Justia Contracts Opinion Summaries

After Ozark was sold to Mobilex, Mobilex filed suit against defendant to enforce the non-compete and confidentiality agreements defendants had signed with Ozark. The district court granted summary judgment to defendants on the basis that a personal services contract cannot be assigned to a subsequent employer under Missouri law without the employee’s contemporaneous consent. The court adopted the majority rule and held that covenants not to compete can be assigned to a successor employer without contemporaneous consent. In this case, the non-compete agreements precluded only working in the field of medical diagnostics or soliciting business from certain clients within a specified geographical area. A reasonable jury, looking at the facts in the record, could find that defendants did not agree to the non-compete and confidentiality agreements because of Ozark’s unique characteristics. Because the court found that the non-compete and confidentiality agreements at issue here were not personal services contracts and could be assigned without the consent of defendants, the court reversed and remanded for further proceedings. View "Symphony Diagnostic Serv. v. Greenbaum" on Justia Law

Popescu sued Apple for damages after he was fired by his employer, Constellium. He alleged that Apple took affirmative steps to convince Constellium to terminate him in retaliation for his resistance to Apple’s alleged illegal anti-competitive conduct. The court dismissed. The court of appeal reversed with respect to claims for intentional interference with contractual relations and for intentional interference with prospective economic advantage. An employee whose at-will employment contract is terminated as a result of a third party’s interference need not allege that the defendant’s conduct was independently wrongful to state a contract interference claim. Popescu was not required to allege that he was directly harmed by an independently wrongful act so long as he alleged (as he did) that Apple’s wrongful act interfered with his economic relationship with Constellium. View "Popescu v. Apple Inc." on Justia Law

Petitioners Interstate Freight USA, Inc., Interstate Specialized, Inc., Interstate Freight, Inc. (collectively referred to as "the Interstate companies"), Charles Browning, and Donald Raughton, Sr., filed a petition for a writ of mandamus seeking to direct the Baldwin Circuit Court to vacate its order denying their motion to transfer the underlying action to the St. Clair Circuit Court and to enter an order granting the motion. The plaintiff in the underlying action, Kevin Vogler, was hired as a vice president/general manager for Interstate Specialized and Interstate Freight USA. Vogler sued, alleging that: in December 2013, he was working for another company and had become interested in acquiring the transportation branch of the Interstate companies; that he had entered into negotiations with Browning, the president of Interstate Freight USA and Interstate Specialized, and Raughton, a business consultant for the Interstate companies; that Browning and Raughton were acting on behalf of the Interstate companies; that the parties had agreed that "Vogler could acquire a minority interest in the trucking business over a two year period and, after two years of employment with the Interstate companies, would have the option of buying out the interest of Defendant Browning"; that Browning and Raughton had made representations to him regarding his salary and benefits; and that, based on those representations, Vogler left his previous employment and entered into separate employment contracts with Interstate Specialized and Interstate Freight USA. In early 2014, however, the businesses were shut down for "financial reasons," and Vogler's position was terminated. Petitioners moved to dismiss Vogler's complaint, or in the alternative, for a change of venue. After review, the Alabama Supreme Court concluded that Baldwin County was the proper venue, but that the trial court exceeded its discretion in denying the motion for change of venue on the "interest-of-justice" prong of the forum non conveniens statute. Accordingly, the Court granted the petition for the writ of mandamus and directed the trial court to transfer this case to the St. Clair Circuit Court. View "Ex parte Interstate Freight USA, Inc., et al." on Justia Law

Kentucky Shakespeare Festival, Inc. (KSF) and Brantley Dunaway entered into an employment agreement. Two years later, KSF terminated Dunaway’s employment. When KSF informed Dunaway that he was not entitled to a bonus for the 2013 fiscal year, Dunaway filed an action for breach of contract. Nearly one year later, KSF filed a motion for partial summary judgment and declaratory relief, arguing that KSF’s determination that Dunaway was not entitled to a bonus was a binding “arbitration award” issued by an independent accounting firm. The circuit court denied relief, concluding that the employment agreement did not contain an agreement to forgo litigation and arbitrate any bonus dispute. The court of appeals affirmed. The Supreme Court affirmed, holding that no arbitration agreement existed between KSF and Dunaway, and because no arbitration proceeding occurred, there was no arbitration award to be confirmed. View "Kentucky Shakespeare Festival, Inc. v. Dunaway" on Justia Law

