Justia Contracts Opinion SummariesArticles Posted in US Court of Appeals for the Fourth Circuit
US f/u/b of Modern Mosaic, Ltd v. Turner Construction Co.
Modern filed suit against Turner, alleging claims arising from a subcontract outlining Modern's role in the construction of an FBI facility. The Fourth Circuit held that the district court properly applied West Virginia's law and rejected all of Modern's claims based on the plain language of the contract. In this case, the district court granted Turner summary judgment on the field verification claim, and subsequently ruled in favor of Turner on the remaining claims. The court held that Modern and Turner were two sophisticated parties that entered into a detailed contract spelling out their rights and responsibilities in the construction of the FBI facility, and the provisions of that contract directly addressed the very issues raised in this appeal. Furthermore, the provisions of the contract compelled the result reached by the district court. Accordingly, the court affirmed the judgment. View "US f/u/b of Modern Mosaic, Ltd v. Turner Construction Co." on Justia Law
Sprint Nextel Corp. v. Wireless Buybacks Holdings, LLC
At issue in this appeal was a tortious interference claim brought by Sprint against Wireless Buybacks, an arbitrager of upgraded phones from customers that then resells them at higher prices. Sprint alleged that its written contract with customers categorically prohibits them from reselling their phones, and Wireless Buybacks has wrongfully induced customers to do so. The district court found that the contract unambiguously barred resale and granted partial summary judgment for Sprint. The Fourth Circuit held that Sprint's terms and conditions did not unambiguously prohibit customers from reselling their phones, and thus Sprint was not entitled to judgment as a matter of law. In this case, the court rejected Sprint's two theories in support of why "Services" unambiguously included all upgraded phones, and Sprint failed to show that Wireless Buybacks bought phones from Sprint customers who agreed to activate their upgraded phones on Sprint's network. Therefore, the court vacated the district court's summary judgment order insofar as it found Wireless Buybacks liable for tortious interference and remanded for further proceedings. View "Sprint Nextel Corp. v. Wireless Buybacks Holdings, LLC" on Justia Law
W. C. English, Inc. v. Rummel, Klepper & Kahl, LLP
After English filed suit against RK&K and CDM Smith for breach of contract and indemnification, the district court granted summary judgment to defendants. The Fourth Circuit vacated the district court's judgment, holding that the district court construed ambiguous contractual language and resolved factual disputes, which violated the established principles of summary judgment. Accordingly, the court remanded for further proceedings. On remand, the court noted that the factfinder will need to interpret the relevant aspects of the contract and to determine the effect of any breach by English on RK&K's liability. Furthermore, the factfinder will need to determine what CDM Smith’s contractual obligations were under the circumstances, whether CDM Smith satisfied those obligations, and if CDM Smith failed to meet its obligations, whether and to what extent English is entitled to damages. View "W. C. English, Inc. v. Rummel, Klepper & Kahl, LLP" on Justia Law
NCO Financial Systems, Inc. v. Montgomery Park, LLC
This case arose out of disputes between the parties involving a twelve year commercial lease of office space in Baltimore, Maryland. The Fourth Circuit held that the district court misconstrued the lease agreement and misapplied Maryland law in concluding that Montgomery Park had a duty to endeavor to relet the premises and minimize its damages as a condition precedent to recovering against NCO. The panel held that the lease agreement's language incorporated the common law mitigation-of-damages doctrine, which holds that a plaintiff cannot recover damages which it could have reasonably avoided. Therefore, Montgomery Park's recovery should only have been reduced by the amount of rent that NCO could demonstrate would have been recovered by reasonable efforts to re-let the space. The court also held that the district court, in evaluating the commercial reasonableness of Montgomery Park's mitigation efforts, applied the wrong standard. The court held that reasonable commercial efforts to mitigate damages did not require Montgomery Park to favor NCO’s space over other vacant space in the building, but rather, commercial reasonableness only required Montgomery Park to reasonably market NCO's space on an equal footing with the other spaces that it was seeking to rent. Accordingly, the court vacated the district court's judgment and remanded for further proceedings. View "NCO Financial Systems, Inc. v. Montgomery Park, LLC" on Justia Law
Equinor USA Onshore Properties, Inc. v. Pine Resources, LLC
The parties dispute whether the obligation to "spud" three wells on a tract of land in West Virginia was an obligation only to begin drilling or to complete the wells to the point of mineral production. The Fourth Circuit affirmed the district court's holding that the Purchase Sale Agreement executed between the parties contained no requirement that the spudded wells be completed to production. The court also affirmed the district court's conclusion that Pine Resources failed to prove that it sustained any damages. View "Equinor USA Onshore Properties, Inc. v. Pine Resources, LLC" on Justia Law
ACA Financial Guaranty v. City of Buena Vista, Virginia
In this case arising from a bond transaction involving a municipal golf course in the City of Buena Vista, Virginia (the City), the Fourth Circuit affirmed the district court’s motion to dismiss a ten-count complaint filed by ACA Financial Guaranty Corporation (ACA) and SunTrust Bank (Bank) against the City and the Public Recreational Facilities Authority (Authority), holding that the complaint failed to allege claims for which relief could be granted. In an effort to refinance a loan that the Authority took out to finance the construction of the golf course, the Authority issued over $9 million in bonds. The Authority and the Bank entered into a trust agreement regarding the bonds. To repay the bonds, the Authority leased the golf course to the City. The City and the Authority then issued deeds of trust to the Bank pledging certain property as security. The City later failed to pay the rent due on the golf course lease, and the Authority could not repay the bonds. ACA, which provided insurance on the bonds, and the Bank sued. The district court dismissed the complaint. The Fourth Circuit affirmed, holding that the City’s obligation to make rent payments was not legally enforceable when the obligation was expressly subject to the city’s annual decision to appropriate funds. View "ACA Financial Guaranty v. City of Buena Vista, Virginia" on Justia Law
Minnieland Private Day School v. Applied Underwriters Captive Risk Assurance Co.
