Justia Contracts Opinion Summaries

Articles Posted in US Court of Appeals for the Second Circuit
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Defendant appealed from so much of the district court's judgment that orders him, jointly and severally with his codefendants Orel, to pay plaintiffs, suppliers of perishable goods, a total of $606,664.87, including principal amounts totaling $473,268.82, plus interest and attorneys' fees, because Orel failed to pay plaintiffs for goods purchased, and because of the dissipation of the statutory trust imposed on Orel's assets for the benefit of unpaid suppliers, in violation of the Perishable Agricultural Commodities Act (PACA). The district court granted plaintiffs' motion for summary judgment holding defendant liable on the ground that he was a person in control of the trust assets.The Second Circuit concluded that partial summary judgment was appropriate with respect to $40,000 of PACA trust assets that were placed in defendant's personal bank account, but that whether he had the necessary degree of control over other assets could not be resolved as a matter of law. In this case, defendant was neither an owner nor an officer of Orel. Accordingly, the court vacated the judgment in part and remanded for trial on the issue of defendant's control over other Orel assets. View "S. Katzman Produce Inc. v. Yadid" on Justia Law

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Plaintiffs filed suit alleging that defendants unlawfully used photographs of them to advertise strip clubs owned by defendants in violation of New York Civil Rights Law sections 50 and 51. The district court granted summary judgment for defendants, holding that plaintiffs signed full releases of their rights to the photographs.The Second Circuit concluded that the terms of Plaintiff Shake and Hinton's release agreements are disputed material facts, and defendants concede that neither they nor the third-party contractors that created and published the advertisements secured legal rights to use any of the photographs at issue. The court held that the district court erred in granting summary judgment to defendants and in denying summary judgment to plaintiffs on liability. Therefore, the court vacated in part and remanded for further proceedings.The court affirmed in part and held that the district court correctly concluded that plaintiffs had not accepted the offer of judgment because the offer's settlement amount term was ambiguous, the parties disagreed over how to interpret the term, and there was accordingly no meeting of the minds. Finally, the court held that the district court correctly dismissed the Lanham Act, 15 U.S.C. 1125(a), New York General Business Law Section 349, and libel claims. View "Electra v. 59 Murray Enterprises, Inc." on Justia Law

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Plaintiffs enrolled in a Group Variable Universal Life Insurance (GVUL) policy offered by MetLife. During the enrollment process, neither plaintiff indicated that he smoked tobacco, but MetLife nevertheless designated them as tobacco smokers, thus triggering their payment of higher insurance premiums. Plaintiffs filed suit after MetLife refused to refund the amount of overpayments, alleging breach of contract and tort violations under New York law.The Second Circuit affirmed the district court's dismissal of plaintiffs' claims as time-barred under New York's applicable statute of limitations. The court held that the continuing-violation doctrine did not toll the limitations period for the breach of contract claim where the issue in this case rests on a single allegedly unlawful act, namely MetLife's initial designation of both plaintiffs as smokers. The court noted that determining whether the Securities Litigation Uniform Standards Act bar applies here is a fraught and unnecessary endeavor. View "Miller v. Metropolitan Life Insurance Co." on Justia Law

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This appeal stems from a contract dispute between PepsiCo and one of its independent Peruvian bottlers, CEPSA. After PepsiCo terminated its contract with CEPSA, CEPSA filed suit in district court alleging, inter alia, breach of contract claims based on wrongful termination and PepsiCo's alleged failure to protect CEPSA's rights as the exclusive bottler and distributor of PepsiCo products in specified areas of Peru.The Second Circuit affirmed the district court's judgment in favor of PepsiCo and held that the contract was terminable at will and that PepsiCo had no affirmative duty under the contract to protect CEPSA against the alleged harm to its exclusive rights. In this case, the court applied the New York common law of contracts, looked within the four corners of the contract, and concluded that the Exclusive Bottler Appointment (EBA) was terminable at will and that PepsiCo had no duty to police or prevent transshipment. The court considered CEPSA's remaining arguments on appeal and concluded that they are without merit. View "Compania Embotelladora Del Pacifico, S.A. v. Pepsi Cola Co." on Justia Law

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The Second Circuit affirmed the district court's decision vacating the bankruptcy court's determination concerning whether General Motors assumed liability, through a judicial admission, for claims like appellant's. Appellant filed a wrongful death lawsuit against New GM after his wife was involved in an accident that left her incapacitated. She was driving a 2004 Pontiac Grand Am, a vehicle manufactured by Old GM, which allegedly had a faulty ignition switch.The Second Circuit held that for a statement to constitute a judicial admission, it must be intentional, clear, and unambiguous. In this case, the court held that the inadvertent inclusion of language from an outdated, non-operative version of a sale agreement was not intentional, clear, and unambiguous, and thus was not a judicial admission. Therefore, General Motors was not bound by the language. View "In re Motors Liquidation Co. (Pillars)" on Justia Law

