Justia Contracts Opinion Summaries

Appellee AGCO Corporation (AGCO) manufactured and sold a self-propelled, agricultural spray applicator called the "RoGator." In 2005, AGCO began offering an Extended Protection Plan (EPP) to its RoGator customers. Appellant Lloyd’s Syndicate No. 5820 d/b/a Cassidy Davis provided the master policy of insurance for the EPP program, which covered AGCO for certain liability to customers who purchased the RoGator EPP. Glynn General Corporation administered the plans. Between 2005 and 2008, AGCO enrolled about 2,050 RoGator machines in the EPP program. In 2008, a number of customers presented claims under the EPP based on the failure of wheel motors on the RoGator. After it paid about 25 claims related to this failure, Cassidy Davis invoked the "Epidemic Failure Clause" of the master insurance policy and refused to pay for any more claims. AGCO then sued Cassidy Davis asserting various claims, namely claims for breach of contract and bad faith denial of insurance coverage. The trial court granted partial summary judgment to AGCO and denied partial summary judgment to Cassidy Davis on a breach of contract issue, holding that the EPP covered failures caused by design and engineering defects in the RoGators. The trial court also denied Cassidy Davis’s motion for summary judgment on the bad faith claim, rejecting the insurer’s argument that it was not obligated to indemnify AGCO until a court entered a judgment establishing AGCO’s legal liability to its customers. The Court of Appeals affirmed the trial court on both issues. Cassidy Davis appealed, arguing: (1) that the Court of Appeals erred in its interpretation of the coverage provision of the extended protection plan; and (2) the Court of Appeals erred in its interpretation of the indemnity provision of the master policy of liability insurance. Upon review of the matter, the Supreme Court concluded the Court of Appeals misinterpreted the relevant language of both contracts. Therefore the Court reversed on both issues. View "Lloyd's Syndicate No. 5820 v. AGCO Corporation" on Justia Law

On July 28, 2012, Michael Becker was injured when a Ford truck driven by his son, Phillip Becker, struck a light pole. Michael and his wife filed suit against Ford Motor Company. On August 26, 2013, Ford filed an answer claiming that the accident was caused by a person other than Ford. On October 1, 2013, the Beckers filed a motion to join Phillip as a party to whom fault could be apportioned and a motion to file an amended complaint. At issue before the Supreme Court was whether, after a defendant asserts a comparative fault claim against a non-party tortfeasor who was known to the plaintiff when the original suit was filed, Tenn. Code Ann. 20-1-119 permits the plaintiff to amend its complaint to assert a claim directly against the tortfeasor named by the defendant. The Court held (1) application of section 20-1-119 is not restricted to tortfeasors who were unknown to the plaintiff when its original complaint was filed; and (2) therefore, the statute permits a plaintiff to file an amended complaint against the tortfeasor named by the defendant within ninety days after the filing of the answer in which the defendant first asserts a comparative fault claim against the tortfeasor. View "Becker v. Ford Motor Co." on Justia Law

Bruce Martin filed suit against CTB for negligent misrepresentation and breach of express warranty after the power sweeps it purchased from CTB did not work. The court concluded that it's decision in Dannix Painting, LLC v. Sherwin-Williams foreclosed Bruce Martin's argument that the district court erred in concluding that Missouri's economic loss doctrine precluded its negligent misrepresentation claim. Further, the court concluded that the district court did not err in granting summary judgment to CTB on Bruce Martin's breach of express warranty claim. Under Indiana law, the court agreed with the district court that Bruce Martin had alleged a defect in the design of the sweeps that was not covered by CTB's warranty against "defects in material and workmanship." Accordingly, the court affirmed the judgment of the district court. View "Bruce Martin Construction, Inc. v. CTB, Inc." on Justia Law

Elliot, which provides construction and maintenance services, owns and leases bucket trucks. In 1996, Elliot entered into a lease with TECO, a manufacturer of such trucks, agreeing agreed to hold TECO harmless from liability arising from injuries resulting from use, operation, or transportation of the vehicle or its location or condition. In 2000, Large was injured while operating a truck, which his employer, Elliot, had leased from TECO. Large sued TECO. TECO’s successor in interest (Mobile) filed a third-party complaint against Elliot, seeking defense and indemnification pursuant to the lease. Mobile later settled with Large without Elliot’s participation, leaving the third-party complaint against Elliot as the only outstanding issue. After a change in Virginia law, Mobile again moved for summary judgment, which the district court granted, holding Elliot responsible to defend and indemnify Mobile. The Seventh Circuit affirmed, rejecting Elliot’s argument that a later invoice superseded the terms of the lease, eliminating Elliot’s duty to defend and indemnify except in the case that Elliot violated obligations under the invoice by failing to either adequately train Large in the use of the truck or to provide him with copies of the truck’s operation and maintenance manuals. View "Large v. Mobile Tool Int'l, Inc." on Justia Law

Bayside installed hurricane-resistant windows manufactured by Viracon and supplied by EFCO. Shortly after installation, cracking and delamination occurred in some of the windows. Bayside filed suit against Viracon and EFCO nine years after it noticed the defect. The court affirmed the district court's grant of summary judgment to Viracon and EFCO, concluding that Minnesota's two-year statute of limitations applied to Bayside's breach of warranty claims and therefore, these claims were time-barred. View "Bayside Holdings, Ltd., et al v. Viracon, Inc., et al" on Justia Law

