Justia Contracts Opinion Summaries

Lopez & Medina Corp. (L&M) filed a lawsuit against several insurers for Patriot Air, LLC, alleging that the insurers were liable for L&M’s breach of contract claims against Patriot Air. The district court dismissed L&M’s complaint, concluding that the relevant insurance policy did not provide coverage for contract claims. The First Circuit affirmed. L&M and its owner subsequently filed the complaint in this action seeking recovery in tort for Patriot Air’s negligence arising out of the same set of facts that underlay the previous suit’s breach of contract claims. The district court dismissed the case on the ground of res judicata. The First Circuit affirmed, holding that the district court correctly invoked res judicata in dismissing the action. View "Medina-Padilla v. US Aviation Underwriters, Inc." on Justia Law

Steven Fustolo’s affiliate companies issued four promissory notes to Patton Drive, LLC. Fustolo personally guaranteed two of the notes. When the principal debtors defaulted on all four notes, Patton drive sued Fustolo. The Massachusetts state court found Fustolo liable for breach of contract and entered judgment against Fustolo. Fustolo appealed, challenging the interest due. Meanwhile, Patton Drive joined with two of Fustolo’s other creditors to file a petition seeking to place Fustolo into involuntary Chapter 7 bankruptcy. Fustolo, in turn, asserted that Patton Drive was not qualified it to serve as a petitioning creditor because his pending state court appeal subjected Patton Drive’s judgment to “bona fide dispute as to liability or amount.” The bankruptcy court allowed Patton Drive to join in initiating involuntary bankruptcy proceedings against Fustolo. The district court affirmed, finding that Fustolo’s state court appeal could not raise a bona fide dispute as to Patton Drive’s claim. The First Circuit affirmed, holding that because the amount of Fustolo’s liability on the guaranteed notes was not subject to bona fide dispute, and because Patton Drive’s claim on the guaranteed notes could be considered separately from Patton Drive’s claim on the judgment within which its underlying contract claims were submerged, Patton Drive qualified as a petitioning creditor. View "Fustolo v. 50 Thomas Patton Dr., LLC" on Justia Law

This three-way dispute between Link Development, LLC (Link), BD Lending Trust (BD), and RFF Family Partnership LP (RFF) stemmed from an unauthorized conveyance of a mortgage to BD on commercial property in Massachusetts, then owned by Link and now owned by RFF. Previous litigation resulted in settlement agreements between Link and BD and between RFF and BD. In this appeal, RFF challenged (1) the district court’s entry of summary judgment for Link and against RFF on RFF’s claims regarding the validity of the BD mortgage on the grounds that RFF was judicially estopped from challenging the validity of the mortgage, and (2) the court’s decision to exclude attorneys’ fees from damages that BD owed RFF for breach of the settlement agreement between RFF and BD, and the court’s refusal to enter judgment as a matter of law in favor of RFF on contract damages. The First Circuit (1) vacated the entry of summary judgment on RFF’s claims pertaining to the validity of the BD mortgage, holding that the district court abused its discretion in applying judicial estoppel; and (2) affirmed the district court’s decisions related to contract damages and the court’s award of attorneys’ fees under Chapter 93A of the Massachusetts General Laws. View "RFF Family Partnership, LP v. Link Dev., LLC" on Justia Law

Redondo Construction Corporation filed for Chapter 11 bankruptcy. Through the proceedings, Redondo filed three complaints against the Puerto Rico Highway and Transportation Authority for money owed under construction contracts, alleging that it was entitled to damages and prejudgment interest. The bankruptcy court ruled in Redondo’s favor and found that Redondo was entitled to prejudgment interest. The First Circuit vacated the award of prejudgment interest and remanded. On remand, the bankruptcy court awarded Redondo prejudgment interest on its contract claims under Article 1061 of the Puerto Rico Civil Code, accruing through the payment of principal. The Authority moved to amend the judgment. The bankruptcy court denied the Authority’s motion, and the district court affirmed. The First Circuit vacated the judgment, holding (1) Redondo did not forfeit its claim to prejudgment interest under Article 1061; but (2) 28 U.S.C. 1961 exclusively controls awards of postjudgment interest in federal court, and therefore, the bankruptcy court should not have extended the prejudgment interest accrual period past the entry of judgment. Remanded for a calculation of section 1961 interest and a recalculation of Article 1061 interest. View "P.R. Highway & Transp. v. Redondo Constr. Corp." on Justia Law

