Justia Contracts Opinion Summaries

Plaintiff and the corporate Defendants freely negotiated and entered into a clear and unambiguous contract for Plaintiff to sell their insurance policies. In the contract, Plaintiff consented to a provision allowing Defendants to immediately terminate the contract if he breached it in any one of five different specified ways. Plaintiff breached the contract, and Defendants exercised their right to terminate. Plaintiff sued Defendants under numerous theories of liability for terminating the contract, including under the doctrine of prima facie tort, asserting that Defendants had nefarious reasons for terminating the contract. After review, the New Mexico Supreme Court held that when a contract is clear, unambiguous, and freely entered into, the public policy favoring freedom of contract precludes a cause of action for prima facie tort when the gravamen of the allegedly tortious action was the defendant’s exercise of a contractual right. View "Beaudry v. Farmers Ins. Exch." on Justia Law

Plaintiff and the corporate Defendants freely negotiated and entered into a clear and unambiguous contract for Plaintiff to sell their insurance policies. In the contract, Plaintiff consented to a provision allowing Defendants to immediately terminate the contract if he breached it in any one of five different specified ways. Plaintiff breached the contract, and Defendants exercised their right to terminate. Plaintiff sued Defendants under numerous theories of liability for terminating the contract, including under the doctrine of prima facie tort, asserting that Defendants had nefarious reasons for terminating the contract. After review, the New Mexico Supreme Court held that when a contract is clear, unambiguous, and freely entered into, the public policy favoring freedom of contract precludes a cause of action for prima facie tort when the gravamen of the allegedly tortious action was the defendant’s exercise of a contractual right. View "Beaudry v. Farmers Ins. Exch." on Justia Law

Although Wis. Stat. 103.465 explicitly refers to a covenant not to compete, the plain meaning of the statute is not limited to covenant in which an employee agrees not to compete with a former employer.Plaintiff imposed a non-solicitation of employees provision as part of Defendant’s employment agreement. The provision prohibited Defendant from soliciting, inducing, or encouraging any employee of Plaintiff to terminate his or her employment or to accept employment with a competitor, supplier or customer of Plaintiff. Plaintiff claimed that Defendant engaged in actions that violated the non-solicitation of employees provision. The circuit court concluded that the provision was reasonable and enforceable under section 103.465. The court of appeals reversed. The Supreme Court affirmed, holding that Defendant’s non-solicitation of employees provision was a restraint of trade governed by section 103.465 and was unenforceable under the statute because it did not meet the statutory requirement that the restriction be “reasonably necessary for the protection of the employer.” View "Manitowoc Co. v. Lanning" on Justia Law

The patent, entitled “Full Duplex Single Clip Video Codec” lists co-inventors, Woo, Li, and Hsiun, and was created while they were Infochips employees. Infochips’ “receivables,” pledged as security, were seized by LM when Infochips went out of business in 1993; in 1995, LM sold Infochips’s assets to Woo. Woo assigned his interest in the patent to AVC. In 1995, AVC filed the patent's parent application. Woo and Li assigned their interests to AVC. Hsiun refused to do so. The PTO permitted AVC to prosecute the application without that assignment. AVC claimed that it obtained Hsiun’s interests by Hsiun's 1992 Employment Agreement with Infochips. The patent was issued to AVC, which later dissolved, after purporting to transfer its assets to its successors (Advanced Video). In 2011, Advanced Video filed patent infringement lawsuits. The district court found that AVC had not complied with Delaware statutes governing dissolved corporations and that no patent rights had transferred to Advanced Video. The cases were dismissed. The state court appointed a Receiver to transfer AVC's patent rights to Advanced Video. After the transfer, Advanced Video filed new infringement lawsuits, arguing that its acquisition of Hsiun’s interest was effected by the Employment Agreement’s “will assign,” trust and quitclaim provisions. The court rejected the argument and, because Hsiun was not a party to the suit, dismissed for lack of standing. The Federal Circuit affirmed. Hsiun never actually assigned her rights, despite her promises to do so. View "Advanced Video Technologies, LLC v. HTC Corp." on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment to at-will employees in an action alleging breach of contract against Panera. Plaintiffs filed suit on behalf of themselves and a class of similarly situated store managers, alleging that Panera violated employee agreements by imposing a bonus cap. The court noted that under Missouri law, the agreements amounted to offers by Panera to enter into an unilateral contract; the court held that the Supreme Court of Missouri would conclude that an offerree must merely begin performance; and since each of the managers in the class here had at least begun performing under the offer, Panera could not modify the offer terms as to any manager. The court rejected Panera's contention that it reserved the power to modify or terminate its bonus offer before the managers began performing in accordance with that offer, and Panera's derivative argument that the district court should have revisited its decision to certify the class after determining that the bonus offers were offers to make a unilateral contract. Finally, the court affirmed the district court's rejection of Panera's novation, waiver, estoppel, and commercial frustration defenses. View "Boswell v. Panera Bread Co." on Justia Law

The Supreme Court affirmed the order of the circuit court granting summary judgment in favor of Employer and certain members of its management staff in this suit brought by Employee after Employee was terminated for allegedly slapping and secluding a senior care facility resident. The Supreme Court held that the circuit court properly granted summary judgment against Employee on his slander claim, intentional infliction of emotional distress claim, malicious prosecution claim, claim for punitive damages, wrongful termination claim, negligent infliction of emotional distress claim, and breach of contract claim. View "Harvey v. Regional Health Network" on Justia Law