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The Second Circuit reversed the district court's award of $64 million to Utica. In this case, the jury found that the Fireman's Fund breached its obligations under reinsurance contracts issued to Utica. The court agreed with Fireman's Fund that the reinsurance contracts, by their terms, demonstrate as a matter of law that Fireman's Fund did not owe to Utica the obligations allegedly breached. The court explained that the umbrella policies unambiguously define their attachment point by reference to the underlying limits of liability "as stated in the Schedule[s]." Therefore, where the losses in question did not exceed the limits stated for bodily injury in the Schedules, Fireman's Fund had no obligation under the reinsurance contracts to pay for those losses. The court remanded for further proceedings. View "Utica Mutual Insurance Co. v. Fireman's Fund Inc." on Justia Law

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Jasmin appealed the district court's grant of Trina's petition to confirm an arbitration award entered in its favor and denial of Jasmin and JRC's motion to vacate the award. The district court relied on an agency and direct benefits theory of estoppel to find that Jasmin was bound by the arbitration clause.The Second Circuit reversed the district court's judgment as to Jasmin, holding that the district court erred when it determined that Jasmin was bound as a principal to the contract under agency theory. The court was not persuaded that JRC acted as Jasmin's agent in executing the contract or that, in the alternative, Jasmin was bound to the arbitration clause under a direct benefits theory of estoppel. In this case, the commercial contract containing the arbitration clause was governed by New York law and signed by Trina and JRC, not Jasmin. The court explained that Jasmin was not a party to the contract and thus could not enforce any rights or duties under the contract. The court remanded with instructions to enter an amended judgment dismissing the case as to Jasmin. View "Trina Solar US, Inc. v. Jasmin Solar Pty Ltd." on Justia Law

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This case arose out of the 2009 bankruptcy of Old GM, which resulted in a sale under 11 U.S.C. 363 of the bulk of its assets to a new entity that has continued the business (the new General Motors). The New General Motors assumed the liability of Old GM with respect to post‐Sale accidents involving automobiles manufactured by Old GM. The claims assumed included those by persons who did not transact business with Old GM, such as individuals who never owned Old GM vehicles and persons who bought Old GM cars after the Sale. At issue was whether the New General Motors was liable for punitive damages with respect to such claims.The Second Circuit held that the new General Motors did not contractually assume liability for punitive damages in its predecessor's bankruptcy sale, and thus the Post-Closing Accident Plaintiffs may not assert claims for punitive damages based on the predecessor's conduct. Accordingly, the court affirmed the district court's decision affirming the bankruptcy court's decision on the issue of punitive damages. View "In re Motors Liquidation Co." on Justia Law

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The Second Circuit affirmed the district court's grant of Argentina's motion to dismiss with prejudice under Federal Rule of Civil Procedure 12(b)(6) and denying as moot plaintiffs' motion for injunctive relief and expedited discovery. In this case, plaintiffs claimed that they entered into binding settlement agreements with Argentina over defaulted bonds.The court held, under its precedent and New York state law, that when an agreement expressly requires a party's countersignature to be binding and the factors set out in Winston Mediafare Entertainment Corp., 777 F.2d 78, 80 (2d Cir. 1985), otherwise indicate that the parties did not intend to be bound, no valid contract exists in the absence of a party's countersignature. In this case, the purported agreements between plaintiffs and Argentina expressly required Argentina's countersignature before binding the parties, and the parties did not intend to be bound in the absence of a countersigned agreement. View "Attestor Value v. Republic of Argentina" on Justia Law

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Plaintiffs appealed the district court's dismissal of their state tort claims against defendants, alleging intentional infliction of emotional distress, tortious interference with contract, and negligent supervision or retention. Plaintiffs' claims stemmed from the actions of Fox News employees after their son, Seth Rich, was murdered during a botched robbery. A Fox News Reporter, Malia Zimmerman, and a Fox News commentator, Ed Butowsky, recruited a contributor to infiltrate the Rich family in order to find information to give credence to a conspiracy theory that Seth had leaked DNC emails to WikiLeaks and was assassinated for doing so.Applying de novo review, the Second Circuit held that the allegations in the complaint sufficiently stated a claim for intentional or reckless "extreme and outrageous" conduct against the Riches on the part of defendants; the complaint plausibly alleged that defendants tortiously interfered with the contract between the Riches and the contributor, who the Riches hired as a private investigator to look into the circumstances of Seth's death; and an amended complaint could likely cure any defect in plaintiffs' claim of negligent supervision or retention regarding the employment relationship between Fox News and Zimmerman and Wheeler. The court vacated and remanded for further proceedings. View "Rich v. Fox News Network, LLC" on Justia Law