Justia Contracts Opinion Summaries

Plaintiff-appellant Rachel Verdugo appealed an order granting a motion to stay based on a forum selection clause in her employment agreement with defendant-respondent Alliantgroup, L.P. The clause designated Harris County, Texas, as the exclusive forum for any dispute arising out of Verdugo’s employment, and also included a provision designating Texas law as governing all disputes. Verdugo contended the trial court erred because enforcing the forum selection clause and related choice-of-law clause violated California’s public policy on employee compensation. After review, the Court of Appeal agreed and reversed the trial court’s order. View "Verdugo v. Alliantgroup" on Justia Law

Drivers working for FedEx in Florida filed suit alleging a number of statutory and common-law claims against the company. At issue was whether FedEx properly classified the drivers as independent contractors. Applying Florida law, the court determined that several factors support the conclusion that the Florida drivers are independent contractors: the Operating Agreement itself identifies the drivers as independent contractors; FedEx pays the Florida drivers on a "settlement" basis; and the drivers can sell part or all of their service areas with notice or they can acquire service areas from other drivers. However, the court concluded that these contractual terms are not dispositive where, inter alia, other provisions of the Operating Agreement, together with FedEx's standard practices and procedures, seem to belie the creation of the status agreed to by the parties. Therefore, the court reversed the MDL court’s grant of summary judgment in favor of FedEx on the drivers’ employment status where there are genuine issues of matter fact as to whether the drivers are employees or independent contractors. The court affirmed the district court's grant of summary judgment in favor of FedEx on the individual claims of Plaintiff Mosher and Harting. View "Carlson v. FedEx Ground Package Sys., Inc." on Justia Law

Hess, an attorney, had worked on a number of medical-malpractice cases before his law firm, Kanoski terminated his employment. Many of these cases settled after Hess’s termination, and Hess was not compensated. He sued under his employment agreement and under the Illinois Wage Payment and Collection Act, adding claims of tortious interference, wrongful discharge, unjust enrichment, and quantum meruit. In 2011, the district court dismissed each of Hess’s claims. On remand the district court held that Hess was not entitled to compensation for the post-termination settlements. The Seventh Circuit affirmed, based on its interpretation of Hess’s employment contract provisions that Hess would receive bonus pay in the amount of 15 percent of all fees “generated over the base salary (or $5,000 per month),” that the bonus shall increase to 25 percent “on all fees received annually in excess of $750,000.00,” and that that, “where the Corporation retains clients upon Employees [sic] termination that Employee has no proprietary interest in fees to be earned since the Employee is to be fully compensated through his salary and/or bonus for all work done while an Employee of the Corporation.” View "Hess v. Kanoski & Associates" on Justia Law

Plaintiff, a physician, filed an employment discrimination action against the California Emergency Physicians Medical Group (CEP) in state court. CEP removed the suit to federal court. Prior to trial, the parties agreed in writing to settle the case. The settlement agreement included a provision that Plaintiff waive his rights to employment with CEP or at any facility that CEP may own or with which it may contract in the future. Plaintiff refused to execute the written agreement and attempted to have it set aside. The district court ultimately ordered that the settlement be enforced and dismissed the case, concluding that Cal. Bus. & Prof. Code 16600, which provides that a contract is void if it restrains anyone from engaging in a lawful profession, did not apply because the no-employment provision in the settlement agreement did not constitute a covenant not to compete. A panel of the Ninth Circuit reversed, holding (1) the parties’ dispute regarding whether the no-employment provision voided the settlement agreement was ripe for review under the traditional ripeness standard; and (2) the district court abused its discretion by categorically excluding the settlement agreement from the ambit of 16600 solely on the ground that it did not constitute a covenant not to compete. Remanded. View "Golden v. Cal. Emergency Physicians Med. Group" on Justia Law

A law firm (Plaintiff) filed a quantum merit claim for part of the contingent fees earned in cases that were first handled by the law firm’s attorneys, including Defendant, and later by Defendant and his law firm after he left Plaintiff’s law firm. The trial court denied quantum merit relief, finding that Defendant was not unjustly enriched. The court of appeals affirmed. The Supreme Court granted transfer and (1) reversed and remanded with instructions to determine, in accordance with Galanis v. Lyons & Truitt, what proportional contributions toward the results in the cases at issue were made by attorneys working for Plaintiff, and to enter a corresponding judgment in Plaintiff’s favor; and (2) summarily affirmed the portion of the court of appeals’ opinion addressing whether Plaintiff should have sued its former clients to recover attorney fees from them. View "Cohen & Malad, LLP v. Daly" on Justia Law

In 1998, Glenn Johnson suffered serious work-related injuries. In separate administrative proceedings, the parties contested the details and amounts of the lifetime workers’ compensation benefits Johnson was entitled to. Johnson and his wife filed the instant suit against his employer’s workers’ compensation insurance provider and related individuals and entities (collectively, Crawford), alleging that Crawford engaged in a plan to delay and deny benefits that the Johnsons were entitled to receive. Crawford filed a plea to the jurisdiction and motion for summary judgment, arguing that the Texas Department of Insurance Division of Workers’ Compensation had exclusive jurisdiction over all of the Johnsons’ claims because they arose out of the workers’ compensation claims-handling process. The trial court dismissed the Johnsons’ claims for breach of the common law duty of good faith and fair dealing and for violations of the Texas Insurance Code but refused to dismiss any of the other claims. The Supreme Court conditionally granted mandamus relief, holding that all of the Johnsons’ claims arose out of Crawford’s investigation, handling, and settling of claims for workers’ compensation benefits, and therefore, the Division had exclusive jurisdiction over the Johnsons’ claims. View "In re Crawford & Co." on Justia Law

