Justia Contracts Opinion Summaries

M & L Financial, Inc. (M&L) took 45 vivid yellow diamonds worth $4 million to Sotheby’s for auction on consignment. M&L told Sotheby’s it was the exclusive owner of the diamonds, but Sotheby’s later released them to a stranger without telling M&L. The diamonds vanished. M&L sued Sotheby’s, which escaped on demurrer.   The Second Appellate District reversed the breach of contract ruling and affirmed the tort ruling, and remanded. The court explained that there was no agreement yet that Sotheby’s definitely would auction the diamonds for M&L, but a potential auction was the point of Sotheby’s involvement. Sotheby’s breached this agreement by giving the diamonds to a stranger without M&L’s permission. This breach cost M&L the value of the lost diamonds.   The court further wrote that as for M&L’s negligence claim, however, the trial court’s ruling was right. The court explained that the economic loss rule governs. “In general, there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage.” (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922 (Sheen).) By deferring to the contract between parties, the economic loss rule prevents the law of contract and the law of tort from dissolving one into the other. M&L offers no good reason for departing from the fundamental economic loss rule, which bars its tort claim. View "M & L Financial v. Sotheby's" on Justia Law

Mecosta County Medical Center, d/b/a Spectrum Health Big Rapids (and others) sued Metropolitan Group Property and Casualty Insurance Company and State Farm Mutual Automobile Insurance Company at the Kent Circuit Court, seeking personal protection insurance (PIP) benefits related to a single-car crash involving Jacob Myers. Myers co-owned the vehicle involved in the crash with his girlfriend; his girlfriend’s grandmother had purchased a no-fault insurance policy on the vehicle through Metropolitan Group. Myers assigned plaintiffs his right to collect PIP benefits in the amount of his treatment bills. After the assignment, Myers sued Metropolitan Group and State Farm at the Wayne Circuit Court for PIP benefits related to other costs arising from the crash. Plaintiffs sued defendants at the Kent Court to recover on the assigned claim. Defendants moved for summary judgment against Myers at the Wayne Court. State Farm argued that because Myers did not live with the State Farm policyholders he was not covered by their policy. Metropolitan Group asserted that Myers was not entitled to coverage because he did not personally maintain coverage on the vehicle. The Wayne Court granted both motions and dismissed Myers’s PIP claim with prejudice. Myers did not appeal. While defendants’ motions were pending with the Wayne Court, Metropolitan Group also moved for summary judgment at the Kent Court on the same basis as its motion in the Wayne Court. However, the Wayne Court granted defendants’ motions before the Kent Court considered Metropolitan Group’s motion. After the Wayne Court granted summary judgment for defendants, defendants filed additional motions for summary judgment at the Kent Court, arguing plaintiffs’ claims were barred under the doctrines of res judicata and collateral estoppel because the Wayne Court had concluded that Myers was ineligible for PIP benefits. The Kent Court granted the motion, holding that plaintiffs’ claims were barred by res judicata and collateral estoppel. Plaintiffs appealed, and the Court of Appeals reversed in a split, unpublished opinion. The appellate majority held that an assignee was not bound by a judgment against an assignor in an action commenced after the assignment occurred. The Michigan Supreme Court affirmed, finding that plaintiffs were not in privity with Myers with respect to the judgment entered subsequently to the assignment, and therefore, plaintiffs could not be bound by that judgment under the doctrines of res judicata and collateral estoppel. View "Mecosta County Medical Center v. Metropolitan Group Property, et al." on Justia Law

