Justia Contracts Opinion Summaries

Hospital purchased from Assurance Company of America a "builder's risk" insurance policy and contracted with Wehr Constructors for installation of subsurfaces and floors as part its project. After installation, a portion of the floors and subsurface done by Wehr was damaged. Hospital sought recompense under the builders risk policy. Assurance denied the claim. Meanwhile, Wehr and Hospital settled on Wehr's breach of contract claim. As part of the settlement, Hospital assigned to Wehr any claim Hospital had against Assurance arising out of the policy. Wehr, as Hospital's assignee, then sued Assurance in federal district court. Assurance moved for judgment on the pleadings, invoking the policy's anti-assignment provision and arguing that it had not consented to the assignment. The district court requested certification to answer a question of Kentucky law. The Supreme Court concluded that under Kentucky law, a clause in an insurance policy that requires the insured to obtain the insurer's prior written consent before assigning a claim for an insured loss under the policy is not enforceable or applicable to the assignment of a claim under the policy where the covered loss occurs before the assignment, and that such a clause would, under those circumstances, be void as against public policy. View "Wehr Constructors, Inc. v. Assurance Co. of Am." on Justia Law

While Brenda Osborne was at home alone, an airplane pilot crashed his airplane into Osborne's home. Osborne subsequently hired Attorney to assist her recovering her losses from the pilot, but when the lawsuit was finally filed, the federal court dismissed the action as barred by limitations. Osborne filed this action against Attorney asserting breach of contract, legal malpractice, and fraud and deceit. A jury found in favor of Osborne, resulting in a judgment against Attorney in excess of $5 million. The court of appeals affirmed the judgment in part but vacated a large portion of the damage award. The Supreme Court reversed, holding (1) the trial court properly tried this case using the suit-within-a-suit method but erred when it failed to instruct the jury on Pilot's negligence, thus resulting in Osborne's failure to establish that Attorney's malpractice proximately caused her loss; (2) emotional-distress plaintiffs must first satisfy the elements of a general negligence claim; and (3) punitive damages are not recoverable against an attorney in a legal malpractice case. View "Osborne v. Keeney" on Justia Law

Hospital purchased from Insurer a "builders risk" insurance policy which included a provision requiring Hospital to obtain Insurer's written consent before assigning a claim for an insured loss. Hospital contracted with Constructors for floors and subsurface work, which was later damaged. Hospital claimed a loss and sought recompense under the builders risk policy, but Insurer denied the claim. Hospital later assigned Constructors any claim or rights Hospital had against Insurer arising out of the insurance policy. Constructors, as Hospital's assignee, brought suit in federal court against Insurer seeking to recover payment due under the builder's risk policy. The Supreme Court granted the certification request of the federal court to answer a question of state law and concluded that, under Kentucky law, a clause in an insurance policy that requires the insured to obtain the insurer's prior written consent before assigning a claim for an insured loss under the policy is not enforceable or applicable to the assignment of a claim under the policy where the covered loss occurs before the assignment, and that such a clause would, under those circumstances, be void as against public policy. View "Wehr Constructors, Inc. v. Assurance Co. of Am." on Justia Law

Appellants James Baldwin and Ronda Reynolds allegedly sustained injuries in separate highway incidents after objects came loose from unidentified vehicles and collided with their vehicles. Both Appellants sought uninsured motorist (UM) coverage for hit-and-run accidents through their automobile insurance policies. Baldwin's State Farm policy provided coverage when an uninsured motor vehicle "strikes" the insured vehicle, and Reynolds's Safeco policy covered damages when an uninsured motor vehicle "hits" the insured vehicle. The Supreme Court accepted review in these consolidated cases to focus on whether Appellants' accidents satisfied the impact requirements contained in the UM clauses of their insurance policies. The Supreme Court held that the impact requirements of the UM clauses of Baldwin's and Reynolds's insurance policies were not met, and therefore, UM coverage was not applicable to Appellants' hit-and-run accidents. View "State Farm Mut. Auto. Ins. Co. v. Baldwin" on Justia Law

