Justia Contracts Opinion Summaries

The case involves a contract dispute between Brands International Corporation, a Canadian manufacturer of hand sanitizer, and Reach Companies, LLC, a Minnesota retail distributor. In 2020, Reach contracted with Brands for 1,000,000 bottles of hand sanitizer to be delivered directly to Reach’s customer, Five Below. The parties agreed to “cash on delivery” terms. Brands began shipping hand sanitizer to individual Five Below stores. Brands made three deliveries, all of which were accepted by Five Below. Brands informed Reach of the deliveries, and Five Below paid Reach for the hand sanitizer, but Reach did not pay Brands. As a result of Reach’s failure to pay, Brands informed Reach that it would no longer deliver hand sanitizer to Five Below on Reach’s behalf. Brands then invoiced Reach for the contract price for the delivered hand sanitizer. Reach still did not pay and ceased communicating with Brands. Brands then filed suit against Reach for breach of contract, unjust enrichment, account stated, and unpaid goods and services. Reach counterclaimed for breach of contract.The parties cross-moved for summary judgment on their contract claims. They disagreed on the applicable law: Brands asserted that the U.N. Convention on Contracts for the International Sale of Goods (CISG) applied, while Reach asserted that Minnesota law applied. The district court determined that the CISG governed and that Reach had breached the contract. The district court granted summary judgment to Brands on the parties’ competing breach-of-contract claims, granted summary judgment to Reach on Brands’s unjust-enrichment and account-stated claims, dismissed all other claims, and awarded Brands the contract price for the delivered hand sanitizer. The district court also found that the CISG authorized the award of attorney’s fees and so awarded Brands attorney’s fees. Reach appealed.The United States Court of Appeals for the Eighth Circuit affirmed the grant of summary judgment but reversed the award of attorney’s fees. The court found that the CISG governed the dispute and that Reach had breached the contract by failing to pay Brands upon delivery of the hand sanitizer. The court also found that Brands was entitled to recover damages based on Reach’s breach of the contract. However, the court held that the CISG does not authorize an award of attorney’s fees, and thus, the district court erred in awarding those fees to Brands. View "Brands International Corp. v. Reach Companies, LLC" on Justia Law

In October 2018, Molitor Equipment, LLC purchased two tractors from Deere & Company. These tractors were a transitional model and did not include engine compartment fire shields as standard equipment, which were included in the subsequent 2019 model. A year after purchase, both tractors caught fire in separate incidents. Molitor had an insurance policy with SECURA Insurance Company, who paid Molitor's claim and then pursued Molitor's warranty claims against Deere. SECURA claimed the tractors were defective and unreasonably dangerous due to the absence of the fire shields and that Deere's warranty obligated them to remedy the problem or refund the purchase prices.Deere moved to dismiss the claims, arguing that its warranty only covered manufacturing defects, not design defects. The district court granted Deere's motion, dismissing SECURA's breach of warranty claim to the extent it was based on a design defect theory. The case proceeded on a manufacturing defect theory. At the close of discovery, both parties moved for summary judgment. Deere argued that since the tractors conformed to their intended design, there was no manufacturing defect. The district court granted Deere's motion, holding that SECURA could not establish its breach of warranty claim because Deere's warranty covers defects only in "materials or workmanship."On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the district court's decisions. The appellate court agreed with the district court's interpretation of Deere's warranty, concluding that it did not cover design defects. The court also agreed that SECURA could not establish a breach of warranty claim based on a manufacturing defect, as the tractors conformed to their intended design. Therefore, the court affirmed the district court's dismissal of SECURA's design defect claim and its grant of summary judgment to Deere on the manufacturing defect claim. View "Secura Insurance Company v. Deere & Company" on Justia Law

This case involves a dispute between Jacam Chemical Company 2013, LLC (Jacam) and its competitor GeoChemicals, LLC, along with Arthur Shepard Jr., a former Jacam employee who later worked for GeoChemicals. Jacam sued both Shepard and GeoChemicals, alleging breach of contract, misappropriation of trade secrets, and tortious interference with contracts. Shepard and GeoChemicals countersued Jacam. The district court granted a declaratory judgment to Shepard, concluding that he owed no contractual obligations to Jacam, and dismissed the remaining claims of Jacam and GeoChemicals.The district court had previously reviewed the case and granted summary judgment to Shepard, holding that he had no enforceable agreements with Jacam. The court also dismissed all of Jacam’s and GeoChemicals’s other claims against each other. Both Jacam and GeoChemicals appealed aspects of the summary judgment order.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court found that neither the HCS Agreement nor the 2015 version of CES’s Conduct Code created an enforceable contract between Jacam and Shepard. The court also held that Jacam did not make reasonable efforts to keep its pricing information secret, which means the pricing information documents were not trade secrets which Shepard could misappropriate. Finally, the court agreed with the district court that Jacam’s tortious-interference claim fails. The court also dismissed GeoChemicals’s cross-appeal, holding that Jacam did not commit an independently tortious act that interfered with GeoChemicals’s relationship with Continental. View "Jacam Chemical Co. 2013, LLC v. Shepard" on Justia Law

