Justia Contracts Opinion Summaries

Four upper-level managers at Tradesmen, a construction staffing company, formed a competing company in 2009. Tradesmen filed suit alleging breach of contract, misappropriation of trade secrets and confidential information, breach of duty of loyalty, tortious interference with contractual relations, tortious interference with business expectancy, conversion, and civil conspiracy, and seeking a declaratory judgment with respect to covenants not to compete and injunctive relief. Proceedings against one defendant were stayed, due to bankruptcy. The district court granted summary judgment to the remaining defendants, except with respect to the declaratory judgment count, but found that the covenants had already expired. The district court denied attorney’s fees. The Seventh Circuit held that because of the stay, the summary judgment ruling was not a final decision, so that it lacked jurisdiction on appeal under 28 U.S.C. 1291, except with respect to the request for injunctive relief (28 U.S.C. 1292(a)(1)). The court affirmed on that issue, reasoning that Tradesmen failed to show that it suffered any harm, let alone irreparable harm, from the remaining defendants’ actions. View "Tradesmen Int'l, Inc. v. Black" on Justia Law

Reynolds acquired Pactiv in 2010 under an agreement that calls for severance pay to any non‐union employee terminated without cause, within a year, as a result of the acquisition. Pactiv established a severance‐pay plan with implementing terms, including a requirement that the departing worker execute a separation agreement in a form acceptable to the company, releasing all other claims against Pactiv. Within a year, Pactiv directed Rupert to relocate. He declined. Pactiv acknowledged entitlement to severance pay and sent him an agreement, which required that Rupert promise, for the next year, not to work for competitors in research and development, solicit sales of competing goods and services, or try to hire Pactiv employees. He had not previously been subject to a restrictive covenant and declined to sign. Pactiv withheld severance benefits. The district court held that Rupert was entitled to benefits because the formal plan, governed by ERISA, lacks any language conditioning benefits on signing a restrictive covenant; material terms must be in writing, 29 U.S.C.1102(a)(1). The Seventh Circuit vacated, noting that Rupert did not ask for benefits under Pactiv’s plan, but asked for benefits under the acquisition agreement, repeatedly asserting that the plan is irrelevant to his claim. The court remanded for consideration under that agreement. View "Pactiv Corp. v. Rupert" on Justia Law

DeGuelle, an accountant, worked from 1997 to 2009 in the tax department of S.C. Johnson & Son. He alleges that during his employment he discovered that the company had committed tax fraud. The company fired him. He took confidential corporate tax documents with him when he left and accused the company, in a newspaper, of tax fraud. The company sued him in Wisconsin state court for breach of contract, conversion, and defamation. He counterclaimed for wrongful termination and breach of contract, claiming retaliation for his opposing the alleged tax fraud. The company moved for summary judgment, attaching an affidavit from a tax lawyer at Kirkland & Ellis denying tax fraud. DeGuelle, litigating pro se, filed no counter-affidavits. The state court granted summary judgment; a court of appeals affirmed. DeGuelle filed a federal suit, charging both federal and state violations, all growing out of the alleged tax fraud. Following a remand, the district judge, after the state court ruled, granted summary judgment in favor of the company, reasoning that the finding by the Wisconsin court that there had been no tax fraud bound the court by the doctrine of issue preclusion. The Seventh Circuit affirmed. View "DeGuelle v. Camilli" on Justia Law

Allen suffered a fatal heart attack in 2009, leaving a wife of three years, Arlene, and three adult children from a previous marriage. At the time of Allen’s death, his daughter and her children lived with Allen and Arlene. Allen had a will bequeathing $100,000, but his assets passed outside of probate, leaving his estate with insufficient funds for the bequest. Allen had designated his children as beneficiaries of assets, including a home, life insurance policies, retirement accounts, and other savings accounts. Allen had one life insurance policy as part of his compensation package as a pharmacist, which provided $74,000 in basic coverage and $341,000 in supplemental coverage. If the policyholder failed to designate a beneficiary by his date of death, the proceeds would pass to the policyholder’s spouse by default. The insurer never received any indication that Allen wished to designate a beneficiary. In the days following Allen’s death, however, the children found a change-of-beneficiary form, allegedly completed by their father more than a year before his death, but never submitted. The district court ruled in Arlene’s favor, finding that even if Allen had filled out a change-of-beneficiary form he had not substantially complied with policy requirements for changing beneficiaries. The Seventh Circuit affirmed. View "Kagan v. Kagan" on Justia Law

Elliot, which provides construction and maintenance services, owns and leases bucket trucks. In 1996, Elliot entered into a lease with TECO, a manufacturer of such trucks, agreeing agreed to hold TECO harmless from liability arising from injuries resulting from use, operation, or transportation of the vehicle or its location or condition. In 2000, Large was injured while operating a truck, which his employer, Elliot, had leased from TECO. Large sued TECO. TECO’s successor in interest (Mobile) filed a third-party complaint against Elliot, seeking defense and indemnification pursuant to the lease. Mobile later settled with Large without Elliot’s participation, leaving the third-party complaint against Elliot as the only outstanding issue. After a change in Virginia law, Mobile again moved for summary judgment, which the district court granted, holding Elliot responsible to defend and indemnify Mobile. The Seventh Circuit affirmed, rejecting Elliot’s argument that a later invoice superseded the terms of the lease, eliminating Elliot’s duty to defend and indemnify except in the case that Elliot violated obligations under the invoice by failing to either adequately train Large in the use of the truck or to provide him with copies of the truck’s operation and maintenance manuals. View "Large v. Mobile Tool Int'l, Inc." on Justia Law

