Justia Contracts Opinion Summaries

The Andersons appealed the grant of summary judgment by the district court in favor of Hess Corporation (Hess), the successor in interest to and lessee of mineral rights on the Andersons' land. The Andersons contended that the district court erred in construing the five leases at issue as requiring Hess to engage in "drilling operations" rather than actual "drilling" in order to extend the primary terms of the leases and granting Hess's motion for summary judgment. The court held that the district court did not abuse its discretion in declining to certify the Andersons' question regarding the meaning of the phrase "engaged in drilling or reworking operations." The court also held that this disputed lease language was not ambiguous and meant "engaged in drilling operations or reworking operations." Therefore, the district court correctly interpreted the disputed lease language and properly granted summary judgment in favor of Hess on the Andersons' quiet title claim.

Auto Owners Insurance Company (Auto Owners) appealed an order granting summary judgment in favor of appellee and awarding her $124,500, the face value of the insurance policy sold to her by Auto Owners. Because Schubert owned a one-half interest in the dwelling covered by the policy, which was completely destroyed by fire, Auto Owners offered to pay her half of the policy value. Auto Owners cited a provision within the policy which limited recovery to "[no] more than the insurable interest the insured had in the covered property at the time of the loss." The district court declared this provision void as contrary to the public policy expressed in the Missouri valued policy statute, Mo. Rev. Stat. 379.140, and alternatively found its language ambiguous so as to allow appellee to recover the face value of the insurance policy. The court agreed with the district court's conclusions as to both points and affirmed the judgment. The court also held that, after initially questioning its jurisdiction over the matter, the case satisfied the $75,000 amount-in-controversy requirement and jurisdiction was proper.

Defendant entered into an Employment Agreement with his employer before the employer entered into a merger. After defendant was terminated by his employer and post-merger disputes arose as to the amounts his employer owed him, defendant filed a demand for arbitration under the Employment Agreement's arbitration provision. The employer commenced this action to enjoin the arbitration as preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The employer alleged federal question jurisdiction under 28 U.S.C. 1331 because the severance dispute "arises out of an [ERISA] employee benefit plan" and therefore state law claims were preempted, and supplemental jurisdiction under 18 U.S.C. 1367 over non-ERISA claims. The court considered ERISA's statutory language, purpose, and historical context and held that an individual contract providing severance benefits to a single executive employee was not an ERISA employee welfare benefit plan within the meaning of section 1002(1). The court also held that ERISA preempted state laws that "relate to" an employee benefit plan. Consequently, further questions arose because the Employment Agreement included two provisions that could "relate" to the Employment Agreement to other programs of the employer that were ERISA plans. As neither parties nor the district court considered this jurisdictional issue, the court remanded for further proceedings.

Appellants sued appellee under 49 U.S.C. 14103(a) for the reimbursement of fees associated with the loading and unloading of its trucks at appellee's facilities. Appellants subsequently appealed the district court's grant of summary judgment. The court concluded that the district court properly read section 14103(a) to preclude relief for unreimbursed "lumping" absent a plaintiff-trucker's affirmative showing that he or she was not reimbursed by either the shipper or the receiver. Therefore, the court affirmed the district court's order of summary judgment where appellants failed to identify any of its trucks whom a shipper had not already reimbursed.

3M Company sued Inspired Technologies, Inc. (ITI) for allegedly unfair and false advertising, in violation of the Lanham Act, 15 U.S.C. 1051, et seq., and the Minnesota Uniform Deceptive Trade Practices Act (MDPTA), Minnesota Statutes 325D.43-325D.48, alleging that ITI engaged in an advertising campaign for its Frog Tape product that depicted 3M Tape as performing poorly in certain respects. ITI tendered a defense of the lawsuit to its liability-insurance carrier, AMCO Insurance Company (AMCO), and the lawsuit ultimately settled. Following the settlement, AMCO filed the instant declaratory judgment action against ITI, seeking a declaration that it did not owe ITI any duty to defend or indemnify because the insurance policy's knowledge-of-false exclusion excluded the 3M suit from coverage. The court found that the two interrogatory answers upon which the district court relied did not reflect that 3M alleged ITI's knowledge of falsity as to all the purportedly unfair advertising. Consequently, the court held that AMCO failed to satisfy its burden of demonstrating, as a matter of law, that every claim in 3M's complaint fell clearly outside the policy's coverage. Accordingly, because 3M alleged at least one arguably coverable claim, AMCO owed ITI a duty under Minnesota law to defend the entire suit and therefore, the district court's grant of summary judgment was reversed and remanded.

