Justia Contracts Opinion Summaries

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

The City of Richmond Heights, Missouri filed a claim with Mt. Hawley Insurance Company under a commercial property policy for losses of tax revenue due to government-mandated COVID-19 closures. Mt. Hawley denied the claim and sued for a declaratory judgment that it was not obligated to cover the losses. Richmond Heights counterclaimed with five counts: (1) breach of contract, (2) vexatious refusal to pay, (3) fraudulent inducement and misrepresentation, (4) negligent misrepresentation, and (5) breach of fiduciary duty. The United States District Court for the Eastern District of Missouri dismissed the counterclaims, denied amendments to two of them, and granted declaratory judgment to Mt. Hawley. On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the decision of the lower court.The appellate court held that the insurance policy required "direct physical loss of or damage to property" for coverage which was not met by the COVID-19 shutdowns. The court also rejected the city's argument that the Additional Covered Property Endorsement in the policy removed the "physical damage or loss" requirement for losses of sales tax revenues. Furthermore, the court found that the city's claims of fraud, misrepresentation and breach of fiduciary duty were not distinct from its breach of contract claim and thus were properly dismissed by the district court. Lastly, the court affirmed the district court's denial of the city's motion to amend its breach of contract and vexatious refusal claims, concluding that the proposed amendments would not have survived a motion to dismiss. View "Mt. Hawley Insurance Company v. City of Richmond Heights" on Justia Law

In this case before the United States Court of Appeals for the Eighth Circuit, Jet Midwest International Co., Ltd. (Jet Midwest International) sought attorneys’ fees and costs from Jet Midwest Group, LLC (JMG) and other defendants (collectively referred to as the Ohadi/Woolley defendants). The request was made in connection with a fraudulent transfer action filed under the Missouri Uniform Fraudulent Transfer Act (MUFTA), following a term loan agreement between Jet Midwest International and JMG which JMG failed to repay. The district court awarded attorneys’ fees and costs against the Ohadi/Woolley defendants, who were not parties to the term loan agreement, based on its finding that they conspired with JMG to violate the MUFTA.On appeal, the Eighth Circuit found that the district court erred in awarding attorneys’ fees and costs against the Ohadi/Woolley defendants based on the term loan agreement since they were not parties to that agreement. However, the court held that the district court's finding of "intentional misconduct" by the Ohadi/Woolley defendants in conspiring with JMG to violate the MUFTA could justify an attorneys’ fees award under the "special circumstances" exception to the American Rule (which generally requires each party to bear its own attorneys’ fees).The court vacated the award and remanded the case back to the district court to calculate a reasonable attorneys’ fee using the lodestar method (multiplying the number of hours reasonably expended by the reasonable hourly rates), and to determine the extent to which the claimed costs are recoverable under the relevant statute. The court's holding did not limit JMG’s ultimate responsibility for attorneys’ fees and costs under the term loan agreement. View "Jet Midwest International Co. v. Ohadi" on Justia Law