Clark, the owner and president of an East St. Louis Illinois company, was charged with making false statements in violation of 18 U.S.C. 1001(a)(3). Clark’s company had entered into a hauling services subcontract with Gateway, general contractor on a federally funded highway project in St. Louis, Missouri. Employers must pay laborers working on certain federally-funded projects the “prevailing wage,” calculated by the Secretary of Labor based on wages earned by corresponding classes of workers employed on projects of similar character in a given area, and maintain payroll records demonstrating prevailing wage compliance, 40 U.S.C. 3142(b) The indictment charged that Clark submitted false payroll records and a false affidavit to Gateway, representing that his employees were paid $35 per hour, when they actually received $13-$14 per hour. The district court dismissed for improper venue, finding that when a false document is filed under a statute that makes the filing a condition precedent to federal jurisdiction, venue is proper only in the district where the document was filed for final agency action. The Seventh Circuit reversed. Although the effects of the alleged wrongdoing may be felt more strongly in Missouri than in Illinois, the Southern District of Illinois is a proper venue. View "United States v. Clark" on Justia Law

PFG and Acuvest had an agreement (later terminated) under which guaranteed Acuvest’s customers that Acuvest would conform its conduct to CEA mandates. Acuvest advised Prestwick with respect to an investment on which it suffered a substantial loss. Prestwick sued PFG, Acuvest, and two of Acuvest’s principals, alleging violations of the Commodity Exchange Act (CEA), 7 U.S.C. 1, a breach of fiduciary duty against the Acuvest defendants, and a guarantor liability claim against PFG. Prestwick argued that termination of PFG’s guarantee of Acuvest’s obligations under the CEA did not terminate protection “for existing accounts opened during the term of the guarantee.” The district court awarded summary judgment to PFG and dismissed the remaining defendants with prejudice so that Prestwick could appeal. The Seventh Circuit affirmed, stating that contracts between the parties were definitive and rejecting Prestwick’s assertion public policy and estoppel to overcome a decision that the guarantee agreement was properly terminated. View "Prestwick Capital Mgmt., Ltd. v. Peregrine Fin. Grp., Inc." on Justia Law

McDonough is an engineering firm that frequently does design jobs for the Illinois Department of Transportation (IDOT). The Illinois Procurement Code provides that, absent required signatures, a contract of the type in dispute is not valid and not an enforceable debt, 30 ILCS 500/20-80(d). McDonough claimed that IDOT owed it $2 million for additional work on three projects, none of which had a supplemental agreement that was fully executed. McDonough claimed that it continued working without the agreements because it was IDOT’s normal business practice always to sign an agreement after a prior approval letter was sent. Based on findings that McDonough had made accounting errors that called its business integrity into question, the chief procurement officer suspended McDonough’s status as a “prequalified vendor” automatically eligible to bid on IDOT projects. McDonough claimed that refusal to sign the agreements deprived it of property interests in the debts without due process of law. Faced with threats, of bankruptcy, the district court entered a temporary restraining order, effectively ordering state officials to pay. The Seventh Circuit vacated, finding that the suit is, in substance, an effort to have a federal court order state officials to make payments from the state treasury to remedy alleged breaches of contract and is prohibited by the Eleventh Amendment. View "McDonough Assocs., Inc. v. Schneider" on Justia Law

The Wehrles were struck by drunk-driver Barth. Robert Wehrle’s injury claim exceeded $750,000 and his wife's claim exceeded $1.5 million. Barth’s auto insurance policy included a $100,000 per-person liability limit. Each recovered that amount from Barth’s insurer. The Wehrle’s own policy, issued by Cincinnati, included underinsured-motorist coverage, for up to $1 million. Cincinnati paid $800,000, reasoning that the Wehrles’ policy reduces its $1 million maximum payout “by all sums paid by anyone who is legally responsible,” and that the Wehrles had recovered $200,000 from Barth’s insurer. The Wehrles claimed that the $100,000 that they each received from the drunk-driver’s insurer should reduce their individual claims. The district court ruled in favor of the insurer. The Seventh Circuit affirmed, holding that the policy language unambiguously supported the insurer’s interpretation and was consistent with the gap-filling purpose of underinsured-motorist insurance. View "Wehrle v. Cincinnati Ins. Co." on Justia Law

In 2006, Kevin and his wife Marjorie moved to Indiana, to manage car dealerships owned by Savoree. In 2007 Savoree proposed selling the dealerships to the couple through a series of stock purchases to be financed by a $3.5 million loan from CSB. After negotiating the loan with CSB, Kevin took out a life insurance policy with Cincinnati Life that named Marjorie as the beneficiary. Two months later, Kevin assigned that policy to CSB. The couple eventually declared bankruptcy and litigation between all of the parties ensued. Kevin died of cancer in 2010. Cincinnati Life deposited the proceeds, $3 million, with the clerk of court and sought judicial determination of ownership. The district court dismissed Marjorie’s claims with prejudice for failing to meet pleading standards and entered summary judgment for CSB. The Seventh Circuit affirmed, finding that Marjorie did not present any evidence to create a genuine disputed issue of material fact. She identified lack of consideration for the assignment as a potential disputed fact, but the assertion was made and repeated without any support or citation to evidence. View "Cincinnati Life Ins. Co. v. Beyrer" on Justia Law