Plaintiff appealed the district court’s summary judgment dismissal of the breach of contract claims that he has asserted, as a third-party beneficiary, against Defendant. The district court determined that the insurer’s duty to defend its insured, on which Plaintiff’s claims were based, was never triggered, relative to Plaintiff’s underlying personal injury suit, because the insured, N.F. Painting, Inc., never requested a defense or sought coverage.   The Fifth Circuit affirmed finding no error in the district court’s assessment under Texas law. The court explained that it is well-established, that under Texas law, despite having knowledge and opportunity, an insurer is not required to simply interject itself into a proceeding on its insured’s behalf.   Here, as stated, N.F. Painting did not seek defense or coverage from Defendant when it was served with Plaintiff’s original state court petition. The undisputed facts show that N.F. Painting chose, with the assistance of counsel, to handle Plaintiff’s personal injury claims in its own way, without involving Defendantin its defense, as it was entitled to do. And Plaintiff has put forth no evidence suggesting that Defendant was not entitled to rely on that decision. Having made that decision, it is N.F. Painting, and thus Plaintiff, as third-party beneficiary, not Defendant who must bear responsibility for any resulting adverse consequences. In other words, the law will not permit a third-party beneficiary to simply disregard an insured’s litigation decisions, i.e., essentially re-write history, merely because he has no other means of satisfying his judgment against the insured. View "Moreno v. Sentinel Ins" on Justia Law

The Supreme Court affirmed in part and vacated in part the judgment of the superior court granting summary judgment in favor of Defendants on all eight counts set forth in Plaintiffs' third amended complaint, holding that the hearing justice correctly granted summary judgment with respect to all counts except count eight.Plaintiffs filed a complaint containing counts sounding in, inter alia, breach of contract, fraud, negligent misrepresentation, and tortious interference with contractual relations. The hearing justice granted summary judgment against Plaintiffs on all counts, commenting that Plaintiffs' complaint was an attempt to circumvent the Statute of Frauds. The Supreme Court vacated in part, holding (1) the hearing justice erred in granting summary judgment on count eight since there were issues of material fact that precluded summary judgment; and (2) the judgment was otherwise without error. View "Loffredo v. Shapiro" on Justia Law

Plaintiff-appellant Nshan Simonyan had a dispute with his insurer, Nationwide Insurance Company of America ("Nationwide") over the company's handling of his defense arising out of a three-car accident in which Simonyan was a driver. Simonyan asked Nationwide to appoint, as "Cumis" counsel, a law firm that he had already hired to advance his affirmative claim against the driver who hit him. Nationwide refused. Simonyan appealed the dismissal of his case after the trial court sustained Nationwide’s demurrer to his second amended complaint without leave to amend. Simonyan argued his allegations were sufficient to state claims for breach of contract and breach of the implied covenant of good faith and fair dealing, and that the trial court abused its discretion in denying his motion to reconsider based on new allegations. Finding no reversible error, the Court of Appeal affirmed the trial court's judgment. View "Simonyan v. Nationwide Ins. Co. of America" on Justia Law

Plaintiff-appellant John Coates brought an action for breach of contract and breach of the duty of good faith and fair dealing against defendant-appellee Progressive Direct Insurance Company. Plaintiff was injured after a motorcycle collision; he was insured by Progressive under a motorcycle policy, an auto policy, and a policy providing UM coverage. Coates moved for partial summary judgment regarding his entitlement to uninsured/underinsured motorist benefits. Progressive moved for summary judgment regarding Coates' bad faith claim. Coates sought more time to conduct discovery to address Progressive's counterclaim on bad faith. The trial court granted Coates' Motion for Partial Summary Judgment, allowing his UM claim against Progressive. The trial court also granted Progressive's Motion for Summary Judgment, denying Coates' claim for breach of duty of good faith and fair dealing. The trial court denied Coates' Motion for Additional Time to Respond. After review of the parties’ arguments on appeal, the Oklahoma Supreme Court affirmed the trial court’s grant of partial summary judgment on Coates' UM claim. The Court reversed, however, the decisions granting Progressive's Motion for Summary Judgment and denying Coates additional time to respond to that motion. View "Coates v. Progressive Direct Ins. Co." on Justia Law

