Justia Contracts Opinion Summaries

Petitioner, The Affiliated Construction Trades Foundation (ACT), filed a declaratory judgment action seeking a declaration that a public highway construction contract awarded to Respondent, Nicewonder Contracting, Inc., by Respondent, West Virginia Department of Transportation, Division of Highways (DOH), violated state competitive bidding and prevailing wage laws. The circuit court dismissed ACT's action, finding it lacked standing to challenge the highway construction contract. The Supreme Court reversed, finding that ACT had representative standing to seek the declarations. On remand, the circuit court determined that the Court's opinion in ACT I did not completely decide the issue of ACT's standing and ordered that ACT join the Federal Highway Administration (FHWA) as a defendant in the action. The Supreme Court subsequently granted ACT's requested writ of prohibition because the circuit court did not give effect to the mandate of the Court in ACT I, holding (1) ACT, as a matter of law, had standing to prosecute its lawsuit; and (2) FHWA was not an indispensable party to the lawsuit.

Defendant appealed the district court's grant of partial summary judgment in favor of CGI in its action seeking "appropriate equitable relief" under section 502(a)(3) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. CGI appealed the district court's grant of partial summary judgment in favor of defendant's counsel and codefendant, dismissing the codefendant from the action. CGI also appealed the district court's grant of proportional fees and costs to the codefendant, deducted from CGI's recovery from defendant. The court affirmed the district court's grant of summary judgment in favor of the codefendant, dismissing it from the action. However, because the court saw no indication that in fashioning "appropriate equitable relief" for CGI, the district court did more than interpret the plain terms of the reimbursement provision, and no indication that the district court considered traditional equitable principles in assigning responsibility to CGI for attorneys' fees and costs, the court vacated the judgment in favor of CGI, vacated the judgment that the codefendant deducted fees and costs from CGI's entitlement, and remanded to the district court for further proceedings.

Bill Kuhl brought wrongful termination claims against his former employer, Wells Fargo Bank, asserting claims for breach of an express contract of employment, breach of an implied contract of employment, promissory estoppel, and tortious breach of the implied covenant of good faith and fair dealing. After the parties engaged in discovery, Wells Fargo moved for summary judgment. Kuhl resisted that motion. After a hearing, the district court granted summary judgment in favor of Wells Fargo. The Supreme Court affirmed, holding that the district court did not err in granting summary judgment in favor of Wells Fargo on any of Kuhl's claims.

Plaintiff, an African-American male of Nigerian origin, was hired by Atlantek, Inc. Zebra Technologies later acquired Atlantek. Three years later, Plaintiff was laid off. Plaintiff signed a release document and submitted it to Zebra Atlantek without consulting with his attorney. According to another document received by Plaintiff, Plaintiff's receipt of separation benefits was contingent on the receipt by Zebra Atlantek of a signed copy of the release document wherein Plaintiff released any claims under the Rhode Island Fair Employment Practices Act (FEPA) or any state law prohibiting employment discrimination or harassment. Plaintiff later commenced an action against Defendants, Zebra Atlantek and several individuals, alleging that he had been discriminated against in violation of the FEPA and State Civil Rights Act. Defendants counterclaimed, alleging that Plaintiff's filing of the lawsuit constituted a material breach of the release document. The superior court granted summary judgment in favor of Defendants. The Supreme Court affirmed, holding that the hearing justice did not err in granting summary judgment in favor of Defendants, holding that FEPA did not render the release document void as it applied to Plaintiff's pending FEPA claims.

Appellants, a clinic study center and three medical doctors, filed an action against Appellees, Dr. Samuel and Marilyn Boellner, alleging breaches of contract for a covenant not to compete, tortious inteference with a business expectancy, defamation, and injunctive relief. Appellees counterclaimed for breach of contract, wrongful termination, and declaratory judgment on the noncompete agreement. The trial court returned verdicts in favor of both Appellants and Appellees. Appellants later caused a writ of garnishment to be issued to reach assets of Marilyn Boellner held in an Individual Retirement Account (IRA). Appellants moved to declare the IRA statute unconstitutional. The circuit court denied Appellants' motion and quashed the writ of garnishment. Appellants appealed. The Supreme Court affirmed, holding that the statute was constitutional, as the IRA exemption provided in Ark. Code Ann. 16-66-220(a)(1) is not an absolute exemption of all personal property, and, as such, does not offend Ark. Const. art. IV, section 2.

The Supreme Court granted certiorari to review a Memorandum Opinion of the Court of Appeals and to address four issues stemming from a lawsuit by LensCrafters to enforce a noncompete provision against optometrist Dennis Kehoe after a sublease contract between the two parties ended. After review of the "complex, convoluted, and contentious eleven-year dispute," the Supreme Court held that (1) the district court properly dismissed LensCrafters' breach of contract claim on summary judgment because LensCrafters terminated the parties' contract as a matter of law and, with it, the contract's noncompete provision; (2) the district court did not abuse its discretion when it denied Kehoe's request to supplement his pleadings shortly before trial; and (3) summary judgment dismissing Kehoe's malicious abuse of process and tortious interference with contract counterclaims was proper because Kehoe did not demonstrate genuine issues of material fact. Because we hold that the noncompete provision was not in effect during any relevant time, the Court did not address Kehoe's fourth issue, whether the provision would have been contrary to public policy. Accordingly, the Court affirmed the Memorandum Opinion of the Court of Appeals in part and reversed in part.

