Justia Contracts Opinion SummariesArticles Posted in US Court of Appeals for the First Circuit
UniBank for Savings v. SBK Holdings USA, Inc.
In this action brought for the nonpayment of a promissory note the First Circuit affirmed the rulings of the district court entering summary judgment against SBK Holdings USA, Inc. and denying SBK's motion to set aside the judgment, holding that there was no error.Unibank for Savings sued Edgar and Elina Sargsyan and 999 Private Jet, LLC based on their nonpayment of a promissory note secured by a Gulfstream aircraft. The district court granted Unibank's unopposed motion for a preliminary injunction authorizing it to repossess the aircraft. SBK subsequently moved to intervene, asserting an alleged superior security interest in the aircraft. The district court allowed the intervention. The district court entered summary judgment against SBK and denied its subsequent motion to set aside the judgment. The First Circuit affirmed, holding that Unibank held a perfected security interest in the aircraft, while SKB did not. View "UniBank for Savings v. SBK Holdings USA, Inc." on Justia Law
Puerto Rico Farm Credit, ACA v. Eco-Parque del Tanama Corp.
The First Circuit affirmed the judgment and order of the district court granting summary judgment for Lender and denying Borrowers' motion for reconsideration in this lawsuit brought by Lender seeking repayment and foreclosure of a loan, holding that the district court did not err.Borrowers defaulted on a loan extended by Lender. The loan was subject to the Farm Credit Act, 12 U.S.C. 2001 et seq., which sometimes requires the lender to restructure the loan rather than foreclose. Borrowers applied to restructure the distressed loan, but Lender rejected the application. Lender eventually brought this action, and the district court ultimately granted summary judgment for Lender. The First Circuit affirmed, holding (1) a lender need not accept a plan of restructuring that the borrower cannot perform; and (2) the district court did not err in finding that Lender properly considered and rejected the requested restructuring. View "Puerto Rico Farm Credit, ACA v. Eco-Parque del Tanama Corp." on Justia Law
Johnson Controls Security Solutions, LLC v. Int’l Brotherhood of Electrical Workers, Local 103
The First Circuit reversed the judgment of the district court in this dispute between the International Brotherhood of Electrical Workers, Local 103 (the Union) and Johnson Controls Security Solutions, LLC over Johnson Controls' compliance with the terms of the parties' collective bargaining agreement (CBA), holding that the district court erred by failing to order arbitration as called for by a clause in the CBA.Johnson Controls' Norwood, Massachusetts facility entered into a CBA with the Union, a labor organization that represented employees of the company, that contained an arbitration clause. The Union filed a grievance concerning Johnson Controls' reduction in its matching contribution to the company's 401(k) plan, which Johnson Controls denied. When the Union filed a demand for arbitration Johnson Controls brought this lawsuit seeking a declaratory judgment that the dispute was not arbitrable under the CBA. The district court concluded that the dispute was not arbitrable. The First Circuit reversed, holding that nothing in the record showed that the parties intended to exclude this type of dispute from the scope of the arbitration clause. View "Johnson Controls Security Solutions, LLC v. Int'l Brotherhood of Electrical Workers, Local 103" on Justia Law
Air-Con, Inc. v. Daikin Applied Latin America, LLC
The First Circuit reversed the judgment of the district court requiring the parties to arbitrate their dispute in this case, holding that the district court erred in compelling arbitration.In 2000, Air-Con signed a written distribution agreement with Daikin Industries, LTD to be an authorized distributor in Puerto Rico of air conditioning and refrigeration equipment. The agreement contained an arbitration provision requiring the parties to arbitrate any disputes in Japan. Also in 2000, Air-Con established a distribution relationship with Daikin Applied Latin America, LLC, Daikin Industries' subsidiary. In 2018, Air-Con filed suit against Daikin Applied seeking injunctive relief and damages under Puerto Rico's Dealer Protection Act. After the case was removed to federal court Daikin Applied filed a motion to compel arbitration, arguing that the written agreement between Air-Con and Daikin Industries governed Daikin Applied's relationship with Air-Con. The district court agreed with Daikin Applied. The First Circuit reversed, holding that the district court erred in concluding that Air-Con agreed to arbitrate the claims at issue in this case. View "Air-Con, Inc. v. Daikin Applied Latin America, LLC" on Justia Law
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