Justia Contracts Opinion Summaries

Kaufman Lynn Construction was hired to build a corporate campus for JM Family Enterprises in South Florida. Kaufman obtained a commercial general liability policy from Liberty Surplus Insurance to cover itself and its subcontractors. After completing several buildings, Tropical Storm Eta caused significant water damage to the completed structures. Kaufman sought indemnification from Liberty, which denied the claim based on the policy's Course of Construction Exclusion (COCE), stating that coverage did not apply until the entire project was completed. Kaufman disputed this and filed a lawsuit against its subcontractors and initiated a claims process with Liberty.The United States District Court for the Southern District of Florida granted Liberty's motion for summary judgment, concluding that the COCE excluded coverage for the water damage because the entire project was not completed. The court also dismissed Kaufman's counterclaim for declaratory relief as duplicative and ruled that Kaufman's breach of contract counterclaim was moot. Additionally, the court dismissed Kaufman's reformation counterclaim for lack of standing, reasoning that Kaufman had not demonstrated a cognizable injury.The United States Court of Appeals for the Eleventh Circuit reviewed the case and determined that Kaufman had Article III standing to seek reformation of the policy, as it suffered a cognizable injury by receiving a policy different from what was bargained for. The court affirmed the district court's ruling that the COCE precluded coverage for the water damage, as the entire project was not completed. The court also affirmed the district court's denial of Liberty's motion for attorney's fees, as Liberty's settlement proposal did not comply with the requirements of Florida's offer of judgment statute and Rule 1.442(c)(2)(B). The case was remanded for further proceedings on the reformation counterclaim. View "Liberty Surplus Insurance Corp. v. Kaufman Lynn Construction, Inc." on Justia Law

Nicole Lampo was hired by Amedisys Holding, LLC as a physical therapist. A month after her hiring, Amedisys sent an email to all employees introducing an arbitration program. The email required employees to acknowledge the arbitration materials and provided an opt-out option within 30 days. Lampo acknowledged the email but did not opt out. She continued working for Amedisys until her termination in March 2018, after which she filed a lawsuit against Amedisys and her former supervisor for wrongful discharge, tortious interference, and defamation. Amedisys moved to compel arbitration based on the arbitration agreement.The Circuit Court of Georgetown County denied Amedisys's motion to compel arbitration, concluding that Lampo's failure to opt out did not constitute acceptance of the arbitration agreement. The Court of Appeals reversed this decision, finding that Lampo had accepted the arbitration agreement as a matter of law by not opting out and continuing to work.The Supreme Court of South Carolina reviewed the case and reversed the Court of Appeals' decision. The Supreme Court held that Lampo did not accept Amedisys's offer to form an arbitration agreement by merely failing to opt out and continuing to work. The court emphasized that silence and inaction do not constitute acceptance of an offer unless specific circumstances indicate a manifestation of assent, which were not present in this case. The court concluded that there was no evidence of Lampo's intent to be bound by the arbitration agreement, and thus, no valid arbitration agreement was formed. The case was remanded for further proceedings consistent with this opinion. View "Lampo v. Amedisys Holding, LLC" on Justia Law

Vernon Black sued Kari Winfield for breach of contract, while Winfield and Samuel Robinson counterclaimed for unjust enrichment against Black. Winfield and Robinson performed various tasks for Black, including constructing fences, branding cattle, and boarding livestock, without receiving compensation or credit towards Winfield's debt to Black. Black had previously secured a judgment against Winfield for $25,828.52 for unpaid legal expenses.The District Court of Fremont County held a bench trial and found that none of the parties established their claims. Specifically, the court found that Winfield and Robinson did not prove their unjust enrichment claims because they failed to show they reasonably notified Black of their expectation of payment and did not prove damages. Winfield and Robinson appealed the decision.The Supreme Court of Wyoming reviewed the case and found that the district court erred in its findings. The Supreme Court determined that the circumstances reasonably notified Black that Winfield and Robinson expected to be compensated for their work. The court noted that Black had a history of paying Winfield for her work, and both Winfield and Robinson directly addressed their expectation of payment with Black on several occasions. Additionally, the nature and quantity of the work performed by Winfield and Robinson indicated that they expected compensation.The Supreme Court also found that Winfield and Robinson proved damages for their day labor, hot shot fees, and boarding and feeding Black's livestock, totaling $22,793.60. The court reversed the district court's decision and remanded the case for entry of judgment in favor of Winfield and Robinson. View "Robinson v. Black" on Justia Law

