Justia Contracts Opinion Summaries

In March 2020, the COVID-19 pandemic led to a surge in demand for personal protective equipment (PPE). Bay Promo, LLC, a merchandise supplier, sought to profit by supplying PPE to various entities. Arely Nicolle Moncada Alaniz, a college student, was brought in to assist. Disputes arose over who was responsible for securing lucrative contracts, leading to litigation.The case was first heard in the Massachusetts Federal District Court. After a two-day bench trial, the court found that Bay Promo breached a contract, entitling Moncada to a commission on one PPE order. However, the court denied Moncada's claims for commissions on nine other orders, determining there was no agreement for those commissions.The United States Court of Appeals for the First Circuit reviewed the case. Bay Promo argued that the district court erred in its breach of contract finding and in admitting certain evidence. Moncada contended she was entitled to commissions on all orders and sought equitable relief. The appellate court found no abuse of discretion in the district court's evidentiary rulings and upheld the factual findings that Bay Promo breached the contract by failing to deliver FDA-approved masks on time. The court also agreed that Moncada did not establish new contracts for additional commissions and was not entitled to equitable relief.The First Circuit affirmed the district court's judgment, concluding that Moncada was only entitled to a commission on the initial PPE order and not on subsequent orders. View "Moncada Alaniz v. Bay Promo, LLC" on Justia Law

In 2016, Tucker Cianchette secured a multimillion-dollar judgment in Maine Superior Court against his father, step-mother, and two LLCs after they backed out of a 2015 agreement that would have given him sole control of a Ford dealership. Following this, in 2021, Eric and Peggy Cianchette, along with Cianchette Family, LLC, and Better Way Ford, LLC, filed a lawsuit alleging that Ford Motor Company violated state and federal laws during the failed 2015 negotiations and through false testimony by Ford employees in Tucker's 2016 suit.The 2021 lawsuit was initially filed in Maine Superior Court but was removed to the United States District Court for the District of Maine. The District Court dismissed all claims against Ford, leading the plaintiffs to appeal. The plaintiffs argued that Ford's actions during the 2015 negotiations and the 2016 lawsuit constituted violations of Maine's civil perjury statute, the Dealers Act, the federal Automobile Dealers' Day in Court Act, and also amounted to breach of contract and tortious interference with contract.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the District Court's dismissal. The Court of Appeals held that the plaintiffs failed to plausibly allege that Ford made any false representations or that any reliance on such representations was justified. The court also found that the plaintiffs' claims under the Dealers Act were barred by res judicata due to a prior ruling by the Maine Motor Vehicle Franchise Board. Additionally, the court concluded that the implied covenant of good faith and fair dealing did not apply to the breach of contract claims under Michigan law, as the SSA explicitly granted Ford the right to approve changes in ownership. View "Better Way Ford, LLC v. Ford Motor Company" on Justia Law

Power Rental Op Co, LLC ("Power Rental") is a Florida-based company providing water and energy services. The Virgin Islands Water and Power Authority ("WAPA") is a municipal corporation in the U.S. Virgin Islands. In 2012, WAPA entered into a rental agreement with General Electric International, which Power Rental later acquired. By 2019, WAPA owed Power Rental over $14 million, which was reduced to approximately $9.3 million through a promissory note governed by New York law. WAPA defaulted on the note in 2020, leading Power Rental to sue in Florida state court for breach of the note and other claims.The case was removed to the Middle District of Florida, which dissolved pre-judgment writs of garnishment issued by the state court, granted partial summary judgment in favor of Power Rental, and ordered WAPA to complete a fact information sheet. The court found that WAPA waived its sovereign immunity defenses under the terms of the note. WAPA's appeal to the Eleventh Circuit was voluntarily dismissed.Power Rental registered the judgment in the U.S. District Court for the District of Puerto Rico, which issued a writ of execution served on WAPA's account at FirstBank in Puerto Rico. WAPA filed an emergency motion to quash the writ, arguing that the funds were exempt under Virgin Islands law and that the Puerto Rico court lacked jurisdiction. The District of Puerto Rico denied the motion, finding that the separate entity rule did not apply and that it had jurisdiction to issue the writ.The United States Court of Appeals for the First Circuit affirmed the District of Puerto Rico's order. The court held that the separate entity rule was outdated and did not apply, allowing the Puerto Rico court to have jurisdiction over the writ. The court also upheld the lower court's finding that WAPA had waived its statutory immunity defenses. View "Power Rental OP CO, LLC v. Virgin Islands Water and Power Authority" on Justia Law