In 1993, plaintiff Dean Altobelli began working as an attorney for Miller, Canfield, Paddock and Stone, P.L.C. (“the Firm”). Upon joining the Firm, plaintiff signed the “Miller Canfield Operating Agreement” (“Operating Agreement”), a document governing the Firm’s internal affairs. By January 2006, plaintiff had become a senior principal at the Firm. However, in late May or early June 2010, plaintiff decided he wanted to pursue a new opportunity as an assistant coach for the University of Alabama football team. Plaintiff proposed a 7- to 12-month leave of absence from the Firm to defendant Michael Hartmann, the Firm’s CEO, and defendant Michael Coakley, who was the head of the Firm’s litigation group but was not a managing director. Plaintiff suggested that the Firm permit him to maintain his ownership interest and return to the Firm as a senior principal any time before June 1, 2011. Plaintiff avers that Hartmann initially promised plaintiff that he could spend as much time at the University of Alabama as he wanted and still receive certain allocated income from his clients. Hartmann disputed this, claiming that plaintiff voluntarily withdrew from the partnership. Plaintiff claimed he was improperly terminated, and that the Firm shorted plaintiff's income as a result. Plaintiff's attempt to resolve the matter through the direct settlement and mediation process, as outlined in the arbitration clause of the Operating Agreement, was unsuccessful. In November 2011, plaintiff filed a demand for arbitration as provided for in the arbitration clause. Despite having made the demand for arbitration, he filed suit alleging that the seven individuals named as defendants were responsible for engaging in tortious conduct with regard to plaintiff's request for a leave of absence and retention of his equity ownership in the Firm. Defendants moved for summary judgment and a motion to compel arbitration as required by the arbitration clause. Plaintiff moved for summary judgment too. The circuit court denied defendants’ motions and granted plaintiff's motion for partial summary judgment, finding as a matter of law that plaintiff did not voluntarily withdraw from the Firm. Rather, the circuit court concluded that defendants had improperly terminated plaintiff's ownership interest without authority. The Court of Appeals affirmed. The Supreme Court reversed the part of the Court of Appeals’ opinion regarding the motion to compel arbitration and instead held that this case was subject to binding arbitration under the arbitration clause of the Operating Agreement. Accordingly, the lower courts should not have reached the merits of plaintiff’s motion for partial summary disposition, as the motion addressed substantive contractual matters that should have been resolved by the arbitrator. The case was remanded back to the trial court for further proceedings. View "Altobelli v. Hartmann" on Justia Law

Southern Resources Consultants, Inc. (“SRC”) was a Residential Service Provider (“RSP”), contracting with the Georgia Department of Behavioral Health and Developmental Disabilities (“DBHDD”) and the Georgia Department of Community Health (“DCH”) to operate group homes and provide care and oversight for Medicaid-funded individuals with developmental disabilities. Linda Mays (“Mays”) contracted with SRC to be a Host Home Provider (“HHP”) for one such woman, S.F., from approximately 2006 to 2014. S.F. became dissatisfied with SRC, and requested that her case manager, who was the Guardianship Case Manager for the Division of Aging Services of Georgia’s Department of Human Services (“DHS”) and S.F.’s legal guardian, change S.F.’s RSP. At the time of the request, DBHDD policy prohibited a HHP from terminating its contract with a RSP, such as SRC, and then continuing to serve the individual who had been in the care of the HHP. Consequently, at S.F.’s behest and believing it to be in S.F.’s best interests, the case manager requested a waiver of such policy from DBHDD so that S.F. could remain in Mays’s host home despite the termination of Mays’s relationship with SRC. DBHDD granted the waiver. S.F. then began to receive services from a new RSP, Southern International Living (“SIL”). SRC subsequently filed suit against Mays for breach of purported confidentiality3 and non-compete provisions in a “Work for Hire Agreement/ Contract/ Subcontract Agreement” (“Contract”), and for violation of the Georgia Trade Secrets Act of 1990 (“GTSA”), and subsequent unjust enrichment. This case reached the Georgia Supreme Court by way of an appeal of the superior court’s grant of an interlocutory injunction and for interlocutory and permanent injunctive relief, damages, attorney fees, and costs. The parties conceded that Mays had returned certain SRC confidential information at issue in the interlocutory injunction. The Supreme Court reversed the superior court as a nullity. Because the second and third provisions of the injunction were inextricably entwined and based upon a non-compete agreement that has since expired, these provisions were moot. Accordingly, the injunction was reversed in part, and the case remanded for further proceedings. View "Mays v. Southern Resources Consultants, Inc." on Justia Law

