Justia Contracts Opinion Summaries

The United States Court of Appeals for the Tenth Circuit certified a question of law to the Oklahoma Supreme Court on whether Progressive Northern Insurance Company's Underinsured Motorist (UM) Exclusion--which operated to deny uninsured motorist coverage to insureds who recover at least the statutorily mandated minimum in the form of liability coverage--contravened Oklahoma's Uninsured Motorist Statute, codified at 36 O.S. section 3636. The Supreme Court responded "yes:" Because of the sweeping nature of the UM Exclusion contained in the insurance policy at issue, Progressive found a way to entirely avoid providing the promised coverage. "[A]n insurer in Oklahoma cannot deprive its policyholder of uninsured-motorist coverage for which a premium has been paid through an exclusion that effectively erases its policyholder's choice to purchase that coverage in the first place. We conclude that Progressive's UM Exclusion contravenes section 3636 and is therefore void as against public policy." View "Lane v. Progressive Northern Ins. Co." on Justia Law

Tokiko Johnson's real property was damaged in a storm and she filed a claim with her insurance company. Johnson also executed an assignment of her insurance claim for the purpose of repairing the property with the execution in favor of Triple Diamond Construction LLC (the construction company). An appraiser retained by the construction company determined storm damage to the property in the amount of $36,346.06. The insurer determined the amount of damage due to the storm was $21,725.36. When sued, the insurer argued the insured property owner was required to obtain written consent from the insurer prior to making the assignment. The Oklahoma Supreme Court determined an insured's post-loss assignment of a property insurance claim was an assignment of a chose in action and not an assignment of the insured's policy. Therefore, the insured's assignment was not prohibited by either the insurance policy or 36 O.S. section 3624. Judgment was reversed and the matter remanded for further proceedings. The insurer's motion to dismiss the appeal was thus denied. View "Johnson v. CSAA General Insurance Co." on Justia Law

Plaintiff Signature Leasing, LLC requested a declaratory judgment regarding a contract containing an arbitration clause which Plaintiff alleged that Defendants Buyer's Group, LLC and Williams & Williams Marketing Services, Inc. had fraudulently induced Plaintiff to sign. Defendants filed motions to dismiss and motions to compel arbitration which the district court granted. The Court of Civil Appeals reversed and remanded to the district court. The underlying question presented for the Oklahoma Supreme Court's review was whether the district court or the arbitrator determined challenges of fraudulent inducement to the entirety of a contract which contains an arbitration clause under the Oklahoma Uniform Arbitration Act (OUAA). The Court determined the arbitrator makes that determination, and affirmed the judgment of the district court compelling the matter to arbitration. View "Signature Leasing, LLC v. Buyer's Group, LLC" on Justia Law

The Oklahoma Supreme Court granted certiorari to address first impression questions of: (1) whether a home warranty plan met the definition of an insurance contract; (2) and if it was insurance, whether a forced arbitration clause in such a contract was unenforceable under the Oklahoma Uniform Arbitration Act; (3) whether 12 O.S. 2011 section 1855 of the Oklahoma Uniform Arbitration Act was a state law enacted for the purpose of regulating insurance under the McCarran-Ferguson Act; and (4) whether pursuant to the McCarran-Ferguson Act, did section 1855 preempted the application of the Federal Arbitration Act. The Supreme Court answered all questions in the affirmative. View "Sparks v. Old Republic Home Protection Co., Inc." on Justia Law

