Justia Contracts Opinion Summaries

San Juan Coal Company and the International Union of Operating Engineers Local 953 entered into binding arbitration to determine whether union members on a certain schedule were entitled to holdover pay. The arbitrator concluded that the union members were entitled to the extra pay, but on review, the district court overturned the arbitral award. Because the arbitrator’s interpretation was colorable, the Tenth Circuit held that the district court improperly substituted its interpretation of the agreement: "[a]n arbitrator's interpretation of an agreement, even one that is flawed or based on questionable findings of fact, is due the utmost judicial deference. It matters not that a reviewing court might offer a more cogent reading of the agreement; the arbitrator's interpretation must be upheld wholly unless it is without any textual basis."

During the course of his employment as a police officer for the Town of Abingdon, Kevin Christy suffered injuries from an automobile accident. Christy was insured under an automobile liability insurance policy issued by Mercury Casualty Company (Mercury). Christy submitted a claim to Mercury for payment of the portion of his medical expenses not paid by the Town's workers' compensation carrier. Mercury denied the claim, asserting that an exclusion in the policy barred Christy from receiving any payment for medical expenses because a portion of those expenses had been paid by workers' compensation benefits. Christy filed a warrant in debt against Mercury seeking contract damages. The district court entered judgment in favor of Christy. The circuit court reversed, concluding that, based on the unambiguous language of the exclusion, payment of workers' compensation triggered the exclusion and precluded payment by Mercury. The Supreme Court affirmed, holding that the language of the exclusion was clear and that the exclusion permitted Mercury to deny coverage for any expenses that would have been subject to workers' compensation coverage without regard to whether all of those expenses were actually paid by the workers' compensation carrier.

Plaintiff-Counterdefendant-Appellant David Oakes, M.D. was employed as a cardiologist by Defendant-Counterclaimant-Respondent Boise Heart Clinic Physicians, PLLC (BHC) from January 2000 until the end of July 2008, when he left to pursue other employment opportunities. While employed by BHC, Plaintiff had an employment agreement that entitled him to half the adjusted gross charges he generated. Because of his complicated arrangements with other service providers, Plaintiff's final payment was not calculated until after his departure. After his employment ended, Plaintiff corresponded with BHC regarding his final payment. Plaintiff never received payment. Instead, he received a series of letters that detailed the evolving computation of his final payment. BHC's last letter to Plaintiff included a demand for repayment. Plaintiff then sued claiming that BHC still owed him money under the employment agreement. In rendering its verdict, the jury was given a choice between three special verdict forms that corresponded with the three possible verdicts: one finding that neither party is entitled to recover from the other; one that finding that BHC owed money to Plaintiff; and one finding that Plaintiff owed money to BHC. The jury returned with a verdict in favor of Plaintiff, and against BHC, that awarded Plaintiff $2,043.92. Ultimately the district court entered a final judgment that awarded Plaintiff $2,043.92 and declared that neither party was the prevailing party for purposes of costs and attorney fees. Plaintiff appealed the "prevailing party" decision to the Supreme Court. e sought. The district court entered a judgment conferring to Oakes the amount awarded by the jury, but found that neither party was the prevailing party for purposes of costs or attorney fees. Upon review, the Supreme Court held that the district court abused its discretion by not finding Plaintiff to be the prevailing party. The case was remanded for a determination of costs and fees.

When Employee left his employment, Employee and Employer entered into a consulting agreement containing restrictive covenants prohibiting Employee from disclosing Employer's confidential information. After Employee purchased another competing company, Employer filed a motion alleging breach of the agreement and seeking a preliminary injunction to enforce the Agreement's covenants. The district court granted Employer's request, concluding that Employee had likely violated several provisions of the agreement and had misappropriated trade secrets in violation of Nevada's Uniform Trade Secrets Act. Employee then filed a motion to dissolve the preliminary injunction upon termination of the agreement, which the district court denied. The Supreme Court (1) affirmed the court's order granting preliminary injunctive relief; and (2) reversed the court's order denying Employee's motion to dissolve the injunctive provisions, finding that the court improperly relied on the terminated agreement in declining to dissolve the injunction and failed to make findings as to the continued existence of a trade secret and for what constitutes a "reasonable period of time" for maintaining an injunction under the Act.

The employer sought an early withdrawal from its obligation to make pension contributions to a multiemployer pension fund; it entered into a new collective bargaining agreement, six weeks before expiration of the existing agreement, that abrogated its obligation to make payments to the fund. The fund sued under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1145. The district court entered summary judgment in favor of the fund. The Seventh Circuit affirmed, rejecting an argument that the agreement was ambiguous in providing that the employer could not “prospectively” change its obligation.

