Justia Contracts Opinion Summaries

Zachery Edens was killed in when an oncoming car turned in front of his motorcycle. David Edens, Zachery's father and the Chief Executive Officer of Edens Structural Solutions LLC (Edens LLC), and Rhonda Edens, Zachery's mother, sent a demand letter to The Netherlands Insurance Company, claiming that Zachery was an insured under Edens LLC’s Netherlands insurance policy and demanding $1,000,000 in underinsured motorist benefits. After Netherlands denied coverage, David, Rhonda, and Edens LLC sued Netherlands. On summary judgment, the district court concluded that David was an insured under the policy because he was an executive officer of Edens LLC, and that Zachery was an insured as David's family member. Despite this, because David and Rhonda Edens owned Zachery's motorcycle, the district court concluded that the Netherlands policy didn’t cover his accident. David, Rhonda and Edens LLC appealed, arguing, among other things, that the policy’s coverage terms were ambiguous and should be construed in their favor. Finding no reversible error in the district court's judgment, the Tenth Circuit affirmed. View "Edens v. Netherlands Insurance" on Justia Law

ACE Fire Underwriters Insurance Company appeals the district court’s declaration that a policy ACE issued offered total coverage up to $2 million for an accident involving two insured vehicles: a tractor and trailer. The trailer detached from the tractor. The driver pulled off the roadway to reattach, then hoped to make a quick u-turn and continue down the road. But before he could complete the turn, another vehicle collided with the trailer, killing the vehicle's driver. As the insurer of the tractor and the trailer, ACE reached a settlement with the Estate of the vehicle's driver. But the parties conditioned the settlement upon litigating the available limits of the policy. ACE maintained that the policy provisions limited its liability to $1 million per accident, regardless of the number of covered autos involved. The Estate, on the other hand, insisted that ACE’s liability under the policy was $1 million per covered auto involved in each accident. That interpretation of the policy would cap ACE’s liability in this case at $2 million because, according to the Estate, the tractor and the trailer were both involved in the accident. Under the terms of the settlement, ACE initially paid the Estate $1 million. But it agreed to pay it an additional $550,000 if the court accepted the Estate’s interpretation of the policy. Because the Tenth Circuit agreed with ACE that the policy instead limits its liability to only $1 million, it reversed. View "ACE Fire Underwriters v. Romero" on Justia Law

At the heart of this case was a 2004 oil and gas lease with a five-year term between Trans-Western Petroleum, Inc. and United States Gypsum Co. (“USG”). Trans-Western contacted USG to lease its land at the conclusion of an existing lease between USG and Wolverine Oil & Gas. USG and Trans-Western agreed to terms, and Trans-Western recorded its lease. Wolverine protested the recording of the new lease, claiming that its lease with USG remained valid under pooling and unitization provisions contained in its lease. In response to the protest, USG, in writing and by phone, rescinded the Trans-Western lease. Trans-Western sued for a declaration that the Wolverine lease expired. The district court determined that the Wolverine lease had expired. As part of their agreement, USG and Trans-Western executed a ratification and lease extension. Armed with the determination that the Wolverine lease was no longer in effect, in 2010, Trans-Western also filed a second amended complaint, seeking a declaratory judgment that its lease with USG was valid and damages for breach of contract and breach of the covenant of quiet enjoyment, among other claims. The district court granted partial summary judgment to Trans-Western, determining that USG had breached the lease but denied attorney’s fees due to disputed material facts on damages. During a bench trial on damages, Trans-Western contended that it was entitled to expectation damages for both breach of contract and breach of the covenant of quiet enjoyment because USG deprived it of the opportunity to assign the lease during its five-year term. USG contended, inter alia, that damages for the breach of an oil and gas lease, like any real property, were measured at the date of breach and not pegged to a hypothetical sale at the market’s peak. The district court rejected Trans-Western’s damages theories, finding that Trans-Western was entitled only to nominal damages based on the value of the contract on the date of breach, which had not increased since the date of execution. The Tenth Circuit certified a question of how expectation damages for the breach of an oil and gas lease should have been measured to the Utah Supreme Court. The Utah Supreme Court held that general (or direct) and consequential (or special) damages were available for the breach of an oil and gas lease and should be measured in “much the same way as expectation damages for the breach of any other contract.” In light of the Utah Supreme Court’s holding, the Tenth Circuit remanded this case to the district court for consideration of damages. View "Trans-Western Petroleum v. United States Gypsum Co." on Justia Law

At issue in this case were two provisions of a title insurance policy underwritten by Fidelity National Title Insurance Company. One provision insured against unmarketability of title, and the other insured against a lack of access to property. The owner of the policy, Woody Creek Ventures, LLC, contended that both provisions covered losses it sustained when it learned, after purchasing two parcels of land, that one parcel lacked permanent access. And although Fidelity obtained a 30-year right-of-way grant to that parcel, Woody Creek argued Fidelity failed to cure the lack of access and the title remained unmarketable. After review, the Tenth Circuit agreed with the district court’s conclusions that: (1) the policy did not insure a permanent right of access; (2) the right-of-way cured the lack of access to the parcel; and (3) the lack of permanent access did not render Woody Creek’s title unmarketable. View "Fidelity National Title v. Woody Creek Ventures" on Justia Law

