Justia Contracts Opinion Summaries

The Companies, Cookson and Vesuvius, appealed the district court's judgment denying their motion for summary judgment and granting the cross-motion of the Union. After the Companies closed a facility that Vesuvius had operated, Vesuvius and the Union entered into a Facility Closure Agreement (FCA). Both parties subsequently disputed whether the agreement required Vesuvius to pay a retiree medical allowance (RMA) to certain eligible employees. The district court held that the FCA imposed such a requirement. The court affirmed, holding that the district court correctly interpreted the parties' agreement and that the Union, as party to that agreement, had standing to enforce it even where the benefits of enforcement accrued to third-party retirees. View "United Steel v. Cookson America, Inc." on Justia Law

Lehigh appealed the district court's award of damages to plaintiffs under the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. 2801-2841. At issue was whether a franchisor could be held under the PMPA for failing to provide notice to a "trial franchisee" prior to termination of its franchise. The court held that the PMPA provided a right of action, both to "full" and "trial" franchisees, when a franchisor failed properly to notify it prior to terminating the franchise. The court also concluded that the district court did not abuse its discretion in awarding plaintiffs compensatory damages, punitive damages, attorney's fees and costs, and interest. View "Jimico Enterprises, Inc. v. Lehigh Gas Corp." on Justia Law

Defendant appealed from the district court's holding that defendant was liable to plaintiff, contending that it was entitled to the benefit of a contractual limitation on liability contained in a contract between its sub-bailor and a shipper. At issue was whether, under the Carmack Amendment, 49 U.S.C. 14706, or the federal common law of bailment, a third-party contractor was entitled to receive the benefit of a liability limitation in a contract between a shipper and a carrier where the contract did not extend the limitation to third parties. Because the court determined that - under either body of law - liability limitations extended to third-party contractors only if the contract clearly stated that they did, and because the court identified no error in the district court's finding on negligence, the court affirmed the judgment. View "Royal Sun Alliance Ins. PLC v. UPS Supply Chain Solutions, Inc." on Justia Law

Olin brought suit against its insurers, including American Home, regarding environmental contamination at Olin sites in the United States. On appeal, Olin challenged the district court's grant of summary judgment in favor of American Home. At issue was whether the $30.3 million attachment point for American Home's excess policies for the years 1966-69 and 1969-72 could be reached by the alleged property damage at Olin's Morgan Hill, California, manufacturing site. The court held that the plain language of Olin's policies with American Home required American Home to indemnify Olin for that damage. Accordingly, the court vacated and remanded for further proceedings. View "Olin Corp. v. Ins. Co. of North America" on Justia Law

Plaintiffs sought to avail themselves under terms of the Interstate Land Sales Full Disclosure Act (ILSA), 15 U.S.C. 1701-20, by bringing suit for revocation of a purchase agreement they executed with defendants for a luxury condominium unit in New York City. Plaintiffs asserted that the agreement failed to comport with ILSA's disclosure requirements. Plaintiffs alleged, inter alia, that the purchase agreement was revocable because it did not contain "a description of the lot which makes such lot clearly identifiable and which is in a form acceptable for recording" under section 1703(d)(1) of ILSA. The court held that section 1703(d)(1) required the description and not the agreement itself be "in a form acceptable for recording" and that the description at issue in this case satisfied ILSA's requirements. Accordingly, the court reversed and remanded with instructions that the district court enter judgment for defendants. View "Bacolitsas v. 86th & 3rd Owner, LLC" on Justia Law

