Justia Contracts Opinion Summaries

VFS Leasing Co. ("VFS") leased trucks to Time Definite Leasing, LLC ("TDL"), which insured the trucks with Markel American Insurance Company ("Markel American"). Markel American issued joint checks to VFS and TDL for insurance claims, but TDL cashed the checks without VFS's endorsement and kept the proceeds. VFS sued Markel American for breach of contract, claiming it was owed the funds from the joint checks.The United States District Court for the Middle District of Florida granted summary judgment in favor of VFS, holding that Markel American breached the insurance contract by failing to ensure VFS received the funds. The court found that under Florida's Uniform Commercial Code (UCC), Markel American's obligation was not discharged because the checks were not properly endorsed by both co-payees.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed whether Markel American's obligation to VFS was discharged when the drawee bank improperly accepted the joint checks. The court concluded that under Florida Statute § 673.4141(3), a drawer's obligation is discharged when a bank accepts a jointly issued check, regardless of whether both co-payees endorsed it. The court noted that while VFS could pursue a conversion claim against the bank, Markel American's obligation was discharged upon the bank's acceptance of the checks.The Eleventh Circuit reversed the district court's summary judgment in favor of VFS and remanded the case for further proceedings consistent with its opinion. View "VFS Leasing Co. v. Markel Insurance Company" on Justia Law

A Guatemalan company, HSR, engaged another Guatemalan company, AICSA, to design and construct a hydroelectric power plant. The project faced opposition from the local indigenous community, leading to work suspension and eventual contract termination by HSR. HSR initiated arbitration seeking payments and damages from AICSA, which counterclaimed for its own damages and sought to include its subcontractor, Novacom, in the arbitration.The United States District Court for the Southern District of Florida initially denied AICSA's motion to vacate the arbitration award, citing Eleventh Circuit precedent. The Eleventh Circuit Court of Appeals, in an en banc decision, later reversed this, holding that Chapter 1 of the Federal Arbitration Act (FAA) provides grounds for vacatur in cases governed by the New York Convention. The case was remanded to the District Court, which ultimately confirmed the arbitration award, leading to AICSA's appeal.The Eleventh Circuit Court of Appeals reviewed the case and affirmed the District Court's decision. The court held that the arbitration tribunal did not exceed its authority in three key areas: requiring AICSA to maintain or renew advance payment bonds, denying AICSA's claim that HSR breached anti-corruption provisions, and refusing to join Novacom to the arbitration. The court emphasized that the tribunal's decisions were based on interpretations of the contract, even if those interpretations were arguably erroneous. The court's review was limited to whether the tribunal interpreted the contract, not whether it did so correctly. View "Hidroelectrica Santa Rita S.A. v. Corporacion AIC, SA" on Justia Law

Taxinet Corporation sued Santiago Leon, alleging various claims stemming from a joint effort to secure a government concession for a taxi-hailing app in Mexico City. The district court granted summary judgment for Leon on all claims except for a Florida-law unjust enrichment claim, which went to trial along with Leon’s counterclaims for fraudulent and negligent misrepresentation. The jury awarded Taxinet $300 million for unjust enrichment and Leon $15,000 for negligent misrepresentation. However, the district court granted Leon’s Rule 50(b) motion for judgment as a matter of law, ruling that the damages award was based on inadmissible hearsay and was speculative.The United States District Court for the Southern District of Florida initially allowed testimony regarding a $2.4 billion valuation by Goldman Sachs, which was later deemed inadmissible hearsay. The court concluded that without this evidence, there was insufficient support for the jury’s $300 million award. The court also noted that the valuation was speculative and not directly tied to the benefit conferred by Taxinet in 2015.The United States Court of Appeals for the Eleventh Circuit affirmed the district court’s Rule 50(b) order, agreeing that the valuation evidence was inadmissible hearsay and that the remaining evidence was insufficient to support the $300 million award. However, the appellate court exercised its discretion to remand for a new trial on the unjust enrichment claim. The court found that Taxinet had presented enough evidence to show that it conferred a benefit on Leon, which he accepted, and that it would be inequitable for him to retain the benefit without payment. The court also noted that Taxinet could potentially present other evidence of damages in a new trial.The appellate court affirmed the district court’s summary judgment on Taxinet’s other claims, ruling that the alleged joint venture agreement was subject to Florida’s statute of frauds, as it could not be completed within a year. Thus, any claims based on the existence of the joint venture agreement were barred. View "Taxinet Corp. v. Leon" on Justia Law

