Justia Contracts Opinion Summaries

This case challenged a circuit court default judgment against Muhammad Wasim Sadiq Ali and others in favor of Mike Williamson after a case ordered to private arbitration was remanded to the trial court. Williamson, Patrick Watson, Ali, and others formed RPM, a regional supplier of rental cranes based in Birmingham, in 2008. Williamson was employed as RPM's general manager. Ali was the primary investor and majority owner of RPM, and Ali and Watson allegedly represented to Williamson at the time RPM was formed that Williamson would own a 12% share of the company. In 2012, Watson and Ali told Williamson that, in order to accrue his 12% equity interest in RPM at the end of his five-year employment term, he needed to pay $1,000,000, and that, if Williamson could not pay, his employment would be terminated unless he signed an employment agreement. Williamson signed an employment agreement with RPM which contained an arbitration clause. The employment agreement also contained a noncompetition clause that prohibited Williamson, for two years following the termination of his employment with RPM, from competing with RPM and from being employed by any business that is in competition with RPM. In 2013, a dispute between Williamson and RPM arose concerning Williamson's insurance coverage with respect to RPM vehicles. RPM terminated Williamson's employment "for cause," citing his failure to obtain an appropriate certificate of insurance. In 2014, Williamson filed a complaint against RPM Cranes, LLC ("RPM"), asserting claims of breach of contract, unjust enrichment, conversion, unreasonable restraint of trade, and misrepresentation arising from his alleged ownership of, his employment with, and the termination of that employment with RPM. Ali contended the default judgment was void because the trial court lacked personal jurisdiction over him. After review, the Alabama Supreme Court agreed, and reversed and remanded. View "Ali v. Williamson" on Justia Law

Signode assumed an obligation to pay health-care benefits to a group of retired steelworkers and their families. Signode then exercised its right to terminate the underlying benefits agreement and also stopped providing the promised benefits to the retired steelworkers and their families, despite contractual language providing that benefits would not be “terminated … notwithstanding the expiration” of the underlying agreement. The retirees and the union filed suit under the Labor-Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1132(a)(1)(B). The Seventh Circuit affirmed the district court’s entry of a permanent injunction, ordering Signode to reinstate the benefits. The agreement provided for vested benefits that would survive the agreement’s termination. While there is no longer a presumption in favor of lifetime vesting, the court applied ordinary contract law interpretation rules and concluded that the agreement unambiguously provided retirees with vested lifetime health-care benefits. Even if the agreement were ambiguous, industry usage and the behavior of the parties here provide enough evidence to support vesting such that resolution of any ambiguity in favor of the plaintiffs as a matter of law would still be correct. View "Stone v. Signode Industrial Group LLC" on Justia Law

TWC operated a Walnut Creek Toyota dealership. The Davises sought employment at TWC, to run its special finance department. The Davises are African-American, and Donald Davis is over the age of 40. The Davises were required to sign agreements providing that the Davises agreed to arbitration. The three agreements are all different. After the Davises became employed, TWC hired a new General Manager, Colon. The Davises claim that Colon “began to systematically undermine [the Davises’s] programs,” an effort “punctuated by shockingly inappropriate ageist and racist comments to and about them.” The Davises eventually resigned, filed complaints with the Department of Fair Employment and Housing, and obtained right to sue letters. The defendants filed an unsuccessful petition to compel arbitration. The court found there was an agreement to arbitrate, but found both procedural and substantive unconscionability. The court of appeal affirmed, noting TWC’s “lack of candor” concerning the agreements. The court noted the “take it or leave it” pressure under which the agreements were signed, the inconsistency between the agreements, how hard it would be for a layman to read the agreements, and the inclusion of broad provisions in violation of public policy. View "Davis v. TWC Dealer Group, Inc." on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the judgment of the district court dismissing Plaintiff's claims that Defendant, his employer, fired him in violation of the implied covenant of good faith and fair dealing in his compensation agreement with Defendant, holding that the court of appeals' application of the covenant was improper.In his complaint, Plaintiff claimed that Defendant fired him in an effort to avoid payment of commissions and that, even though he was an at-will employee, his termination violated the implied covenant of good faith and fair dealing. In dismissing the claims, the district court concluded that the covenant could did not apply in this context. The court of appeals reversed, concluding that the covenant can be invoked to prevent employers form using at-will termination to avoid obligations under the compensation agreement. The Supreme Court reversed, holding (1) the covenant of good faith and fair dealing may not be applied to contradict express contractual terms; and (2) the court of appeals' application was inconsistent with the express terms of the compensation agreement and with the parties' course of dealings. View "Vander Veur v. Groove Entertainment Technologies" on Justia Law

