Justia Contracts Opinion Summaries

A group of public servants who had contacted Navient for help repaying their loans (collectively, “Plaintiffs”) filed a putative class action lawsuit, alleging that Navient had not “lived up to its obligation to help vulnerable borrowers get on the best possible repayment plan and qualify for PSLF.”   Navient moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, which the district court granted in part, dismissing all claims except “the claim brought under New York’s General Business Law Section 349”. The district court certified a class for settlement purposes under Federal Rule of Civil Procedure 23(b)(2) and approved the settlement as “fair, reasonable, adequate,” and “in the best interest of the Settlement Class as a whole.”   Two objectors now appeal that judgment, arguing that the district court erred in certifying the class, approving the settlement, and approving service awards of $15,000 to the named Plaintiffs. The Second Circuit affirmed concluding that the district court did not abuse its discretion in making any of these determinations. The court explained that here, the amended complaint plausibly alleged that the named Plaintiffs were likely to suffer future harm because they continued to rely on Navient for information about repaying their student loans. At least six of the named Plaintiffs continue to have a relationship with Navient. That is enough to confer standing on the entire class. Further, the court explained individual class members [in fact] retain their right to bring individual lawsuits,” and the settlement does not prevent absent class members from pursuing monetary claims. View "Hyland v. Navient Corporation" on Justia Law

Appellants lost over $850,000 when an alleged BB&T employee and a co-conspirator impersonated them, changed their passwords, and transferred the money out of their BB&T bank accounts. Appellants sued BB&T under contract and tort theories. The district court dismissed the tort claims as duplicative of the contract claim, concluding that Appellants’ demand was time-barred because BB&T’s standard bank account contract limited the time to assert a demand from the statutory one-year period to just 30 days. In the alternative, the district court entered summary judgment for BB&T because it concluded the bank had and had followed commercially reasonable security procedures.The Eleventh Circuit vacated (1) the district court’s order dismissing the complaint and (2) the district court’s order entering summary judgment for BB&T on the remaining counts in the Fourth Amended Complaint, finding, as a matter of law, that Appellants’ claim for statutory repayment is not time-barred. View "Jesus Alonso Alvarez Rodriguez, et al v. Branch Banking & Trust Company, et al" on Justia Law

Plaintiff designated his nephew as his health care agent and attorney-in-fact using an advance health care directive and power of attorney for health care decisions form developed by the California Medical Association (the Advance Directive). After the execution of the Advance Directive, Plaintiff was admitted to a skilled nursing facility. Nineteen days later, his nephew executed an admission agreement and a separate arbitration agreement purportedly on Plaintiff’s behalf as his “Legal Representative/Agent”. The sole issue on appeal is whether the nephew was authorized to sign the arbitration agreement on Plaintiff’s behalf.   In answering the relevant question on appeal, the Second Appellate District held that an agent’s authority to make “health care decisions” on a principal’s behalf does not include the authority to execute optional arbitration agreements. Accordingly, the court affirmed the trial court’s order denying the motion to compel arbitration. The court explained that its conclusion that the execution of an arbitration agreement is not a “health care decision” finds support in the regulatory history of the recently enacted federal regulatory scheme prohibiting nursing facilities participating in Medicare or Medicaid programs from requiring a resident (or his representative) to sign an arbitration agreement as a condition of admission. Specifically, in the Centers for Medicare & Medicaid Services’ (i.e., the agency’s) responses to public comments published in the Federal Register. These comments and responses demonstrate that practically speaking, arbitration agreements are not executed as part of the health care decision-making process, but rather are entered into only after the agent chooses a nursing facility based on the limited options available and other factors unrelated to arbitration. View "Logan v. Country Oaks Partners" on Justia Law

The issue this appeal presented for the New Jersey Supreme Court’s review centered on an exclusionary clause in a commercial general liability insurance policy issued by Admiral Insurance Company (Admiral) to Richfield Window Coverings, LLC (Richfield). Richfield sold window coverage products, including blinds, to national retailers like Home Depot and provided retailers with machines to cut the blinds to meet the specifications of the retailers’ customers. Colleen Lorito, an employee of a Home Depot located in Nassau County, was injured while operating the blind cutting machine. She and her husband filed a civil action against Richfield, asserting claims for product liability, breach of warranty, and loss of spousal services. Admiral denied any obligation to defend or indemnify, asserting the claims were not covered under the policy based on the Designated New York Counties Exclusion of the insurance policy. Richfield filed a declaratory judgment action seeking to compel Admiral to defend it in the Lorito case and, if necessary, indemnify it against any monetary damages awarded to the plaintiffs. The Law Division granted summary judgment in favor of Admiral. The Appellate Division reversed, finding that “Richfield’s limited activities and operations have no causal relationship to the causes of action or allegations.” The Supreme Court found that the policy’s broad and unambiguous language made clear that a causal relationship was not required in order for the exclusionary clause to apply; rather, any claim “in any way connected with” the insured’s operations or activities in a county identified in the exclusionary clause was not covered under the policy. Richfield’s operations in an excluded county were alleged to be connected with the injuries for which recovery was sought, so the exclusion applied. Admiral had no duty to defend a claim that it is not contractually obligated to indemnify. View "Norman International, Inc. v. Admiral Insurance Company " on Justia Law

Luis Munoz and LR Munoz Real Estate Holdings, LLC (together, Munoz) bought a hotel from a company owned and managed by Rajesh Patel and his son, Shivam. Before escrow closed, the parties negotiated a leaseback arrangement requiring Munoz to lease the hotel back to the Patels’ company after the sale. Escrow closed and the parties thereafter executed the previously-negotiated lease. However, Munoz contended the Patels secretly swapped out the agreed-upon lease for a lease substantially more beneficial to the Patels and worse for Munoz, and then tricked him into signing it. Munoz filed suit against the Patels, an alleged alter ego entity of the Patels called Inn Lending, LLC, and other defendants involved in the sale, asserting causes of action for breach of contract, breach of the covenant of good faith and fair dealing, promissory fraud, and elder financial abuse, among other causes of action. Rajesh and Inn Lending demurred to the operative second amended complaint, the trial court sustained the demurrer without leave to amend. In a prior opinion, the Court of Appeal reversed the judgment and determined, among other things, that Munoz alleged a viable fraud cause of action based on a theory of fraud in the execution. The California Supreme Court granted review and remanded the case back to the appellate court, ordering a rehearing of the parties arguments for fraud. After reconsideration, the Court of Appeal concluded operative complaint alleged facts sufficient to state a viable cause of action for fraud in the execution against Rajesh, but not against Inn Lending. Additionally, the Court concluded the complaint plead facts sufficient to state an elder financial abuse cause of action against both Rajesh and Inn Lending. The Court concluded Munoz failed to establish that the trial court erred in dismissing his breach of contract and bad faith causes of action. In light of these determinations, the appeals court reversed the trial court judgment and remand the matter with instructions that the trial court vacate its order sustaining the demurrer to the entire complaint, and enter a new order. View "Munoz v. Patel" on Justia Law

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