Justia Contracts Opinion Summaries

The bankruptcy Trustee of MBS Management Services, Inc. (MBS), a management company for dozens of apartment complexes, appealed judgments rejecting his claim that payments made by the debtor to MXEnergy Electric, Inc (MX) to reimburse MX for supplying electricity to the complexes were avoidable preferences. The bankruptcy court and district court found that the payments were made on a "forward contract" expressly exempt from the Bankruptcy Code's preference provision. The Fifth Circuit Court of Appeals affirmed, holding that because the agreement was a forward contract within the meaning of 11 U.S.C. 546(e), and because expert testimony from the President and CEO of MX was admissible, the bankruptcy and district court's correctly rejected the Trustee's avoidance action. View "Lightfoot v. MXenergy Elec., Inc. " on Justia Law

The City of New Orleans filed suit against BellSouth Telecommunications, LLC, claiming that the company owed it additional compensation for the use of its public rights-of-way. The district court rejected the City's claims for additional compensation pursuant to the various contracts between the parties. The court, however, awarded the City $1.5 million in unjust enrichment damages to compensate the City for benefits the company had received from its use of the City's rights-of-way. Both parties appealed. The City then enacted an ordinance to force BellSouth to continue compensating the City in future years for the unjust enrichment identified by the district court. BellSouth moved for a preliminary injunction to enjoin the City from enforcing the ordinance, which the district court denied. The Fifth Circuit Court of Appeals (1) affirmed the district court's findings of fact and conclusions of law, in part, to the extent the court rejected the City's claims for damages; and (2) reversed and vacated the district court's judgment awarding unjust enrichment damages to the City, holding that BellSouth had justification in contract for any enrichment it was enjoying from its use of the City's rights-of-way. Remanded with instructions to permanently enjoin enforcement of the City's ordinance. View "City of New Orleans v. BellSouth Telecomm., Inc." on Justia Law

Following a jury trial, Chevron USA, Inc. was awarded damages from Aker Maritime, Inc. and its subsidiaries, and from Oceaneering International, Inc. for the failure of small and inexpensive bolts used on an oil production and drilling facility. A bench trial was held on remand to consider remaining contractual claims. The district court ordered Oceaneering to pay indemnity and attorneys' fees to Aker. On appeal, Oceaneering sought to reverse those awards. The Fifth Circuit Court of Appeals affirmed, holding (1) Aker was an agent of Chevron under the parties' contract, and therefore, pursuant to the contract, Aker was entitled to indemnity; and (2) the district court did not abuse its discretion in awarding attorneys' fees to Aker. View "Chevron USA, Inc. v. Aker Maritime, Inc." on Justia Law

The City of New Orleans filed suit against BellSouth Telecommunications, LLC, claiming that the company owed it additional compensation for the use of its public rights-of-way. The district court rejected the City's claims for additional compensation pursuant to the various contracts between the parties. The court, however, awarded the City $1.5 million in unjust enrichment damages to compensate the City for benefits the company had received from its use of the City's rights-of-way. Both parties appealed. The City then enacted an ordinance to force BellSouth to continue compensating the City in future years for the unjust enrichment identified by the district court. BellSouth moved for a preliminary injunction to enjoin the City from enforcing the ordinance, which the district court denied. The Fifth Circuit Court of Appeals (1) affirmed the district court's findings of fact and conclusions of law, in part, to the extent the court rejected the City's claims for damages; and (2) reversed and vacated the district court's judgment awarding unjust enrichment damages to the City, holding that BellSouth had justification in contract for any enrichment it was enjoying from its use of the City's rights-of-way. Remanded with instructions to permanently enjoin enforcement of the City's ordinance. View "BellSouth Telecomm., LLC v. City of New Orleans" on Justia Law

This case arose from an underlying dispute involving three parties related to an alleged breach of an assignment agreement. The three parties disagreed over the appointment of arbitrators to hear their dispute. The agreement to arbitrate seemed designated for a two-party dispute. Notwithstanding that the parties agreed to arbitrate before three arbitrators, the district court ordered the parties to proceed to arbitration before five arbitrators: three party-appointed arbitrators, who would then choose two neutral arbitrators. If the party-appointed arbitrators could not agree, the district court ordered the parties to petition for appointment of the two neutral arbitrators. On appeal, the Fifth Circuit Court of Appeal affirmed in part and vacated in part the district court's judgment, holding (1) there was a lapse in the naming of the arbitrators in the parties' agreement; (2) the district court was authorized to exercise appointment power under 9 U.S.C. 5; and (3) the district court erred in deviating from the parties' express agreement to arbitrate before a three-member panel. Remanded. View "BP Exploration Libya Ltd. v. ExxonMobil Libya Ltd." on Justia Law

