Justia Contracts Opinion Summaries

Barton Hankins was hired by Crain Automotive Holdings, LLC in 2019 as Chief Operating Officer and was offered a deferred compensation plan (DCP). After four years, Hankins resigned and sought compensation under the DCP, which Crain denied. Hankins then filed a lawsuit under the Employee Income Retirement Security Act of 1974 (ERISA) to claim his benefits. The DCP stipulated that Hankins could earn a percentage of Crain’s fair market value upon his exit, with full vesting at five years. Having served four years, Hankins was entitled to 80% of the benefits.The United States District Court for the Eastern District of Arkansas granted judgment in favor of Hankins, concluding that the DCP did not require the creation of an Employment Agreement or a Confidentiality, Noncompete, and Nonsolicitation Agreement for enforceability. The court found that Crain’s claims of misconduct by Hankins were unsubstantiated and awarded Hankins attorney’s fees, determining that Crain’s conduct was sufficiently culpable.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court affirmed the district court’s judgment, holding that Crain’s interpretation of the DCP was unreasonable. The court found that the DCP’s Article 4, which mentioned the Employment and Confidentiality Agreements, did not create a condition precedent but rather a condition subsequent. The court also upheld the award of attorney’s fees, noting that Crain’s actions lacked merit and were raised only after Hankins sought his vested compensation. The appellate court concluded that the district court did not abuse its discretion in its rulings. View "Hankins v. Crain Automotive Holdings, LLC" on Justia Law

First Baptist Church, located in Fort Smith, Arkansas, had property insurance policies with Zurich American Insurance Company. The church experienced leaks over the years and hired roofing companies to repair portions of its roofing system in 2016, 2017, and 2018. In 2022, a roofing company representative determined the roofing system had hail damage, and First Baptist filed a claim with Zurich, alleging the damage occurred on April 28, 2017. Zurich denied the claim, citing no damage from the alleged hail event and evidence of excluded causes such as wear and tear. First Baptist sued Zurich for breach of contract and insurance bad faith.The United States District Court for the Western District of Arkansas granted summary judgment in favor of Zurich, concluding that First Baptist failed to comply with the prompt notice provision in the insurance policy. The court based its decision on evidence first discussed in Zurich’s reply brief, which indicated that First Baptist knew of past loss or damage to its property as early as 2016. The court held that no reasonable jury could find that First Baptist promptly notified Zurich of the loss or damage nearly six years later in January 2022. First Baptist filed a motion to reconsider, which the district court denied.The United States Court of Appeals for the Eighth Circuit reviewed the case and concluded that there were potential genuine disputes of material fact not properly litigated. The court noted that First Baptist did not have a fair opportunity to counter Zurich’s evidence and arguments about past leaks and repairs. The court reversed the district court’s grant of summary judgment and remanded the case for further consideration of the issues related to past loss or damage and the effect on First Baptist’s claims. The court also reversed and remanded the grant of summary judgment on First Baptist’s bad faith claim. View "First Baptist Church v. Zurich American Insurance Co." on Justia Law

Sioux Steel Company, a South Dakota corporation, designed and manufactured a new line of hopper bins for grain storage. After selling one of these bins to a distributor in Mexico, the bin failed catastrophically, causing fatalities and property damage. Sioux Steel had an insurance policy with the Insurance Company of the State of Pennsylvania (ISOP), which included a professional services exclusion. ISOP denied coverage based on this exclusion, leading Sioux Steel to settle with the affected party without ISOP's involvement.The United States District Court for the District of South Dakota granted summary judgment in favor of ISOP, finding that the professional services exclusion in the insurance policy was unambiguous and applicable, thus precluding coverage. The court also dismissed Sioux Steel's claims for bad faith, punitive damages, and attorney's fees.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. The court affirmed the district court's decision, holding that the professional services exclusion was clear and unambiguous. The exclusion applied because the damage arose from professional engineering services provided by Sioux Steel's employee and an external engineering firm. The court also found that ISOP did not breach its duty to defend, as no civil proceeding or alternative dispute resolution process had been initiated with ISOP's consent. Consequently, Sioux Steel's claims for breach of contract and insurance bad faith were dismissed, and the district court's judgment was affirmed. View "Sioux Steel Company v. Ins. Co. of the State of PA" on Justia Law

CEZ Prior, LLC ("CEZ") entered into a purchase agreement with 755 N Prior Ave., LLC ("Prior") to buy a property for $26 million. The agreement required Prior to cooperate in obtaining tenant estoppel certificates. Errors in square footage measurements led to rent discrepancies, prompting an amendment to reduce the purchase price to $15.1 million and the cash required at closing to $3.8 million. CEZ later requested to delay closing due to financial issues, but Prior did not agree. Prior sent estoppel certificates that did not address rate increases, and CEZ proposed edits that Prior rejected. CEZ demanded satisfactory certificates on the closing date, but Prior terminated the agreement, alleging CEZ failed to tender cash.CEZ sued Prior for breach of contract in Minnesota state court and sought to enjoin the termination. Prior removed the case to federal court and counterclaimed for breach of contract. The district court stayed the matter and later denied CEZ's motion for a preliminary injunction.The United States Court of Appeals for the Eighth Circuit reviewed the district court's denial of the preliminary injunction. The court found that CEZ was unlikely to succeed on the merits of its breach of contract claim, as Prior had reasonably cooperated in obtaining the estoppel certificates. The balance of harms favored Prior, given CEZ's insufficient evidence of its ability to pay. The public interest did not favor CEZ due to its low probability of success on the merits.The court also addressed CEZ's argument under Minnesota law, finding that the district court's stay order was not an injunction and did not extend statutory deadlines. Consequently, CEZ was not entitled to additional time to close under Minnesota statutes. The Eighth Circuit affirmed the district court's judgment. View "CEZ Prior, LLC v. 755 N Prior Ave. LLC" on Justia Law