CEEG (Shanghai) Solar Science & Technology Co., Ltd. (“CEEG”), a Chinese company, agreed to sell solar energy products to LUMOS, LLC, a U.S. company. After receiving certain shipments, LUMOS filed a warranty claim alleging workmanship defects, and refused to remit the balance due. After two years of "fitful" negotiations, CEEG filed an arbitration proceeding pursuant to the parties’ agreements. Although the parties had communicated exclusively in English to that point, CEEG served LUMOS with a Chinese-language notice of the proceedings, and LUMOS did not immediately realize what the notice was. After the arbitration panel ruled in its favor, CEEG moved for the district court to confirm the award. LUMOS filed a motion to dismiss, arguing that the Chinese-language notice caused it to miss the deadline to participate in appointing the arbitration panel. The district court granted the motion, finding that the notice was not reasonably calculated to apprise LUMOS of the arbitration proceedings. The Tenth Circuit agreed and affirmed. View "CEEG (Shanghai) Solar Science v. Lumos" on Justia Law

In June 2012, a hailstorm damaged Plaintiff KCOM’s motel. Soon a dispute arose between KCOM and its insurer, defendant Employers Mutual Casualty (EMC), over the extent of the damage. In October 2012, following receipt of an inspection report, KCOM submitted a proof of loss of $631,726.87. EMC admitted coverage but not the amount of loss. Dissatisfied, KCOM invoked the insurance contract’s appraisal provision. KCOM claimed there were issues with the appraisal process, prompting it to ultimately file suit against EMC, alleging breach of contract, unreasonable delay and denial of benefits, and bad faith breach of the insurance contract. The threshold question presented for the Tenth Circuit's review in this state law diversity action was whether the Court had appellate jurisdiction over the district court’s non-final order denying confirmation of a property loss appraisal. The Court concluded it did not, and dismissed the appeal. View "KCOM, Inc. v. Employers Mutual Casualty Co." on Justia Law

This appeal grew out of a conflict between the business models of Sprint Nextel Corporation and The Middle Man, Inc. Middle Man bought mobile telephones, including Sprint’s, and tries to resell them at a profit. Sprint brought a breach of contract lawsuit against Middle Man, and Middle Man counterclaimed seeking a declaration that its business model did not violate the contract that accompanied the purchase of Sprint telephones. The district court held as a matter of law that the contract unambiguously prohibited Middle Man from selling new mobile telephones purchased from Sprint regardless of whether they were active on Sprint’s network. In light of this holding, the district court: (1) granted judgment on the pleadings to Sprint on Middle Man’s counterclaim for a declaratory judgment; and (2) granted summary judgment to Sprint on its breach of contract claim, awarding Sprint nominal damages of $1. Middle Man appealed, contending that the entry of judgment on Sprint’s claim and Middle Man’s counterclaim was made in error and that the district court should have awarded judgment to Middle Man on both claims. The Tenth Circuit, after review of the contract at issue here, determined parts were ambiguous, and that the district court erred in ruling as a matter of law that it was not. As such, Sprint was not entitled to judgment on the pleadings or summary judgment. The district court's judgment was vacated and the matter remanded for further proceedings. View "Sprint Nextel Corp. v. Middle Man" on Justia Law

