Justia Contracts Opinion Summaries

This insurance coverage dispute arose from a policy designed to protect financial institutions from losses caused by dishonest employees. Trying to recover nearly one million dollars stolen by an employee from client brokerage accounts, three financial institutions sued the insurance company that issued the policy. The district court held that the policy covered the losses and granted summary judgment to the financial institutions. The Sixth Circuit Court of Appeals affirmed the court's liability judgment and all but one of its damages calculations, holding (1) the stolen money was covered property; (2) the employee's theft caused a direct loss to the bank; (3) the employee committed his dishonest acts with the manifest intent to cause the loss; and (4) the district court's decision to subtract another insurance company's $50,000 pay-out to the banks based on another employee-dishonesty policy from the damages award was error. Remanded. View "First Defiance Fin. Corp. v. Progressive Cas. Ins." on Justia Law

This insurance coverage dispute arose from a policy designed to protect financial institutions from losses caused by dishonest employees. Trying to recover nearly one million dollars stolen by an employee from client brokerage accounts, three financial institutions sued the insurance company that issued the policy. The district court held that the policy covered the losses and granted summary judgment to the financial institutions. The Sixth Circuit Court of Appeals affirmed the court's liability judgment and all but one of its damages calculations, holding (1) the stolen money was covered property; (2) the employee's theft caused a direct loss to the bank; (3) the employee committed his dishonest acts with the manifest intent to cause the loss; and (4) the district court's decision to subtract another insurance company's $50,000 pay-out to the banks based on another employee-dishonesty policy from the damages award was error. Remanded. View "First Defiance Fin. Corp. v. Progressive Cas. Ins." on Justia Law

Plaintiffs sought to recover on behalf of themselves and similarly-situated employees and retirees of the City of Cincinnati the current value of the 870,021 shares of Anthem stock that the City received from Anthem’s demutualization. Plaintiffs asserted eight claims for breach of contract and four tort claims against Anthem and three breach of contract claims and four tort claims against the City. The district court certified the class: 2,536 people named as insureds, or former members of a group of insured persons, covered under a health care group policy from June 18 through November 2, 2001. The class included “Class A” members, who had an insurance policy with Anthem prior to its merger with Community in 1995 and “Class B” members who received a health insurance group policy after the merger. The court later dismissed. The Sixth Circuit, exercising jurisdiction under the Class Action Fairness Act of 2005, 28 U.S.C. 1332(d), affirmed. Plaintiffs cannot recover any demutualization compensation; the City was the policyholder before the merger and maintained its policyholder rights post-merger through a grandfather clause, including any rights to demutualization proceeds. The 2001 demutualization process did not disrupt the City’s membership interests or confer any equity rights to Plaintiffs.

DiPonio Construction entered into a collective bargaining agreement with the Union, which it subsequently terminated according to the terms of the agreement. DiPonio refused to bargain for a new agreement and sought a declaratory judgment. The district court held that even if it possibly had concurrent jurisdiction with the National Labor Relations Board to decide this issue, it would be inappropriate to exercise it, and imposed sanctions (attorney fees) against DiPonio under Federal Rule of Civil Procedure 11. The Sixth Circuit affirmed. The ultimate issue is whether the CBA was entered into pursuant to section 8(f) of the National Labor Relations Act, 29 U.S.C. 158(f), or section 9(a) of the NLRA, 29 U.S.C. 159(a). If the CBA was a section 8 contract, DiPonio had no duty to negotiate for a new CBA; however, if it is a section 9(a) contract it did. DiPonio’s claims are clearly “primarily representational” and fall within the primary jurisdiction of the NLRB.

Access to the Ambassador Bridge between Detroit and Windsor, Ontario necessitated traversing city streets. The state contracted with the Company, which owns the Bridge, to construct new approaches from interstate roads. The contract specified separate jobs for the state and the Company. In 2010, the state obtained a state court order, finding the Company in breach of contract and requiring specific performance. The Company sought an order to open ramps constructed by the state, asserting that this was necessary to complete its work. The court denied the motion and held Company officials in contempt. In a 2012 settlement, the court ordered the Company to relinquish its responsibilities to the state and establish a $16 million fund to ensure completion. Plaintiffs, trucking companies that use the bridge, sought an injunction requiring the state to immediately open the ramps. The district court dismissed claims under the dormant Commerce Clause, the motor carriers statute, 49 U.S.C. 14501(c), and the Surface Transportation Assistance Act, 49 U.S.C. 31114(a)(2). The Sixth Circuit affirmed. For purposes of the Commerce Clause and statutory claims, the state is acting in a proprietary capacity and, like the private company, is a market participant when it joins the bridge company in constructing ramps.