Little Hearts Marks Family II L.P. ("Little Hearts") was a member of 305 East 61st Street Group LLC, a company formed to purchase and convert a building into a condominium. 61 Prime LLC ("Prime") was the majority member and manager, and Jason D. Carter was the manager and sole member of Prime. In 2021, the company filed for bankruptcy and sold the building to another company created by Carter. The liquidation plan established a creditor trust with exclusive rights to pursue the debtor’s estate's causes of action. Little Hearts sued Prime and Carter for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment, seeking damages for lost capital investment and rights under the Operating Agreement.The bankruptcy court dismissed all claims, ruling that they were derivative and belonged to the debtor’s estate, thus could only be asserted by the creditor trustee. The district court affirmed this decision.The United States Court of Appeals for the Second Circuit reviewed the case. The court affirmed the dismissal of the breach of fiduciary duty and aiding and abetting breach of fiduciary duty claims, agreeing that these were derivative and could only be pursued by the creditor trustee. However, the court vacated the dismissal of the breach of contract and breach of the implied covenant of good faith and fair dealing claims, determining that these were direct claims belonging to Little Hearts and could proceed. The unjust enrichment claim was dismissed as duplicative of the contract claims. The case was remanded for further proceedings consistent with this opinion. View "In re 305 East 61st Street Group LLC" on Justia Law

Douglas Ramsey, the plaintiff, sued his former employer, Sheet Pile, L.L.C., for breach of his employment agreement and a promissory note under which he had loaned the company money. Sheet Pile counterclaimed for breach of the employment agreement and sought an injunction to force Ramsey to return confidential information. Ramsey largely succeeded at trial, receiving an award for prejudgment interest and the denial of Sheet Pile’s requested injunction. Sheet Pile appealed, challenging the jury instructions, sufficiency of the evidence, the grant of prejudgment interest, and the denial of injunctive relief.The United States District Court for the Western District of Texas oversaw the initial trial. The jury found in favor of Ramsey, awarding him the final $5,000 of his salary and $155,878.47 in damages on the loan. The jury also found that Ramsey breached the employment agreement but was not liable due to Sheet Pile’s prior material breach. After the trial, the district court awarded Ramsey prejudgment interest and denied Sheet Pile’s request for a permanent injunction. Sheet Pile filed a post-judgment motion reiterating its arguments, which the district court denied.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court’s decisions on the jury instructions and the finding of prior material breach. However, it vacated the award of prejudgment interest, finding that the jury had improperly included interest in its damages award, leading to a double recovery. The court remanded the case for the district court to offer a remittitur based on the amount owed on the loan as of the date Ramsey filed suit. The court also instructed the district court to consider an injunction requiring Ramsey to return any documents containing confidential information. The court affirmed in part, vacated in part, and remanded for further proceedings. View "Ramsey v. Sheet Pile" on Justia Law

Jason and Kacie Highsmith hired Shelter, LLC to manage a home renovation project and later contracted with Design Gaps, Inc. to design and install cabinets and closets. The contracts required arbitration for disputes but did not specify completion dates. Design Gaps failed to meet multiple promised deadlines, leading the Highsmiths to terminate the contracts and hire another company. The Highsmiths shared Design Gaps' copyrighted drawings with the new contractor. They then filed for arbitration, alleging breach of contract and other claims, while Design Gaps counterclaimed for various issues, including copyright infringement.The arbitrator held a three-day hearing, during which the Highsmiths presented multiple witnesses, while Design Gaps only presented David Glover. The arbitrator found in favor of the Highsmiths, awarding them damages and attorney’s fees, and denied Design Gaps' counterclaims, including the copyright claim, citing fair use and lack of evidence for copyright registration.Design Gaps petitioned the United States District Court for the District of South Carolina to vacate the arbitration award, arguing the arbitrator disregarded the law and failed to issue a reasoned award. The district court denied the petition and confirmed the arbitration award, also granting the Highsmiths' motion for attorney’s fees.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court dismissed the appeal, citing lack of federal jurisdiction based on the precedent set in Friedler v. Stifel, Nicolaus, & Co., which held that federal courts do not have jurisdiction over motions to vacate arbitration awards unless there is an independent basis for federal jurisdiction beyond the Federal Arbitration Act. The court concluded that the petition did not meet this requirement. View "Design Gaps, Inc. v. Shelter, LLC" on Justia Law

The case involves a business venture between W.R. Cobb Company (Cobb) and V.J. Designs LLC (VJ Designs) to sell diamond products under the Forevermark brand. Cobb, unable to secure a license directly from Forevermark, entered into an agreement with VJ Designs, an existing Forevermark licensee, to form a new company, WR Cobb/VJ LLC (the Joint Entity). The agreement stipulated that the Joint Entity would operate under the Forevermark license. However, VJ Designs could not transfer its Forevermark rights without Forevermark's written consent. The venture quickly fell apart, and Cobb sued VJ Designs and its owner, Benjamin Galili, to recover funds paid under the agreement, alleging breach of contract and misrepresentation.The United States District Court for the District of Rhode Island held a two-day bench trial and ruled in favor of VJ Designs and Galili on all claims. The court found that VJ Designs did not breach the contract or misrepresent any material facts. Cobb appealed, arguing that the district court erred by not rescinding the agreement and not holding Galili personally liable for fraud and misrepresentation.The United States Court of Appeals for the First Circuit reviewed the case. The court affirmed the district court's judgment, holding that VJ Designs did not breach the contract by failing to assign the Forevermark license to the Joint Entity upon execution of the agreement. The court found no provision in the agreement requiring immediate transfer of the license and noted that the parties understood Forevermark's consent was necessary. The court also rejected Cobb's claims of fraud and misrepresentation, finding no evidence of material misrepresentation by VJ Designs or Galili. Additionally, the court dismissed Cobb's mutual mistake theory as it was not pled in the complaint and was raised too late in the proceedings. View "W.R. Cobb Company v. VJ Designs, LLC" on Justia Law

