Justia Contracts Opinion Summaries

To seek redress for an opioid epidemic, characterized by the Court of Appeal as having placed a financial strain on state and local governments dealing with the epidemic’s health and safety consequences, two California counties sued (the California Action) various pharmaceutical manufacturers and distributors, including the appellants in this matter, Actavis, Inc., Actavis LLC, Actavis Pharma, Inc., Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., and Watson Pharma, Inc. (collectively, “Watson”). The California Action alleged Watson engaged in a “common, sophisticated, and highly deceptive marketing campaign” designed to expand the market and increase sales of opioid products by promoting them for treating long-term chronic, nonacute, and noncancer pain - a purpose for which Watson allegedly knew its opioid products were not suited. The City of Chicago brought a lawsuit in Illinois (the Chicago Action) making essentially the same allegations. The issue presented by this appeal was whether there was insurance coverage for Watson based on the allegations made in the California Action and the Chicago Action. Specifically, the issue was whether the Travelers Property Casualty Company of America (Travelers Insurance) and St. Paul Fire and Marine Insurance Company (St. Paul) owe Watson a duty to defend those lawsuits pursuant to commercial general liability (CGL) insurance policies issued to Watson. Travelers denied Watson’s demand for a defense and brought this lawsuit to obtain a declaration that Travelers had no duty to defend or indemnify. The trial court, following a bench trial based on stipulated facts, found that Travelers had no duty to defend because the injuries alleged were not the result of an accident within the meaning of the insurance policies and the claims alleged fell within a policy exclusion for the insured’s products and for warranties and representations made about those products. The California Court of Appeal concluded Travelers had no duty to defend Watson under the policies and affirmed. View "The Traveler's Property Casualty Company of America v. Actavis, Inc." on Justia Law

In the 1990s, Stryker purchased a Pfizer subsidiary that made orthopedic products, including the “Uni-knee” artificial joint. It was later discovered that those devices were sterilized using gamma rays, which caused polyethylene to degrade. If implanted past their five-year shelf-life, the knees could fail. Expired Uni-Knees were implanted in patients. Stryker, facing individual product-liability claims and potentially liable to Pfizer, sought defense and indemnification under a $15 million XL “commercial umbrella” policy, and a TIG “excess liability” policy that kicked in after the umbrella policy was fully “exhausted.” XL denied coverage, arguing that the Uni-Knee claims were “known or suspected” before the inception of the policy. Stryker filed lawsuits against the insurers, then unilaterally settled its individual product-liability claims for $7.6 million. Stryker was adjudicated liable to Pfizer for $17.7 million. About 10 years later, the Sixth Circuit held that XL was obliged to provide coverage. XL paid out the Pfizer judgment first, exhausting coverage limits. TIG declined to pay the remaining $7.6 million, arguing that Stryker failed to obtain “written consent” at the time the settlements were made. Stryker claimed that the policy was latently ambiguous because XL satisfied the Pfizer judgment first, Stryker was forced to present its settlements to TIG years after they were made. The district court granted Stryker summary judgment. The Sixth Circuit reversed, finding the contract unambiguous in requiring consent. View "Stryker Corp. v. National Union Fire Insurance Co." on Justia Law

Jarred Wellman, a West Virginia resident, was killed in a one-car rollover crash in West Virginia. Jarred was operating a 2002 Ford Explorer at the time of the accident. Plaintiff, a West Virginia resident and the father and administrator of Jarred’s estate, filed a complaint in the Circuit Court of Wyoming County against Ford Motor Company alleging product liability, negligence, and breach of warranty. Ford filed a motion to dismiss for lack of personal jurisdiction on the grounds that it was a nonresident corporation. The trial court denied the motion to dismiss. Ford requested the Supreme Court to issue a writ of prohibition seeking dismissal from the underlying action. The Supreme Court granted the requested writ as moulded, holding (1) Ford has not shown that it is entitled to extraordinary relief whereby the Court would dismiss it from the underlying civil action; but (2) Ford’s assertions regarding its challenge to jurisdiction are of such a significant nature that the parties are entitled to an opportunity to develop the record and submit argument to be considered and determined by the circuit court. View "State ex rel. Ford Motor Co. v. Hon. Warren R. McGraw" on Justia Law

Plaintiffs filed a class action suit against Ford, alleging that Ford breached implied and express warranties and committed fraud in the sale of Ford Focus vehicles containing rear suspension defects. The court concluded that the district court's order granting summary judgment as to the Song-Beverly Consumer Warranty Act, Cal. Civ. Code 1792, claims of plaintiffs is reversed in light of Mexia v. Rinker Boat Co. Mexia held that “latent defects” may breach the implied warranty even when they are not discovered within the implied warranty’s duration. The court reversed the district court's order granting summary judgment as to the express warranty claims of plaintiffs given the ambiguous terms of Ford's express warranty. Finally, the court reversed the district court's order granting summary judgment on plaintiff's Consumers Legal Remedies Act, Cal. Civ. Code 1770(a), and Unfair Competition Law, Cal. Bus. & Prof. Code 17200, because plaintiffs have raised a genuine issue of fact as to reliance. The court declined to address additional issues raised by Ford. Because the court reversed plaintiffs’ implied and express warranty claims, the court also reversed the district court’s order granting summary judgment as to the Magnuson-Moss Warranty Act, 15 U.S.C. 2301–2312, claims. View "Daniel v. Ford Motor Co." on Justia Law

