Justia Contracts Opinion SummariesArticles Posted in US Court of Appeals for the First Circuit
Patel v. 7-Eleven, Inc.
The First Circuit certified to the Massachusetts Supreme Judicial Court (SJC) the unresolved question of what is meant, in the context of a franchise agreement, by "performing any service," as that phrase is used in the Massachusetts Independent Contractor Law (ICL), Mass. Gen. Laws ch. 149, 148B(a).Plaintiffs, owners and operators of 7-Eleven franchises in Massachusetts, filed a putative class action against 7-Eleven, Inc. for alleged violations of the Massachusetts ICL, the Massachusetts Wage Act, and the Massachusetts Minimum Wage Law, challenging 7-Eleven's decision to classify them as independent contractors rather than employees. The district court ruled in favor of 7-Eleven and then, after remand, ruled for 7-Eleven again. At issue was whether Plaintiffs performed "any service" for 7-Eleven under the Massachusetts ICL. The First Circuit certified to the Massachusetts SJC the following question: Do Plaintiffs perform "any service" for 7-Eleven within the meaning of the Massachusetts ICL where they perform various contractural obligations under their franchise agreement and 7-Eleven receives a percentage of the franchise's gross profits. View "Patel v. 7-Eleven, Inc." on Justia Law
Allstate Insurance Co. v. Fougere
The First Circuit affirmed the decision of the district court entering summary judgment in favor of Allstate Insurance Company and dismissing the counterclaims brought by two of Allstate's former agents - James Fougere and Sarah Brody-Isbill - and A Better Insurance Agency, Inc. (ABIA) (collectively, Appellants), holding that there was no error.At issue in the underlying case were spreadsheets that Allstate alleged contained trade secrets misappropriated by Brody-Isbill and Fougere, thus breaching their contracts with Allstate. Allstate filed suit alleging claims for, among other things, breach of contract and trade secrets, violations of the Defend Trade Secrets Act, 28 U.S.C. 1836. Appellants counterclaimed, alleging claims for, inter alia, wrongful interference with contractual relations and violations of Mass. Gen. Laws ch. 93A. The district court granted summary judgment for Allstate and dismissed Appellants' counterclaims. The First Circuit affirmed, holding that the district court (1) did not err in dismissing Appellants' counterclaims; and (2) did not abuse its discretion in granting summary judgment to Allstate on liability for its trade secret and contract claims against Appellants. View "Allstate Insurance Co. v. Fougere" on Justia Law
Financial Oversight & Management Bd. for P.R. v. Cooperativa de Ahorro y Credito
The First Circuit affirmed the judgment of the Title III court confirming a plan of adjustment that permitted the discharge of the Commonwealth of Puerto Rico from its obligation to pay Plaintiff the entire amount of a settlement it had entered into with the Commonwealth regarding the Commonwealth's milk regulation scheme, holding that there was no error.Plaintiff and the Commonwealth of Puerto Rico litigated for years their dispute over the Commonwealth's milk regulation scheme. The dispute was resolved by settlement, after which the Commonwealth entered Title III proceedings to adjust the Commonwealth's sovereign debt. Under the plan of adjustment, the Commonwealth was no longer obligated to pay Plaintiff the full amount specified in the parties' settlement. Plaintiff subsequently brought this action challenging that decision. The Title III court discharged the Commonwealth from its obligation to pay Plaintiff the full amount specified in the settlement and overruled Plaintiff's objections to the Plan. The First Circuit affirmed, holding that Plaintiff's arguments on appeal failed. View "Financial Oversight & Management Bd. for P.R. v. Cooperativa de Ahorro y Credito" on Justia Law
Klauber v. VMware, Inc.
The First Circuit affirmed the district court's order entering summary judgment in favor of Defendant with respect to Plaintiff's assertion that he was wrongfully deprived of thousands of dollars in commissions he alleged he was due, holding that there was no error.After he resigned, Plaintiff brought suit against Defendant, his former employer, asserting claims for nonpayment of wages under the Act, breach of contract, unjust enrichment, and quantum meruit. Defendant successfully removed the action to federal district court, which granted summary judgment in favor of Defendant. The First Circuit affirmed, holding that the district court (1) did not err in granting in part Defendant's motion to strike certain portions of his response to the summary judgment motion; and (2) did not err in granting summary judgment against Plaintiff on his claims. View "Klauber v. VMware, Inc." on Justia Law
Philadelphia Indemnity Insurance Co. v. BAS Holding Corp.
The First Circuit vacated the judgment of the district court in favor of Philadelphia Indemnity Insurance Company in this action seeking a declaration that BAS Holding Corporation breached a condition of the parties' insurance contract, holding that the district court's findings providing grounds for summary judgment were insupportable.After an arsonist destroyed a building owned by BAS and purportedly insured against loss by Philadelphia, the insurer sought an examination under oath (EUO) of George Carney, BAS's president and owner. Philadelphia then denied coverage on the grounds that BAS refused to provide Carney for an EUO, in violation of its obligations under the relevant insurance policy. Philadelphia then brought this action. The district court granted summary judgment for Philadelphia on the ground that BAS failed to cooperate by refusing to submit to the EUO. The First Circuit vacated the judgment, holding that where the evidence unequivocally showed the BAS never willfully and inexcusably refused to provide Carney for the EUO, and therefore summary judgment was improper. View "Philadelphia Indemnity Insurance Co. v. BAS Holding Corp." on Justia Law
Nahant Preservation Trust, Inc. v. Mount Vernon Fire Insurance Co.
