Justia Contracts Opinion Summaries

The plaintiff in the underlying case, Brian Barze, sought a writ of mandamus to direct the Jefferson Circuit Court to set aside an order sealing a motion to stay filed by one of the defendants, James Holbrook. Barze filed suit against Sterne Agee Group, Inc., and Holbrook, the then CEO of Sterne Agee. Barze included claims of promissory fraud and fraudulent inducement, breach of contract, conversion, and defamation. In his complaint, Barze alleged that, in spring 2009, Sterne Agee had approached him about leaving his old company and becoming the chief financial officer ("CFO") of Sterne Agee and that Holbrook had told him that, if he joined Sterne Agee, Sterne Agee would pay him severance pay of at least one year's salary and bonus if the job with Sterne Agee did not work out. Barze alleged that he relied on Holbrook's promises and representations when he agreed to accept the job at Sterne Agee and when he left his former employer and gave up his opportunities there. Barze asserted that, after he started working with Sterne Agee, he was presented with an employment agreement to sign; that Holbrook assured him that the employment agreement was signed by all employees; that Holbrook assured him that Holbrook could and would take care of Barze and honor their oral agreement regarding the severance pay of at least one year's salary and bonus; and that Holbrook told Barze that he was committed to Barze as the long-term CFO of Sterne Agee. Barze asserted that, in reliance on Holbrook's assertions, he signed the employment agreement. Upon review of the dispute, the Supreme Court concluded that the trial court did not comply with the controlling case law procedure set forth in "Holland v. Eads" (614 So.2d 1012 (Ala. 1993)), it exceeded its discretion when it granted Holbrook's motion and directed the circuit clerk to seal Holbrook's motion to stay the underlying civil action. Accordingly, the Supreme Court granted the petition for the writ of mandamus and directed the trial court to vacate its July 23, 2014, order granting Holbrook's motion for leave to file his motion to stay under seal and sealing Holbrook's motion to stay. View "Ex parte Barze." on Justia Law

Krista Gilmore was employed by Excellence Community Management (ECM), an LLC, and signed an employment agreement containing restrictive covenants. The owners and operators of ECM later sold 100 percent of their membership interest in the LLC to First Services Residential Management Nevada (FSRM). Thereafter, Gilmore’s employment with ECM terminated, and Gilmore began working for Mesa Management, LLC. ECM sent Gilmore a cease-and-desist letter alleging that Gilmore violated her employment agreement by contacting ECM’s clients and soliciting them to hire Mesa. ECM filed a complaint seeking damages and injunctive relief against Gilmore and Mesa (collectively, Respondents). The district court denied ECM’s motion for a preliminary injunction, concluding that the agreement was not assignable to FSRM without Gilmore consenting to the assignment. The Supreme Court affirmed, holding (1) the sale of 100 percent of the membership interest in an LLC does not affect the enforcement of an employee’s employment contract containing a restrictive covenant because such a sale does not create a new entity, and therefore, ECM may enforce a restrictive covenant in Gilmore’s employment contract without Gilmore’s consent of assignment; but (2) ECM failed to show that it would suffer irreparable harm for which compensatory damages were not an adequate remedy if the district court did not enter a preliminary injunction. View "Excellence Cmty. Mgmt. v. Gilmore" on Justia Law

Ben Lack was employed as a draftsman at Marshall Hunn's architectural design firm. After Lack resigned from his position from a project for Hunn's client, Dan Wilson Homes, Dan Wilson hired Lack to complete the project. Hunn filed suit alleging that Lack and Wilson secretly agreed to cut Hunn out of the business relationship. The district court granted summary judgment to Lack and Wilson on many claims and ruled in favor of them on the remaining claims. The court affirmed the judgment, concluding that the district court did not clearly err in finding that Lack and Wilson never made the alleged secret agreement and Hunn's legal theories lack merit. View "Hunn v. Dan Wilson Homes Inc." on Justia Law

Plaintiffs-insurance intermediaries were Brown & Brown, Inc., a Florida corporation, and its New York subsidiary, Brown & Brown of New York, Inc. (BBNY). When Theresa Johnson began working for BBNY she signed an employment agreement that contained a Florida choice-of-law provision and a non-solicitation provision precluding Johnson from soliciting, accepting, or servicing any customer of Plaintiffs. One month after Johnson was terminated, she began working for a competitor of BBNY. Plaintiffs commenced this action against Johnson and her new employer (collectively, Defendants) alleging that Johnson breached the employment agreement by soliciting Plaintiffs’ customers. The Appellate Division dismissed the portion of the breach of contract cause of action based on the non-solicitation provision, concluding that the provision was overbroad and unenforceable and that the choice-of-law provision was unenforceable as against public policy. The Court of Appeals reversed, holding (1) the agreement’s choice-of-law provision was unenforceable in relation to the non-solicitation provision; and (2) questions of fact existed as to whether Plaintiffs engaged in overreaching or used coercion to obtain the non-solicitation restrictive covenant, and therefore, dismissal was inappropriate. View "Brown & Brown, Inc. v Johnson" on Justia Law

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