Justia Contracts Opinion Summaries

In addition to about $4 million invested through his family corporation, Nonneman personally invested about $15 million in OKO for domestic oil and gas exploration, although he had no experience in such businesses, was showing signs of dementia, and suffered disabilities. In 2003, Nolfi assumed management of Nonneman’s affairs and it was apparent that the OKO investments would yield no returns. Of 128 wells, only 11 produced oil, and did not produce enough to recoup the investment. Nolfi filed suit in Ohio state court and learned facts that gave rise to federal and state securities claims. He filed in federal court, alleging violations of the Securities Act of 1933, 15 U.S.C. 78j(b) and 77l(a)(1); violations of the Ohio Blue Sky laws by the sale of unregistered securities; federal securities fraud; misrepresentation; common law fraud; breach of fiduciary duties; and breach of contract. The cases were consolidated and, after complicated rulings concerning limitations periods, the district court entered judgment for Nonneman. Despite having stated rescissory damages as more than $7 million, the jury only listed an award of $1,777,909 on its verdict form. The court held that plaintiffs had waived their right to challenge the verdict. Sixth Circuit affirmed.

Nonneman, acting through Fencorp, a family investment corporation, invested $3,980,345.50 in OKO for domestic oil and gas exploration, although he had no experience in such businesses, was showing signs of dementia, and suffered disabilities. In 2003, Nolfi assumed management of Nonneman’s affairs and it was apparent that the OKO investments would yield no returns. Of 128 wells, only 11 produced oil, and did not produce enough to recoup the investment. Nolfi filed suit in Ohio state court. During discovery plaintiffs learned facts indicating federal and state securities violations and filed in federal court, alleging violations of the Securities Act of 1933, 15 U.S.C. 77l(a)(1); violations of the Ohio Blue Sky laws by the sale of unregistered securities; federal securities fraud; common law fraud; misrepresentation; breach of fiduciary duties; and breach of contract. After a complicated set of rulings, the district court awarded Fencorp $1,012,835.50, the maximum not barred by the statute of repose. The Sixth Circuit affirmed in part, upholding rulings concerning the statute of repose, but setting aside the verdict on the state common law fraud claim and directing reinstatement of the verdict on the federal securities claim ($847,858).

The collective bargaining agreement was scheduled to expire. During negotiations, the union disclaimed representation of the company's employees and terminated the collective bargaining process. The company then withdrew from the multiemployer pension plan. The pension fund imposed withdrawal liability and assessed $57,291.50, 29 U.S.C. 1399. The company demanded indemnification from the union pursuant to the collective bargaining agreement, which stated: "The Union shall indemnify the Company for any contingent liability which may be imposed under the Multiemployer Pension Plan Amendments Act of 1980." The district court concluded that an arbitration provision was enforceable. The arbitrator ordered the union to pay. The district court upheld the award. The Sixth Circuit affirmed, rejecting an argument that it would violate public policy for a union to indemnify an employer for any contingent liability to a pension plan established under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1381-1461.

Plaintiff rented a car, drove 64 miles in one day, refilled the fuel tank, and returned the car to the same location from which he rented the car. In addition to rental and other fees that he does not dispute, he was charged a $13.99 fuel service fee that he challenged by filing a putative class action, claiming breach of contract, fraud, and unjust enrichment. Defendant claimed that, because plaintiff drove fewer than 75 miles during the rental period, to avoid the charge he was required to return the car with a full fuel tank and to submit a receipt. The district court dismissed, finding that the contract was not ambiguous. The Sixth Circuit affirmed, citing the voluntary payment doctrine.

Dorn Sprinkler, formed in 1977 and operated by its owner, David, failed to contribute to benefit funds required by its collective bargaining agreement for three months in 2006-2007. Employees organized a work stoppage. Sprinkler went out of business with its required contributions still unpaid. David’s son, Christopher, lead salesman at Sprinkler, had formed a company called Dorn Fire Protection during the 1990s but had not started doing business. Shortly before financial troubles at his father's business, Christopher began operations. The Union submitted a request to arbitrate to Fire Protection under the theory that it is an alter ego of Sprinkler. Fire Protection refused. The district court, finding that Fire Protection is not an alter ego of Sprinkler, granted summary judgment to defendants. The Sixth Circuit affirmed. The management structures at the companies were not substantially identical; there was no substantial continuity in employees, customers or equipment. There was no proof of intent to avoid the bargaining agreement.