Kelly Kohn and Kohn Electric, LLC, appealed a damages award given in favor of Eugene Pegg for $11,299 for breach of an oral partnership agreement. Pegg had been an electrician for more than 30 years and had several employers throughout his career. In 1999, Sungold, a sunflower seed processing facility, became Pegg's customer, and Pegg brought the Sungold account with him when he changed employers. Kohn had been an electrician since 1996 and became a partner in each of the companies in which he was employed. In 2009, both Pegg and Kohn worked at Enterprise Electric in Valley City. In March 2009, Kohn left Enterprise Electric and started Kohn Electric. In June 2009, Pegg was dissatisfied with his job at Enterprise Electric because the company refused to pay him a percentage of the substantial revenue generated by the Sungold account. Pegg testified he approached Kohn and proposed that they become partners in Kohn Electric, with Pegg contributing the Sungold account and $10,000 in capital. In return, Pegg would receive 10 percent of the gross revenue generated by the Sungold account, 10 percent of Kohn Electric's net revenue, and an hourly wage. Pegg stated he agreed to the same wage he received from Enterprise Electric and agreed to no paid vacations or overtime pay. Although no written agreement existed about the alleged partnership, Pegg testified he and Kohn "shook hands on it," and Pegg began working at Kohn Electric in July 2009. Pegg paid $9,152.49 for a pickup truck titled in Kohn Electric and paid for tools and equipment for the business. After Kohn denied he and Pegg were partners, Pegg quit Kohn Electric and in 2011 brought this action for breach of the oral partnership agreement, seeking recovery of proceeds due under the agreement. Before trial, Kohn paid Pegg $9,152.49 for his contributions to the business. Following a bench trial, the district court found the parties entered into an oral partnership agreement, Pegg substantially performed his obligations under the agreement by contributing the pickup, equipment and the Sungold account, and Kohn breached the agreement. The court found no agreement existed giving Pegg 10 percent of Kohn Electric's net income from all accounts, but it awarded Pegg $11,164 representing 10 percent of the gross revenue generated from the Sungold account during Pegg's employment. Judgment of $11,299, including costs and disbursements, was entered against Kohn and Kohn Electric. Because the district court's challenged findings of fact were not clearly erroneous, the Supreme Court affirmed. View "Pegg v. Kohn" on Justia Law

Kyle Kercher sued the Board of Regents at the University of Nebraska and the University of Nebraska at Omaha (collectively, “the University”), alleging that the University breached his employment contract when it removed him from his appointed professorship that he alleged was a part of his tenured appointment as a faculty member. The district court granted partial summary judgment in favor of Kercher on the issue of liability. Damages were stipulated by the parties, save for the issue of attorney fees. The University appealed the judgment against it, and Kercher cross-appealed the district court’s order awarding him attorney fees. The Supreme Court affirmed, holding that the district court properly granted Kercher’s motion for partial summary judgment and did not abuse its discretion in its award of attorney fees for Kercher. View "Kercher v. Board of Regents" on Justia Law

Richard M. Gilley sued his former employer, Southern Research Institute ("SRI"), seeking compensation he alleged he was owed as a result of his work leading to SRI's procurement of United States Patent No. 5,407,609. The trial court entered a summary judgment in favor of SRI, and Gilley appealed that judgment to the Supreme Court. After review, the Supreme Court found that because Gilley did not timely assert a claim based on a January 2005 transaction in his complaint and because the money received by SRI in a July 2007 transaction was not intellectual-property income subject to sharing under the SRI awards policy, the summary judgment entered by the trial court was proper and was therefore affirmed. View "Gilley v. Southern Research Institute" on Justia Law

In 2001, St. Jude hired Tormey to sell cardiac-related medical devices. Tormey entered into several agreements, providing Tormey’s initial sales quota would be zero due to a noncompete agreement; that St. Jude would hire a technical support specialist (TSS) to assist Tormey; and that St. Jude could terminate Tormey if he failed to meet sales quotas. St. Jude made a $650,000 interest-free loan; Tormey executed a promissory note. Around the time he began selling for St. Jude’s, Tormey’s wife was diagnosed with terminal lung cancer. Tormey informed St. Jude of his wife’s condition. He began inquiring about when St. Jude would hire a TSS and negotiated sales quotas accordingly. Tormey rejected the TSS assigned in October 2003. Tormey’s wife’s condition worsened in November; Tormey thereafter did not meet quotas. She died in May, 2004. Two weeks later, St. Jude, terminated the agreements. Tormey claimed that he accepted St. Jude’s proposal that if Tormey waived any actions against St. Jude, it would waive repayment of the $650,000 and presumed his obligations had been discharged. There are no written documents and St. Jude denies any such agreement. The district court rejected Tormey’s counterclaims alleging fraud and, after a jury was unable to reach a verdict, entered judgment for St. Jude on the note, finding that it did not first commit a material breach. The Eighth Circuit affirmed. View "St. Jude Med. S.C., Inc. v. Tormey" on Justia Law