Justia Contracts Opinion SummariesArticles Posted in US Court of Appeals for the First Circuit
McKenzie v. Brannan
The First Circuit vacated the judgment of the judgment of the district court granting a motion to compel arbitration filed by the personal representative of the estate of a famous American artist (Estate), dismissing an art publisher's (Publisher) motion for a preliminary injunction as moot, and eventually dismissing the case, holding that the district court erred.At issue was an agreement between the Estate and Publisher. Publisher asserted that the parties' original contract, which included an agreement to arbitration, was terminated and supplanted by a superseding contract that did not contain an arbitration provision. In question was whether the arbitrability of the parties' dispute about the newer contract's enforceability and impact on the earlier agreement to arbitrate should be decided by the court or by arbitrators. The district court concluded that the gateway question of arbitrability was for the arbitrators. The First Circuit reversed, holding that it is the court, and not the arbitrators, that must resolve the disagreement in this case. View "McKenzie v. Brannan" on Justia Law
Bautista Cayman Asset Co. v. Asociacion De Miembros De La Policía De Puerto Rico
The First Circuit affirmed the outcome relating to litigation concerning a loan agreement in the District of Puerto Rico in which the district court granted summary judgment to Plaintiff on its Puerto Rico law claims and dismissed Defendant's Puerto Rico law counterclaims for failure to state a claim, holding that there was no error or abuse of discretion.Specifically, the First Circuit held (1) this Court had appellate jurisdiction to hear this case under 28 U.S.C. 1291, and there was no other jurisdictional hurdle as to this appeal; (2) the district court did not abuse its discretion when it denied Defendant's motion for jurisdictional discovery; and (3) the district court did not err in dismissing one of Defendant's counterclaims. View "Bautista Cayman Asset Co. v. Asociacion De Miembros De La Policía De Puerto Rico" on Justia Law
General Hospital Corp. v. Esoterix Genetic Laboratories, LLC
The First Circuit vacated the district court's damages award and certain of its other rulings in this dispute between sophisticated parties concerning intellectual property rights, holding that the district court erred in applying the pertinent principles to the documents at issue.Plaintiffs brought suit alleging that Defendants violated the terms of a license by failing to pay certain royalties and sublicensing fees. The district court granted partial summary judgment for Plaintiffs. The First Circuit vacated the judgment in favor of Plaintiffs as to the breach of contract claim and directed the district court to enter judgment granting Defendants' motion to dismiss that claim and vacated the judgment as to audit-and-account and reformation claims without prejudice, holding that the district court erred. View "General Hospital Corp. v. Esoterix Genetic Laboratories, LLC" on Justia Law
AMTAX Holdings 227, LLC v. Tenants’ Development II Corp.
The First Circuit affirmed the judgment of the district court dismissing this action for want of subject matter jurisdiction, holding that the district court did not err.AMTAX Holdings 227 LLC, joined by Tax Credit Holdings III, LLC, sued Tenants' Development Corporation (TDC) and Tenants' Development II Corporation (TD II) in the United States District Court for the District of Massachusetts seeking a declaratory judgment concerning the validity of an agreement that embodied a right of first refusal. TDC and TD II moved to dismiss the suit for want of federal subject-matter jurisdiction. The district court dismissed the suit. The First Circuit affirmed, holding that the district court did not err in concluding that the complaint in this case failed to trigger embedded federal question jurisdiction. View "AMTAX Holdings 227, LLC v. Tenants' Development II Corp." on Justia Law
Merrill Lynch v. Flanders-Borden
In this appeal concerning the validity of a Transfer of Death Agreement (TOD agreement) executed by Alton L. Flanders, III, the First Circuit affirmed the judgment of the district court concluding that no reasonable jury could find that Plaintiff had met her burden of showing that Flanders lacked capacity at the time he entered into the TOD Agreement, holding that there was no reversible error.The TOD agreement in this case related to an account containing a subset of Flanders's assets for which Merrill Lynch acted as custodian. The agreement, if valid, avoided probate of an at-death transfer of the account assets to five designated beneficiaries, including Plaintiff, Flanders's daughter. After Flanders died intestate, Plaintiff claimed that Flanders lacked the mental capacity to enter into the TOD agreement. Merrill Lynch commenced this interpleader action. The district court granted summary judgment to the beneficiaries who consented to the distribution of the account assets per the terms of the TOD agreement. The First Circuit affirmed, holding that Plaintiff's claims on appeal were unavailing. View "Merrill Lynch v. Flanders-Borden" on Justia Law
Toddle Inn Franchising, LLC v. KPJ Associates LLC
