Justia Contracts Opinion Summaries

The district court granted Perficient, Inc.’s motion for summary judgment against Defendants. It awarded nominal damages and attorney’s fees to Perficient, but its orders did not quantify the amount of the award. Defendants appeal. Perficient filed a motion to dismiss for lack of appellate jurisdiction, arguing that the orders from which Defendants appealed are not final.The Eighth Circuit granted Perficient’s motion and dismissed it for lack of jurisdiction finding that Defendants’ appeal was not taken from a final, appealable order and was therefore ineffective to confer appellate jurisdiction upon the court. The court explained that Federal Rule of Appellate Procedure 4(a)(2) cannot save the prematurely filed notice of appeal here. The rule applies “only when a district court announces a decision that would be appealable if immediately followed by the entry of judgment” and does not save a premature appeal “from a clearly interlocutory decision—such as a discovery ruling or a sanction order under Rule 11. View "Perficient v. Thomas Munley" on Justia Law

Defendant, a neurosurgeon, chose to use implants distributed by DS Medical, a company wholly owned by his fiancée. Physicians in other practices grew suspicious and filed various claims under the False Claims Act. The jury returned a verdict for the government on two of the three claims. The district court then awarded treble damages and statutory penalties in the amount of $5,495,931.22. Following the verdict, the government moved to dismiss its two remaining claims without prejudice, see Fed. R. Civ. P. 41(a)(2), on the ground that any recovery would be “smaller and duplicative of what the [c]ourt ha[d] already awarded.”   The Eighth Circuit reversed and remanded for a new trial. The court explained that are several ways to prove that a claim is “false or fraudulent” under the False Claims Act. One of them is to show that it “includes items or services resulting from a violation” of the anti-kickback statute. This case required the court to determine what the words “resulting from” mean. The court concluded that it creates a but-for causal requirement between an anti-kickback violation and the “items or services” included in the claim. Thus, the court reversed and remanded because district court did not instruct the jury along these lines. View "United States v. Midwest Neurosurgeons, LLC, et al" on Justia Law

After disputes arose between a general contractor and two of its subcontractors, an arbitrator awarded the subcontractors money for the labor and material they had provided the general contractor along with associated costs, attorneys' fees, interest, and other sums. The general contractor declared bankruptcy before paying up, and the surety company that issued a bond guaranteeing the subcontractors would be paid tendered amounts representing only the part of the awards that compensated for labor and material (and some interest). But the subcontractors (or in one case, the subcontractor's assignee) wanted the whole of the awards and sued in federal court to get it.   The district court sided with the surety and granted it summary judgment. The Eighth Circuit reversed and remanded the district court’s decision granting summary judgment to the surety. The court held that the bond at issue obligates the surety to pay not only for labor and material but also for other related items to which Plaintiffs’ subcontracts entitle them (or their assignees). The court explained that the bond provided that if the subcontractors were not paid in full, which is the case here, they were entitled to sums "justly due," which included costs, attorneys' fees and interest. View "Owners Insurance Company v. Fidelity & Deposit Company" on Justia Law

Rock Dental Arkansas PLLC and Rock Dental Missouri LLC (Rock Dental) operate dental clinics in Arkansas and Missouri. After Rock Dental’s insurer, Cincinnati Insurance Company (Cincinnati), denied coverage for Rock Dental’s claims for losses related to the COVID-19 pandemic, Rock Dental sued for breach of contract. The district court granted Cincinnati’s motion to dismiss for failure to state a claim.   The Eighth Circuit affirmed. The court explained that Rock Dental has failed to plausibly allege that COVID-19 physically damaged its properties or that removal of any virus from its properties was required. Further, Rock Dental has not shown that it is entitled to coverage under the Civil Authority Coverage. The court explained that coverage requires allegations of physical loss of or damage to properties other than Rock Dental’s clinics. Rock Dental’s complaint contains no such allegations. View "Rock Dental Arkansas PLLC v. Cincinnati Insurance Company" on Justia Law

Plaintiffs appealed the district court’s grant of summary judgment in favor of Safeco Insurance Company of Illinois (“Safeco”). The case involved a dispute over the applicability of an “other structure” exclusion in a homeowner’s policy when the building sustaining damage was “used in whole or in part for business.”   At issue is a loss caused by the failure of an in-floor radiant heat system in a pole barn that was occasionally used for business purposes. The Eighth Circuit affirmed the district court’s summary judgment ruling in favor of Defendants. The court concluded that the business use exclusion for other structures precludes coverage for the loss, there is no evidence of bad faith on the part of Safeco, and Safeco had no duty to advise Plaintiffs about coverage.   The court explained that Plaintiffs’ arguments seeking to engraft an additional requirement on the business use exclusion—that the structure be used for “actual business activity”— or that the limited coverage for business property located on the premises somehow changes or modifies the plain language of the business use exclusion are unavailing. Because the policy language is unambiguous and the exclusion is neither obscure nor unexpected, the reasonable expectations doctrine is inapplicable. Thus, Safeco did not breach the contract when it denied coverage.Further, the court held that there is no other evidence of bad faith in the investigation of this claim. Finally, there is no evidence in the record to support a claim that Plaintiff either relied on the agent to provide appropriate coverage or needed protection from any specific threat. View "Joseph Wobig v. Safeco Ins Co of Illinois" on Justia Law