Monsanto Company, Pharmacia, LLC, and Solutia, Inc. (collectively, "Monsanto") filed a lawsuit in St. Louis County Circuit Court in Missouri against Magnetek, Inc., General Electric Co. ("GE"), Paramount Global, KYOCERA AVX Components Corporation, Cornell Dubilier Electronics, Inc., and The Gillette Company LLC (collectively, "Defendants"). Monsanto alleged that it continues to incur substantial costs to defend against PCB lawsuits that should be borne by Defendants and sought to enforce written agreements obligating Defendants to defend, indemnify, and hold Monsanto harmless in all currently pending and future PCB lawsuits.GE removed the action to federal court, asserting jurisdiction under the federal officer removal statute, 28 U.S.C. § 1442(a)(1). The United States District Court for the Eastern District of Missouri granted Monsanto’s motion to remand, finding that GE's removal was untimely. GE appealed the decision.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court found that the parties had waived Missouri Supreme Court Rule 54.13(c)’s personal service provision and expressly agreed that January 31, 2023, was the effective date for service of process. The court determined that the 30-day removal period began on the agreed effective date of service, not when GE signed the acknowledgment and waiver of service of process or when Monsanto filed the document. Consequently, GE's notice of removal was filed within the 30-day period, making the removal timely.The Eighth Circuit vacated the district court’s order of remand and remanded the case for further proceedings consistent with its opinion. The court declined to address whether GE satisfies the government contractor requirement of 28 U.S.C. § 1442(a)(1), as this issue was not addressed by the district court. View "Monsanto Company v. General Electric Co." on Justia Law

Plaintiff filed suit against Scottsdale for coverage under a Business and Management Indemnity Policy. The Eighth Circuit affirmed the district court's grant of summary judgment to Scottsdale, holding that Food Market presented no evidence providing notice over seven months was "as soon as practicable." Where, as here, notice is a condition precedent to coverage, a showing of prejudice was not required. Finally, the district court properly found the policy unambiguous; Scottsdale expressly relied on the notice provision when denying coverage; and there was no waiver. View "Food Market Merchandising v. Scottsdale Indemnity" on Justia Law

Plaintiffs filed a class action against the Pegasus Pipeline's current owners and operators, Exxon, alleging that the company's operation of the pipeline was unreasonable and unsafe. The Eighth Circuit agreed with the district court's decision to decertify the class based on a lack of commonality of issues. In this case, the contract claims would require examination of how Exxon's operation of the pipeline affects plaintiffs, which varies depending on where individual class members' property was located, as well as many other factors. The Eighth Circuit also concluded that the evidence here was insufficient to raise a genuine issue of material fact as to whether there was unreasonable interference. The court explained that the question of unreasonable use of an easement was generally one of fact, dependent on the nature of the easement, the terms of the grant, and other relevant circumstances. Finally, the district court did not clearly abuse its discretion by denying plaintiffs' motion to alter or amend the judgment where the additional evidence at issue would not have produced a different result. Accordingly, the Eighth Circuit affirmed the judgment. View "Webb v. Exxon Mobil" on Justia Law

Hanzada, an Egyptian company that imports and exports beef, appealed the jury verdict and judgment against it on plaintiff's breach of contract claim. The district court relied on the Seventh Circuit's widely adopted Sadat v. Mertes rule that only the American nationality of the dual citizen should be recognized for purposes of 28 U.S.C. 1332(a). The court concluded that the district court properly found diversity jurisdiction because plaintiff was a U.S. citizen and his Egyptian citizenship did not defeat jurisdiction. The court also concluded that the district court properly exercised personal jurisdiction over Hanzada where there was sufficient minimum contacts with Missouri for the Missouri long-arm statute to authorize personal jurisdiction. Finally, the district court properly found the statute of frauds inapplicable in this case where, under Missouri law, an oral contract for an indefinite period of time does not violate the statute of frauds. Accordingly, the court affirmed the judgment. View "Aly v. Hanzada for Import & Export Co." on Justia Law

Omega filed suit against Mayo, alleging claims of fraud, negligent misrepresentation, breach of contract, and breach of the implied covenant of good faith and fair dealing. The parties had entered into an Exclusive Patent License Agreement in which Omega, a start-up company, agreed to, among other things, pursue Mayo's pending patent application. After the patent application was abandoned when the U.S. Patent and Trademark Office denied an elected group of claims as anticipated by prior art, Omega alleged damages because it relied on Mayo's pre-Agreement false representations. The court concluded that the Agreement and the patent application file squarely contradict Omega's general, conclusory allegation of reasonable reliance. Therefore, the district court properly dismissed these claims grounded in fraud for failure to state plausible claims of reasonable reliance. Accordingly, the court affirmed the judgment. View "OmegaGenesis Corp. v. Mayo Foundation" on Justia Law

The parties entered into a contract wherein John Lamoureux provided the necessary capital to MPSC, a start-up company, in exchange for a royalty fee every time the company used its patented service. After John died, his wife filed a breach of contract suit against MPSC for ceasing to make payments. The district court granted summary judgment to plaintiff, denying MPSC an at-will termination term. The court concluded that the express terms of the Investment Agreement compelled MPSC's continued performance. Because no principle of Minnesota state law or general contract law overrides the agreement's intent, the court affirmed the judgment. View "Lamoureux v. MPSC, Inc." on Justia Law