Justia Contracts Opinion Summaries

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.

The union contracts state that a cost-of-living allowance will be applied to offset health insurance costs for hourly-rated employees and not be applied to hourly wage rates. The contracts state that the COLA will be equal to 1¢ per hour for each full 0.3 of a point change in the Consumer Price Index calculation. An employer was calculating the COLA on a weekly basis and maintained that the adjustment was only $0.08 per week; the union argued that the adjustment should be calculated at $3.20 per week ($0.08 x 40 hours per week). In November 2008, an arbitrator rejected management's argument that the contracts included a scrivener's error and that the COLA should be calculated on a weekly, rather than hourly basis.The district court entered summary judgment in favor of the unions. The Eleventh Circuit affirmed. The Labor Management Relations Act, 29 U.S.C. 185, preempts employers' state law fraud counterclaims. An attempt to assert a federal common law "fraudulent procurement" defense was barred by the three-month limitations period for challenging the arbitrator's award.

The Board of Trustees of Stanford University filed suit against Roche Molecular Systems ("Roche") claiming that their HIV test kits infringed upon Stanford's patents. The suit stemmed from Stanford's employment of a research fellow who was arranged by his supervisor to work at Cetus, a research company developing methods to quantify blood-borne levels of HIV. The research fellow subsequently devised a PCR-based procedure for measuring the amount of HIV in a patient's blood while working with Cetus employees. The research fellow had entered into an agreement to assign to Stanford his "right, title and interest in" inventions resulting from his employment there and subsequently signed a similar agreement at Cetus. Stanford secured three patents to the measurement process. Roche acquired Cetus's PCR-related assets and commercialized the procedure into HIV test kits. At issue was whether the University and Small Business Patent Procedures Act of 1980, 35 U.S.C. 200 et seq., commonly referred to as the Bayh-Dole Act ("Act"), displaced the basic principle that rights in an invention belonged to the inventor and automatically vested title to federally funded inventions in federal contractors. The Court held that the Act did not automatically vest title to federally funded inventions in federal contractors or authorize contractors to unilaterally take title to such inventions and therefore, affirmed the judgment of the Court of Appeals for the Federal Circuit, which held that the research fellow's agreement with Cetus assigned his rights to Cetus, and subsequently to Roche; that the Act did not automatically void an inventor's rights in federally funded inventions; and thus, the Act did not extinguish Roche's ownership interest in the invention and Stanford was deprived of standing.

Plaintiff sued defendants over whether plaintiff had been fully paid for construction, rehabilitation, and maintenance work performed for defendants. Defendants moved for summary judgment on the ground, inter alia, that plaintiff was not licensed to do home improvement business in his individual name. At issue was whether plaintiff, by doing business in his own name and not the name on his license, violated Westchester County Administrative Code 863.319(1)(b). The court held that a licensed home improvement contractor who entered into a contract using a name other than the one on his license was not barred from enforcing the contract unless the other party was deceived or otherwise prejudiced by the misnomer. The court also held that the forfeiture of the right to be paid for work done was an excessive penalty in this case for what seemed to have been an inadvertent and harmless violation of the County Code. Accordingly, the order of the appellate division should be reversed with costs and defendants' motion for summary judgment denied.

When the plaintiff left the company, the parties entered an agreement about how the company would handle requests for references. In a suit alleging breach, the district court entered summary judgment in favor of the company and awarded $173,232 in attorney fees. On remand a jury returned a general verdict that the company did not breach the agreement and the court awarded $522,527 attorney fees and costs and expenses in the amount of $40,493.64. On a second appeal, the Seventh Circuit affirmed. The trial court properly allowed the company to argue waiver. Jury instructions concerning waiver, agency, breach, and damages were within the court's discretion. The award of fees was commercially reasonable and not inequitable.

Plaintiff, who was employed as the City of McDonough's ("city") chief building inspector, brought suit against the city when the city refused to pay him severance under an employment agreement contract. At issue was whether the contract was binding to a successor municipal council in violation of OCGA 36-30-3(a). The court held that the contract was ultra vires and void because the contract was renewed automatically and the severance package required the city to pay plaintiff his salary and benefits for an entire year after the year in which the contract was terminated.

New York Marine & General Insurance Company ("NYMAGIC") and Union Fire Insurance Company of Pittsburgh, Pennsylvania ("NUFIC-PA") were both insuring Bayou Steel Corporation ("Bayou") when an employee of Bayou's Illinois stevedoring contractor, Kindra Marine Terminal ("Kindra"), was injured during Kindra's unloading of Bayou's steel bundles from a vessel belonging to Memco Barge Lines ("Memco"). Memco had contracted with Bayou to haul the cargo for Bayou by barge from Louisiana to Illinois. At issue was whether Kindra was Bayou's contractor or subcontractor for purposes of the provision in NYMAGIC's policy that excluded coverage of Bayou's liability for bodily injury incurred by employees of Bayou's subcontractors but did not exclude coverage of such injuries incurred by Bayou's contractors. The court held that, because Bayou was the principal party, paying party, and not the prime contractor, performance party, under both its barge transportation agreement with Memco and its offloading agreement with Kindra, there was no way for Kindra to have been a subcontractor of Bayou within the intendment of NYMAGIC's policy's exclusion of coverage. Kindra contracted directly with Bayou, not with some contractor of Bayou, to offload Bayou's cargo, so Kindra was Bayou's contractor. Accordingly, NYMAGIC's coverage exclusion did not apply to the employee's injuries because he was the employee of a contractor of Bayou.

Petitioner Lucht's Concrete Pumping sought to enforce a non-compete agreement signed by Respondent Tracy Horner, a former at-will employee. Because Mr. Horner was an at-will employee at the time he signed the agreement, Lucht's argued that its forbearance from terminating Mr. Horner constituted adequate consideration for the non-compete agreement. The appellate court held that continued employment did not constitute adequate consideration once an employee started working for an employer because the employee is in the same position as he was before he signed the agreement. Upon careful consideration of the arguments and the applicable legal authority, the Supreme Court reversed the appellate court's decision. The Court found that an employer that forbears from terminating an existing at-will employee forbears from exercising a legal right, and that constitutes adequate consideration. The Court remanded the case for further proceedings.

This case involves the State's "working retiree program," and the propriety of its withholding retirement contributions from eligible members who returned to work with the state prior to July, 2005. Before that time, the program allowed employees to retire, then after a break, be re-hired and receive retirement benefits and a salary of up to $50,000 per year without having to pay into the pension plan. The State was ordered to refund any contributions made since July, 2005 by program members. In 2005, the State Retirement System Preservation and Investment Reform Act amended the program to require retired members pay the employee contribution as if they were active members but without accruing additional service credit. The State appealed the circuit court's order to refund the contributions. The retirees challenged the change in the program, arguing that it was unlawful for the State to change the terms of the working retiree program after the retirees "irreversibly retired" with the understanding that contributions to the pension plan would not be required. Upon careful consideration of the arguments and legal authority, the Supreme Court reversed the circuit court's holding with respect to the State's return of contributions since 2005. The Court found that the Legislature enabled the State to take the contributions when it amended the program by Act in 2005. The Court dismissed the Retirees' challenge to the State Retirement System Preservation and Investment Reform Act, finding no merit in their argument.