Justia Contracts Opinion Summaries

The National Labor Relations Board determined that Polycon had violated the National Labor Relations Act, 29 U.S.C. 158(a)(1), (5), by refusing to sign a collective bargaining agreement after agreeing to its terms because employees of Polycon were circulating a petition to decertify the union as their collective bargaining representative. The Seventh Circuit enforced its order, directing Polycon to sign the agreement and comply with its terms until it expires. The decertification petition may have been signed by a majority of the employees as early as May 9, and by May 22 clearly commanded a majority, but either date was too late for Polycon to repudiate a collective bargaining agreement to which the company had agreed on May 3. Polycon’s challenge bordered on the frivolous. Polycon could have asked for correction of any material mistakes before signing the contract but could not refuse to review and sign it because of the mere possibility that it contained a mistake. View "Polycon Indus., Inc. v. Nat'l Labor Relations Bd." on Justia Law

From 2005-2009, Assaf was medical director for Trinitiy's epilepsy clinic. Trinity terminated his employment; Assaf filed suit. The parties entered into a settlement agreement in 2010,under which Assaf would be employed by Trinity from 2009 until at least 2011 as Director of the Neuroscience Program. The position never materialized. Assaf obtained summary judgment on his claim for breach of that settlement agreement. Assaf sought lost salary for the years in which he was to have been employed under the agreement, and lost professional fees during that time. The court rejected the claim for lost professional fees ,holding that Assaf failed to provide an adequate estimate of the loss, then entered judgment without trial awarding Assaf his salary for 2009-2011 and compensatory damages totaling $172,759 plus $15,000 in attorneys’ fees. The Seventh Circuit reversed with respect to professional fees. On remand, Assaf sought to establish that his professional fees from EEG video monitoring and follow‐up of epilepsy patients decreased as a result of Trinity’s failure to rehire him. The court used a verdict form asking the jury “Did Dr. Assaf prove that he sustained damages as explained in these instructions.“ The jury responded “No.” Judgment was entered for Trinity. The Seventh Circuit affirmed. Assaf had no valid claim to damages for lost professional fees, so any errors were harmless. View "Assaf v. Trinity Med. Ctr." on Justia Law

Dual‐Temp installs refrigeration systems. A crucial component of such systems is the refrigeration control system (RCS), which regulates temperature, humidity, and ammonia levels and controls compressors and condensers. The RCS must maintain communication with the rest of the system to function properly. In 2006, Home Run Inn expanded its pizza manufacturing facility. Its general contractor, Milord, subcontracted with Dual‐Temp to update Home Run’s refrigeration system. Dual‐Temp solicited bids to design an RCS for the system and accepted Hench’s bid. The Hench RCS components were shipped to Dual‐Temp and installed by Dual‐Temp’s affiliate, Spur Electric. Problems began immediately. In April 2008, Milord demanded that Dual‐Temp replace the Hench RCS. Dual‐Temp paid Select $113,500 to remove the Hench RCS and to design, build, and install a replacement RCS; the new Select RCS has been operating and communicating properly since installation. Dual‐Temp filed suit, relying on circumstantial evidence that defendants supplied a defective RCS. The Seventh Circuit affirmed an award of damages and attorneys’ fees to Dual-Temp. Even if the Hench RCS operated properly for some time after startup, there was sufficient circumstantial evidence for a reasonable factfinder to conclude that the communication failures were caused by a defect in the Hench RCS. View "Dual-Temp of Ill., Inc. v. Hench Control, Inc." on Justia Law

CIT, a large finance company, leased credit‐card processing machines to businesses and individuals. The leases describe themselves as business rather than consumer contracts and contain a forum‐selection clause that requires any disputes to be litigated in Cook County, Illinois and governed by Illinois law. Each lease also required a personal guaranty, by the lessee, an agent of the lessee, or someone else. The leases were ultimately assigned to Pushpin, which filed suits in small‐claims courts in Cook County against more than 3000 of the guarantors of defaulted leases. The guarantors filed a class-action, claiming that in invoking the forum‐selection clause Pushpin hoped to induce default judgments, in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, and related torts. After remands, the district court accepted jurisdiction under the Class Action Fairness Act, 28 U.S.C. 1453(b), and dismissed on the merits. The Seventh Circuit affirmed: Any forum‐selection clause will be an inconvenience to a nonresident signer of the contract, so that the challenge amounted to urging a blanket prohibition of such clauses. View "Johnson v. Pushpin Holdings, LLC" on Justia Law

Knauf Insulation, the Delaware subsidiary of a German corporation, has its principal place of business in Indiana. SBI was a distributor of Knauf’s insulation; the Dowds are SBI’s principals. For many years SBI was delinquent in paying Knauf. By 2012, when Knauf filed suit , SBI owed Knauf more than $3.5 million. The district judge granted Knauf summary judgment with interest on the debt. The Seventh Circuit affirmed, rejecting arguments that the Dowds’ 2003 guaranty, of SBI’s debts to Knauf did not “intend or contemplate being sued by Knauf in Indiana on its much larger claims against SBI, arising more than four years later,” and that despite the forum‐ selection clause “SBI, an out‐of‐state distributor doing business in the southeast, did not have such minimum contacts with Indiana as would subject it to Indiana’s jurisdiction.” The size disparity between the firms did not render the guaranties unconscionable or unenforceable. The statute of limitations barred a purported counter-claim. View "Knauf Insulation, Inc. v. S. Brands, Inc." on Justia Law

