Justia Contracts Opinion SummariesArticles Posted in US Court of Appeals for the Eighth Circuit
Jacobson Warehouse Co., Inc. v. Schnuck Markets, Inc.
SMI, a supermarket retailer, and XPO, a logistics company, both appeal the district court's orders and judgment in a breach of contract and tort dispute arising out of the parties' business relationship.The Eighth Circuit concluded that the parties' agreement bars SMI from recovering non-direct damages from XPO; the Limitation of Liability Provision contractually limits both parties' liability to each other, but does not exonerate them, and is therefore not contrary to Missouri public policy; the Limitation of Liability Provision does not violate Missouri public policy simply because it prevents SMI from recovering its mitigation damages; there was no error in the district court's determination at summary judgment that three categories of SMI's claimed damages were consequential damages; there was no error in granting judgment as a matter of law on SMI's negligence counterclaim where SMI has not provided sufficient evidence to show that XPO breached a duty of care other than its contractual duty under the agreement; there was no error in the district court's determination that two emails SMI sought to exclude were protected by the attorney-client privilege; and there was no error in awarding statutory prejudgment interest to XPO.In regard to XPO's arguments on appeal, the court concluded that there was no error in the district court's denial of judgment as a matter of law on SMI's breach of contract counterclaim, and there was no error in the district court's determination that XPO was not entitled to attorney's fees under the agreement. View "Jacobson Warehouse Co., Inc. v. Schnuck Markets, Inc." on Justia Law
McGowen, Hurst, Clark & Smith, PC v. Commerce Bank
Robert McGowen served as the president, was on the board of directors, and was a shareholder of MHCS, an account firm. After McGowen obtained a personal loan from Commerce Bank, Commerce attempted to secure McGowen's personal loan by his signature on a pledge that purportedly made his shares of stock in MHCS collateral, and Commerce also required that McGowen obtain MHCS’s signature on a document acknowledging the pledge. When McGowen defaulted, the parties disputed the enforceability of the pledge and the acknowledgement against MHCS.The Eighth Circuit concluded that MHCS has standing to seek a declaratory judgment regarding the pledge where MHCS has shown an injury in fact, traceability, and redressability. Under Iowa law, a shareholder cannot make a voluntary transfer of shares in a professional corporation unless both of the following are true: (1) the transfer is to the professional corporation to which the shares belong or to an individual who is licensed to practice in Iowa in the same profession the corporation is authorized to practice, and (2) the transfer is authorized by the shareholders. The court concluded that there is no evidence that the pledge can meet these requirements. The court further concluded that even if the pledge's illegality did not infect the acknowledgement, MHCS would still not be bound by the acknowledgement because McGowen did not have the authority to enter into it on MHCS's behalf. In this case, McGowen did not have actual or apparent authority. Accordingly, the court affirmed the district court's grant of summary judgment in favor of MHCS. View "McGowen, Hurst, Clark & Smith, PC v. Commerce Bank" on Justia Law
Rodenburg LLP v. Cincinnati Insurance Co.
Rodenburg purchased a Commercial Umbrella Liability Policy from Cincinnati. In the underlying action, a plaintiff filed suit against Rodenburg, asserting several theories including wrongful garnishment, tort-based claims, and violations of the Fair Debt Collection Practices Act (FDCPA). Rodenburg filed a claim under the policy for coverage of the underlying lawsuit, but Cincinnati denied coverage.The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Cincinnati, concluding that the policy did not provide coverage for the underlying lawsuit and Cincinnati had no duty to defend Rodenburg under the policy. In this case, the underlying complaint alleged "personal and advertising injury" that was not "caused by an 'occurrence.'" The court explained that any potential liability arose either directly or indirectly from conduct that was alleged to violate the FDCPA, however, and was thus excluded from coverage by the Violation of Statutes Exclusion. Therefore, Cincinnati did not breach its contractual duty to defend Rodenburg. View "Rodenburg LLP v. Cincinnati Insurance Co." on Justia Law
Miller v. Honkamp Krueger Financial Services, Inc.