FlightSafety International Inc. (FlightSafety) supplied the U.S. Air Force with commercial technical data under subcontracts awarded by CymSTAR, LLC. The data included restrictive markings, which the Air Force challenged. The Armed Services Board of Contract Appeals (Board) determined that the restrictive markings were improper under applicable statutes and regulations, leading FlightSafety to appeal.The Board found that the restrictive markings placed by FlightSafety on the technical data were improper. The Board concluded that the government had unrestricted rights to the data, as it was necessary for operation, maintenance, installation, or training (OMIT data). The Board also determined that the government could challenge the restrictive markings under the Validation Clause, which was not limited to challenges based on the funding source of the data.The United States Court of Appeals for the Federal Circuit reviewed the case and affirmed the Board's decision. The court held that the government had unrestricted rights to the OMIT data and that the restrictive markings placed by FlightSafety contradicted these rights. The court also held that the government could challenge the restrictive markings under the Validation Clause, which was not limited to challenges based on the funding source of the data. The court found that the restrictive markings, including the terms "proprietary" and "confidential," as well as the requirement for written authorization, were impermissible as they contradicted the government's unrestricted rights. The court also found that the copyright notice in the markings was misleading and contradicted the government's rights. View "FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE " on Justia Law

Barton Hankins was hired by Crain Automotive Holdings, LLC in 2019 as Chief Operating Officer and was offered a deferred compensation plan (DCP). After four years, Hankins resigned and sought compensation under the DCP, which Crain denied. Hankins then filed a lawsuit under the Employee Income Retirement Security Act of 1974 (ERISA) to claim his benefits. The DCP stipulated that Hankins could earn a percentage of Crain’s fair market value upon his exit, with full vesting at five years. Having served four years, Hankins was entitled to 80% of the benefits.The United States District Court for the Eastern District of Arkansas granted judgment in favor of Hankins, concluding that the DCP did not require the creation of an Employment Agreement or a Confidentiality, Noncompete, and Nonsolicitation Agreement for enforceability. The court found that Crain’s claims of misconduct by Hankins were unsubstantiated and awarded Hankins attorney’s fees, determining that Crain’s conduct was sufficiently culpable.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court affirmed the district court’s judgment, holding that Crain’s interpretation of the DCP was unreasonable. The court found that the DCP’s Article 4, which mentioned the Employment and Confidentiality Agreements, did not create a condition precedent but rather a condition subsequent. The court also upheld the award of attorney’s fees, noting that Crain’s actions lacked merit and were raised only after Hankins sought his vested compensation. The appellate court concluded that the district court did not abuse its discretion in its rulings. View "Hankins v. Crain Automotive Holdings, LLC" on Justia Law

Brothers Robert, Gary, and Richard Hunter, experienced farmers, converted their general partnership into a limited liability company (LLC) named Hunter Three Farms, LLC. Each brother owned twenty voting units, while Hunter of Iowa, Inc. owned forty nonvoting units. The LLC did not have an operating agreement but filed a statement of authority with the Iowa Secretary of State, which allowed a majority of voting members to make ordinary business decisions.In 2018, Richard submitted a claim to the Syngenta Corn Seed Settlement Program on behalf of "Hunter Farms" using the LLC's tax identification number, without informing his brothers. He received a $62,467.91 settlement payment, which he deposited into an account inaccessible to the LLC or his brothers. When Robert and Gary discovered the payment, they demanded Richard distribute the funds, but he refused, claiming entitlement to the entire amount. Robert and Gary then authorized the LLC to sue Richard to recover the settlement proceeds.The Iowa District Court for Greene County granted Richard's motion for summary judgment, ruling that the LLC lacked standing to sue without unanimous consent from all voting members, including Richard. The Iowa Court of Appeals reversed this decision, with a divided panel concluding that the LLC could sue Richard if all disinterested members authorized the litigation. The dissenting judge argued that unanimous consent was required.The Iowa Supreme Court reviewed the case and clarified that the issue was one of authority, not standing. The court held that a majority of the voting members could authorize the LLC to file a suit to recover funds owed to the company, as such actions are within the ordinary course of the LLC's activities. Consequently, the court vacated the decision of the Court of Appeals, reversed the district court's judgment, and remanded the case for further proceedings. View "Hunter Three Farms, LLC v. Hunter" on Justia Law