The Tenth Circuit Court of Appeals certified two questions of law to the Oklahoma Supreme Court. Billy Hamilton, a small-business owner in Council Hill, Oklahoma, filed a claim in December 2015 with his insurer, Northfield Insurance Company, seeking coverage for his building's leaking roof. Northfield twice denied his claim: once in February 2016, and again in April 2016. Hamilton filed suit against Northfield in November of that year, alleging bad-faith denial of his insurance claim and breach by Northfield of the insurance contract. Hamilton rejected a proposed settlement, and the matter went to trial. A jury awarded him $10,652, the maximum amount of damages the judge instructed the jury it could award. Hamilton then sought attorney fees and statutory interest under 36 O.S. section 3629(B). Northfield responded that Hamilton was not the prevailing party under the statute, given that he had recovered less than its settlement offer to him. The federal district court agreed with Northfield, and Hamilton appealed to the Tenth Circuit Court of Appeals. Initially, a panel of that court affirmed the district court's determination that Hamilton was not the prevailing party for purposes of awarding attorney fees under section 3629(B). Following a petition for en banc rehearing by Hamilton and additional briefing by amicus curiae, the Tenth Circuit Court of Appeals granted panel rehearing sua sponte, vacated its opinion as to the issues raised in Hamilton's appeal, and certified the two questions to the Oklahoma Court. The questions were: (1) in determining which is the prevailing party under 36 O.S. 3629(B), should a court consider settlement offers made by the insurer outside the sixty- (formerly, ninety-) day window for making such offers pursuant to the statute?; and (2) should a court add to the verdict costs and attorney fees incurred up until the offer of settlement for comparison with a settlement offer that contemplated costs and fees? The Oklahoma Court answered both questions "no:" (1) a court may consider only those timely offers of settlement of the underlying insurance claim--and not offers to resolve an ensuing lawsuit that results from the insurer's denial of the same; and (2) this is strictly limited to the specific context of determining prevailing-party status under section 3629(B) alone. The Oklahoma Court expressed no opinion on a trial court's evaluation of the form of settlement offer described in the certifying court's second question when made outside the section 3629(B) setting. View "Hamilton v. Northfield Ins. Co." on Justia Law

Defendant-appellee TAMKO Building Products, Inc. was a roof shingle manufacturer incorporated in Missouri. Plaintiffs-appellants were homeowners whose contractors installed Defendant's shingles on homeowner's roof. Plaintiffs filed suit alleging they were entitled to compensation for damage to their home caused by Defendant's faulty shingles and the expense of installing a new roof. Defendants moved to stay proceedings and compel arbitration pursuant to an arbitration agreement on the shingle's packaging. The trial court granted the Defendant's Motion to Stay Proceedings and Compel Arbitration concluding the Plaintiffs were charged with the knowledge of the contract even if they did not read it, that TAMKO did not waive its right to compel arbitration, and that the contract was not unconscionable. Plaintiffs appealed. The Oklahoma Supreme Court reversed, finding that the arbitration clause at issue in this case was printed on the shingles' wrapping, which was seen only by the contractors installing them. The wrapping was discarded once the shingles were unpackaged and placed on rooftops. The Supreme Court concluded the Homeowners were not bound by the arbitration agreement: "n implied agent whose sole authority is to select and install shingles does not have the authority to waive the principal's constitutional rights. Further, the intentional printing of an agreement to waive a constitutional right on material that is destined for garbage and not the consumer's eyes is unconscionable. The Homeowners never had an opportunity to make a knowing waiver of access to the courts." View "Williams v. TAMKO Building Products, Inc." on Justia Law

This case centered on a dispute between Green Meadow Realty Co. (Realtor) and Roger and Mary Gillock (Owners) over Realtor's right to a commission. Realtor sued to recover a commission on a sale to certain buyers that Owners believed were excluded from the listing agreement. Realtor relied on an addendum to the listing agreement that limited the period of time in which an excluded sale could occur as well as the fact that the sale closed outside the time period. Owners claimed they insisted on a complete exclusion and did not knowingly agree to a time limit for the excluded sale, despite having signed the addendum. Owners asserted that they signed the addendum without reading it based on Realtor's representation that it set forth "your exclusion." The trial court concluded Owners were bound by the addendum, having had the opportunity to read it and not doing so. The trial court granted summary judgment to Realtor. The Court of Civil Appeals affirmed the summary judgment awarding Realtor the commission, but reversed for further proceedings on a counter claim by Owners. Owners sought certiorari review. Realtor did not. The trial court and Court of Civil Appeals regarded Owners' failure to read the addendum when presented with it to be dispositive. The Oklahoma Supreme Court found while this was certainly important, ultimately, the communications and conduct of the parties with respect to the addendum "must be judged in the totality of the circumstances surrounding its creation. The conflicting positions and evidentiary materials of the parties in the case at hand pose a comparable controversy that would preclude summary judgment on Realtor's claim for a commission." View "Green Meadow Realty Co. v. Gillock" on Justia Law