ACL manufactures and operates tow boats and barges that operate in U.S. inland waterways. Lubrizol manufactures industrial lubricants and additives, including a diesel‐fuel additive, LZ8411A. VCS distributed the additive. Lubrizol and VCS jointly persuaded ACL to buy it from VCS. Before delivery began, Lubrizol terminated VCS as a distributor because of suspicion that it was engaging in unethical conduct: a Lubrizol’s employee had failed to disclose to his employer that he was also a principal of VCS. Lubrizol did not inform ACL that VCS was no longer its distributor. No longer able to supply ACL with LZ8411A, VCS substituted an additive that ACL contends is inferior to LZ8411A. VCS didn’t inform ACL of the substitution. According to ACL, Lubrizol learned of the substitution, but did not inform ACL. When ACL discovered the substitution, it sued both companies. ACL settled with VCS. The district judge dismissed Lubrizol. The Seventh Circuit affirmed, rejecting claims that Lubrizol had a “special relationship” that required it to disclose ACL’s conduct, that VCS was Lubrizol’s apparent agent, and of “quasi contract” between ACL and Lubrizol. View "Am. Commercial Lines, LLC v. Lubrizol Corp." on Justia Law

Sgouros purchased a “credit score” package from TransUnion. Armed with the number TransUnion gave him, he went to a car dealership and tried to use it to negotiate a favorable loan. The score he had bought, however, was useless: it was 100 points higher than the score pulled by the dealership. Sgouros filed suit, asserting that TransUnion violated the Fair Credit Reporting Act, 15 U.S.C. 1681g(f)(7)(A); the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1; and the Missouri Merchandising Practices Act, Mo. Rev. Stat. 407.010, by misleading consumers by failing to inform them that the formula used to calculate their purchased credit scores was materially different from the formula used by lenders. TransUnion moved to compel arbitration, asserting that the website through which Sgouros purchased his product included an agreement to arbitrate. The district court concluded that no such contract had been formed and denied TransUnion’s motion. The Seventh Circuit affirmed after evaluating the website and concluding that TransUnion had not put consumers on notice of the terms of agreement, as required by Illinois law, but actually distracted them from noticing those terms. View "Sgouros v. TransUnion Corp." on Justia Law

In 1998 IGF bought Continental’s crop-insurance business at a price to be determined at either side’s option by the exercise of a put or call. In 2001 Continental exercised its put option; under the contractual formula, IGF owed Continental $25.4 million. Around that same time, IGF sold its business to Acceptance for $40 million. The Symons, who controlled IGF, structured the purchase price: $16.5 million to IGF; $9 million to IGF's parent companies Symons International and Goran in exchange for noncompetition agreements; and $15 million to Granite, an affiliated Symons-controlled company, for a reinsurance treaty. Continental, still unpaid, sued for breach of contract and fraudulent transfer. The court found for Continental and pierced the corporate veil to impose liability on the controlling companies and individuals. The Seventh Circuit affirmed, finding Symons International liable for breach of the 1998 sale agreement; Symons International, Goran, Granite, and the Symons liable as transferees under the Indiana Uniform False Transfer Act; and the Symons liable under an alter-ego theory. The Symons businesses observed corporate formalities only in their most basic sense. The noncompetes only made sense as a fraudulent diversion of the purchase money, not as legitimate protection from competition. The reinsurance treaty. which was suggested bySymons and outside industry norms, was unjustified and overpriced. View "Cont'l Cas. Co. v. Symons" on Justia Law

Beverly, a former Abbott employee whose employment was terminated on October 20, 2010, filed suit against Abbott. She alleged that during her employment, Abbott had discriminated and retaliated against her on the basis of her German nationality in violation of Title VII of the Civil Rights Act, as well as on the basis of her disabilities in violation of the Americans with Disabilities Act. The district court denied Abbott’s motion for summary judgment and the parties engaged in a private mediation. During mediation, the parties signed a handwritten agreement stating that Beverly demanded $210,000 and mediation costs in exchange for dismissing the lawsuit. Abbott later accepted Beverly’s demand and circulated a more formal settlement proposal. After Beverly refused to execute the draft proposal, Abbott moved to enforce the original handwritten agreement. The court found that the parties entered into a binding settlement agreement and granted Abbott’s motion to enforce. The Seventh Circuit affirmed, holding that the handwritten agreement was valid and enforceable, since its material terms were clearly conveyed and consented to by both parties, and the existence and content of the draft proposal do not affect enforceability. View "Beverly v. Abbott Labs., Inc." on Justia Law

Segal, a lawyer, CPA, and insurance broker, and his company, were indicted for racketeering, mail and wire fraud, making false statements, embezzlement, and conspiring to interfere with operations of the IRS. Convicted in 2004, Segal was sentenced to 121 months in prison. After further proceedings, in 2011, he was resentenced to time served and ordered to pay $842,000 in restitution and to forfeit to the government his interest in the company and $15 million. In 2013, the parties entered a binding settlement that specified the final disposition of Segal’s assets. After the district judge approved the settlement the parties disagreed and returned to court. The agreement gave Segal two of eight insurance policies on his life outright and an option to purchase the others, but required that he exercise the option within six months of approval of the settlement. He opted to purchase one policy before the deadline and asked for an extension, claiming that the government had not promptly released money owed to him and had delayed his efforts to obtain information from the insurance companies. The Seventh Circuit affirmed refusal to extend the deadline, but reversed with respect to claims relating to Segal’s right to repurchase his shares of the Chicago Bulls basketball team. View "United States v. Segal" on Justia Law