Plaintiff, a management employee of the Summit County Board of Developmental Disabilities, worked under renewable one-year agreements that contained broad arbitration provisions. When Plaintiff joined the Ohio Army National Guard in 2008, his contract provided for “military leave in accordance with Board Policy.” Thereafter, there were several disputes about his entitlement military leave at full pay. Plaintiff refused to sign a proposed 2011–12 contract. Plaintiff filed his first complaint in 2011. In April 2012, shortly after returning from military leave, the Board delivered to Plaintiff a pre-disciplinary hearing notice. The Board subsequently notified Plaintiff of his termination. Plaintiff filed another complaint, alleging wrongful termination of employment, breaches of the employment contract, and discrimination and retaliation based on his military status. The district court granted Defendants’ motion to compel arbitration, excluding two breach of contract claims. An arbitrator determined that all of the claims identified as possibly subject to arbitration were arbitrable, and granted the Defendants summary judgment. The court granted Defendants summary judgment regarding Plaintiff’s breach of contract claims. The Sixth Circuit affirmed. The contract provided that the arbitrators could decide questions of arbitrability and, under Ohio law, the arbitrators did not exceed their powers by entering a decision on Defendants’ motion for summary judgment. Plaintiff failed to show a breach of his contract with respect to military leave. View "McGee v. Armstrong" on Justia Law

Ron Koenig was the superintendent and principal of the Warner Unified School District (the district). He and the district entered an agreement to terminate his employment one year before his employment agreement was due to expire. Under the termination agreement, Koenig agreed to release any potential claims against the district in exchange for a lump sum payment equivalent to the amount due during the balance of the term of his employment agreement, consistent with Government Code section 53260. The district also agreed to continue to pay health benefits for Koenig and his spouse "until Koenig reaches age 65 or until Medicare or similar government provided insurance coverage takes effect, whichever occurs first." The district stopped paying Koenig's health benefits 22 months later. Koenig then sued to rescind the termination agreement and sought declaratory relief he was entitled to continued benefits pursuant to his underlying employment agreement, which provided that Koenig and his spouse would continue receiving health benefits, even after the term of the agreement expired. After a bench trial, the trial court determined the district's promise in the termination agreement to pay health benefits until Koenig turned 65 violated section 53261, was unenforceable, and rendered the termination agreement void for lack of consideration. Both Koenig and the district appealed the judgment entered after trial. Koenig contended the trial court properly determined the termination agreement was void but should have concluded he was entitled to continued health benefits until the age of 65. The district contended the trial court erred when it concluded the termination agreement was void; rather, the trial court should have severed the termination agreement's unenforceable promise to continue paying benefits, enforced the remainder of the termination agreement, and required Koenig to pay restitution for benefits paid beyond the term of the original agreement. The Court of Appeal concluded the termination agreement's unlawful promise to pay health benefits in excess of the statutory maximum should have been severed to comply with sections 53260 and 53261, Koenig did not establish he was entitled to rescind the termination agreement, and the district was entitled to restitution for health benefits paid beyond the statutory maximum. Judgment was reversed and the trial court directed to enter judgment in favor of the district for $16,607. View "Koenig v. Warner Unified School District" on Justia Law