The National Labor Relations Board determined that Polycon had violated the National Labor Relations Act, 29 U.S.C. 158(a)(1), (5), by refusing to sign a collective bargaining agreement after agreeing to its terms because employees of Polycon were circulating a petition to decertify the union as their collective bargaining representative. The Seventh Circuit enforced its order, directing Polycon to sign the agreement and comply with its terms until it expires. The decertification petition may have been signed by a majority of the employees as early as May 9, and by May 22 clearly commanded a majority, but either date was too late for Polycon to repudiate a collective bargaining agreement to which the company had agreed on May 3. Polycon’s challenge bordered on the frivolous. Polycon could have asked for correction of any material mistakes before signing the contract but could not refuse to review and sign it because of the mere possibility that it contained a mistake. View "Polycon Indus., Inc. v. Nat'l Labor Relations Bd." on Justia Law

From 2005-2009, Assaf was medical director for Trinitiy's epilepsy clinic. Trinity terminated his employment; Assaf filed suit. The parties entered into a settlement agreement in 2010,under which Assaf would be employed by Trinity from 2009 until at least 2011 as Director of the Neuroscience Program. The position never materialized. Assaf obtained summary judgment on his claim for breach of that settlement agreement. Assaf sought lost salary for the years in which he was to have been employed under the agreement, and lost professional fees during that time. The court rejected the claim for lost professional fees ,holding that Assaf failed to provide an adequate estimate of the loss, then entered judgment without trial awarding Assaf his salary for 2009-2011 and compensatory damages totaling $172,759 plus $15,000 in attorneys’ fees. The Seventh Circuit reversed with respect to professional fees. On remand, Assaf sought to establish that his professional fees from EEG video monitoring and follow‐up of epilepsy patients decreased as a result of Trinity’s failure to rehire him. The court used a verdict form asking the jury “Did Dr. Assaf prove that he sustained damages as explained in these instructions.“ The jury responded “No.” Judgment was entered for Trinity. The Seventh Circuit affirmed. Assaf had no valid claim to damages for lost professional fees, so any errors were harmless. View "Assaf v. Trinity Med. Ctr." on Justia Law

After the 2004 collective bargaining agreement (CBA) between the Unions and the Chicago Transit Authority (CTA) expired, the retiree health care benefits were the subject of an interest arbitration award. That award, which modified the retiree health care benefits, was accepted by the CTA and the Unions. Current and retired employees who had begun work with the CTA before 2001 challenged that award in a putative class action, asserting breach of contract, promissory estoppel, breach of fiduciary duty, and that the arbitration award was unenforceable under article XIII, section 5, of the Illinois Constitution, the “pension protection clause.” The circuit court ruled that the retired CTA employees had standing to challenge the modifications to their retiree health care benefits, but current CTA employees lacked standing, then dismissed for failure to state a claim. The appellate court agreed that current employees lacked standing but held that the retirees had a vested right to receive the health care benefits that were provided in the prior CBA and had stated claims for breach of that contract and for promissory estoppel. The Illinois Supreme Court held that plaintiffs who retired before the effective date of the 2007 CBA had standing; other retirees and current employees lacked standing. Dismissal of the claim for promissory estoppel against the CTA was proper; the complaint stated claims for breach of contract and under the pension protection clause. View "Matthews v. Chicago Transit Auth." on Justia Law

This case stemmed from a number of disputes that arose after the defendant corporation, Nuzzo Campion Stone Enterprises, Inc. (NCS), was purchased by its present owner. Plaintiff James Nuzzo alleged that he was owed $133,816 in unpaid commissions on orders that had been placed prior to his termination but not actually paid for by customers of NCS until after his termination. NCS filed a counterclaim for breach of contract, alleging that Plaintiff failed to indemnify NCS for certain amounts covered by the terms of an Asset Purchase Agreement signed by the parties. The trial justice concluded that Plaintiff was not entitled to the disputed commissions and that NCS was due nearly $17,000 for both “work in progress” and warranty work pursuant to the Agreement. The Supreme Court affirmed, holding (1) the trial justice did not err in determining that Plaintiff was not entitled to commissions for orders that had been placed, but not actually paid for, prior to Plaintiff’s termination; and (2) the trial justice did not make “fundamental mistakes regarding the contract and damages” relating to the counterclaim. View "Nuzzo v. Nuzzo Campion Stone Enters., Inc." on Justia Law