Justia Contracts Opinion Summaries

Plaintiff Leonard Brown entered into an employment agreement with the Yellowstone Club that employed Brown for a term of three years and provided that Brown's employment could be terminated at any time without cause. After six months, the Club terminated Brown's employment without cause. Brown brought an action for damages against the Club under the Wrongful Discharge from Employment Act. The district court granted the Club's motion to dismiss the action based upon Mont. Code Ann. 39-2-912(2), which exempts from the Act an employee covered by a "written contract of employment for a specified term." The Supreme Court reversed the judgment of the district court, holding that if an employment contract for a specific term also allows the employer to terminate at will, it is not a "written contract for a specific term" under Section 39-2-912. Therefore, a discharged employee covered by such a contract is not excluded by the statute from bringing a claim under the Act.

Twenty three former tribal employees sued the Seneca-Cayuga Tribe of Oklahoma for breach of employment contracts. The contracts contained a limited waiver of sovereign immunity. Tribal law requires that waiver of sovereign immunity must be consented to by the Business Committee of the Tribe by resolution. The trial judge, on motion for reconsideration, granted the Tribe's motion to dismiss for lack of subject matter jurisdiction and dismissed the case. On appeal, the question before the Supreme Court was whether the Tribe expressly and unequivocally waived its sovereign immunity with respect to Plaintiffs' employment contracts. Upon review of the contracts and the applicable tribal resolutions and legal standards, the Supreme Court held that waiver of sovereign immunity was neither expressed nor consented to in the Business Committee's resolutions that authorized the Chief to sign the employment contracts. The Court affirmed the lower courtâs decision.

Claimant Anthony Traugott, a Kentucky resident, filed an application for benefits alleging that he injured his left arm in Missouri while working for defendant-employer under a contract of hire. The employer was headquartered in Rhode Island and had no office in Kentucky. The employer denied the claim on the grounds that Kentucky lacked extraterritorial jurisdiction over the matter under Ky. Rev. Stat. 342.670. The ALJ dismissed the claim based on findings that the claimant's employment was not principally localized in Kentucky and that the contract for hire was not made in Kentucky. The claimant appealed, and the Workers' Compensation Board affirmed, noting that the claimant failed to petition for reconsideration and that the record contained substantial evidence to support the ALJ's legal decision. The Court of Appeals affirmed. On appeal, the claimant maintained that the court erred by failing to find that contract for hire was made in Kentucky. The Supreme Court affirmed, finding the record contained no evidence to support claimant's argument.

Petitioner filed suit against respondent for breach of contract and breach of fiduciary duty. Respondent had been employed by petitioner since 1983 and rose to become a managing director. In 2005, respondent signed a Non-Solicitation Agreement and notice form stating that he wanted to exercise a stock option to acquire 3000 shares of stock of petitioner's parent company. At issue 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 (Act), Tex. Bus. & Com. Code 15.50, 52, the consideration for the noncompete agreement (stock options) was reasonably related to the company's interest in protecting its goodwill, a business interest the Act recognized as worthy of protection. Therefore, the noncompete was not unenforceable on that basis. Accordingly, the court reversed the court of appeal's judgment and remanded to the trial court for further proceedings.

In 2003, the Division of Highways (DOH) let out a public highway construction contract to Nicewonder Contracting. The Affiliated Construction Trades Foundation (ACT) filed a declaratory judgment action against the DOH and Nicewonder, alleging that the construction contract violated state and federal law because the DOH did not seek public bids for the project and there was no prevailing wage clause in the contract. Upon remand from the district court, the circuit court granted Nicewonder's motion for summary judgment, finding ACT lacked standing. The Supreme court reversed, holding that the appropriate standard to determine if an organization has representative standing to sue on behalf of its members is when the organization proves that (1) at least one of its members would have standing to sue in their own right; (2) the interests it seeks to protect are germane to the organization's purpose; and (3) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. The Court found that ACT met all three prongs and thus had representative standing to seek the declarations contained in its petition.

