Justia Contracts Opinion Summaries

CARCO sub-chartered an oil tanker from tanker operator Star, which had chartered it from Frescati. During the tanker’s journey, an abandoned ship anchor punctured the tanker’s hull, causing 264,000 gallons of heavy crude oil to spill into the Delaware River. The 1990 Oil Pollution Act, 33 U.S.C. 2702(a), required Frescati, the vessel’s owner, to cover the cleanup costs. Frescati’s liability was limited to $45 million. The federal Oil Spill Liability Trust Fund reimbursed Frescati for an additional $88 million in cleanup costs.Frescati and the government sued, claiming that CARCO had breached a clause in the subcharter agreement that obligated CARCO to select a berth that would allow the vessel to come and go “always safely afloat,” and that obligation amounted to a warranty regarding the safety of the selected berth. Finding that Frescati was an implied third-party beneficiary of the safe-berth clause, the Third Circuit held that the clause embodied an express warranty of safety.The Supreme Court affirmed. The safe-berth clause's unqualified plain language establishes an absolute warranty of safety. That the clause does not expressly invoke the term “warranty” does not alter the charterer’s duty, which is not subject to qualifications or conditions. Under contract law, an obligor is strictly liable for a breach of contract, regardless of fault or diligence. While parties are free to contract for limitations on liability, these parties did not. A limitation on the charterer’s liability for losses due to “perils of the seas,” does not apply nor does a clause requiring Star to obtain oil-pollution insurance relieve CARCO of liability. View "CITGO Asphalt Refining Co. v. Frescati Shipping Co." on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment in favor of the Jackson Hole Airport Board and dismissing Appellants' petition for declaratory judgment challenging the validity of an asset purchase agreement between the Board and Jackson Hole Aviation, holding that airport boards have the statutory authority to issue revenue bonds to fund the purchase of intangible property, including goodwill.Appellants were two entities interested in providing services at Jackson Hole Airport and individuals dissatisfied with the Airport's current services. Appellants brought this action claiming that the purchase agreement between the Board and Jackson Hole Aviation, the current service provider at the Airport, exceeded the Board's statutory authority because the Board could not acquire intangible assets using revenue bond funding. The district court concluded that the term "other property" in Wyo. Stat. Ann. 10-5-101(a) authorized the use of revenue bonds for purchases of both tangible and intangible property. The Supreme Court affirmed, holding that section 10-5-101(a) authorized purchases of both tangible and intangible property and that the district court correctly determined that goodwill is intangible property included in the term "other property" found in section 10-5-101(a). View "Herrick v. Jackson Hole Airport Board" on Justia Law

LS, a trucking company, also operates as a broker of construction trucking services. Under a 2009 oral agreement between LS and Cheema, Cheema purchased a Super Dump Truck, with the understanding that LS would purchase the truck’s detachable box from Cheema. As the box owner, LS would give priority to Cheema in dispatching assignments to Cheema as a subhauler. The parties entered a written “Subhauler and Trailer Rental Agreement” under which Cheema would submit to LS completed freight bills for all hauling that he performed for LS; LS would prepare statements showing the amount billed payable to Cheema, less a 7.5 percent brokerage fee and, if the work was performed with a box owned by LS, a 17.5 percent rental fee. Cheema began providing hauling services. Cheema claimed that because LS failed to pay him the $32,835.09 purchase price of the box, it remained his, and LS was not entitled to deduct rental fees from the payments due him. In June 2010, LS began paying Cheema $1,000 a month for nine months, noting on the checks that the payments were repayment of a “loan.” Cheema recovered damages from L.S. for having been underpaid and untimely payments. The court of appeal affirmed but remanded for calculation of prejudgment interest and penalty interest (Civil Code 3287, 3322.1), rejecting LS’s argument that the parties’ oral agreement for Cheema to sell it the box, justifying its deductions for rental, was enforceable. View "Cheema v. L.S. Trucking, Inc." on Justia Law

Exel, a shipping broker, sued SRT, an interstate motor carrier, after SRT lost a load of pharmaceuticals owned by Exel’s customer, Sandoz, that was being transported from Pennsylvania to Tennessee. After nearly seven years of litigation, including a prior appeal, the district court entered judgment for Exel and awarded it the replacement cost of the lost pharmaceuticals, approximately $5.9 million. SRT argued that the district court erred in discounting bills of lading that ostensibly limited SRT’s liability to a small fraction of the shipment’s value. Exel argued that the court erred in measuring damages by the replacement cost of the pharmaceuticals rather than by their higher market value. The Sixth Circuit affirmed. Exel and SRT had a Master Transportation Services Agreement (MTSA), which stated that any bill of lading “shall be subject to and subordinate to” the MTSA; that SRT “shall be liable” to Exel for any “loss” to commodities shipped pursuant to the agreement; and that the “measurement of the loss . . . shall be the Shipper’s replacement value.” The Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 14706 “puts the burden on the carrier to demonstrate that the parties had a written agreement to limit the carrier’s liability, irrespective [of] whether the shipper drafted the bill of lading.” SRT did not carry its burden to show that it effectively limited its liability. View "Exel, Inc. v. Southern Refrigerated Transport, Inc." on Justia Law