Appellants, the M/V Akili, its owner, and manager, appealed from the district court's judgment holding that it was liable in rem for damage to cargo shipped aboard the vessel. Ferrostaal cross-appealed from the holding that the owner and manager were not liable in personam under a bailment theory. At issue was whether (1) an in rem proceeding rendering the Akili liable for damage to, or loss of, cargo was unavailable in this matter because a vessel was not a "carrier" within the meaning of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. 30701, and (ii) the free-in-and-out provision in the Voyage Charter Party purportedly absolving the Akili of in rem liability was enforceable. The court held that the first issue was essentially irrelevant because a vessel's in rem liability for damage to cargo existed under maritime common law, not COGSA, for a violation of a carrier's contractual or statutory obligations. The court resolved the second issue against enforcement of the free-in-and-out provision so far as it might be construed to prevent in rem liability of the vessel. In doing so, the court did not decide whether COGSA applied as a matter of law to this voyage because, even if it did not, the Voyage Charter Party's Clause Paramount contractually incorporated the Hague-Visby rules prohibiting a carrier from contracting for a waiver of its obligations regarding damage to cargo. The court also held that there was no in personam liability for the owner and manager where the carriers remained responsible for delivery of the goods and maintained exclusive control and custody over the cargos through agents they hired directly. View "Man Ferrostaal, Inc. v. M/V Akili" on Justia Law

LSED sought to rescind an agreement to purchase bond insurance from FGIC and recover its $13 million premium payment. LSED based its claim on failure of cause, a tenet of Louisiana law that required all contracts be supported by cause. Because the court found that the principal cause of the agreement between the parties was the purchase of bond insurance to protect the bondholders in the event of default, not to reduce the interest rate LSED paid to borrow money, the court affirmed the district court's decision. View "In Re: Merrill Lynch & Co., Inc." on Justia Law

This appeal arose out of a contract dispute between Costco and Leadsinger, a company that sold karaoke systems. Ipcon is the successor-in-interest to Leadsinger. On appeal, the court affirmed the district court's judgment granting Costco's motion to dismiss because Ipcon's claim - that Costco never intended to honor the relevant sales contracts - was a claim for fraud in the inducement, and thus - under the terms of the contracts and the Federal Arbitration Act, 9 U.S.C. 1 et seq. - must be considered by an arbitrator and not a district court. Because a district court has broad discretion both in finding whether a party had violated Federal Rule of Civil Procedure 11 and in deciding whether to impose sanctions, the court affirmed the district court's denial of Rule 11 sanctions. The court also denied Costco's motion for sanctions under Federal Rule of Appellate Procedure 38. View "Ipcon Collections LLC v. Costco Wholesale Corp." on Justia Law

GFK, a shipowner, appealed from the district court's dismissal of its action for declaratory judgment that it was not contractually bound to arbitrate a fuel agreement with AM, a marine fuel supply company. The court held that the district court properly exercised admiralty jurisdiction over the case even though plaintiff disclaimed the existence of any maritime contracts. However, concluding that the district court prematurely resolved disputed factual issues over whether the actual fuel purchaser had authority to bind GFK to the alleged contracts with AM, the court vacated the district court's judgment and remanded for further proceedings. View "Garanti Finansal Kiralama A.S. v. Aqua Marine and Trading Inc." on Justia Law

Aladdin’s purportedly gross mismanagement allegedly caused plaintiffs to lose their entire $60 million investment in a collateralized debt obligation. A CDO pays investors based on performance of an underlying asset. The CDO at issue was “synthetic” in that its asset was not a traditional asset like a stock or bond, but was a derivative instrument, whose value was determined in reference to still other assets. The derivative instrument was a “credit default swap” between Aladdin CDO and Goldman Sachs based on the debt of approximately 100 corporate entities and sovereign states. The district court held that, because of a contract provision limiting intended third-party beneficiaries to those “specifically provided herein,” plaintiffs could not bring a third-party beneficiary breach of contract claim and could not “recast” their claim in tort. The Second Circuit reversed. Plaintiffs plausibly alleged that the parties intended the contract to benefit investors in the CDO directly and create obligations running from Aladdin to the investors; that the relationship between Aladdin and plaintiffs was sufficiently close to create a duty in tort; and that Aladdin acted with gross negligence in managing the investment portfolio, leading to the failure of the investment vehicle and plaintiffs’ losses. View "Bayerische Landesbank, NY v. Aladdin Capital Mgmt., LLC" on Justia Law