Ila Reid appealed a district court’s summary judgment dismissal of her breach of contract claim against Primerica Life Insurance Company (“Primerica”). Reid brought her claim after Primerica filed an interpleader action to resolve competing claims to her late husband Garvin Reid’s life insurance beneficiary proceeds. She contended Primerica acted unfairly in multiple ways to create the controversy and thus the district court should not have permitted Primerica to use interpleader as a shield against her breach of contract claim. Finding no reversible error, the Eighth Circuit Court of Appeals affirmed the district court’s summary judgment order in favor of Primerica. View "Primerica Life Insurance Co. v. Reid" on Justia Law

Torgerson Properties, Inc. ("TPI") develops and operates hotels, restaurants, and conference centers in Minnesota and Florida. It was covered by an all-risk property insurance policy issued by Continental Casualty Co. from May 1, 2019, through May 1, 2020. the policy’s Business Interruption and Civil Authority/Ingress-Egress provisions. The Business Interruption clause “covers against loss resulting from necessary interruption of business caused by direct physical loss of or damage to covered property.”   TPI filed a claim under the policy for lost business income during the COVID pandemic. After Continental denied the claim, TPI sued for breach of contract. Continental moved to dismiss for failure to state a claim. The district court granted Continental’s motion, and TPI appealed. The Eighth Circuit affirmed, holding that the district court was correct to dismiss TPI’s breach of contract action for failure to state a claim.   The court reasoned that insurance provisions covering “direct physical loss of or damage to property” are not triggered unless “there [is] some physicality to the loss or damage of property.” Oral Surgeons, P.C. v. Cincinnati Ins. Co., 2 F.4th 1141 (8th Cir. 2021) (relying on Minnesota law).  TPI tried to distinguish this case from Oral Surgeons by alleging that the virus was actually present on its property. However, TPI failed to show that causal link. The contamination did not cause TPI’s business interruption; the shutdown orders did. TPI would have been subject to the exact same restrictions even if its premises weren’t contaminated. And the cause of TPI’s business interruption—governmental orders alone—is not a direct physical loss. View "Torgerson Properties, Inc. v. Continental Casualty Company" on Justia Law

Cardiovascular Systems, Inc. (“CSI”) brought this action against Cardio Flow, Inc. (“Cardio Flow”), alleging the breach of a settlement agreement that resolved ownership of intellectual property rights related to atherectomy devices. Cardio Flow was not a named party to the settlement, however, and moved for summary judgment on that basis. In response, CSI asserted that principles of equitable estoppel and agency bound Cardio Flow to abide by the agreement.   The district court rejected CSI’s arguments and dismissed its claims and the Eighth Circuit affirmed. The court held that equitable estoppel provides no basis to enforce the settlement agreement against Cardio Flow. The court reasoned that the doctrine of equitable estoppel generally involves some type of misrepresentation. Given the Minnesota Supreme Court’s unequivocal holdings elsewhere that a representation or concealment is essential, the court declined to supplant the usual equitable estoppel elements.   Further, the party who signed the agreement with Plaintiff was not acting as Defendant's agent when she signed the settlement; there was no joint venture between the signer and Defendant, and Defendant did not control the signer's lawsuit against Plaintiff which led to the settlement agreement. View "Cardiovascular Systems, Inc. v. Cardio Flow, Inc." on Justia Law

SUNZ Insurance Company (“SUNZ”) appealed from the denial of its motion to dismiss or, in the alternative, to compel arbitration of the crossclaims filed in a complex insurance dispute. SUNZ argued the district court lacked subject matter jurisdiction over the crossclaims between non-diverse parties in the underlying interpleader action and otherwise erred by denying arbitration.   The Eighth Circuit reversed and remanded the district court’s denial of Defendant’s motion to compel arbitration of the crossclaims. The court explained arbitration agreements are generally favored under federal law. Further, a court may not rule on the potential merits of the underlying claim that is assigned by contract to an arbitrator, even if it appears to be frivolous.Here, the Program Agreement sets forth the terms and conditions of the Policy and contains the disputed statements pertaining to collateral, costs, and fees. The Policy cannot be read without the Program Agreement, which explicitly controls the administration of the Policy and only becomes binding and enforceable after its execution. While the other party’s crossclaim alleges that SUNZ breached the Policy, it is the Program Agreement that drives the question of liability. And, under the Program Agreement, both parties agreed to submit to arbitration any disagreement regarding its terms. This is a challenge to the contract’s validity that, under Buckeye, shall be considered by an arbitrator, not a court. Thus, the district court erred when it denied SUNZ’s alternative motion to compel arbitration. View "SUNZ Insurance Company v. Butler American Holdings Inc." on Justia Law

After a construction project fell through, Plaintiff sued Defendant. Defendant filed a motion to compel arbitration. At issue in this case is whether the party who signed the contract on behalf of Plaintiff had authority to do so. The district court concluded they did not and the Eighth Circuit affirmed.The Eighth Circuit found that the signing party neither had actual or apparent authority to sign the contract containing the arbitration agreement. Apparent authority is created by the conduct of the principal, not of the agent. View "GP3 II, LLC v. Litong Capital, LLC" on Justia Law