In 2006, plaintiffs contracted with defendant to purchase a condominium for $395,900. They made cash deposits of $11,877 and executed a note for $19,795. When notified of a closing date in 2009, plaintiffs' counsel sent defendant a letter rescinding the agreement and requesting return of the deposits. Defendant declined. Plaintiffs' complaint alleged violation of the Interstate Land Sales Full Disclosure Act, 15 U.S.C. 1701, for failing to provide a printed property report, and failure to include a provision notifying plaintiffs that if defendant failed to furnish a property report before execution of the purchase agreement, they had the right to revoke the purchase agreement within two years of its signing. They also asserted a claim under the Michigan Condominium Act, Mich. Comp. Laws 559.184. The district court held that the claim for rescission was untimely, stating that a purchaser must notify the seller of rescission within two years after the signing, but a has an additional third year to bring suit if the seller refused to honor the rescission. The Sixth Circuit affirmed that the claim for automatic rescission was untimely, but reversed dismissal of the state law claim and remanded. Equitable rescission may be available under 15 U.S.C. 1709.

Defendant, a Russian citizen, attended graduate school and owns real property, vehicles, and bank accounts in Ohio. He spends some time in Ohio each year, ranging from 40 days in 2007 to a total of 17 days in 2008–2009. He visits under a tourist visa and does not have an Ohio driver's license. After going to Russia to take part in a business venture with defendant, plaintiff filed suit in Ohio. The contract had no connection to the state. The trial court dismissed for lack of personal jurisdiction, noting that defendant was not served with process in a manner that automatically confers personal jurisdiction. The Sixth Circuit affirmed, finding that notions of fair play and substantial justice weigh against jurisdiction in Ohio. The court quoted a Russian proverb, “If you’re afraid of wolves, don’t go into the forest” that could be read, “If you’re afraid of the Russian legal system, don't do business in Russia.”

Plaintiff was hired as a nurse by defendant in October 2006, had to take leave for cancer treatment, then was informed that she had been terminated on December 12, 2006 because she did not have "any accrued PTO time or FMLA." The district court dismissed claims under the Americans with Disabilities Act, finding that plaintiff assented to a valid agreement to arbitrate the claims. The Sixth Circuit reversed. The employee handbook stated: "Dispute Resolution Process Please refer to the Eby Companies Dispute Resolution Procedure (DRP) for details." That policy does refer to arbitration and contains a signature line. Plaintiff claims she did not receive or sign the policy and defendant did not provide a signed acknowledgment. There was no indication that plaintiff was notified of the existence of the arbitration agreement, much less that she manifested an intent to agree to its terms.

Plaintiff a law school faculty member living in Ohio, contracted with defendant (Nevada corporation, doing business in California) for publication of his manuscript, giving a Virginia address. Based on delays in publication, plaintiff sued for breach of contract, interference with contract and prospective advantage, defamation, intentional or reckless infliction of emotional distress, negligent infliction of emotional distress; misrepresentation, and fraud. After several motions, including default judgment and reinstatement, and discovery, defendant successfully moved to dismiss for lack of personal jurisdiction. The Sixth Circuit reversed and remanded. Defendant waived the personal jurisdiction defense and voluntarily submitted to the district courtâs jurisdiction, when its attorney entered a general appearance on its behalf.

Plaintiff contracted to purchase 11 Burger King restaurants. A jury found that defendant had properly terminated the agreement but had breached the duty of good faith and fair dealing, and awarded $190,907.27. Over one year later, the district court entered a partial judgment denying specific performance and awarding $5,176.24 of the $424,282.19 in attorneysâ fees and expenses incurred in connection with the litigation. The Sixth Circuit reversed and remanded. The plaintiffs presented evidence that defendant hindered attempts to close the transaction, but defendant's actions in blocking due diligence and failing to provide financial information did not cause plaintiff damages because defendant properly terminated the agreement. The district court erred in calculating fees and expenses.