Petitioner Willard Ryals appealed a trial court's order enforcing a creditor's judgment against him in favor of Respondent Lathan Company, Inc. (Lathan). In 2004, Lathan sued Ryals Construction Company for breach of a construction sub-contract. The contract called for Ryals to obtain workers' compensation insurance for the project. Lathan claimed it made an advance payment for the insurance. When Ryals failed to get the insurance, Lathan sued. No one appeared on behalf of Ryals on the trial date. A default judgment was entered on behalf of Lathan. Two years later, Lathan tried to collect on its default judgment by serving a post-judgment discovery request on Ryals Construction. The request went unanswered. Lathan filed a motion for sanctions, naming "Ryals Real Estate," Willard Ryals and Ryals Construction Company. Through counsel, Willard Ryals moved to strike the motion for sanctions which the trial court granted. Lathan then amended its complaint to substitute Willard Ryals with fictitious parties. Rather than re-allege the allegations of its first complaint, Lathan sought to hold Ryals Real Estate and Willard Ryals liable as alter egos for the judgment it held against Ryals Construction Company. After a bench trial, the trial court determined that Lathan's amended complaint did not technically substitute Willard Ryals and Ryals Real Estate for fictitiously named parties in the original complaint; it added them and asserted a new cause of action. The court found that Willard Ryals and Ryals Construction were liable for the creditor judgment. Willard Ryals appealed, arguing that the trial court lacked jurisdiction over Lathan's amended complaint. Upon careful consideration of the trial court record and the applicable legal authority, the Supreme Court dismissed the case as void: "The trial court's attempt to treat Lathan's amended complaint as a new action was in words only and was not sufficient to commence a new action." Accordingly, the trial court did not have jurisdiction to enter its judgment against Willard Ryals and Ryals Real Estate.

After lobbying for legislation authorizing collective bargaining for its members, the Maryland Transportation Authority Police Lodge #34 of the Fraternal Order of Police, Inc. (FOP) struck a written memorandum agreement with the Maryland Transportation Authority (MTA), in which the MTA agreed to fund a multi-million take-home vehicle (THV) program provided the bills were withdrawn and no collective bargaining legislation covering the MTA was passed that session. When a new governor took office, he declined to continue funding for the THV program. The FOP sued on theories of breach of contract and promissory estoppel. The circuit court granted MTA's motion to dismiss, finding that the agreement was unenforceable and violated the state's collective bargaining laws. The court of special appeals reversed. The Court of Appeals reversed the judgment of the appellate court and remanded the case with instructions to affirm the judgment of the circuit court, holding that because the legislature did not expressly authorize the MTA and its employees to bargain collectively at the time the agreement was executed, the agreement was unenforceable.

Plaintiff sued defendant asserting claims of breach of contract and various business torts in connection with defendant's alleged wrongful termination of plaintiff's employment affiliation with defendant. Plaintiff appealed from summary judgment in favor of defendant on one of its counterclaims against plaintiff for nonrepayment of the outstanding balance of a loan for which he had given a promissory note. The court held that the district court's order of summary judgment was inappropriate and dismissed the appeal for lack of appellate jurisdiction where the determination that the promissory note was independent of the promises made by defendant in the Affiliation Agreements would involve consideration of defendant's promises underlying plaintiff's claims for breach of contract and wrongful termination and of the relationships among those promises. Therefore, the court would be required to consider many of the same issues that would need to be considered in any appeal from a final judgment adjudicating plaintiff's claims.

In 2005, Southwest Emergency Physicians, Inc. (SWEP) and Alldredge entered into a contract under which SWEP's physician-employees staffed Lewis-Gale's emergency department. The contract provided that it could be terminated by either party without cause. In 2008, Alldredge became involved with some signatories to a letter addressed to the Lewis-Gale administration voicing work-related concerns. Certain Lewis-Gale administrators expressed concern that Alldredge had become involved in the hospital's personnel matters, and SWEP later terminated Alldredge's employment. Alldredge sued Lewis-Gale for tortious interference with her employment contract with SWEP, and the circuit court found in favor of Alldredge. The Supreme Court reversed, holding that the administrators' statements of intimidation and animus toward Allredge did not rise as a matter of law to the level of "improper methods"- such as fraud, deceit, or defamation - necessary to establish a cause of action for tortious interference with contract expectancy when a contract is terminable at will.

Robert Bennett signed a one-year employment agreement with Sage. That summer, Bennett communicated to Sage that he would require an increase of almost triple his salary or he would transition out of the company. When Sage did not meet his demands, Bennett continued working for Sage but pursued other employment opportunities. Bennett's employment was terminated that fall. Bennett filed a complaint against Sage seeking severance payments. During trial, the circuit court granted Sage's motion to amend its pleadings to include a defense of repudiation and submitted the issue of repudiation to the jury. The jury ruled against Bennett, and Bennett appealed. At issue was whether a party may repudiate his contractual duties after performance has commenced. The Supreme Court held that (1) repudiation may apply to a contract that has been partially performed when future obligations under the contract are repudiated, and (2) the circuit court properly rejected Bennett's argument that he did not repudiate the contract as a matter of law. Based on the evidence, the jury was entitled to conclude that Bennett's communications while he attempted to transition out of the company constituted a repudiation of his future obligations under the contract.