A Reinsurance Participation Agreement (RPA) executed by AUCRA and Minnieland was an insurance contract under Virginia law. The Fourth Circuit held that the district court did not violate the court's prior mandate by looking at the EquityComp program as a whole; the RPA and insurance policies constituted an integrated transaction and must be read as one contract; and the integrated contract was a contract of insurance under Virginia Code 38.2–312. Finally, the court noted that it was not the first to determine that the program marketed by Applied Underwriters was insurance. View "Minnieland Private Day School v. Applied Underwriters Captive Risk Assurance Co." on Justia Law
AirFacts, Inc. v. De Amezaga
AirFacts appealed the district court's judgment for defendant on AirFacts' breach of contract and misappropriation of trade secrets claims. Determining that it had jurisdiction, the court held that AirFacts did not abandon its claim under Paragraph 4.2 of the Employment Agreement and vacated as to this issue. In regard to the breach of contract claim, the court held that there was no legal error in the district court's conclusion that defendant did not misappropriate the Proration Documents in emailing them to himself for continued AirFacts business. Accordingly, the court affirmed in part, vacated in part, and remanded. View "AirFacts, Inc. v. De Amezaga" on Justia Law
Hutton v. National Board of Examiners in Optometry, Inc.
Optometrists across the country noticed that Chase Amazon Visa credit card accounts had been fraudulently opened in their names, using correct social security numbers and birthdates. The victims discussed the thefts in Facebook groups dedicated to optometrists and determined that the only common source to which they had given their personal information was NBEO, where every graduating optometry student submits personal information to sit for board-certifying exams. NBEO released a Facebook statement that its “information systems [had] NOT been compromised.” Two days later, NBEO stated that it had decided to further investigate. Three weeks later, NBEO posted “a cryptic message stating its internal review was still ongoing.” NBEO advised the victims to “remain vigilant in checking their credit.” Victims filed suit under the Class Action Fairness Act, 28 U.S.C. 1332(d)(2). The district court dismissed for lack of standing. The Fourth Circuit vacated. These plaintiffs allege that they have already suffered actual harm in the form of identity theft and credit card fraud; they have been concretely injured by the use or attempted use of their personal information to open credit card accounts without their knowledge or approval. There is no need to speculate on whether substantial harm will occur. The complaints contain allegations demonstrating that it is both plausible and likely that a breach of NBEO’s database resulted in the fraudulent use of the plaintiffs’ personal information. View "Hutton v. National Board of Examiners in Optometry, Inc." on Justia Law
Legacy Data Access, Inc. v. Cadrillion, LLC
Plaintiffs filed suit against Cadrillion, Legacy North Carolina, and James Yuhas, alleging claims for breach of contract, conversion, abuse of process, and unfair and deceptive trade practices. The Fourth Circuit held that, by failing to pay the Call Price owed under the Agreement, Cadrillion breached a duty it assumed only as a result of that contract. Therefore, the economic loss rule applied and Cadrillion and Yuhas were entitled to judgment as a matter of law on plaintiffs' conversion claim. Because the court reversed as to the conversion claim, leaving plaintiffs with only a breach of contract claim, the court must also reverse the punitive damages award. Because the court reversed on the conversion claim and remanded for a new trial on contract damages, the results obtained and extent to which plaintiffs prevailed may substantially change. Therefore, the court vacated the district court's grant of attorneys' fees and remanded for the district court to reassess the proper amount of fees. The court also held that the district court did not err in granting judgment as a matter of law in favor of Cadrillion and Yuhas on the abuse of process claim. Finally, the court affirmed the district court's judgment on the abuse of process and unfair and deceptive trade practices claim. View "Legacy Data Access, Inc. v. Cadrillion, LLC" on Justia Law