SMS Financial Recovery Services, LLC ("SMS") sued Samaritan Senior Village, Inc. and Samaritan Medical Center, Inc. (collectively, "Samaritan") for breach of contract after Samaritan canceled two contracts during the COVID-19 pandemic. The contracts, signed in December 2019, required Harmony Healthcare International Inc. ("Harmony"), SMS's predecessor, to provide healthcare consulting services to Samaritan for three years. Samaritan canceled the contracts in May 2020, citing financial constraints and the inability to allow Harmony's representatives on-site due to state COVID-19 restrictions.The United States District Court for the District of Massachusetts granted summary judgment in favor of Samaritan, finding that Samaritan's performance was excused under the doctrine of impracticability. The court reasoned that New York State Department of Health guidelines made it illegal for Harmony representatives to enter Samaritan's facilities, thus excusing Samaritan from its contractual obligations.The United States Court of Appeals for the First Circuit reviewed the case and found that a genuine dispute of material fact remained regarding whether Harmony could have performed its contractual obligations remotely, despite the state visitation restrictions. The court noted that the doctrine of frustration of purpose might apply, but it was unclear whether the temporary nature of the restrictions substantially frustrated the overall purpose of the three-year contracts. The court also found that the issue of whether Samaritan's performance was excused only temporarily should be determined by a factfinder.The First Circuit reversed the district court's grant of summary judgment in part and remanded the case for further proceedings. The court affirmed the district court's grant of summary judgment on SMS's claims of breach of the covenant of good faith and fair dealing and violations of Massachusetts General Law Chapter 93A, finding no evidence of bad faith or consumer protection violations by Samaritan. View "SMS Financial Recovery Services, LLC v. Samaritan Senior Village, Inc." on Justia Law

Dahua Technology USA, Inc. ("Dahua") and Feng "Frank" Zhang, a former Dahua executive, are involved in a contract dispute. Zhang claims Dahua breached its obligation to pay him severance of $680,000 per month for sixteen months, while Dahua asserts the severance was intended to be a total of $680,000 paid in sixteen monthly installments. Dahua sued under diversity jurisdiction, seeking reformation of the contract and alleging breach of the implied covenant of good faith and fair dealing. Zhang counterclaimed for breach of contract.The United States District Court for the District of Massachusetts initially granted summary judgment in Dahua's favor, finding a mistake in the severance provision. However, the United States Court of Appeals for the First Circuit vacated this judgment, leading to an eleven-day bench trial. The district court concluded that the severance provision contained a mistake but could not be reformed under Massachusetts law, and thus must be enforced as written. Consequently, the district court entered judgment for Zhang in the amount of $10,200,000, plus prejudgment interest.On appeal, the United States Court of Appeals for the First Circuit reviewed the case. The court found the severance provision ambiguous and vacated the judgment, remanding the case for resolution consistent with extrinsic evidence of the parties' intent. The court affirmed the district court's ruling that Dahua's implied covenant of good faith and fair dealing claim fails. View "Dahua Technology USA, Inc. v. Zhang" on Justia Law