Logan worked as a cook for MGM. As part of her job application, she agreed to a six-month limitation period to bring any lawsuit against her employer. After leaving the job, she sued MGM under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e, alleging employment discrimination. Her former employer asserted a statute of limitations defense. Although Logan arguably brought her claim within the Title VII statutory period, she waited longer than the limitation period provided in her employment application. The district court granted MGM summary judgment. The Sixth Circuit reversed. The contractual limitation period cannot supersede the statutory limitation period for bringing suit under Title VII. The Title VII limitation period is part of an elaborate pre-suit process that must be followed before any litigation may commence. Contractual alteration of this process abrogates substantive rights and contravenes Congress’s uniform nationwide legal regime for Title VII lawsuits. View "Logan v. MGM Grand Detroit Casino" on Justia Law

Beginning in 2009, Plaintiff Rajesh Singh worked as an untenured professor in the School of Library and Information Management (SLIM) at Emporia State University (ESU). He was informed in February 2014 that his annual contract would not be renewed. He sued ESU and various administrators in their individual capacities, asserting several retaliation and discrimination claims under Title VII of the Civil Rights Act of 1964; the Kansas Act Against Discrimination (KAAD); and the Civil Rights Act of 1871. The district court granted summary judgment for Defendants on every claim except one: a First Amendment retaliation claim under section 1983 against Provost David Cordle. Provost Cordle appealed the denial of summary judgment on the ground that he was entitled to qualified immunity. The district court then certified as final under Fed. R. Civ. P. 54(b) its order granting summary judgment on all other claims, and Plaintiff filed a cross-appeal, challenging the grant of summary judgment on Plaintiff’s claims: (1) ESU and the individual Defendants discriminated against him by not renewing his contract; and (2) ESU and the individual Defendants retaliated against him for filing discrimination complaints with ESU’s human resources department and the Kansas Human Rights Commission (KHRC). The Tenth Circuit found the claims against ESU were brought under Title VII and the KAAD, and the claims against the individual Defendants were brought under section 1983. The Court reversed the district court’s denial of summary judgment for Provost Cordle and affirmed grants of summary judgment on the remaining claims. Cordle was entitled to qualified immunity because he could have reasonably believed that the speech for which he allegedly punished Plaintiff was not on a matter of public concern. As for the discrimination claims, the district court properly granted summary judgment because Plaintiff did not establish a genuine issue of fact that ESU’s given reason for his nonrenewal, that he was noncollegial, was pretextual. “Although Plaintiff contends that these discrimination claims survive under the cat’s-paw theory of liability, he does not provide adequate evidence that the allegedly biased supervisor - his school’s dean - proximately caused the ultimate nonrenewal decision.” The Court affirmed summary judgment on Plaintiff’s retaliation claims because he failed to present adequate evidence that the ESU employees who allegedly retaliated against him knew that he had filed formal discrimination complaints. View "Singh v. Cordle" on Justia Law

Brock filed suit against a former employee for violating his employment agreement's non-compete provision and requested a preliminary injunction. The Fifth Circuit affirmed the district court's grant of the injunction, holding that the agreement was not geographically overbroad. In this case, when defendant signed the agreement, he knew that he could be prohibited from working in the identified parishes, and that the restriction was the only one the district court enforced following reformation.The court also held that the district court did not err in admitting parol evidence and in determining that the parties' intent as to the meaning of subsection 7.1(a) of the agreement regarding where defendant needed to be working for Apache in order to violate the provision; the district court's reliance on evidence of customer solicitation was unnecessary to the finding of breach; and thus the district court did not err in finding a likelihood of success on the merits. In this case, defendant has not shown that the district court abused its discretion in finding the balance of harm and public interest weigh in Brock's favor; the burden to plaintiff was minimal; and the injunction did not disserve the public. View "Brock Services, LLC v. Rogillio" on Justia Law

Bonni Genzer, an Uber driver, contended James River Insurance Company, Uber’s insurer, breached its contractual obligations by declining coverage for injuries she sustained in an accident on the return leg of a lengthy fare. Genzer also contended that, under Oklahoma law, the “mend the hold” doctrine limited James River to the grounds it gave for declining coverage before she sued. The district court granted summary judgment in James River’s favor, first ruling that Oklahoma had not adopted the mend-the-hold doctrine, and next holding that Genzer’s claim falls outside the scope of the governing insurance policy. The Tenth Circuit agreed as to both issues. View "Genzer v. James River Insurance Company" on Justia Law