Justia Contracts Opinion Summaries

An associate, dismissed from the law firm after five years, sought bonuses and fees with respect to cases on which he worked that settled after his departure. He filed attorney's liens in Illinois state courts. When that strategy failed, he filed in federal court. The district court granted the defendants summary judgment. The Seventh Circuit reversed with respect to contract claims and claims under the Illinois Wage Payment and Collection Act (820 ILCS 115/2), but otherwise affirmed. No court has ever decided whether plaintiff's employment agreement entitled him to compensation for work he did on the cases at issue and he made a plausible case that the agreement entitles him to some portion of the revenues. His contract required the firm to give him 30 days' notice before terminating his employment, but it failed to do so.

Employee was injured in an automobile accident while working for Employer. Employer had a state-certified workers' compensation plan in effect that provided coverage to Employee, and some of Employee's medical bills were paid by the workers' compensation carrier. Employee had a policy with State Farm that included no-fault medical coverage. State Farm, however, denied coverage to Employee under a policy exclusion that denied coverage for an insured if any workers' compensation law applied to the insured's bodily injury. Employee filed an action against State Farm, seeking recovery of benefits under the no-fault medical provision. The circuit court granted summary judgment in favor of State Farm. The Supreme Court affirmed, holding that Employer was entitled to judgment as a matter of law where, in accordance with previous precedent, the exclusion clearly applied in all scenarios where workers' compensation benefits either had been paid in whole or in part or could be paid in whole or in part.

In 2005, during plaintiff's employment, defendant issued an employee handbook, including a provision that all employment-related disputes, whether initiated by an employee or by defendant, would be "resolved only by an arbitrator through final and binding arbitration," that disputes under the Fair Labor Standards Act were among those subject to the arbitration policy, that disputes cannot be brought as class actions or in representative capacities, and that the Federal Arbitration Act was its governing authority. Plaintiff signed a receipt that reiterated the arbitration policy. After his employment ended, plaintiff filed a class action, alleging violation of the FLSA by failing to adequately compensate him and other similarly-situated employees for overtime work. The district court denied a motion to stay proceedings and compel arbitration, finding that the provision was illusory because the employer retained the right to terminate or modify the provision at any time. The Fifth Circuit affirmed, noting that under the provision the company could make amendments almost instantaneously.

James Whealon was employed by the Anaconda School District pursuant to a series of employment contracts. Upon retirement, Whealon filed a formal grievance, asserting that, under the terms of his contract, he was entitled to payment of his health insurance premiums by the District until he reached the age of sixty-five. The District denied his claim. The County Superintendent granted summary judgment to the District, holding that the language of the contract was unambiguous and that Whealon was not entitled to the claimed benefits beyond the date of his retirement. The State Superintendent of Public Instruction reversed and remanded for an evidentiary hearing, holding that the language of the contract was ambiguous. The district court reversed and reinstated the County Superintendent's ruling. The Supreme Court affirmed the district court, holding (1) the district court did not err in holding that a county superintendent has authority to grant summary judgment; and (2) the district court did not err in reinstating summary judgment in favor of the district where the language of the agreement was unambiguous and the District was entitled to judgment.

This matter arose out of a dispute over whether the City of Dallas paid its firefighters and police officers in accord with a 1979 ordinance adopted pursuant to a voter-approved referendum. Claiming the City had not properly paid them, some firefighters and police officers brought a class action asserting breach of contract claims and seeking a declaratory judgment. For the reasons set out in City of Dallas v. Albert, the court concluded that: (1) the ordinance's adoption by means of referendum did not result in the City's loss of immunity from suit; (2) the City had immunity from suit as to the declaratory judgment action; (3) by non-suiting its counterclaim the City did not reinstate immunity from suit as to the Officers' claims that were pending against the City when it non-suited the counterclaim; and (4) the case must be remanded for the trial court to consider whether the Legislature waived the City's immunity by amending the Local Government Code.

This case arose when plaintiff filed suit against its former employee and the employee's new employer for breach of contract and breach of fiduciary duty, claiming, among other things, that the new employer had solicited and accepted business from clients and prospects of plaintiff who were serviced by the new employer or where the new employer supervised the solicitation of activities related to the client or potential client. At issue on appeal was whether a covenant not to compete signed by a valued employee in consideration for stock options, designed to give the employee a greater stake in the company's performance, was unenforceable as a matter of law because the stock options did not give rise to an interest in restraining competition. The court held that, under the terms of the Covenants Not to Compete Act, Tex. Bus. & Com. Code ch. 15, the consideration for the noncompete agreement was reasonably related to the company's interest in protecting its goodwill, a business interest the Act recognized as worthy of protection. The noncompete was thus not enforceable on that basis. The court reversed the court of appeals' judgment and remanded to the trial court for further proceedings.

Plaintiff alleged infringement of patents covering systems and devices for testing blood samples against a competitor in the diagnostic field. The patents at issue name defendant as the assignee. Plaintiff claimed ownership based on confidentiality and non-competition clauses in employment and consulting contracts between its predecessor and an employee, the inventor. The district court dismissed, finding that plaintiff lacked standing because the 1999 Consulting Agreement did not continue the 1984 Agreement’s Disclosure and Assignment Covenant. The Federal Circuit affirmed, holding that the company lacked standing with respect to rights assigned long after the inventor resigned from the company.

Plaintiff, producer of ready-mix concrete, commenced this action to vacate an arbitrator's order to provide plaintiff's employee with a second Functional Capacity Evaluation (FCE) under the company's return-to-work policy and to assign the employee work as a ready-mix truck driver, restoring his seniority if he passed the FCE. The district court granted summary judgment for the union and enforced the award. The court held that the district court properly rejected plaintiff's petition to vacate the award where the arbitrator's decision drew its essence from the collective bargaining agreement's management rights provision as construed by the parties. The court also held that plaintiff's contention that the award was contrary to federal law was without merit.

Plaintiff-Appellant Dr. John Noak was dismissed as the medical director for Prison Health Services, Inc. (PHS). He appealed the district court's grant of summary judgment in favor of the Idaho Department of Correction (IDOC) on claims of breach of an implied covenant of good faith, intentional and negligent infliction of emotional distress, defamation, and intentional interference with contract. A 2004 investigation into how Plaintiff treated a female inmate at an IDOC facility lead to IDOC demanding that PHS replace Plaintiff as medical director. Finding no error in the district court's judgment, the Supreme Court affirmed the grant of summary judgment in favor of IDOC.

Plaintiff, a former police officer, filed an action against Defendants, the Town of Portsmouth, its then chief of police, and a now retired lieutenant, alleging several causes of action arising from an investigation into Plaintiff's conduct during an officer training exercise. The superior court entered judgment in favor of Defendants. The Supreme Court affirmed in part and vacated in part, holding (1) the trial justice properly granted judgment as a matter of law in favor of Defendants on the claims of malicious prosecution and tortious interference with contractual relations; but (2) the trial justice erred by granting Plaintiff's R.I. R. Civ. P. 12(b)(6) motion to dismiss the chief of police and lieutenant's counterclaim for defamation arising from an inflammatory letter that Plaintiff submitted to the town council to notify the council of his forthcoming suit in accordance with R.I. Gen. Laws 45-15-5 where (i) absolute privilege did not apply in this instance because the notice required by section 45-15-5 was not part of a judicial or quasi-judicial proceeding, and (ii) baseless claims and allegations made by parties who must provide notice under section 45-15-5 are not protected by absolute immunity under McDonald v. Smith. Remanded.