Plaintiff Archangel Diamond Corporation Liquidating Trust, as successor-in-interest to Archangel Diamond Corporation (collectively, “Archangel”), appealed dismissal of its civil case against defendant OAO Lukoil (“Lukoil”), in which it alleged claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), breach of contract, and commercial tort law. The district court dismissed the case for lack of personal jurisdiction over Lukoil and under the doctrine of forum non conveniens. Archangel Diamond Corporation was a Canadian company and bankrupt. The liquidating trust was located in Colorado. In 1993, Archangel entered into an agreement with State Enterprise Arkhangelgeology (“AGE”), a Russian state corporation, regarding a potential license to explore and develop diamond mining operations in the Archangelsk region of Russia. Archangel and AGE agreed that Archangel would provide additional funds and that the license would be transferred to their joint venture company. However, the license was never transferred and remained with AGE. In 1995, AGE was privatized and became Arkhangelskgeoldobycha (“AGD”), and the license was transferred to AGD. Diamonds worth an estimated $5 billion were discovered within the license region. In 1998, Lukoil acquired a controlling stake in AGD, eventually making AGD a wholly owned subsidiary of Lukoil. Pursuant to an agreement, arbitration took place in Stockholm, Sweden, to resolve the license transfer issue. When AGD failed to honor the agreement, Archangel reactivated the Stockholm arbitration, but the arbitrators this time concluded that they lacked jurisdiction to arbitrate the dispute even as to AGD. Archangel then sued AGD and Lukoil in Colorado state court. AGD and Lukoil removed the case to Colorado federal district court. The district court remanded the case, concluding that it lacked subject-matter jurisdiction because all of the claims were state law claims. The state trial court then dismissed the case against both AGD and Lukoil based on lack of personal jurisdiction and forum non conveniens. The Colorado Supreme Court affirmed the dismissal as to AGD, reversed as to Lukoil, and remanded (leaving Lukoil as the sole defendant). On remand, the Colorado Court of Appeals reversed the trial court’s previous dismissal on forum non conveniens grounds, which it had not addressed before, and remanded to the trial court for further proceedings. The trial court granted Lukoil and AGD's motion to hold an evidentiary hearing, and the parties engaged in jurisdictional discovery. In 2008 and early 2009, the case was informally stayed while the parties discussed settlement and conducted discovery. By June 2009, Archangel had fallen into bankruptcy due to the expense of the litigation. On Lukoil’s motion and over the objection of Archangel, the district court referred the matter to the bankruptcy court, concluding that the matter was related to Archangel’s bankruptcy proceedings. Lukoil then moved the bankruptcy court to abstain from hearing the matter, and the bankruptcy court concluded that it should abstain. The bankruptcy court remanded the case to the Colorado state trial court. The state trial court again dismissed the action. While these state-court appeals were still pending, Archangel filed this case before the Tenth Circuit Court of Appeals, maintaining that Lukoil had a wide variety of jurisdictional contacts with Colorado and the United States as a whole. Finding no reversible error in the district court's ruling dismissing the case on forum non conveniens grounds, the Tenth Circuit affirmed. View "Archangel Diamond v. OAO Lukoil" on Justia Law

Plaintiff-Appellant Corey Christy purchased a commercial general-liability insurance policy from Travelers in the name of his sole proprietorship, K&D Oilfield Supply. Subsequently, Christy registered his business as a corporation under the name K&D Oilfield Supply, Inc. Christy renewed his CGL Policy annually, but did not notify Travelers that he had incorporated his business. After Christy formed K&D, Inc., he was in an accident and made a claim under the CGL Policy. Travelers denied coverage based on Christy’s failure to inform it of the change in business form, and Christy filed this action. On cross motions for summary judgment, the district court found in favor of Travelers. Because there was a material factual dispute as to whether Christy knew or should have known Travelers would have considered the formation of K&D, Inc. material to its decision to renew the Policy, summary judgment based on Christy’s legal duty to speak was inappropriate. And because the existence of a legal duty governs whether Christy engaged in a material misrepresentation by not informing Travelers he had formed K&D, Inc., the Tenth Circuit held the district court erred in reforming the Policy on that basis at this stage of the proceedings. Accordingly, the Court reversed the district court’s grant of summary judgment and remanded for further proceedings. But because Christy had not met his burden to come forward with evidence in support of his claim for breach of the implied covenant of good faith and fair dealing, the Tenth Circuit affirmed the district court’s grant of summary judgment on that claim. View "Christy v. Travelers Indemnity" on Justia Law

Plaintiffs Delbert Soseeah, Maxine Soseeah and John Borrego filed this action against defendants Sentry Insurance, Dairyland Insurance Company, Peak Property and Casualty Insurance Company, and Viking Insurance Company of Wisconsin (collectively Sentry) claiming, in part, that Sentry failed to timely and properly notify them and other Sentry automobile insurance policyholders of the impact of two New Mexico Supreme Court decisions regarding the availability of uninsured and underinsured motorist coverage under their respective policies. The complaint alleged that Delbert Soseeah, after being injured in a motor vehicle accident, made a claim for UM/UIM benefits under two policies of automobile insurance issued by Sentry to Mrs. Soseeah. According to the complaint, Mrs. Soseeah “never executed a valid waiver of UM/UIM coverage under the” two policies and, consequently, Mr. Soseeah “demanded that . . . Sentry reform” the two policies “to provide stacked uninsured/underinsured motorist coverage limits equal to the limits of the liability coverage on each of the vehicles covered by the” policies pursuant to the two New Mexico Supreme Court decisions. Sentry purportedly refused to reform the policies and rejected Mr. Soseeah’s claim for UM/UIM benefits. The complaint alleged that Sentry, by doing so, violated New Mexico’s Unfair Practices Act (UPA), violated a portion of New Mexico’s Insurance Code known as the Trade Practices and Frauds Act (TPFA), breached the implied covenant of good faith and fair dealing, and breached the terms of the two policies. The district court granted plaintiffs’ motion for class certification. Sentry subsequently sought and was granted permission to appeal the district court’s class certification ruling. Because plaintiffs failed to establish that all members of the general certified class suffered the common injury required by Rule of Civil Procedure 23(a)(2), the Tenth Circuit concluded that the district court abused its discretion in certifying the general class. Because the district court’s certification ruling did not expressly address the Rule 23 factors as they applied to each of the identified subclasses, the Court did not have enough information to determine whether the district court abused its discretion in certifying two subclasses. Consequently, the Court directed the district court on remand to address these issues. View "Soseeah v. Sentry Insurance" on Justia Law