The First Circuit affirmed the judgment of the district court judge confirming an arbitration award, holding that none of Appellant's legal theories for reversal were meritorious.KPJ Associates, LLC ran a daycare in Maine as a franchisee of Toddle Inn Franchising, LLC. When KPJ ended the franchise agreement on Friday and told Toddle it would open another daycare at the same site the following Monday Toddle filed a federal complaint alleging unfair competition under the federal Lanham Act and breach of contract and trade secret misappropriation under Maine law. Toddle then moved to compel arbitration and stay court proceedings. The judge compelled arbitration, and the arbitrator found for Toddle. The First Circuit affirmed, holding that the district court judge (1) did not lack subject matter in this case because Toddle did not present a frivolous Lanham Act claim; (2) did not err in ruling that Toddle did not waive its right to arbitrate by its litigation conduct; and (3) did not err in awarding additional attorneys' fees and costs. View "Toddle Inn Franchising, LLC v. KPJ Associates LLC" on Justia Law
EdgePoint Capital Holdings, LLC v. Apothecare Pharmacy, LLC
In this action brought by EdgePoint Capital Holdings, LLC (EPCH) arising out of the sale of Apothecare Pharmacy, LLC, the First Circuit affirmed the district court's grant of summary judgment in Apothecare's favor, holding that EPCH could not recover because Apothecare's securities law defense was valid.This breach of contract suit was based on a provision of the contract stating that if the agreement was terminated by either party, Apothecare was obligated to pay EPCH a fee. In granting summary judgment in favor of Apothecare, the district court (1) rejected Apothecare's federal securities law defense that the contract was void under section 29(b) of the Securities Exchange Act of 1984; but (2) concluded that, as a matter of Massachusetts contract interpretation law, EPCH was not entitled to the fee it sought. The First Circuit affirmed, holding (1) Apothecare's federal securities law defense was valid; and (2) because the contract was unenforceable, EPCH could not recover. View "EdgePoint Capital Holdings, LLC v. Apothecare Pharmacy, LLC" on Justia Law
Zhao v. CIEE, Inc.
The First Circuit affirmed the judgment of the district court concluding that no refund was due to Plaintiff after Defendant, Plaintiff's study abroad provider, cancelled the abroad portion of her program in response to the COVID-19 pandemic, holding that the district court did not err in dismissing Plaintiff's complaint for breach of contract for failure to state a claim.Plaintiff was studying abroad in the Netherlands when the pandemic hit. In response to the pandemic, Defendant cancelled the abroad portion of Plaintiff's program and made arrangements for Plaintiff to complete her coursework online. Plaintiff brought this action for breach of contract because Defendant refused to provide a refund in lieu of experiences, excursions, activities, and services she would have otherwise enjoyed had the pandemic not occurred. The district court entered judgment for Defendant, concluding that no refund was due when the cancellation of a program occurred after it started. The First Circuit affirmed, holding that the contract between the parties unambiguously did not require Defendant to provide Plaintiff with a refund when her program was cancelled following the start date. View "Zhao v. CIEE, Inc." on Justia Law
Atlas Glass & Mirror, Inc. v. Tri-North Builders, Inc.
The First Circuit affirmed the judgment of the district court dismissing a subcontractor's suit against a construction contractor, holding that the district court did not err in relying on a forum selection clause in an agreement between the parties in dismissing the lawsuit.The contractor sought to dismiss the complaint pursuant to the forum selection clause. The subcontractor opposed the motion, arguing that the forum selection clause was not applicable. The district court found the forum selection clause both applicable and binding and so dismissed the lawsuit. The First Circuit affirmed, holding (1) the clause was both valid and enforceable; and (2) the district court did not err in failing to consider transfer of its own accord. View "Atlas Glass & Mirror, Inc. v. Tri-North Builders, Inc." on Justia Law
Covidien LP v. Esch
In this appeal arising from a contract action, the First Circuit affirmed the judgment of the district court denying Appellants' post-trial request for a declaratory judgment, holding that the district court did not abuse its discretion.Appellants, Covidien LP and Covidien Holding Inc. (collectively Covidien), brought this action against Brady Esche, a former employee, who assigned medical device patent rights to a company he subsequently founded, seeking declaratory judgment to the effect that Esch assign his rights, title, and interest in the patent applications to Covidien. Covidien also alleged that Esch breached his obligations under employment and/or separation agreements he signed. The jury found that Esch breached confidential information and awarded Covidien damages. Covidien subsequently moved for a declaratory judgment asking that Esch be required to assign to Covidien the inventions he subsequently made. The district court denied the request. The First Circuit affirmed, holding that the district court did not abuse its discretion in denying Appellants' post-trial declaratory judgment request. View "Covidien LP v. Esch" on Justia Law