Appellants, individually and on behalf of all others similarly situated, filed a class action complaint against their Internet service providers (Providers). Providers' Internet service agreement contained an arbitration clause that required customers to submit damage claims against Insight to arbitration, and it barred class action litigation against Providers by their customers. The circuit court determined the class action ban was enforceable and dismissed Appellants' complaint. The court of appeals affirmed. The Supreme Court affirmed in part and reversed in part, holding (1) the contractual provision under which Appellants waived their right to participate in class action litigation was enforceable under federal law; (2) the service agreement's choice of law provision was not enforceable; (3) the service agreement's general arbitration provision was enforceable; and (4) the provision imposing a confidentiality requirement upon the litigants to arbitration proceedings was void and severable from the remaining portions of the agreement. Remanded for entry of a final judgment. View "Schnuerle v. Insight Commc'ns Co., LP" on Justia Law

At issue in this appeal was the question of an agent's authority to bind his or her principal to an arbitration agreement presented with other documents upon the principal's admission to a long-term care facility. Agent in this case was the daughter and executrix of the deceased Principal. Agent brought a claim for negligence against the long-term care facility where Principal spent the last years of her life. Invoking an arbitration agreement executed in conjunction with Principal's admission to the nursing home, Defendants moved the trial court to dismiss the complaint. The trial court denied the motion, holding that Agent, who executed the admissions agreement on behalf of Principal, had no authority to agree to arbitration. The court of appeals reversed, holding that the agreement was enforceable. The Supreme Court reversed, holding that the optional arbitration agreement Agent purported to execute on Principal's behalf was beyond the scope of Agent's authority and was therefore unenforceable. View "Ping v. Beverly Enters., Inc." on Justia Law

The circuit court granted Appellants' motion for summary judgment in a partition action for the sale of jointly owned real estate, having found that the statute of frauds prevented enforcement of an alleged oral "buy/sell" agreement between the parties. The court of appeals reversed, holding that Appellants, as the party attempting to force the sale, were impermissibly using the statute of frauds as a "sword" and not a "shield" and because "no action" was brought by Appellees that might trigger the application of the statute. The court therefore remanded the matter for a determination as to whether the oral buy/sell agreement existed and its effect on the disposition of the property at issue. The Supreme Court reversed the court of appeals, holding that because there was no signed writing in this case, and because there was no evidence that the agreement was not reduced to writing because of fraud at the time of omission or evidence that the application of the statute of fraud would result in Appellants being unjustly enriched, summary judgment was proper.

This matter involved the ability to recover attorney's fees based on a contingency fee arrangement when an attorney withdraws from representation of the client for what the lawyer believes is a valid cause. The district court found Attorney was not entitled to recover his attorney's fees based on a quantum meruit claim but awarded him funds to cover calculated expenses from his representation of Appellee in a personal injury case with a contingency fee contract. The court of appeals affirmed. The Supreme Court affirmed, holding that a disagreement with a client over whether to accept a settlement offer is not good and sufficient cause for an attorney to withdraw with expectation of a quantum meruit fee.

This case presented the question of whether an automobile insurance policy's permissive user step-down provision was valid and enforceable. Specifically, the Supreme Court addressed whether the particular provision at issue was sufficiently conspicuous, plain, and clear to satisfy the doctrine of reasonable expectations. The circuit court entered summary judgment in favor of the insurance company, declaring the permissive user step-down provision enforceable. The court of appeals affirmed. The Supreme Court reversed, holding that the policy's permissive user step-down provision was insufficiently plain and clear to defeat the reasonable expectations of the insureds, and therefore, the provision violated the doctrine of reasonable expectations. Remanded.

General Electric (GE) obtained a judgment against Intra-Med for breach of contract. Thomas Schultz was the president and sole shareholder of Intra-Med. After collecting only a portion of the judgment, GE intervened in another lawsuit and filed a third-party complaint against Schultz seeking to pierce the corporate veil and hold him personally liable for the judgment against Intra-Med. The trial court entered judgment on the pleadings in favor of GE, allowing GE to pierce Intra-Med based upon the instrumentality theory of veil piercing. The court of appeals affirmed, concluding (1) none of Schultz's affirmative defenses negated the fact that he admittedly used corporate funds and property as his own to GE's detriment, and (2) Schultz's admissions fulfilled the requirements for piercing the corporate veil and supported the trial court's judgment on the pleadings. The Supreme Court reversed, holding that the trial court improperly granted GE's motion for judgment on the pleadings, as Schultz's admissions did not conclusively establish harm, fraud, or unjust loss, the three elements that must be established to warrant a piercing of the corporate veil under the instrumentality theory.