The case involves a group of grocery store owner-operators and their related company, Anchor Mobile Food Markets, Inc. (AMFM), who sued Onex Partners IV, Onex Corporation, Anthony Munk, and Matthew Ross (collectively, Onex) for violations of Missouri common law and the Racketeer Influenced and Corrupt Organizations Act (RICO). The owner-operators had invested in the discount grocery chain Save-A-Lot and its independent licensee program, which turned out to be a disastrous investment. They alleged that Onex, which had acquired Save-A-Lot, had fraudulently induced them into the investment.The United States District Court for the Eastern District of Missouri had granted summary judgment to Onex. The court found that the owner-operators had signed multiple contractual releases and anti-reliance disclaimers before opening their stores, which barred their claims. The owner-operators and AMFM argued that these releases and disclaimers were fraudulently induced.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court found that the owner-operators failed to raise a genuine dispute of material fact that they were fraudulently induced to enter the releases. The court also found that the releases were valid and barred the owner-operators' claims. The court further found that AMFM's claims against Onex failed, as neither Save-A-Lot nor Onex had contracted with AMFM. Finally, the court affirmed the district court's denial of the owner-operators and AMFM's request for leave to amend their complaint. View "SBFO Operator No. 3, LLC v. Onex Corporation" on Justia Law

KOKO Development, LLC, a real estate developer, contracted with Phillips & Jordan, Inc., DW Excavating, Inc., and Thomas Dean & Hoskins, Inc. (TD&H) to develop a 180-acre tract of land in North Dakota. However, the project faced numerous issues, leading KOKO to sue the defendants for breach of contract and negligence. KOKO did not disclose any expert witnesses before the trial, leading the district court to rule that none of its witnesses could give expert testimony. Consequently, the district court granted the defendants' motion for summary judgment, finding that without expert witnesses, KOKO could not establish its claims.The district court's decision was based on the complexity of the issues involved in the case, which required expert testimony. The court found that KOKO's negligence and breach of contract claims required complex infrastructure and engineering analysis, which was beyond the common knowledge or lay comprehension. KOKO appealed the decision, arguing that the district court erred in finding that it did not properly disclose witnesses providing expert testimony and that expert testimony was necessary for the case.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The appellate court found that KOKO did not identify the witnesses that would provide expert testimony and did not meet the requirements of Rule 26(a)(2). The court also agreed with the district court that the negligence and breach of contract claims required expert testimony due to the complexity of the issues in the case. The court concluded that the district court did not abuse its discretion by excluding the three witnesses' expert testimony and requiring expert testimony for the negligence and breach of contract claims. View "KOKO Development, LLC v. Phillips & Jordan, Inc." on Justia Law

In 2011, James Buchl and Doren Chatinover, electrical engineers with experience in oil fields, entered into an oral contract with Gascoyne Materials Handling & Recycling to work as project managers for a division of Gascoyne. After five years, Gascoyne stopped making monthly payments under the contract, leading the plaintiffs to end the relationship and file a lawsuit. The plaintiffs' initial complaint alleged eleven causes of action, including fraud and deceit, which were dismissed by the district court. The case proceeded to a bench trial on the remaining claims for breach of contract and conversion, and on Gascoyne’s counterclaims.The district court found that Gascoyne had underpaid the plaintiffs by $822,199 and entered judgment in their favor for that amount, plus prejudgment and post-judgment interest. The court dismissed Gascoyne’s counterclaims. Gascoyne filed a post-trial motion to alter or amend, raising the issues now presented on appeal. The district court modified the award of post-judgment interest but otherwise denied the motion.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed all but $14,650 of the award of contract damages and the award of costs, reversed the grant of prejudgment interest, and remanded for entry of an amended judgment. The court found that the district court had not made a clear error in calculating the profits due to the plaintiffs, except for failing to include $29,300 in expenses for a particular project, which would reduce the plaintiffs' share of the profits by $14,650. The court also held that the plaintiffs' contract damages were not certain and were not capable of being made certain by calculation, so the district court erred in awarding prejudgment interest. View "Buchl v. Gascoyne Materials" on Justia Law