This case arose out of a warehouse fire in Pasadena, Texas. Plaintiffs, the company that leased the warehouse and the company that stored materials in the warehouse, sued Defendants, the suppliers of the chlorpyrifos that the lessee used in the warehouse, for manufacturing and marketing defect, breach of contract, negligence, and other causes of action. The jury found that the chlorpyrifos was defective and that Defendants breached the parties’ contract. After the trial court entered judgment for Plaintiffs, Defendants moved for judgment notwithstanding the verdict. The trial court granted the motion, concluding that the testimony of all four of Plaintiffs’ experts was unreliable and constituted no evidence of negligence, manufacturing defect, and causation. The court of appeals reversed, concluding that each expert’s individual testimony was reliable, and therefore, the experts’ collective testimony was reliable. The Supreme Court reversed, holding (1) the testimony of all four experts was unreliable; and (2) consequently, there was no evidence of an essential element of Plaintiffs’ claims. View "Gharda USA, Inc. v. Control Solutions, Inc." on Justia Law

Zachary Gage Duncan sustained a serious injury while driving his 2008 Hyundai Tiburon when he struck a tree. The side airbag did not deploy. Plaintiffs, individual and as Duncan’s guardians and conservators, filed suit against Hyundai, claiming breach of implied warranty of merchantability. During trial, Plaintiffs’ designated expert witness Geoffrey Mahon testified that the location of the side airbag sensor rendered the Tiburon unreasonably dangerous. Hyundai appealed from the judgment of the trial court, arguing that there was an insufficient foundation for the expert witness’s opinion. The Supreme Court agreed and reversed, holding (1) Mahon’s opinion was premised upon his unfounded assumption that the side airbag would have deployed if the sensor had been located in a different area; and (2) because Mahon’s opinion supplied the only support for Plaintiffs’ claim that the vehicle was unreasonably dangerous, the inadmissibility of Mahon’s opinion was fatal to Plaintiffs’ claim. View "Hyundai Motor Co. v. Duncan" on Justia Law

Bill Head, who owns and operates the Silver Spur Truck Stop in Pharr, Texas, hired Petroleum Solutions, Inc. to manufacture and install an underground fuel system. After the discovery that a major diesel-fuel release leak had occurred, Head sued Petroleum Solutions for its resulting damages. Petroleum Solutions filed a third-party petition against Titeflex, Inc., the alleged manufacturer of a component part incorporated into the fuel system, claiming indemnity and contribution. Titeflex filed a counterclaim against Petroleum Solutions for statutory indemnity. The trial court rendered judgment in favor of Head and in favor of Titeflex. The court of appeals affirmed. The Supreme Court (1) reversed as to Head’s claims against Petroleum Solutions, holding that the trial court abused its discretion by charging the jury with a spoliation instruction and striking Petroleum Solutions’ defenses, and the abuse of discretion was harmful; and (2) affirmed as to Titeflex’s indemnity claim, holding that Titeflex was entitled to statutory indemnity from Petroleum Solutions and that any error with respect to the indemnity claim was harmless. View "Petroleum Solutions, Inc. v. Head" on Justia Law

Ezequiel Castillo and other occupants of his Ford Explorer sued Ford Motor Company for injuries sustained in a roll-over accident, asserting design defects in the Explorer. During the jury’s deliberations, Ford Motor Company agreed to settle the case with one of Castillo’s attorneys for $3 million. Later, in its defense to the settlement, Ford asserted fraudulent inducement, unilateral mistake, and mutual mistake. After hearing all of the evidence, the jury found the settlement agreement invalid due to fraudulent inducement and mutual mistake. The trial court rendered a take-nothing judgment. Castillo appealed. The court of appeals reversed, concluding that the evidence was legally insufficient to support the jury’s verdict. The Supreme Court reversed, holding that the evidence was legally sufficient to support the jury’s verdict.View "Ford Motor Co. v. Castillo" on Justia Law

Plaintiffs sued Ford Motor Company for injuries they sustained in a roll-over accident. The case was submitted to a jury. After the jury began its deliberations, the parties agreed to settle the case. Ford, however, later refused to pay the settlement amount to Plaintiffs, and Plaintiffs sued for breach of contract. After hearing all of the evidence, the jury found the settlement agreement was invalid because of fraudulent inducement and mutual mistake. The court of appeals reversed the trial court’s take-nothing judgment, concluding that the circumstantial evidence of fraud in the case was legally insufficient. The Supreme Court reversed the court of appeals’ judgment and reinstated the judgment of the trial court, holding that the circumstantial evidence was legally sufficient to support the jury’s verdict. View "Ford Motor Co. v. Castillo" on Justia Law

The Administrators of the estates of two individuals killed in a single-engine airplane crash filed wrongful death actions against Honeywell International, Inc., the manufacturer of the plane’s autopilot system, alleging that Honeywell breached of the warranty of merchantability. The jury returned a verdict in favor of Honeywell. The Administrators appealed. The Supreme Court reversed, holding (1) the circuit court erroneously admitted hearsay statements in testimony regarding an accident investigation report prepared by the Mooney Airplane Company describing its investigation of the crash, and their admission was not harmless error; and (2) the circuit court abused its discretion in admitting certain opinion testimony and in allowing Honeywell’s counsel to make certain statements during closing argument. View "Harman v. Honeywell Int'l, Inc." on Justia Law