In 1990, Pedicini purchased a LICOA supplemental cancer-insurance policy that provided for unlimited cash benefits, payable directly to Pedicini, equal to “usual and customary charges” for radiation or chemotherapy received as treatment. In 2001, Pedicini obtained assistance from an insurance agent, who negotiated a policy with LICOA that capped benefits for treatments at $25,000 per year, lowering the premium. The policy, effective October 2001, tied benefits to “actual charges” made by a person or entity furnishing services treatment or material. Unbeknownst to Pedicini, in February 2001, LICOA changed its practices. It had paid benefits tied to the amount billed by medical providers regardless of the amount accepted in payment, but began paying benefits equal to the amount accepted as full payment by providers. LICOA did not notify policyholders, but did notify its agents. In 2007, Pedicini was diagnosed with cancer. His benefits were only equal to the discounted amount accepted by his provider due to his status as a Medicare recipient. Pedicini won summary judgment on a breach of contract claim, but the court ruled in favor of LICOA on bad faith claims. The Sixth Circuit affirmed on the contract claim, but reversed with respect to bad faith claims.

Plaintiffs sought damages for breach of contract and unjust enrichment. Hartmann counterclaimed for breach of contract. The parties unsuccessfully exchanged multiple settlement offers. Three days before an agreed-upon discovery deadline, Hartmann notified plaintiffs that it intended to exercise its right to arbitrate as provided by their contract. When plaintiffs failed to respond, Hartmann filed a motion to compel arbitration. Plaintiffs served discovery responses on Hartmann in accordance with the agreed deadline and continued to seek discovery from Hartmann while the motion was pending. When Hartmann served discovery responses, it stipulated that it was not waiving its right to arbitrate. The court held that Hartmann had waived its right to compel arbitration by obtaining an extension of time within which to file an answer; asserting 10 affirmative defenses and a counterclaim; engaging in a judicial settlement conference and informal efforts to resolve the case; requesting adjustments of the Case Management Order; and serving discovery requests and that those actions prejudiced plaintiffs. The Sixth Circuit affirmed. Hartmann’s actions were completely inconsistent with any reliance on its right to arbitration and belated assertion of that right caused plaintiffs actual prejudice in the form of unnecessary delay and expense.

The center provided care for children of low-income parents and sought license renewal in 2005. The application remained pending for 15 months. During that period, the state agency, ODJFS, reduced its capacity from 88 to 38 children. The agency responsible for funding under Title XX, which provides government assistance for child care, 42 U.S.C. 1397, discontinued public assistance for its services, based on a proposed adjudication, which would reject the renewal application based on alleged improper use of physical discipline and failure to adequately ensure that employees did not have disqualifying criminal convictions. While the matter was pending, the center experienced difficulty with third-party contracts, including liability insurance and workers compensation renewal certification, and went out of business. The center sued under 42 U.S.C. 1983 and state law, claiming tortious interference with business relationships, based on racial animus. After the center also filed in the Ohio Court of Claims, the district court dismissed the claims against ODJFS. The center continued to amend its federal pleadings, including addition of an antitrust claim, but the claims were ultimately dismissed. The Sixth Circuit affirmed, finding that any unwaived claims were barred by the Local Government Antitrust Act.

V&M filed suit against Centimark alleging breach of contract and negligence after metal roof sheeting panels being installed at its steelwork facility fell into an electrical substation, causing loss of power for more than 30 hours. Damages for repairs and lost profits were around $3 million The district court granted Centimark summary judgment, ruling that V&M failed to produce sufficient evidence of causation to sustain either legal claim. The Sixth Circuit reversed and remanded, holding that genuine issues of material fact exist.

Plaintiffs were catastrophically injured in automobile accidents. All sustained traumatic brain injuries and are now mentally impaired. State Farm initially paid no-fault insurance benefits for the cost of attendant care services rendered at home, but reduced the rates on the basis of market surveys of the cost of the services. State Farm refused to raise the rates because it could not verify whether plaintiffs had received the type of care that would justify paying higher rates. Plaintiffs refused to submit documentation regarding the nature and extent of the care they were receiving. Plaintiffs sued. The district court awarded plaintiffs monetary sanctions, instead of default judgment, in response to State Farm’s violation of discovery orders. A jury rendered a verdict in State Farm’s Favor. The Sixth Circuit dismissed appeal regarding the discovery sanctions, for lack of jurisdiction, but otherwise affirmed.