After plaintiff left her employment at HKFS, she filed suit seeking a declaratory judgment that the restrictive covenants in her various employment contracts were unenforceable. HFKS brought counterclaims against plaintiff and a third-party complaint against plaintiff's new employer, Mariner.The Eighth Circuit reversed the district court's order preliminarily enjoining plaintiff from breaching the non-compete and nonsolicitation provisions in her employment contracts. The court agreed with plaintiff and Mariner that the non-compete provision did not survive her termination of the Employment Agreement. Because HKFS is not likely to prevail on the merits of its breach of contract claim with respect to the non-compete provision, the district court erred in enjoining plaintiff from violating that provision. In regard to the non-solicitation provision in plaintiff's contract, the court concluded that South Dakota law applies under the agreement's choice-of-law provision, and such provisions cannot prevent a former employee from accepting unsolicited business. Therefore, the non-solicitation agreement, in part, violates South Dakota law and public policy and it is at least in part unenforceable. The court remanded for further proceedings. View "Miller v. Honkamp Krueger Financial Services, Inc." on Justia Law
Laredo Ridge Wind, LLC v. Nebraska Public Power District
The Eighth Circuit affirmed the district court's grant of summary judgment in favor of NPPD's wind-farm affiliates. NPPD contends that these affiliates breached their power purchase agreements (PPAs) by transferring control of their parent companys' ownership interests without NPPD's written consent.The court concluded that the Project Entities did not transfer their direct ownership interests to NRG or GIP and did not violate the change-of-control provision of the PPAs. The court also concluded that the transfer of the Project Entities' parent companies, from Edison to NRG to GIP, did not transfer the "direct ownership interests" of each of the Project Entities. Therefore, the Project Entities did not need to obtain NPPD's written consent for each of the transactions involving its upstream parent companies, and the transfer of the ownership interests at the parent company level did not trigger a change of control under the PPAs. The court also agreed with the district court's conclusion that the Project Entities did not violate the anti-assignment provisions by delegating performance of certain duties, because the Project Entities remain ultimately responsible for their obligations. Finally, the court concluded that the district court did not abuse its discretion in issuing a permanent injunction to prevent defendant from terminating the PPAs. View "Laredo Ridge Wind, LLC v. Nebraska Public Power District" on Justia Law
Ascente Business Consulting, LLC v. DR myCommerce
Ascente filed suit against Digital River for Minnesota contract, fraud, and fraud-adjacent claims. Ascente's claims arose after it hired Digital River to build a customer-facing web portal and the portal fell below Ascente's expectations.The Eighth Circuit affirmed the district court's denial of Ascente's motion to amend its fraud and reckless-misrepresentation claims where amendment would be futile. The court concluded that there was no error in granting summary judgment on the contract claims where Ascente failed to raise a triable issue of fact regarding whether Digital River breached its purported duties. The court also concluded that there was no error in granting summary on the fraudulent inducement claim where Ascente failed to raise a triable issue of fact regarding its actual reliance. View "Ascente Business Consulting, LLC v. DR myCommerce" on Justia Law
Randy Kinder Excavating, Inc. v. JA Manning Construction Company, Inc.
The Eighth Circuit affirmed the district court's award of $283,609.15 in attorneys' fees to Manning in this action arising out of a contract dispute between Kinder, a general contractor, and Manning, a subcontractor.The court concluded that the district court properly applied Arkansas state law to decide the matter because the issue of attorneys' fees is a procedural matter governed by Arkansas law. The court also concluded that the subcontract's silence as to Manning's ability to recover attorneys' fees as the prevailing party does not operate as a waiver of its right to recover such fees under Ark. Code Ann.16-22-308. The court further concluded that because the requested attorneys' fees were incurred by Manning, Manning's recovery of such attorneys' fees is not prohibited under Ark. Code Ann. 23-79-208. View "Randy Kinder Excavating, Inc. v. JA Manning Construction Company, Inc." on Justia Law
CRST Expedited, Inc. v. Swift Transportation Co.
CRST filed suit alleging that Swift wrongfully recruited and hired long-haul truck drivers who were "under contract" with CRST. Ruling on post-verdict motions, the district court upheld the intentional interference with contracts award, vacated the unjust enrichment award because it was predicated on a theory of damages rejected in the court's summary judgment rulings, and remitted the punitive damages to $3 million.The Eighth Circuit reversed the district court's post-verdict order upholding the intentional interference verdict because it relied upon CRST's theory of liability that the court rejected in CRST Expedited, Inc. v. TransAm Trucking, Inc., 960 F.3d 499 (8th Cir. 2020). The court explained that the proper focus is on intentionally and improperly causing the employee to violate his or her covenant not to compete, not merely on the hiring of a competitor's at-will employee to further the actor's legitimate competitive interests. After careful review of the record, the court concluded that it must reverse with instructions to dismiss because, for multiple reasons, CRST failed to prove its interference with contract claim and therefore its claim for unjust enrichment as well. The court affirmed the amended judgment in favor of Swift on CRST's unjust enrichment claim. View "CRST Expedited, Inc. v. Swift Transportation Co." on Justia Law
Agrifund, LLC v. Heartland Co-op
The Eighth Circuit affirmed the district court's order granting summary judgment to Agrifund on the conversion claim Agrifund brought against Heartland. The court concluded that Heartland failed to exercise reasonable commercial standards of fair dealing, and Heartland does not qualify as a holder in due course. In this case, it would have taken minimal effort for Heartland to confirm, whether with the borrowers or with Agrifund, that Agrifund had been fully recompensed before accepting the payment at issue.The court also concluded that the Subrogation Agreement did not bind Heartland to the terms of the Note; the 14% contractual interest rate does not apply to the damages award; and the district court properly awarded pre-judgment interest at the rate required by Iowa law and post-judgment interest at the federal rate. Finally, the court concluded that Heartland is not liable for attorney fees as set forth in the Note, and there is no abuse of discretion in the district court's decision to deny Agrifund's request for attorney fees. Accordingly, the court affirmed the district court's award of damages and attorney fees. View "Agrifund, LLC v. Heartland Co-op" on Justia Law
Kohlbeck v. Wyndham Vacation Resorts, Inc.
Plaintiffs, two couples who entered into multiple timeshare contracts with Wyndham, filed suit against Wyndham, alleging various improper trade practices under Missouri law. Wyndham counterclaimed for breach of contract. Plaintiffs' claims were dismissed and the district court granted summary judgment in favor of Wyndham on its counterclaim.The Eighth Circuit affirmed, concluding that the notice of appeal confers appellate jurisdiction over the district court's grant of summary judgment. On the merits, the court concluded that plaintiffs ratified their contracts with Wyndham and thus cannot assert duress as a defense. Furthermore, even assuming that the couples did not ratify their contracts and waive the duress defense, the facts show that neither couple was prevented from exercising their free will. Finally, the court concluded that none of Wyndham's alleged misrepresentations rise to the level of fraudulent misrepresentation. View "Kohlbeck v. Wyndham Vacation Resorts, Inc." on Justia Law