Dorn Sprinkler, formed in 1977 and operated by its owner, David, failed to contribute to benefit funds required by its collective bargaining agreement for three months in 2006-2007. Employees organized a work stoppage. Sprinkler went out of business with its required contributions still unpaid. David’s son, Christopher, lead salesman at Sprinkler, had formed a company called Dorn Fire Protection during the 1990s but had not started doing business. Shortly before financial troubles at his father's business, Christopher began operations. The Union submitted a request to arbitrate to Fire Protection under the theory that it is an alter ego of Sprinkler. Fire Protection refused. The district court, finding that Fire Protection is not an alter ego of Sprinkler, granted summary judgment to defendants. The Sixth Circuit affirmed. The management structures at the companies were not substantially identical; there was no substantial continuity in employees, customers or equipment. There was no proof of intent to avoid the bargaining agreement.

Appellant Richard Dregseth appealed a district court's judgment that dismissed his equitable claims against Appellee Randy Brown. Appellant argued that the district court erred in failing to make findings of fact, failed to reject testimony and dismissed his promissory estoppel, equitable estoppel and unjust enrichment claims. In 1999, Appellant left his job at Bremer Bank to work for Appellee Brown at Capital Harvest, Inc., a captive finance company for AGSCO, Inc., a corporation owned Brown. Appellant worked for Brown until 2003, first at Capital Harvest then at AGSCO. In 2005, Appellee and two former Capital Harvest employees, John D. Erickson and Jon A. Ramsey, sued Brown and Capital Harvest for breach of contract, fraud, deceit, promissory estoppel, equitable estoppel, unjust enrichment and breach of fiduciary duty. Appellee claimed he was entitled to be paid the value of an ownership interest in Capital Harvest that Brown promised to provide as part of his compensation. Prior to trial, the district court dismissed all of Appellant's claims except for breach of contract and fraud. The Supreme Court affirmed in part, and reversed in part of the first appeal. The case was remanded for further proceedings on Appellant's deceit and equitable claims. On rehearing, the district court then dismissed the remaining claims, and the Supreme Court affirmed. In this case before the Supreme Court, the Court found that the district court's findings and conclusions were based on evidence from all of the witnesses, including Appellant, Brown and the economists who testified on behalf of both parties. Therefore the Court concluded the district court did not err relying on that evidence, nor did it err concluding under the facts of this case that Brown was not unjustly enriched by not paying Appellant for the value of the ownership interest in Capital Harvest that was not transferred by Brown. The Court affirmed the district court's judgment, finding no error to make findings of fact, to reject testimony or in dismissing Appellant's claims.

The issue before the Supreme Court in this case concerned whether Section 514(a) of the Employee Retirement Income Security Act of 1974 (ERISA), preempted the breach of contract claim asserted by Appellees Lawrence J. Barnett, Christine Cookenback, James M. Defeo, and Madlin Laurent against Appellant SKF USA, Inc. under Pennsylvania law. Appellees were salaried, non-unionized, employees of SKF, working in its Philadelphia plant. The Company also employed hourly unionized employees at the plant. In 1991, SKF announced its decision to shut down the plant and terminate all workers. Over the course of the next year, the effect of the closing on employee retirement rights and benefits became a matter of discussion between Appellees and their supervisors. Appellees' retirement and pension rights were set forth in the an ERISA plan which SKF maintained and administered. Appellees became aware that, as a result of collectively bargaining the effects of plant closing, SKF agreed that any union worker with 20 years of service and 45 years of age, as of March 10, 1993, the date on which the collective bargaining agreement then in effect expired, would be entitled to receive an immediate and full pension (the creep provision). Two years after their employment with SKF was terminated, and prior to the submission of pension applications, Appellees commenced a breach of contract action against SKF alleging that throughout the course of their employment with the Company, they were employed under the same or better terms and conditions, including "pension eligibility," as SKF’s union workers. Upon review of the trial court record, the Supreme Court found that Appellees' claim was preempted, and accordingly reversed the Superior Court's order that affirmed the trial court's denial of summary judgment in favor of SKF.

For over twenty-five years, the State required certain employees to work forty-hour weeks while requiring other employees to work only 37.5-hour weeks. Through the employees received the same biweekly paycheck, the effect of the State's policy was a disparity in actual hourly wage. The State ended the policy in 1993, but this class action was brought on behalf of those forty-hour employees. The court of appeals found (1) the merit employees were owed back pay on their statute-base claims from the day they filed their complaint or grievances until the day the State eliminated its split-pay system; and (2) the non-merit employees were owed back pay on their constitutional claims from the day the State eliminated its split-pay system and extending back approximately twenty years. The Supreme Court affirmed in part and reversed in part, holding that, under the doctrine of laches, the back pay recovery of the non-merit employees should be limited in the same manner as the court of appeals set forth for that of the merit employees.

Defendant-Appellant Nodak Mutual Insurance Company appealed from a judgment awarding Plaintiff-Appellee Barry Myaer $34,933.24 plus interest in his breach of contract action against Nodak. Upon review, the Supreme Court concluded the district court did not err in ruling Plaintiff was entitled to deferred commissions payable to him in December 2009, but did err in ruling those commissions could exceed 10 percent under the terms of the parties' contract.