Tiara Condominium Association (Tiara) retained Marsh & McLennan (Marsh) as its insurance broker. Marsh secured windstorm coverage through Citizens Property Insurance Corporation (Citizens), which issued a policy that contained a loss limit in an amount close to $50 million. Tiara's condominium subsequently sustained damages caused by two hurricanes. After being assured by Marsh that the loss limits coverage was per occurrence, Tiara spent more than $100 million in remediation efforts. However, when Tiara sought payment from Citizens, Citizens claimed that the loss limit was $50 million in the aggregate, not per occurrence. Tiara filed suit against Marsh, alleging, inter alia, breach of contract, breach of fiduciary duty, and negligence. The trial court granted summary judgment for Marsh on all claims. The appeals affirmed with the exception of the negligence and breach of fiduciary claims, as to which it certified a question to the Supreme Court to determine whether the economic loss rule prohibits recovery, or whether an insurance broker falls within the professional services exception that would allow Tiara to proceed with the claims. The Court answered by holding that the application of the economic loss rule is limited to products liability cases. View "Tiara Condo. Ass'n, Inc. v. Marsh & McLennan Cos. " on Justia Law

The United States District Court for the Middle District of Alabama, Southern Division certified a question to the Alabama Supreme Court: "Under Alabama law, may a drug company be held liable for fraud or misrepresentation (by misstatement or omission), based on statements it made in connection with the manufacture or distribution of a brand-name drug, by a plaintiff claiming physical injury from a generic drug manufactured and distributed by a different company?" Plaintiffs Danny and Vicki Weeks filed this action against five current and former drug manufacturers for injuries that Mr. Weeks allegedly suffered as a result of his long-term use of the prescription drug product metoclopramide, the generic form of the brand-name drug "Reglan." The Weekses contended that the Wyeth defendants had a duty to warn Danny's physician about the risks associated with the long-term use of metoclopramide and that the Weekses, as third parties, have a right to enforce the alleged breach of that duty. The Supreme Court concluded: "[i]n the context of inadequate warnings by the brand-name manufacturer placed on a prescription drug manufactured by a generic-drug manufacturer, it is not fundamentally unfair to hold the brand-name manufacturer liable for warnings on a product it did not produce because the manufacturing process is irrelevant to misrepresentation theories based, not on manufacturing defects in the product itself, but on information and warning deficiencies, when those alleged misrepresentations were drafted by the brand-name manufacturer and merely repeated by the generic manufacturer." View "Wyeth, Inc., et al. v. Weeks " on Justia Law

In this case the Kentucky Supreme Court considered whether to adopt the "economic loss rule," which prevents the commercial purchaser of a product from suing in tort to recover for the economic losses arising from the malfunction of the product itself. The case involved a claim to insurers for a damaged piece of machinery. The insurers sued the manufacturers to recover the amount paid, claiming several causes of action including negligence, strict liability, and negligent misrepresentation. The trial court held the economic loss rule barred the tort claims. The court of appeals affirmed the trial court's adoption and application of the rule. The Supreme Court affirmed the judgment of the trial court, holding (1) the economic loss rule applies to claims arising from a defective product sold in a commercial transaction, and that the relevant product is the entire item bargained for by the parties and placed in the stream of commerce by the manufacturer; and (2) the economic loss rule applies regardless of whether the product fails over a period of time or destroys itself in a calamitous event, and the rule's application is not limited to negligence and strict liability claims but also encompasses negligent misrepresentation claims.

In two consolidated original jurisdiction actions, petitioners Mylan, Inc., Mylan Pharmaceuticals, Inc., and Mylan Technologies, Inc. sought writs of prohibition in two actions pending in the circuit court of Kanawha County. In each action, the circuit court denied a motion filed by petitioners to dismiss the case on the basis of forum non conveniens. Petitioners filed a petition for a writ of prohibition, asserting that each of the circuit judges erred in applying the forum non conveniens statute, W. Va. Code 56-1-1a, and seeking to prohibit the circuit court from refusing to dismiss their actions. In a show cause order, the Supreme Court held that the circuit court erred in failing to make findings of fact and conclusions of law regarding the eight factors listed for consideration in Section 56-1-1a. The Court, therefore, granted the writs and remanded the actions.

Randy Mace, as personal representative of the estate of Kathy Mace, appealed from an order of the circuit court dismissing his wrongful death lawsuit on the basis of forum non conveniens. Applying the forum non conveniens statute, the circuit court concluded that North Carolina, the state in which the action accrued, was a more convenient forum for Mace's claims. Mace argued, however, that he was unable to try his claims in North Carolina because they were barred by that state's statute of limitations. Thus, he argued, the circuit court erred in dismissing the case because it misinterpreted the forum non conveniens statute as permitting dismissal despite the lack of an alternate forum in which the claims may be tried. The Supreme Court reversed and remanded. Finding the language of the statute ambiguous, the Court construed the statute in a manner consistent with the Court's prior case law and the federal common law doctrine of forum non conveniens. Under this construction, the circuit court erred in its interpretation of the statute.