Plaintiff, the Chapter 7 trustee, appealed the bankruptcy court's entry of a judgment in favor of defendants on his complaint seeking turnover under 11 U.S.C. 542 of money allegedly owed to the bankruptcy estate. The court held that while there was no clear error in the bankruptcy court's determination that defendants were not unjustly enriched and therefore, defendants were not indebted to the bankruptcy estate, the court affirmed on the more fundamental ground that the relief sought by the trustee was beyond the scope of 11 U.S.C. 542.

Appellants challenged the denial of their claim for benefits arising from an underinsured motorists (UIM) policy issued by appellee. Appellants appealed the adverse grant of summary judgment and the denial of their request for certification of a question of law to the North Dakota Supreme Court. The court held that the negligent driver's excess-liability policy was relevant to determining the underinsured status of his vehicle. Thus, as a matter of law, the negligent driver's vehicle was not underinsured and appellants were not entitled to coverage under the UIM endorsement. The court also declined to certify the question where the case had been decided by summary judgment. Accordingly, the court affirmed the judgment of the district court.

Appellants sued appellee seeking insurance coverage for damages resulting from a pipe rupture in appellants' refrigerated warehouse. Appellants appealed the district court's grant of appellee's motion for summary judgment on appellants' first coverage theory and the dismissal of appellants' vexatious refusal to pay claim. Appellants also raised several claims of error with respect to the second theory of coverage submitted to the jury, including a claim of instructional error. The court held that the district court erred in adopting the restrictive definition of "collapse" discussed by the Missouri Court of Appeals in Williams v. State Farm Fire & Cas. Co., Eaglestein v. Pac. Nat'l Fire Ins. Co., and Heintz v. U.S. Fid. & Guar. Co., because none of those cases addressed the meaning of the term "collapse" when used in conjunction with the expansive definition of the term "buildings" used in this policy. As a result, the district court erred in granting appellee's motion for summary judgment. The court also held that the district court erred when it determined the weight of ice on the refrigerated pipes did not constitute a specified cause of loss under the terms of the policy. The court further held that it was unnecessary to address the claims appellants appealed with respect to alleged trial errors because the only theory of coverage submitted to the jury was appellants' "weight of ice" coverage claim and appellants were entitled to partial summary judgment on the issue of liability under that theory. The court finally affirmed the district court's grant of summary judgment on the vexatious refusal to pay claim where the district court correctly determined that appellee could insist upon a judicial determination of certain questions without being penalized for a vexatious refusal to pay claim.

This case arose when appellant alleged claims of tortuous interference with contract or business expectancy and violation of the Arkansas Deceptive Trade Practices Act (ADTPA), Ark. Code Ann. 4-88-101, et seq. Appellant subsequently sought a temporary retraining order and preliminary injunction after appellee terminated appellant's patient privileges at a residential nursing home. The court held that appellant did not meet the factors in the Dataphase Syst. Inc. v. C.L. Syst., which evaluated whether to issue an injunction. Consequently, the court held that the district court did not abuse its discretion in denying the motion for a preliminary injunction and the judgment was affirmed.

This case stemmed from the replevin actions filed by Klein Bank against debtors. Klein Bank appealed from the Orders of the Bankruptcy Court denying its motions to remand its replevin actions which had been removed from the state court to the bankruptcy court. In denying the motions, the Bankruptcy Court concluded that replevin actions were core proceedings. While this appeal was pending, the United States Supreme Court clarified that core proceedings were limited to those "arising under or arising in" a bankruptcy case. Based on that, the court now concluded that the matters involved in the replevin actions were not core proceedings. Accordingly, the court reversed and remanded to the Bankruptcy Court for further findings on the question of whether the court was required to abstain under 28 U.S.C. 1334(c)(2).