Justia Contracts Opinion Summaries

Defendant Richard Howell appealed a judgment in favor of plaintiff Kneebinding, Inc. on his counterclaims alleging breach of contract, tortious interference with contract, defamation, trademark violation, and misappropriation of trade secrets in this commercial contract and employment dispute. Howell contended on appeal that the trial court erred in concluding that: (1) a contractual release barred the counterclaims arising prior to the date of the release; and (2) the release was supported by sufficient consideration. In 2006, Howell formed Kneebinding, Inc. to develop a ski binding based on a new release mechanism that he had invented. John Springer-Miller provided major financing and received a controlling interest in the corporation. Pursuant to a series of agreements, Springer-Miller became the chairman of the board of directors and Howell was employed as president and chief executive officer. An employment agreement executed by the parties in November 2007 provided that Howell would be an at-will employee with an annual base and, in the event his employment was terminated "other than for Cause," Howell would receive severance payable in equal installments over a period of one year. Less than a year later, the company’s board of directors voted to terminate Howell’s employment without cause. Negotiations between the company and Howell over the terms of his departure resulted in a letter from Springer-Miller on behalf of the company to Howell confirming the terms of the severance arrangement. Pertinent to the appeal was an exhaustive list of claims which Howell agreed to release, "including, but not limited to," employment discrimination under federal and state law and tort and contract claims of every sort, subject to several exceptions, including Howell’s rights under the parties’ Voting Agreement and Investors’ Rights Agreement. In 2009, Kneebinding filed a lawsuit against Howell alleging that he had violated certain non-disparagement and non-compete provisions of their agreements, committed trademark violations and defamation, tortiously interfered with contracts between Kneebinding and its customers and distributors, and misappropriated trade secrets. Howell answered and counterclaimed, alleging counts for breach of contract, defamation, invasion of privacy, misappropriation, unfair competition, tortious interference with business relations, patent violations, and intentional infliction of emotional distress. Kneebinding moved for summary judgment on Howell’s counterclaims, asserting that they were barred by the release set forth in the letter agreement. The trial court granted the motion with respect to all of the counterclaims that arose prior to the execution of the release on and denied the motion as to those claims that arose after the release. Howell asserted that, in granting summary judgment on the counterclaims, the trial court erred in finding a valid release because he never signed the separate release of claims set forth in Attachment B to the letter agreement. Finding no reversible error, the Supreme Court affirmed the trial court. View "Kneebinding, Inc. v. Howell" on Justia Law

Most of the employees at a La Porte unit (“Unit”) of E. I. du Pont de Nemours and Company (“DuPont”) were covered by a collective bargaining agreement (“CBA”). When DuPont announced plans to spin off part of its operations, including the Unit, into a wholly owned subsidiary, DuPont Textiles and Interiors (“DTI”), almost all of the Unit employees moved to DTI, even though the CBA gave the employees the right to transfer to other DuPont jobs. DuPont subsequently sold DTI to Koch Industries, which reduced the former DuPont employees’ compensation and retirement benefits. Several of the former DuPont employees sued DuPont for fraudulently inducing them to terminate their employment and accept employment with DTI by misrepresenting that DTI would not be sold. The Fifth Circuit Court of Appeals certified questions of law to the Texas Supreme Court, which answered by holding (1) at-will employees cannot bring an action against their corporate employer for fraud that is dependent on continued employment; and (2) employees covered under a cancellation-upon-notice CBA that limits the employer’s ability to discharge its employees only for just cause cannot bring Texas fraud claims against their employer based on allegations that the employer fraudulently induced them to terminate their employment. View "Sawyer v. E.I. du Pont de Nemours & Co." on Justia Law

In 2011, the Montgomery County Council adopted Resolution No. 17-149 (Resolution), which “changed” three contract provisions for fiscal year 2012 in the pre-existing collectively-bargained agreement (CBA) with members of the County’s police force. Specifically, the Resolution changed certain employment benefits of the CBA. The Fraternal Order of the Police, Montgomery County Lodge 35 filed suit against the County and the Council, challenging the legality of the Council’s actions in adopting the Resolution and the actions of the Council and the County in implementing the changes in the resolution. The circuit court declared that the Council’s actions were permissible under the Police Labor Relations Act (PLRA), the Maryland Declaration of Rights, and the CBA. The court of special appeals affirmed. The Court of Appeals affirmed, holding that the Council acted within its authority under the PLRA in deciding not to fund fully - and thereby, to change - certain benefits in the CBA, where the changes were fiscal in nature and the County Executive and the FOP did not submit a re-negotiated agreement to the Council. View "Fraternal Order of Police Lodge 35 v. Montgomery County" on Justia Law

The Union filed suit against WUSA-TV, a television station, alleging that the station breached its contractual obligations by laying off a technician. Because the grievance did not "arise under" the 2008 bargaining agreement, and the 2012 agreement was not yet in effect, the district court concluded that the station was not obligated to arbitrate. The court affirmed, concluding that seniority provisions in the 2008 agreement did not create vested or accrued rights and therefore, the grievance was not arbitrable under the 2008 agreement. Nor do the qualified seniority protections against layoffs contained in the 2008 agreement survive expiration under normal principles of contract interpretation. Moreover, the union's extrinsic evidence was itself ambiguous. Finally, the court rejected the Union's claim that the grievance was arbitrable under the 2012 agreement. View "Int'l Brotherhood of Electrical Workers v. Detroit Free Press, Inc." on Justia Law