The case involves a dispute between Commodities & Minerals Enterprise, Ltd. (CME) and CVG Ferrominera Orinoco, C.A. (FMO). CME sought to confirm a New York Convention arbitration award of $187.9 million against FMO. FMO opposed the confirmation, alleging that CME procured the underlying contract through fraud, bribery, and corruption, arguing that enforcing the award would violate U.S. public policy. The district court confirmed the award, ruling that FMO was barred from challenging the confirmation on public policy grounds because it failed to seek vacatur within the three-month time limit prescribed by the Federal Arbitration Act (FAA).The United States District Court for the Southern District of Florida initially reviewed the case. CME moved to confirm the arbitration award in December 2019. FMO opposed the confirmation nearly two years later, citing public policy concerns. The district court granted CME’s motion, explaining that FMO was barred from opposing confirmation on public policy grounds due to its failure to seek vacatur within the FAA’s three-month time limit.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that, based on its recent en banc decision in Corporación AIC, SA v. Hidroélectrica Santa Rita S.A., FMO should have been allowed to assert its public policy defense in opposition to confirmation. The court clarified that the grounds for vacating a New York Convention arbitration award are those set forth in U.S. domestic law, specifically Chapter 1 of the FAA, which does not recognize public policy as a ground for vacatur. However, the court affirmed the district court’s confirmation of the award, concluding that FMO’s public policy defense failed on the merits because it attacked the underlying contract, not the award itself. View "Commodities & Minerals Enterprise, Ltd. v. CVG Ferrominera Orinoco C.A." on Justia Law

A group of drivers sued their employer, Owl, Inc., for breach of contract and violations of the Fair Labor Standards Act (FLSA). They claimed they were not paid the correct hourly rate under their employment contract or overtime wages under the FLSA. The district court granted summary judgment for Owl on the breach of contract claim and limited the damages available to the drivers for the FLSA claim. The parties then settled the FLSA claim for $350,000, and the drivers appealed the district court’s rulings.The district court for the Middle District of Florida granted summary judgment on the breach of contract claim, reasoning that the drivers had agreed to a specific hourly rate, and enforcing a higher rate under the Service Contract Act (SCA) would create a private right of action under the SCA, which does not exist. The court also granted Owl’s motion in limine, limiting the FLSA damages to one-and-a-half times the rate the drivers were actually paid. The drivers settled the FLSA claim but reserved the right to appeal the district court’s rulings.The United States Court of Appeals for the Eleventh Circuit reviewed the case. It held that it had jurisdiction under 28 U.S.C. § 1291 because the district court entered a final judgment on all claims. The court also held that the drivers had standing to challenge the district court’s rulings despite the settlement. On the merits, the Eleventh Circuit affirmed the district court’s summary judgment on the breach of contract claim, holding that the SCA wage was not incorporated into the employment contracts. However, it reversed the district court’s ruling on the FLSA claim, holding that the “regular rate” under the FLSA should include the prevailing wage required by the SCA. The case was remanded for further proceedings consistent with this opinion. View "Perez v. Owl, Inc." on Justia Law

Constantin, an accounting firm, performed an audit for Schratter Foods Incorporated, a food services company. The audit allegedly went wrong, leading to liability. Constantin had a professional services insurance policy from Chubb Insurance Company of New Jersey, which covered services directed toward expertise in banking finance, accounting, risk and systems analysis, design and implementation, asset recovery, and strategy planning for financial institutions. Constantin assigned its rights under the policy to ECB USA, Inc., Atlantic Ventures Corp., and G.I.E. C2B (collectively, the ECB parties).The ECB parties sued Chubb in the United States District Court for the Southern District of Florida, seeking to enforce Constantin’s assigned contractual rights, alleging a breach of contract based on Chubb’s duty to defend or indemnify in the earlier lawsuit. The district court granted summary judgment to Chubb, ruling that the insurance policy did not cover the audit because it was not performed for a financial institution. The court also granted reformation of the 2017–18 contract to include Constantin as a named insured.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that the phrase “for financial institutions” in the insurance policy modified all the terms in the list, including “accounting.” The court applied the series-qualifier canon of interpretation, which suggests that a postpositive modifier like “for financial institutions” modifies all the terms in a list of parallel items. The court found that the surrounding language of the policy supported this interpretation. The court rejected ECB’s arguments based on the last-antecedent canon and contra proferentem, concluding that the policy unambiguously required the services to be for financial institutions. Therefore, the court affirmed the district court’s grant of summary judgment to Chubb. View "ECB USA, Inc. v. Chubb Insurance Company of New Jersey" on Justia Law

John Doe, a student at Emory University, was accused of sexual misconduct by Jane Roe following an encounter in April 2019. Roe alleged that Doe engaged in nonconsensual intercourse and choked her. Doe denied the allegations, asserting that the encounter was consensual. Emory conducted an investigation, during which Roe changed parts of her story. Despite inconsistencies in Roe's account, Emory found Doe responsible for sexual misconduct and suspended him for a semester. Doe appealed internally without success.Doe then filed a lawsuit in the United States District Court for the Northern District of Georgia, claiming that Emory violated Title IX by discriminating against him based on sex and breached a contractual obligation to conduct the investigation fairly. The district court dismissed Doe's Title IX claim, reasoning that his allegations suggested pro-complainant bias rather than gender bias. The court also dismissed his contract claims, finding no mutual assent to the terms of the university's sexual misconduct policy.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court affirmed the dismissal of Doe's Title IX claim, holding that his allegations did not plausibly indicate gender bias but rather suggested pro-complainant bias, which is not prohibited under Title IX. However, the court reversed the dismissal of Doe's breach-of-contract claims. It concluded that Doe plausibly alleged mutual assent to an implied contract based on Emory's sexual misconduct policy and found no basis to determine that Emory retained a unilateral right to amend the policy that would preclude mutual assent. The case was remanded for further proceedings on the contract claims. View "Doe v. Emory University" on Justia Law