Insight Equity, a private-equity firm headquartered in Southlake, Texas, purchased Berry Family Nurseries, a nationwide wholesale nursery company headquartered in Tahlequah, Oklahoma, for $160 million. The Purchase Agreement entered into by the parties contained a Texas choice-of-law provision. The Agreement also contained a five-year non-compete provision, prohibiting the owners of Berry Family Nurseries, Bob Berry and Burl Berry, from owning a competing wholesale nursery company for five years. Park Hill Nursery, a nursery also located in Tahlequah, and owned by the Berrys, was not included in the Agreement, but the Agreement allowed the Berrys to continue to own and operate Park Hill Nursery so long as it did not compete with the newly formed BFN Operations. The parties performed under the terms of the Agreement for approximately three years until the Berrys, through Park Hill Nursery, began selling to several of BFN's largest customers. The Berrys sought a declaration that the restrictive covenants were unenforceable and void under Oklahoma law. BFN filed a counterclaim, seeking injunctive relief and monetary damages for the Berrys' breach of the covenants. Upon review, the Oklahoma Supreme Court concluded the Texas choice-of-law provision was valid, and the non-compete was enforceable under Texas law. The Berrys breached the non-compete, and Park Hill Nursery tortiously interfered with the parties' Agreement. BFN was entitled to injunctive relief through December 7, 2015, and was also entitled to monetary damages. The trial court's determination that BFN was entitled to attorney's fees was not a final judgment, and appeal of that issue was deemed premature. View "Berry & Berry Acquisitions v. BFN Properties" on Justia Law

Insight Equity, a private-equity firm headquartered in Southlake, Texas, purchased Berry Family Nurseries, a nationwide wholesale nursery company headquartered in Tahlequah, Oklahoma, for $160 million. The Purchase Agreement entered into by the parties contained a Texas choice-of-law provision. The Agreement also contained a five-year non-compete provision, prohibiting the owners of Berry Family Nurseries, Bob Berry and Burl Berry, from owning a competing wholesale nursery company for five years. Park Hill Nursery, a nursery also located in Tahlequah, and owned by the Berrys, was not included in the Agreement, but the Agreement allowed the Berrys to continue to own and operate Park Hill Nursery so long as it did not compete with the newly formed BFN Operations. The parties performed under the terms of the Agreement for approximately three years until the Berrys, through Park Hill Nursery, began selling to several of BFN's largest customers. The Berrys sought a declaration that the restrictive covenants were unenforceable and void under Oklahoma law. BFN filed a counterclaim, seeking injunctive relief and monetary damages for the Berrys' breach of the covenants. Upon review, the Oklahoma Supreme Court concluded the Texas choice-of-law provision was valid, and the non-compete was enforceable under Texas law. The Berrys breached the non-compete, and Park Hill Nursery tortiously interfered with the parties' Agreement. BFN was entitled to injunctive relief through December 7, 2015, and was also entitled to monetary damages. The trial court's determination that BFN was entitled to attorney's fees was not a final judgment, and appeal of that issue was deemed premature. View "Berry & Berry Acquisitions v. BFN Properties" on Justia Law

Plaintiff Stacy Gaasch, as personal representative for the Estate of Troy Gaasch, filed suit against St. Paul File and Marine Insurance Company, alleging the insurance company failed to timely provide reasonable and necessary medical treatment as ordered by the Workers' Compensation Court. Troy required multiple surgeries over several years due to his work-related injury. Troy was hospitalized due to his work-related injury. He allegedly became malnourished with accompanying weight loss and different physicians recommended a nutritional consult. A nurse case manager recommended monthly a nutritional consult. Troy died during his hospitalization approximately six months after the initial recommendation for a nutritional consult. Prior to his work-related injury, Troy underwent a gastric bypass surgery and allegedly suffered from a malabsorption syndrome secondary to this surgery. A disagreement arose between insurer and Troy concerning whether the insurer was required to pay for a nutritional consult. Insurer claimed Troy's nutritional problems were created prior to his work-related injury and his nutritional state in the hospital was not due to the work-related injury. The company moved for summary judgment which was granted. Plaintiff appealed. The Oklahoma Supreme Court held: (1) Plaintiff's district court action alleging breach of contract also included a request for damages resulting from the death of the workers' compensation claimant; (2) the district court action was based upon alleged delay by a workers' compensation insurer in providing medical care as previously awarded by the Worker's Compensation Court; and (3) the district court action against the workers' compensation insurer was precluded by an exclusive remedy provided by the Workers' Compensation Act. “Plaintiff attempts to go around this procedure we classified as a ‘jurisdictional requirement’ . . .by characterizing the claim as a breach of contract and an action for damages resulting from an alleged wrongful death. The clear public policy expressed in the amended version of Art. 23 sec. 7 requires available workers' compensation remedies for any type of wrongful death claim to be pursued in the Workers' Compensation Court when required by the workers' compensation statutes.” View "Gaasch v. St. Paul Fire & Marine Ins. Co." on Justia Law