In 2007, Plaintiff was hired as a salesperson at Planet Group, Inc. As part of his employment, Plaintiff signed a Sales Compensation Plan, which set out the requirements for when a commission was earned and how it would be paid. In 2009, Plaintiff’s employment was terminated. Plaintiff filed an amended complaint against Planet Group, alleging that he was owed commissions on four of the projects he was working on that were ongoing at the time of his termination. The district court granted partial summary judgment to Planet Group on three of the projects, finding that the Compensation Plan required a signed contract prior to a commission’s being paid. Plaintiff appealed, arguing that Neb. Rev. Stat. 48-1229(4) does not permit an employer and an employee to contractually define when a commission becomes payable as “wages,” and therefore, he was entitled to commissions for two of the three projects at issue. The Supreme Court affirmed, holding (1) the 2007 legislative amendments to section 48-1229(4) allow an employer and employee to contractually define when a commission becomes payable; and (2) therefore, the commissions for the two projects were not payable to Plaintiff under the Compensation Plan. View "Coffey v. Planet Group, Inc." on Justia Law

The Minnesota Laborers Health and Welfare Fund (“the Funds”) filed a declaratory judgment action against Granite Re, Inc. seeking clarification of their right to payment on a surety bond. The district court granted summary judgment to Granite Re, concluding, among other things, that the Funds’ lawsuit was time-barred because the Funds failed to commence litigation within the one-year contractual limitations period set out in the bond. The court of appeals reversed and remanded, concluding that fraudulent concealment by the bond principal tolled the limitations period set out in the bond. The Supreme Court affirmed, holding (1) fraudulent concealment can be applied to a surety that was not involved in the fraudulent concealment by the principal; and (2) therefore, the one-year contractual limitations period set out in the bond may be tolled against Granite Re. View "Minn. Laborers Health & Welfare Fund v. Granite Re, Inc." on Justia Law

When Tyco Valves & Controls, L.P. decided to close one of its facilities located in Houston, Tyco offered certain employees retention agreements providing that, if the employees remained with the company through the facility’s closure, they would receive severance payments in the event they were not offered comparable employment with Tyco. After Tyco sold one of the production units located in the facility to another company, Plaintiffs, several former employees who had worked in that unit and been denied severance, filed a breach of contract action against Tyco. The trial court ruled in favor of the employees and awarded the severance pay. The court of appeals reversed. The Supreme Court affirmed, holding that the Employee Retirement Income and Security Act of 1974 preempted Plaintiffs’ breach-of-contract claims. View "Arsenio Colorado v. Tyco Valves & Controls, L.P." on Justia Law

Vista, plaintiff's employer, appealed the district court's denial of Vista's motion to compel arbitration of plaintiff's on-the-job injury claim. The court held that even if the Benefit Plan and the Arbitration Agreement were properly considered as part of a single contract, the termination provision found in the Benefit Plan did not apply to the Arbitration Agreement. Accordingly, the court concluded that the Arbitration Agreement was not illusory under Texas law because Vista's power to terminate the Arbitration Agreement was properly constrained. The court reversed and remanded for the district court to enter an order compelling arbitration. View "Lizalde v. Vista Quality Markets" on Justia Law

The Union sought to set aside an arbitration award that ruled in favor of the MADA and several member car dealerships. At issue was the transition between the 2006 collective bargaining agreement (CBA) and the 2010 CBA and its impact on above-scale time allowances for hybrid car warranty and recall work. The district court granted defendants' motion to dismiss under Rule 12(b)(6). The court agreed with the district court and found that the arbitrator was "warranted" in determining the CBA's plain language to be "silent or ambiguous with respect to the disputed issue - how the above-scale time allowances could be legitimately terminated." With MADA's attorney's unrebutted testimony and the letters documenting other dealerships' similar conduct to help the parties' past practice with respect to the ambiguous CBA language at issue, the court concluded that the arbitration award drew its essence from the CBA. Therefore, the court found no basis to vacate the arbitration award. The court affirmed the district court's order granting MADA's motion to dismiss with prejudice. View "Garage Maintenance, etc. v. Greater Metropolitan, etc., et al." on Justia Law

In 2003, a joint venture formed between llcs, TABFG and NT Prop, to trade securities. TABFG was responsible for trading and was comprised of three individual traders. NT Prop was to fund the venture, and included two limited liability corporations: NT Financial and Pfeil Commodities. The sole member of Pfeil Commodities was Richard Pfeil, the “money man.” NT Prop was managed by Pfeil’s attorney, and another. NT Prop provided $2 million start-up money and the traders earned profits of $3.4 million. Before forming TABFG, the traders were employees of SIG and were subject to restrictive covenants. The Agreement provided for payment of attorneys’ fees and costs necessary to escape the restriction. The traders sought a declaratory judgment. SIG responded by adding TABFG and NT Prop to the lawsuit, seeking disgorgement of profits. SIG obtained an injunction covering nine months after their departure from SIG, ending the joint venture. The parties failed to agree to a final accounting, but TABFG needed funds for a defense in the SIG lawsuit. Pfeil caused NT Prop to distribute $360,000 to TABFG, $533,023.69 to NT Financial, and $2,742,182.02 to Pfeil Commodities. TABFG sued, alleging that Pfeil, who was not an officer, director or manager of NT Prop, engineered a distribution of the bulk of the joint venture funds to himself and tortiously caused NT Prop to breach its obligations to TABFG under the Agreement. The district court judge agreed and awarded $957,659.68. The Seventh Circuit affirmed. View "TABFG, LLC v. Pfeil" on Justia Law