The case involves a business venture between W.R. Cobb Company (Cobb) and V.J. Designs LLC (VJ Designs) to sell diamond products under the Forevermark brand. Cobb, unable to secure a license directly from Forevermark, entered into an agreement with VJ Designs, an existing Forevermark licensee, to form a new company, WR Cobb/VJ LLC (the Joint Entity). The agreement stipulated that the Joint Entity would operate under the Forevermark license. However, VJ Designs could not transfer its Forevermark rights without Forevermark's written consent. The venture quickly fell apart, and Cobb sued VJ Designs and its owner, Benjamin Galili, to recover funds paid under the agreement, alleging breach of contract and misrepresentation.The United States District Court for the District of Rhode Island held a two-day bench trial and ruled in favor of VJ Designs and Galili on all claims. The court found that VJ Designs did not breach the contract or misrepresent any material facts. Cobb appealed, arguing that the district court erred by not rescinding the agreement and not holding Galili personally liable for fraud and misrepresentation.The United States Court of Appeals for the First Circuit reviewed the case. The court affirmed the district court's judgment, holding that VJ Designs did not breach the contract by failing to assign the Forevermark license to the Joint Entity upon execution of the agreement. The court found no provision in the agreement requiring immediate transfer of the license and noted that the parties understood Forevermark's consent was necessary. The court also rejected Cobb's claims of fraud and misrepresentation, finding no evidence of material misrepresentation by VJ Designs or Galili. Additionally, the court dismissed Cobb's mutual mistake theory as it was not pled in the complaint and was raised too late in the proceedings. View "W.R. Cobb Company v. VJ Designs, LLC" on Justia Law

Annalia Montany, a student in the University of New England’s (UNE) occupational therapy master’s degree program, injured her back when Scott McNeil, an instructor playing the role of a mock patient, feigned a fall while Montany attempted to assist him in transferring from a wheelchair into a bed. Because of her back problem she failed a practical exam and did not receive a passing grade for the course. Montany was subsequently dismissed from the program. Montany filed suit against UNE and McNeil, alleging negligence and breach of contract. The district court entered summary judgment in favor of Defendant. The First Circuit affirmed, holding (1) contrary to Montany’s assertion, expert testimony was required in this case; and (2) Montany’s breach of contract claims failed. View "Montany v. University of New England" on Justia Law

A plaintiff may not bring claims for damages under 42 U.S.C. 1981 against state actors, including defendants sued in their official capacities as government officials.The First Circuit affirmed the district court’s dismissal of Plaintiff's section 1981 claims against employees of the City of Boston. Plaintiff, who represented the estate of her late father, challenged her father’s termination from his employment with the Department of Public Works. The district court dismissed the section 1981 claims, concluding that section 1981 provides no implied private right of action for damages against state actors. The First Circuit affirmed, holding that Jett v. Dallas Independent School District compelled the result reached by the district court. View "Buntin v. City of Boston" on Justia Law

The First Circuit reversed the grant of summary judgment to Defendant in this action for breach of contract. Plaintiff filed suit against Defendant alleging that in causing a $200,000 loan to be taken out against a life insurance policy, Defendant had violated the non-contravention agreement inducing the lender to enter into the loan agreement. The district court concluded that Defendant breached the non-contravention agreement but that he was immune from liability under a non-recourse provision in the loan agreement. In reversing, the First Circuit held that the terms of the non-contravention agreement applied to the facts of this case without nullification by the loan agreement’s non-recourse clause. View "Dukes Bridge LLC v. Beinhocker" on Justia Law

Gerardo Salvati died from injuries he sustained while doing maintenance work. Gerardo’s wife, Lucia (hereinafter referred to as Salvati) filed a lawsuit seeking damages for wrongful death and loss of consortium. The underlying defendants had a primary policy through Western World Insurance Company in the amount of $1 million and an excess policy through the American Insurance Company (AIC) in the amount of $9 million. AIC refused to provide coverage to the underlying defendants. Salvati and the underlying defendants eventually reached a $6 million settlement agreement. In exchange for tendering the full $1 million of the Western World primary insurance policy, the agreement released Western World and the underlying defendants from any further liability and assigned all rights held by the underlying defendants against AIC to Salvati. Thereafter, Salvati filed a complaint against AIC, alleging, inter alia, breach of contract and seeking a declaratory judgment that she was entitled to collect $5 million from AIC under the excess policy. The district court dismissed the complaint for failure to state a claim. The Supreme Court affirmed, holding (1) Salvati failed to show that the settlement agreement triggered AIC’s duty to indemnify; and (2) Salvati may not bring a claim under Mass. Gen. Laws ch. 176D, and therefore, none of her causes of action survived. View "Salvati v. American Insurance Co." on Justia Law