The First Circuit affirmed the judgment of the district court granting United States Liability Insurance Group's (USLI) motion to dismiss this lawsuit brought by Nahant Preservation Trust, Inc. to secure insurance coverage in connection with defense costs and indemnification arising from a state court action brought by Northeastern University, holding that there was no error.Northeastern sued Nahant in state court seeking a declaratory judgment regarding its rights concerning certain land. Nahant, which carried liability insurance through USLI, did not notify USLI of the suit until it wrote to USLI seeking coverage for defense costs. USLI refused to provide coverage on the grounds that Nahant had provided untimely notice of the claim. Thereafter Nahant sued USLI seeking, among other things, a declaratory judgment regarding USLI's duty to defend and indemnify. The First circuit granted USLI's motion to dismiss, concluding that the "exclusion agreement" signed by the parties excluded coverage. The First Circuit affirmed, holding that the district court properly accepted USLI's plausible reading of the exclusion amendment. View "Nahant Preservation Trust, Inc. v. Mount Vernon Fire Insurance Co." on Justia Law
President & Fellows of Harvard College v. Zurich American Insurance Co.
The First Circuit affirmed the order of the district court granting summary judgment in favor of Insurer in this insurance dispute, holding that the failure to give notice according to the terms and conditions of an excess insurance policy forfeits any right to coverage.The President and Fellows of Harvard College purchased a one-year liability insurance policy from a member company of the American International Group, Inc. (AIG) requiring prompt notice of any claim filed against Harvard. Harvard purchased a secondary excess policy from Zurich American Insurance Co. providing that a policyholder give notice of any claims arising under the policy "in the same manner required by the terms and conditions of the [AIG] Policy." In 2014, a student organization sued Harvard for violating Title VI of the Civil Rights Act of 1964. Harvard timely notified AIG of the pending suit but neglected to notify Zurich until after the policy's notification window. Therefore, Zurich denied coverage. Harvard brought this action seeking declaratory relief and damages for breach of contract. The district court granted summary judgment for Zurich. The First Circuit affirmed, holding that there was no basis for overturning the district court's entry of summary judgment. View "President & Fellows of Harvard College v. Zurich American Insurance Co." on Justia Law
NuVasive, Inc. v. Day
The First Circuit affirmed the rulings of the district court requiring Timothy Day to pay NuVasive, Inc., his former employer, more than $1.7 million in damages and attorney's fees for breach of contract and spoliation of evidence, holding that the district court did not err or abuse its discretion.NuVasive brought suit against Day making claims arising from Day's business interactions with NuVasive's customers on behalf of Alphatec Spine, Inc., Day's new employer, in violation of non-competition and non-solicitation obligations in Day's contract with NuVasive. After the district court entered its final judgment Day appealed, arguing that the court erred in finding the requisite causal nexus between Day's improper solicitations and the decisions of certain NuVasive customers to switch to Alphatec as their primary supplier of spine-related surgical products. The First Circuit affirmed, holding that there was no error in the damages award or the sanctions-based award of attorney's fees and costs. View "NuVasive, Inc. v. Day" on Justia Law
Vazquez-Velazquez v. P.R. Highway & Transportation Authority
The First Circuit affirmed the judgment of the district court in favor of the Puerto Rico Highways and Transportation Authority (PRHTA) and its executive directors (collectively, Appellees) and dismissing this complaint brought by sixty-nine current and former employees of the PRHTA (collectively, Appellants), holding that the district court did not err or abuse its discretion.Appellants brought this action challenging the PRHTA's decision no longer to give effect to a regulation providing Appellants with additional compensation. Specifically, Appellants claimed that the decision was contrary to P.R. Act No. 66-2014, giving rise to violations of the Contracts Clause and Due Process Clause. The district court granted summary judgment for the PRHTA on the federal constitutional claims and declined to exercise supplemental jurisdiction over Appellants' claims under Puerto Rico law. The First Circuit affirmed, holding that the district court (1) did not err in concluding that Appellants could not establish their federal constitutional claims; and (2) did not abuse its discretion in declining to exercise jurisdiction over Appellants' remaining Puerto Rico law claims. View "Vazquez-Velazquez v. P.R. Highway & Transportation Authority" on Justia Law
Webb v. Injured Workers Pharmacy, LLC
The First Circuit affirmed in part and reversed in part the judgment of the district court dismissing this putative action asserting various state law claims in relation to a data breach that allegedly exposed Plaintiffs' personally identifiable information (PII) and that of more than 75,000 other patients of Injured Workers Pharmacy, LLC (IWP), holding that remand was required.Plaintiffs brought a class action complaint against IWP, a home-delivery pharmacy service registered and headquartered in Massachusetts, asserting state law claims for negligence, breach of implied contract, unjust enrichment, invasion of privacy, and breach of fiduciary duty. Plaintiffs sought to certify a class of United States residents whose PII was compromised in the data breach at issue. The district court granted IWP's motion to dismiss for lack of Article III standing. The First Circuit reversed in part, holding (1) the complaint plausibly demonstrated Plaintiffs' standing to seek damages; and (2) Plaintiffs lacked standing to pursue injunctive relief because their desired injunctions would not likely redress their alleged injuries. View "Webb v. Injured Workers Pharmacy, LLC" on Justia Law