Plaintiffs, licensed taxi and limousine operators, sued under 42 U.S.C. 1983, challenging an agreement between Newark and Uber as violating their rights under the Takings, Due Process, and Equal Protection Clauses. In order to operate in Newark without taxi medallions or commercial driver’s licenses, setting its own rates, Uber agreed to pay the city $1 million per year for 10 years; to provide $1.5 million in liability insurance for each of its drivers; to have a third-party provider conduct background checks on its drivers. The Third Circuit affirmed the dismissal of the suit. The agreement places the plaintiffs in an “undoubtedly difficult position” but the situation cannot be remedied through constitutional claims. Even if plaintiffs have a legally cognizable property interest in the medallions themselves, they remain in possession of and able to use their taxi medallions to conduct business. The decrease in the market value of the medallions is not sufficient to constitute a cognizable property interest necessary to state a claim under the Takings Clause. The city controls the number of medallions in circulation and maintains the ability to flood the market with medallions. With respect to equal protection, it is rational for the city to determine that customers require greater protections before accepting a ride from a taxi on the street than before accepting a ride where they are given the relevant information in advance. View "Newark Cab Association v. City of Newark" on Justia Law

Plaintiff filed the underlying action against BNSF after he was injured when the backrest of his locomotive seat broke, and alleged that the seat did not comply with the federal standards in the Locomotive Inspection Act (LIA). BNSF settled a Federal Employers' Liability Act (FELA) claim with plaintiff.BNSF then filed suit against Seats to recover the costs of settlement. The Eighth Circuit reversed and held that the district court erred in determining that the LIA preempted BNSF's claims for products liability and breach of contract. Because the district court did not address defendant's other grounds for dismissal of the two claims, the court remanded for further proceedings on those alternative arguments. View "BNSF Railway Co. v. Seats, Inc." on Justia Law

The Eleventh Circuit reversed the district court's grant of summary judgment against two transportation companies, Barrett and Landstar, in an action by Nationwide and its insurer, Essex, seeking to recover loss of an MRI under the Carmack Amendment, 49 U.S.C. 14706 et seq. The court held that the Magistrate Judge applied the correct standard for distinguishing brokers from carriers, but that there was a genuine factual dispute as to whether Barrett accepted legal responsibility to transport the magnet or communicated to Nationwide that it was brokering the shipment of the magnet to a third party. The court applied the holding in Werner Enterprises, Inc. v. Westwind Maritime International, Inc., 554 F.3d 1319 (11th Cir. 2009), to this case, and held that Landstar was entitled to rely on the Broker-Carrier Agreement's (BCA) limitation of liability, because the BCA satisfied the Carmack Amendment's requirements. In this case, Landstar was entitled to the $1.00 per pound liability limitation in the bill of lading. Therefore, the court remanded for further proceedings. View "Essex Insurance Co. v. Barrett Moving & Storage, Inc." on Justia Law

Atlas, an authorized interstate transporter of household goods, contracts with agents to perform its shipments. One of its agents, Ace, leases trucks and driving services from owner-operators. In 2009, owner-operator Mervyn entered into a lease agreement with Ace to haul shipments for Atlas. In 2013, Mervyn sued Atlas and Ace in a purported class action, alleging breach of contract and violations of the federal Truth-In-Leasing regulations under 49 C.F.R. 376.12(d). The Seventh Circuit affirmed summary judgment in favor of Atlas and Ace. Mervyn advanced claims that are necessarily inconsistent: that he was not paid according to the plain terms of the lease and that the lease violated the Truth-In-Leasing regulations because the terms were not “clearly stated.” Mervyn never disputed the financial entries he complained of until he filed this lawsuit, in violation of a contract provision allowing a 30-day window to dispute financial entries. Mervyn was compensated according to the plain and ordinary terms of the lease. View "Mervyn v. Atlas Van Lines, Inc." on Justia Law

In 1962, PWV leased to Norfolk Southern certain railroad properties, consisting of a 112-mile tract of main line railroad and approximately 20 miles of branch rail lines in Western Pennsylvania, Ohio, and West Virginia. After securing appropriate regulatory approvals, the Lease went into effect on October 16, 1964. The term of the Lease is 99 years, renewable in perpetuity at the option of Norfolk Southern absent a default. On May 17, 1990, Norfolk Southern entered into a sublease with Wheeling & Lake Erie Railway. Wheeling assumed the rights, interests, duties, obligations, liabilities, and commitments of Norfolk Southern as lessee, including the role as principal operator of the Rail Line. In 2011, disputes arose following the proposed sale of an unused branch of the railroad line, a restructuring by PWV and its demand for additional rent and attorney's fees. Norfolk Southern sought a declaration that it was not in default under the terms of the Lease. The Third Circuit affirmed the district court’s use of course-of-performance evidence, found that PWV had engaged in fraud to obtain Norfolk’s consent to a transaction otherwise prohibited by the Lease. View "Norfolk Southern Railway Co v. Pittsburgh & West Virginia Railroad" on Justia Law

Paris Limousine filed suit against Executive Coach, alleging that limousines it purchased from Executive Coach were in breach of warranty. The Eighth Circuit reversed the district court's dismissal of the complaint, holding that Paris Limousine brought its express warranty claim under Missouri law, which authorizes private enforcement actions for breaches of express warranties. The National Traffic and Motor Vehicle Safety Act of 1966 (Safety Act), 15 U.S.C. 1381 et seq., and the Federal Motor Vehicle Safety Standards did not affect Executive Coach’s potential liability under Missouri law for breach of its express warranty. The court also held that Executive Coach had not met its burden to demonstrate that conflict preemption applied, and that Paris Limousine had alleged legally cognizable damages. View "Paris Limousine of OK, LLC v. Executive Coach Builders, Inc." on Justia Law