The case involves a qui tam action under the False Claims Act (FCA) brought by Relators against Great American Insurance Company (GAIC) and Native American Services Corporation (NASCO). The Relators allege that GAIC and NASCO fraudulently took control of DWG & Associates, Inc. (DWG), a company that had graduated from the Small Business Administration's (SBA) 8(a) program but was still performing on 8(a) contracts. The 8(a) program is designed to help small, disadvantaged businesses compete for federal contracts. DWG, initially owned and controlled by a disadvantaged individual, Gose, lost its eligibility when GAIC and NASCO allegedly took over its ownership and control without notifying the SBA or seeking a waiver, as required by the program's regulations.The United States District Court for the Middle District of Florida dismissed the Relators' claims with prejudice. The court found that DWG, having graduated from the 8(a) program, was no longer a "participant" and thus not subject to the program's ownership and control requirements. Consequently, the court ruled that Relators failed to allege any false claims. Additionally, the court held that fraudulent inducement related to bidding on government contracts was not actionable under the FCA and that Relators failed to meet the particularity requirements of Rule 9(b) for pleading fraud.The United States Court of Appeals for the Eleventh Circuit reversed the District Court's decision. The appellate court held that a business that has graduated from the 8(a) program but is still performing on 8(a) contracts remains a "participant" and is subject to the program's ownership and control requirements. The court further held that submitting bids and claims for payment under these circumstances without notifying the SBA or obtaining a waiver could constitute an actionable claim under the FCA. The court also found that Relators' complaint met the particularity requirements of Rule 9(b) by providing sufficient details about the alleged fraudulent conduct, including the specific contracts, task orders, and the date DWG became ineligible to bid. The case was remanded for further proceedings consistent with the appellate court's opinion. View "Berry v. Native American Services Corporation" on Justia Law

Yorktown Systems Group Inc. and Threat Tec LLC, both defense contractors, entered into a mentor-protégé relationship under the Small Business Administration’s program to jointly pursue government contracts. They formed a joint venture (JV) and were awarded a $165 million contract with the U.S. Army. The JV agreement allocated specific work shares to each company. However, the relationship soured, and Threat Tec attempted to terminate Yorktown’s subcontract, effectively cutting Yorktown out of its share of the contract.The United States District Court for the Northern District of Alabama granted Yorktown a preliminary injunction, preventing Threat Tec from terminating the subcontract and depriving Yorktown of its rights under the JV agreement. The court found that Yorktown had shown a substantial likelihood of success on its breach of contract and breach of fiduciary duty claims and faced irreparable harm. The court noted that Threat Tec’s CEO had made false statements and lacked candor, leading to the belief that Threat Tec’s motives were unethical.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the district court’s decision. The appellate court found no clear error in the district court’s factfindings and concluded that the district court acted within its discretion. The court held that Threat Tec, as the managing member of the JV, owed fiduciary duties of loyalty and care to Yorktown and likely breached those duties by attempting to cut Yorktown out of its contractually specified workshare. The court also agreed that Yorktown faced irreparable harm, including potential damage to its business reputation and the loss of highly skilled employees, which could not be remedied by monetary damages alone. View "Yorktown Systems Group Inc. v. Threat TEC LLC" on Justia Law

The case involves PB Legacy, Inc., a Texas-based shrimp breeding company, and American Mariculture, Inc., a Florida-based company that operated a shrimp breeding facility. PB Legacy had a contract with American Mariculture to breed shrimp. However, PB Legacy failed to fulfill its contractual obligations, including removing its shrimp from the facility on time. When American Mariculture threatened to harvest the abandoned shrimp, PB Legacy sued in state court. After a failed attempt to resolve the dispute, American Mariculture used the shrimp to launch a competing company, American Penaeid, Inc. PB Legacy then sued American Mariculture, Penaeid, and their CEO, Robin Pearl, in federal court, alleging conversion, defamation, trade secret misappropriation, breach of contract, unfair competition, and unjust enrichment.The case proceeded to a jury trial in the United States District Court for the Middle District of Florida. During the trial, the district judge had to leave before the jury returned its verdict. The parties agreed to have a magistrate judge receive the verdict. However, the magistrate judge also responded to several jury questions and rejected a request for clarification about the verdict. The jury awarded $4.95 million in damages to PB Legacy on each of their federal and state trade secret claims. Post-trial motions were filed and denied.The case was appealed to the United States Court of Appeals for the Eleventh Circuit. The defendants argued that the magistrate judge lacked authority to preside over the last three days of trial because the parties did not consent to the magistrate judge’s exercise of Article III authority. The court agreed, stating that while the parties had consented to the magistrate judge receiving the verdict, they had not consented to the magistrate judge performing non-ministerial duties such as responding to jury questions and rejecting a request for clarification about the verdict. The court vacated the judgment, remanded for a new trial, and dismissed the cross-appeal as moot. View "TB Foods USA, LLC v. American Mariculture, Inc." on Justia Law