In this case alleging breach of contract, fraud, retaliation, constructive discharge, and invasion of privacy, the Supreme Court held (1) in Ohio, punitive damages may not be awarded for a breach of contract; (2) a party to a contract does not breach the implied duty of good faith and fair dealing by seeking to enforce the agreement as written or by acting in accordance with its express terms, and the implied duty is not breached unless a specific obligation imposed by the contract is not met; (3) a release of liability is an absolute bar to a later action on any claim encompassed within it absent a showing of fraud, duress, or other wrongful conduct in procuring it, and a party must prove duress by clear and convincing evidence; (4) the prevention of performance doctrine is not a defense to a release of liability and therefore cannot be asserted as a defense to a release; and (5) a claimant cannot rely on predictions or projections that relate to future performance or that are made to third parties to establish a fraud claim. View "Lucarell v. Nationwide Mutual Insurance Co." on Justia Law

This case arose from an employment agreement between Allen Nettleton and Canyon Outdoor Media, LLC (“Canyon Outdoor”). The parties disagreed with respect to Nettleton’s entitlement to commission wages following his resignation. The district court granted summary judgment in favor of Nettleton and denied Canyon Outdoor’s motion for summary judgment and motion for reconsideration of the rulings on summary judgment. Canyon Outdoor argued the district court erred in granting Nettleton’s motion for summary judgment: (1) because the parties did not agree to a term in the employment agreement that covers post-separation compensation; (2) because the Snake River Dental contract did not establish a “course of dealing”; and (3) because Nettleton was required to service client accounts to be entitled to commission wages. Among these, the third argument was essentially a dispositive issue in the summary judgment rulings at the district court. For these reasons, Canyon Outdoor contended the district court improperly applied the relevant standard of review in reaching its conclusion that a servicing requirement did not exist under the employment agreement. The Idaho Supreme Court agreed with Canyon Outdoor and found the judgment in favor of Nettleton had to be vacated. View "Nettleton v. Canyon Outdoor Media" on Justia Law

Appellant International Business Machines Corporation (IBM) appealed a superior court order upholding a wage claim decision issued by the New Hampshire Department of Labor (DOL) in favor of appellee Gary Khoury. As part of his work, Khoury sold IBM’s products to the federal government. Khoury testified that, prior to July 2014, IBM paid its sales representatives commissions based solely upon revenue-generating sales. According to Khoury, under this arrangement, sales representatives lacked an incentive to promote the deployment of IBM products that had previously been sold to an intermediary business partner (for which they received no commission), and a number of sales representatives had quit and found other jobs within IBM. In July 2014, IBM rolled out a new pilot program that allowed sales representatives to earn commissions on both the sale and deployment of IBM’s products. Under this program, sales representatives would receive a “primary” commission for reaching a revenue or sales quota and a “secondary” commission for reaching a deployment quota. Khoury testified that, approximately every six months, IBM sent each sales representative an individualized Incentive Plan Letter (IPL) defining the method by which the sales representative’s commissions would be calculated for sales and new deployments. IBM presented Khoury with an IPL for the period of July 1 to December 31, 2014. Pursuant to the terms of the IPL, Khoury would receive the “secondary” commission at issue in this case after meeting a quota of $571,000 for certain specified signings. The IPL contained several prominent disclaimers. By the end of the IPL period, he had met and surpassed his quota for the specified signings. At the DOL hearing, he testified that, in December 2014, his manager informed him that this entitled him to a commission payment of $154,124.21. That same month, he received $47,619.23 in advances from IBM towards this commission. Khoury testified that he subsequently made repeated unsuccessful inquiries about the additional funds. In March 2015, Khoury filed a wage claim with the DOL for $106,504.65, the balance of the commission. One month later, Khoury was informed that IBM planned to change his IPL terms by increasing the original quota from $571,000 to $1,000,000. Khoury testified that he was told that he could expect to receive a final payment of approximately $35,000 to $36,000. He stated that he then received a payment of $34,558.71 in May. Upon receiving this payment, Khoury reduced his wage claim against IBM from $106,504.65 to $71,946.27. The New Hampshire Supreme Court found no reversible error in the superior court's order, and affirmed it. View "International Business Machines Corp. v. Khoury" on Justia Law

Hall and Thompson built a significant client base as brokers of equipment rental insurance. They brought some of their clients to a specialty division they formed at Hylant. USI paid a substantial sum for Hylant’s assets and to keep Hall and Thompson on as employees to continue building their client base; Hall and Thompson gave up any ownership interest in their clients and promised that if they were terminated, they would refrain from soliciting those clients for two years. They agreed that USI could assign their employment contracts to a subsequent purchaser. Edgewood bought out USI’s entire equipment rental insurance business. Hall and Thompson could not work out an arrangement with Edgewood, so USI terminated them. They began contacting their old clients and sought a declaratory judgment permitting them to do so. Edgewood obtained a preliminary injunction barring Hall and Thompson from breaching their non-solicitation agreements. The Sixth Circuit remanded for factual findings as to which of Thompson’s clients he recruited and developed solely on his own accord, and which clients Hylant and USI expended their resources in recruiting and developing, with respect to which Edgewood is likely to succeed on the merits. Edgewood has no legitimate interest in barring Thompson from soliciting clients who came to Hylant and USI solely to avail themselves of Thompson’s services and only as a result of his own independent recruitment efforts. View "Hall v. Edgewood Partners Insurance Center, Inc." on Justia Law