The Fifth Circuit Court of Appeals withdrew its previous opinion in this case filed on April 20, 2012. Because the case involved important and determinative questions of Texas law as to which there was no controlling Texas Supreme Court precedent, the Court substituted its previous opinion with the following questions to the Supreme Court of Texas: (1) whether, under Texas law, at-will employees may bring fraud claims against their employers for loss of their employment; and (2) if question number one is answered in the negative, whether employees covered under a sixty-day cancellation-upon-notice collective bargaining agreement that limits the employer's ability to discharge its employees only for just cause may bring Texas fraud claims against their employer based on allegations that the employer fraudulently induced them to terminate their employment. View "Sawyer v. E I DuPont de Nemours & Co." on Justia Law

Defendant United Polychem, Inc. (UPC) and Lynne Van Der Wall (collectively, Appellants) and Plaintiff Westlake Petrochemicals, LLC (Westlake) appealed different results of a jury trial. At the core of the trial was an agreement between UPC as buyer and Westlake as seller of ethylene, a petroleum product. The jury found that (1) the parties had formed a binding contract, (2) UPC breached that contract, and, as a result, (3) UPC was liable to Westlake for $6.3 million in actual damages and $633,200 in attorneys fees. The district court also held Van Der Wall jointly and severally liable under the terms of a guaranty agreement. The Fifth Circuit Court of Appeals affirmed in part and reversed and remanded in part, holding (1) a binding contract was established, (2) the district court applied the incorrect measure of damages, and (3) Van Der Wall, as UPC's president, was not jointly and severally liable with UPC for the jury verdict under the terms of the guaranty. The Court vacated the damages award and remanded for the district court to calculate the damages under Tex. Bus. & Com. Code Ann. 2.708(b).

The Stockmans entered into an extension of their mineral lease with Chesapeake Louisiana, L.P. and received a $240,000 bonus. In May 2008, the Stockmans entered into a mineral lease with Petrohawk Properties, L.P. for a $1.45 million bonus. Petrohawk then dishonored the draft and executed a second mineral lease with the Stockmans, paying them a $1.7 million bonus. Chesapeake sued the Stockmans for breach of contract, and the parties settled at trial. The Stockmans then sued Petrohawk for fraud in obtaining the first mineral lease, and Chespeake sued Petrohawk for intentional interference with its contract with the Stockmans. The district court (1) found that Petrohawk procured the first mineral lease by fraud and rescinded the lease, (2) dismissed Chesapeake's tort claim, and (3) dismissed Petrohawk's claim for a return of its bonus money. The Fifth Circuit Court of Appeals affirmed, holding (1) Petrohawk obtained the first lease by fraud, and the district court did not err in rescinding the lease, awarding attorney's fees to the Stockmans; (2) the district court did not err in dismissing Petrohawk's counterclaim for the return of the lease bonus; and (3) the district court correctly dismissed Chespeake's intentional interference with a contract claim.

Plaintiff, Pervasive Software Inc., a Delaware corporation having its principal office in Austin, Texas, sued Defendant, Lexware GmbH & Co. Kg, a corporation organized under the laws of the Federal Republic of Germany, for damages and injunctive relief on the basis of breach of contract, quantum meruit, unjust enrichment, and conversion in a Texas state court. Lexware removed the case to the federal district court, and that court, in response to Lexware's motion, dismissed the case for lack of personal jurisdiction over Lexware. Pervasive appealed. The Fifth Circuit Court of Appeals affirmed, concluding that Pervasive had failed to establish a prima facie case that Lexware minimum contacts with Texas to support the exercise of either specific or general personal jurisdiction over Lexware.

After coming home drunk, Wesley Vincent was found face-down in front of his house by his wife, Cheryl Likens. Vincent was taken to the hospital but eventually died. Likens tried to collect as the beneficiary of an accidental-death insurance policy, but the claim was denied under an alcohol exclusion because Hartford Life and Accident Insurance Company determined that the injury resulted from being legally intoxicated from alcohol. The district court granted summary judgment for Hartford based on the alcohol exclusion. The Fifth Circuit Court of Appeals affirmed, holding that a reasonable jury could not help but conclude that Vincent fell and suffered injuries as a result of his intoxication. On these facts, intoxication may not have been the only cause, but it did not have to be so to satisfy the exclusion.