Plaintiff Susan Jeffery appealed a superior court order that granted summary judgment in favor of Defendant City of Nashua on her wrongful discharge and breach of contract claims. Plaintiff worked for the City since 1977 in the payroll department. She became the City's risk manager in 1998. n 2004, Plaintiff became concerned that her direct supervisor, Maureen Lemieux, did not understand the budgetary process because "she wanted to level fund the health line items" in the City’s 2005 fiscal year budget. Plaintiff raised her concerns with Lemieux "dozens of times," but Lemieux responded that "she was comfortable with her numbers." In April 2005, the City discovered that the health insurance line item was underfunded. Consequently, the Board of Aldermen convened an ad hoc health care budget committee to investigate the circumstances leading up to the shortfall. Plaintiff alleged that between her two interviews with the committee, she was summoned to a meeting with the mayor, at which he asked her whether she, as department manager, should be held responsible for the budget shortfall. Plaintiff refused to accept responsibility, explaining that she had tried to prevent the error by raising her concerns with Lemieux and others. Further, Plaintiff alleged that on a separate occasion, the mayor suggested that they "all share the blame," but she refused his suggestion. Subsequently, Plaintiff started receiving poor performance evaluations and later received disciplinary actions. She would later be demoted. Shortly after her demotion, Plaintiff took a leave of absence under the Family and Medical Leave Act; while still on leave, Plaintiff resigned her position, stating she wished to retire early. Three years after her resignation, Plaintiff sued the City alleging constructive discharge and breach of contract. Finding that Plaintiff's suit fell outside the statute of limitations, and that Plaintiff had no enforceable employment contract with the City, the Supreme Court affirmed summary judgment granted in favor of the City.

Nation left his position as CEO of Spring Air in 2007 with a severance package of $1.2 million to be paid over 15 months provided he did not work for competitors through 2008. Spring Air paid Nation more than $836,000, but in August 2008 ceased making payments due to liquidity problems. Spring Air ultimately filed for bankruptcy. Nation sued defendant, Spring Air's majority shareholder and primary creditor, asserting tortious interference with contract: that defendant used its majority position on Spring Air's board of directors to induce the company to breach his severance agreement. The district court dismissed, finding that defendant was conditionally privileged based on its status as Spring Air's majority shareholder and that Nation had not presented sufficient evidence to overcome the privilege. The Seventh Circuit affirmed. Illinois law recognizes that a corporation's directors, officers, and shareholders are conditionally privileged to interfere with the corporation's contracts. The privilege is an aspect of the business-judgment rule. Nation failed to overcome the privilege with evidence that defendant induced breach for the specific purpose of injuring him or to further its own goals and that it acted against the best interests of the corporation.

In these consolidated cases, the primary issue was whether there was liability insurance coverage for Plaintiffs' injuries resulting from an altercation on the premises of Insured's bar and restaurant. Insurer denied coverage and declined to defend Insured based on its determination that there was no coverage under the terms of the policy. The trial court entered an order finding that the altercation was covered under both the commercial general liability and liquor liability provisions of the policy. The court of appeals ruled that the liquor liability coverage agreement provided coverage for the judgments but that the commercial general liability agreement provided no coverage. The Supreme Court reversed, holding (1) based on the clear terms of the policy agreement, there was no liability coverage because the incident arose from an assault and battery, which was an excluded cause, and because there was no nonexcluded concurrent cause to provide coverage; and (2) estoppel by judgment did not apply to collaterally estop Insurer from arguing the lack of coverage.

Monte Sano Research Corporation (MSRC), Steven L. Thornton, and Steven B. Teague appealed a preliminary injunction entered against them in an action brought by Kratos Defense & Security Solutions, Inc., a California-based aerospace and defense contractor, Digital Fusion, Inc. (DFI), an Alabama-based holding company, and Digital Fusion Solutions, Inc. (DFSI), a Florida corporation and a subsidiary of DFI (referred to collectively as Kratos), alleging breach of the duty of loyalty, breach of contract, tortious interference with business and contractual relationships, and civil conspiracy. Additionally, Kratos sought injunctive relief. MSRC was formed in 2009 to procure government subcontract work at Redstone Arsenal in Huntsville. Thornton and Teague were employees of DFI, which also engaged in government subcontract work; they became employees of Kratos when Kratos Defense merged with DFI in 2008. Kratos terminated Teagues employment on June 23, 2011. Thornton resigned from Kratos four days later. A dispute arose between the parties which implicated the employment contracts for Thornton and Teague when they sought subsequent work. Upon review of this case, the Supreme Court found that because the provisions of Rule 65(d)(2) of the Alabama Rules of Civil Procedure were not complied with and because there was no evidence of an irreparable injury or the lack of an adequate remedy at law, the trial court erred in issuing the preliminary injunction. The Court reversed the trial courts order entering the preliminary injunction and remanded the case to the trial court with directions that it dissolve the injunction it issued September 10, 2011.