Copia Communications, LLC, a Massachusetts company, brought this action in federal district court in Massachusetts against Seawind Key Investments, Limited, a Jamaican resort operator, and Seawind’s alleged alter-ego, AMResorts, LP, a Pennsylvania limited partnership, alleging breach of contract. The subject contract was proposed and executed in Jamaica, performance on the contract occurred almost exclusively in Jamaica, and the contract was governed by the laws of Jamaica. Both defendants, neither of which operated any business or had any corporate presence in Massachusetts, moved to dismiss, arguing lack of personal jurisdiction and forum non conveniens. The district court dismissed the case without prejudice, finding that it lacked personal jurisdiction over the defendants. The First Circuit affirmed, holding that the exercise of personal jurisdiction over the defendants was barred by the due process clause of the Fifth Amendment. View "Copia Commc’ns, LLC v. AMResorts, LP" on Justia Law

LimoLiner Inc. contracted with Dattco, Inc. to repair a luxury motor coach that LimoLiner owned. LimoLiner later filed this action in Massachusetts state court alleging breach of contract, misrepresentation, negligence, replevin, and violation of 940 C.M.R. 5.05, a Massachusetts regulation. Dattco removed the case to federal district court. The magistrate judge found that Dattco breached the repair contract by failing to do all of the work that LimoLiner had requested. The judge also ruled for Dattco on all of LimoLiner’s other claims, awarding LimoLiner a total of $25,123 in damages. LimoLiner appealed, arguing, among other things, that the magistrate judge erred in ruling that Dattco may not be held liable under 940 C.M.R. 5.05 for certain actions and omissions that occurred on the job. The First Circuit certified a question concerning 940 C.M.R.’s intended scope to the Supreme Judicial Court of Massachusetts and thus did not decide the merits of LimoLiner’s regulatory claims. The Court otherwise affirmed, holding that the magistrate judge did not err in concluding that Dattco did not breach the parties’ oral contract to make the repairs in a timely manner and owed damages only for the loss of use of the vehicle for one limited period of time. View "Limoliner, Inc. v. Dattco, Inc." on Justia Law

These interlocutory appeals were from a district court order that, inter alia, compelled a law firm (Mintz Levin) to produce documents relating to a fraud allegedly committed by David Gorski in his operation of Legion Construction, Inc. in order to qualify for and obtain government contracts. Gorski and Legion appealed the portion of the order that required attorney-client privileged documents connected with Mintz Levin’s representation of Legion to be produced under the crime-fraud exception. The government cross-appealed the portion of the district court decision to exclude communications between Gorski and his personal attorney from the production order. The First Circuit (1) dismissed Gorski’s appeal for want of appellate jurisdiction, holding that the Court did not have jurisdiction over Gorski’s appeal but did have jurisdiction over Legion’s appeal and the government’s cross-appeal; (2) affirmed the production order as to Mintz Levin, holding that a prima facie case for the crime-fraud exception had been made; and (3) vacated the district court’s decision to exclude Gorski’s communications with his personal attorney from the production order, holding that the district court employed incorrect legal reasoning with regard to these documents. View "United States v. Gorski" on Justia Law

Mark Galvin was the guarantor of a defaulted promissory note on a loan secured by an interest in a Cessna 421C aircraft. The note and security agreement were assigned to Harley-Davidson Credit Corp. After the borrower defaulted on the note, Harley-Davidson repossessed and sold the aircraft through a third-party dealer for $155,000 and then sought to collect $108,681 from Galvin. Galvin did not pay. Harley-Davidson subsequently filed a breach of contract action against Galvin to collect the deficiency. The district court entered partial summary judgment in favor of Harley-Davidson, concluding that there was no dispute of material fact that the sale was “commercially reasonable.” The First Circuit reversed, holding that a genuine issue of material fact existed as to whether the sale was “commercially reasonable,” and therefore, summary judgment should have been denied. Remanded. View "Harley-Davidson Credit Corp. v. Galvin" on Justia Law