The Supreme Court vacated the order of the circuit court entering summary judgment in favor of Alexis Still in this dispute over whether there was a settlement agreement between the parties, holding that there was no settlement agreement between the parties.Clifton Jameson and Still were involved in an automobile accident. Jameson sent MetLife, Still's insurer, an offer to settle. MetLife made a counteroffer. Jameson took the counteroffer as a rejection of his offer to settle and sued Still for damages arising from the accident. MetLife then attempted to accept Jameson's original settlement offer. The circuit court granted summary judgment for Still, concluding that MetLife's counteroffer did not terminate the settlement offer and that its subsequent letter of acceptance created a settlement agreement between the two parties. The Supreme Court vacated the judgment, holding that that the circuit court erred in granting summary judgment on the basis of settlement because no settlement agreement was reached. View "Jameson v. Still" on Justia Law

Dual Diagnosis Treatment Center, Inc., d/b/a Sovereign Health of San Clemente, and its owner, Tonmoy Sharma, (collectively Sovereign) appealed the trial court's denial of Sovereign's motion to compel arbitration of claims asserted by Allen and Rose Nelson for themselves and on behalf of their deceased son, Brandon. The Nelsons alleged a cause of action for wrongful death, and on behalf of Brandon, negligence, negligence per se, dependent adult abuse or neglect, negligent misrepresentation, and fraud. According to the complaint, despite concluding that 26-year-old "Brandon requires 24 hour supervision ... at this time" after admitting him to its residential facility following his recent symptoms of psychosis, Sovereign personnel allowed him to go to his room alone, where he hung himself with the drawstring of his sweatpants. The trial court denied Sovereign's motion to compel arbitration because: (1) the court found Sovereign failed to meet its burden to authenticate an electronic signature as Brandon's on Sovereign's treatment center emollment agreement; and (2) even assuming Brandon signed the agreement, it was procedurally and substantively unconscionable, precluding enforcement against Brandon or, derivatively, his parents. Sovereign challenged the trial court's authentication and unconscionability findings. Finding no reversible error, the Court of Appeal affirmed the trial court's judgment. View "Nelson v. Dual Diagnosis Treatment Center" on Justia Law

This appeal involved a challenge to how Geico General Insurance Company (“GEICO”) processed insurance claims under 21 Del. C. 2118. Section 2118 provided that certain motor vehicle owners had to obtain personal injury protection (“PIP”) insurance. Plaintiffs, all of whose claims for medical expense reimbursement under a PIP policy were denied in whole or in part, were either GEICO PIP policyholders who were injured in automobile accidents or their treatment providers. Plaintiffs alleged GEICO used two automated processing rules that arbitrarily denied or reduced payments without consideration of the reasonableness or necessity of submitted claims and without any human involvement. Plaintiffs argued GEICO’s use of the automated rules to deny or reduce payments: (1) breached the applicable insurance contract; (2) amounted to bad faith breach of contract; and (3) violated Section 2118. Having reviewed the parties’ briefs and the record on appeal, and after oral argument, the Delaware Supreme Court affirmed the Superior Court’s ruling that the judiciary had the authority to issue a declaratory judgment that GEICO’s use of the automated rules violated Section 2118. The Supreme Court also affirmed the Superior Court’s judgment as to the breach of contract and bad faith breach of contract claims. The Court concluded, however, that the issuance of the declaratory judgment was improper. View "GEICO General Insurance Company v. Green" on Justia Law

The Supreme Court reversed the judgment of the court of appeals as to attorney's fees in this case concerning whether Defendant, a condominium association, was entitled to attorney's fees after obtaining a take-nothing judgment on claims by Plaintiff, a unit owner, the Supreme Court held that the fee award was authorized by Tex. Prop. Code 82.161(b).Plaintiff sued Defendant for, among other things, fraud, civil conspiracy, breach of contract, and negligence. Defendant filed a counterclaim for declaratory judgment and requested attorney's fees. The trial court granted Defendant's motion on twelve declaratory issues. After a trial, the court granted judgment for Defendant and awarded attorney's fees. The court of appeals affirmed the judgment for Defendant but reversed the award of attorney's fees. The Supreme Court reversed in part, holding that Defendant was a prevailing party under Tex. Prop. Code 82.161(b) and was thus entitled to reasonable attorney's fees. View "Sunchase IV Homeowners Ass'n v. Atkinson" on Justia Law