Yasmin Varela filed a class action lawsuit against State Farm Mutual Automobile Insurance Company (State Farm) after a car accident. Varela's insurance policy with State Farm entitled her to the "actual cash value" of her totaled car. However, she alleged that State Farm improperly adjusted the value of her car based on a "typical negotiation" deduction, which was not defined or mentioned in the policy. Varela claimed this deduction was arbitrary, did not reflect market realities, and was not authorized by Minnesota law. She sued State Farm for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, and violation of the Minnesota Consumer Fraud Act (MCFA).State Farm moved to dismiss the complaint, arguing that Varela's claims were subject to mandatory, binding arbitration under the Minnesota No-Fault Automobile Insurance Act (No-Fault Act). The district court granted State Farm's motion in part, agreeing that Varela's claims for breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment fell within the No-Fault Act's mandatory arbitration provision. However, the court found that Varela's MCFA claim did not seek the type of relief addressed by the No-Fault Act and was neither time-barred nor improperly pleaded, and thus denied State Farm's motion to dismiss this claim.State Farm appealed, arguing that Varela's MCFA claim was subject to mandatory arbitration and should have been dismissed. However, the United States Court of Appeals for the Eighth Circuit dismissed the appeal for lack of jurisdiction. The court found that State Farm did not invoke the Federal Arbitration Act (FAA) in its motion to dismiss and did not file a motion to compel arbitration. The court concluded that the district court's order turned entirely on a question of state law, and the policy contained no arbitration provision for the district court to "compel." Therefore, State Farm failed to establish the court's jurisdiction over the interlocutory appeal. View "Varela v. State Farm Mutual Automobile Insurance Co." on Justia Law

The United States Court of Appeals for the Eighth Circuit heard an appeal brought by DRE Health Corporation, a personal protective equipment (PPE) wholesaler, against a district court's decision to deny its motion to stay litigation and compel arbitration under the Federal Arbitration Act (FAA) with Anhui Powerguard Technology Company, a Chinese PPE manufacturer. Anhui had filed a breach-of-contract action alleging that DRE Health failed to pay for over $9 million in fulfilled purchase orders.The crux of the case revolved around an agreement between the parties where Anhui agreed to reduce DRE Health's debt in exchange for the latter's promise to purchase additional shipments of gloves. This agreement stipulated that future disputes would be subjected to binding arbitration, but the court had to determine whether this stipulation was conditional on DRE Health's completion of initial payments.The court, applying the series-qualifier canon of contract interpretation and Missouri law, determined that the prefatory phrase in the agreement, “AFTER THE INITIAL PAYMENT OF $1,970,000.00 USD,” served as a condition precedent to all the obligations enumerated in the agreement, including the agreement to arbitrate. As DRE Health had not completed the initial payment, there was no contract between the parties to arbitrate.The court thus affirmed the district court’s judgment, concluding that the parties did not agree to submit their dispute to arbitration. View "Anhui Powerguard Tech Co, Ltd v. DRE Health Corporation" on Justia Law

This case from the United States Court of Appeals for the Eighth Circuit involves a dispute between Midwest Medical Solutions, LLC and Exactech U.S., Inc. This is the second time the case has come before the court. The initial appeal by Midwest was regarding a summary judgment in favor of Exactech, which was based on the district court's interpretation of a non-compete clause in the parties' Sales Agreement. The Court of Appeals reversed the summary judgment, finding the clause unambiguous, and remanded the case for further proceedings.In the latest appeal, Exactech contends that the district court erred by denying its motion for leave to replead two counterclaims. Exactech had initially included these counterclaims in its pleadings but later removed them, believing they had been rendered moot by the district court's order interpreting the disputed contract language in Exactech's favor. Exactech attempted to reintroduce these counterclaims after the Court of Appeals reversed the summary judgment. The district court denied Exactech's motion to amend its pleadings, citing Exactech's lack of diligence in adhering to scheduling deadlines and the absence of changed circumstances that would justify its delay.The Court of Appeals affirmed the district court's decision. It found that the district court did not abuse its discretion in denying Exactech's motion to amend, as Exactech had failed to establish good cause for amending the scheduling order. The court noted that Exactech had voluntarily chosen not to replead these counterclaims in its amended pleadings, and that this decision could not be considered a changed circumstance. The court further noted that Exactech could have pleaded these counterclaims in the alternative, rather than omitting them entirely. View "Midwest Medical Solutions, LLC v. Exactech U.S., Inc." on Justia Law

In this breach-of-contract dispute, the United States Court of Appeals for the Eighth Circuit upheld the decision of the District Court of Minnesota, which rejected Reach Companies, LLC's appeal for a new trial after a jury awarded $1,196,364 in damages to Newsert, LLC and David Serata. Reach Companies, a distributor of hand sanitizers, alleged that Newsert, a wholesaler of the same products, continued accepting late shipments despite delays and price fluctuations. Newsert countered that Reach failed to fulfill all but one of its purchase orders, causing Newsert to lose two customers. The court found that the purchase orders were unambiguous with respect to their terms, rejecting Reach’s argument that the "must ship by" dates were simply aspirational. The court also held that the evidence presented at trial was sufficient to prove Newsert's lost profits with reasonable certainty, dismissing Reach's argument that the losses were speculative and didn't account for overhead. Lastly, the court allowed the admission of evidence of prior criminal convictions of Reach’s Vice President for impeachment purposes, as the crimes involved fraud and deceit and were thus relevant to the issues in the case. View "Reach Companies, LLC v. Newsert, LLC" on Justia Law