Justia Contracts Opinion Summaries

American Express National Bank (“AmEx”) filed suit for breach of contract in Mississippi state court to recover $2,855.74 of unpaid credit card debt incurred on Plaintiff's account. Plaintiff contended an unknown person incurred this debt fraudulently. Plaintiff then filed Fair Credit Reporting Act (“FCRA”) claims against AmEx and other defendants in Mississippi state court. The district court denied AmEx’s motion to compel arbitration.   The Fifth Circuit vacated the decision of the district court and remanded for reconsideration in the first instance in light of Forby v. One Techs., L.P and Morgan v. Sundance, Inc. The court held that these cases were decided on the same day and after the district court’s ruling. Forby clarified the test for waiver by a party of the right to compel arbitration and reiterated that waiver analysis occurs on a claim-by-claim basis. In addition, Morgan addressed this and other sister circuits’ tests for waiver by a party of the right to compel arbitration. The court explained that although it can apply subsequent precedent to cases before it, “[a]s a court for review of errors, we are not to decide facts or make legal conclusions in the first instance." Thus, the court’s task is to review the actions of a trial court for claimed errors. View "Barnett v. American Express National" on Justia Law

Public Risk Management of Florida (“PRM”) Munich Reinsurance America, Inc. (“Munich”) for breach of contract and sought declaratory relief that Munich is obligated by the parties’ reinsurance agreement (“the Reinsurance Agreement”) to reimburse PRM for the defense and coverage it provided to an insured in an underlying lawsuit. Munich counter-claimed for a declaratory judgment stating that it has no duty to reimburse PRM, and the district court granted that relief. On appeal, PRM argues, inter alia, that the Reinsurance Agreement contained a “follow the fortunes” clause, which forbids a reinsurer “from second guessing” an insurer’s “good faith decision” to pay a claim to the insured.   The Eleventh Circuit affirmed the grant of summary judgment holding that the district court correctly decided that Munich had no duty to reimburse PRM for its defense and indemnification of the City in the underlying Section 1983 suit. The court explained that The Reinsurance Agreement contains language that is plainly inconsistent with the follow the-fortunes doctrine. Accordingly, the district court properly rejected the doctrine’s application in this case. Further, the court held that it will not infer the application of the follow-the-fortunes doctrine in a reinsurance agreement where the agreement’s plain and unambiguous language is inconsistent with the doctrine. Applying this rule the court concluded that it would be inconsistent with the plain, unambiguous terms of the Reinsurance Agreement to infer that Munich should be bound by PRM’s coverage decision. View "Public Risk Management of Florida v. Munich Reinsurance America, Inc." on Justia Law

The Louisiana Supreme Court granted review in this case to determine whether a stamped signature on an uninsured/underinsured motorist (“UM”) coverage rejection form, affixed by the administrative assistant of the corporate insured’s owner and president, complied with the statutory requirement that the UM form be signed by the named insured or his legal representative. Because the stamped signature was affixed on behalf of the legal representative and not by the legal representative himself, the Supreme Court agreed with the court of appeal that the lack of prior written authorization to the administrative assistant rendered the UM form invalid. View "Havard v. JeanLouis, et al." on Justia Law

The First Circuit affirmed the judgment of the district court granting Defendant's motion to dismiss this case brought against him by Plaintiff, his previous employer, for lack of personal jurisdiction, holding that the district court did not err.Plaintiff brought this lawsuit against Defendant in the District of New Hampshire, alleging that he breached his employment contract and violated a non-solicitation of employees clause by encouraging three of Defendant's employees to quit their employment and join him at his new company. The district court dismissed the case for lack of personal jurisdiction. The First Circuit affirmed, holding that the requirements for personal jurisdiction were not met in this case. View "Vapotherm, Inc. v. Santiago" on Justia Law

The co-tenancy provision in the parties’ lease required a shopping center to have either: (1) three anchor tenants; or (2) 60 percent of the space leased, and, if it did not, Tenant-respondent JoAnn Stores, LLC was permitted to pay “Substitute Rent.” In 2018, Jo-Ann informed JJD it intended to start paying Substitute Rent effective July 1, 2018, because the co-tenancy provision was not met after two anchor tenants closed. Landlord-appellant JJD-HOV Elk Grove, LLC (JJD) responded that the co-tenancy provision was an unenforceable penalty under the holding in Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc., 232 Cal.App.4th 1332 (2015). Jo-Ann contended Grand Prospect was distinguishable and the co-tenancy provision was enforceable. JJD and Jo-Ann filed competing complaints for declaratory relief and cross-motions for summary judgment. The trial court found the co-tenancy provision was enforceable, and thus granted Jo- Ann’s motion, denied JJD’s, and entered judgment accordingly. JJD appealed. The Court of Appeal declined to follow the rule announced in Grand Prospect here, and instead held that this case was governed by the general rule that courts enforce contracts as written. The Court therefore agreed with the trial court’s conclusion that the co-tenancy provision at issue in this case was enforceable, and affirmed the judgment. View "JJD-HOV Elk Grove, LLC v. Jo-Ann Stores" on Justia Law

Torgerson Properties, Inc. ("TPI") develops and operates hotels, restaurants, and conference centers in Minnesota and Florida. It was covered by an all-risk property insurance policy issued by Continental Casualty Co. from May 1, 2019, through May 1, 2020. the policy’s Business Interruption and Civil Authority/Ingress-Egress provisions. The Business Interruption clause “covers against loss resulting from necessary interruption of business caused by direct physical loss of or damage to covered property.”   TPI filed a claim under the policy for lost business income during the COVID pandemic. After Continental denied the claim, TPI sued for breach of contract. Continental moved to dismiss for failure to state a claim. The district court granted Continental’s motion, and TPI appealed. The Eighth Circuit affirmed, holding that the district court was correct to dismiss TPI’s breach of contract action for failure to state a claim.   The court reasoned that insurance provisions covering “direct physical loss of or damage to property” are not triggered unless “there [is] some physicality to the loss or damage of property.” Oral Surgeons, P.C. v. Cincinnati Ins. Co., 2 F.4th 1141 (8th Cir. 2021) (relying on Minnesota law).  TPI tried to distinguish this case from Oral Surgeons by alleging that the virus was actually present on its property. However, TPI failed to show that causal link. The contamination did not cause TPI’s business interruption; the shutdown orders did. TPI would have been subject to the exact same restrictions even if its premises weren’t contaminated. And the cause of TPI’s business interruption—governmental orders alone—is not a direct physical loss. View "Torgerson Properties, Inc. v. Continental Casualty Company" on Justia Law

Plaintiff suffered serious injuries in an automobile accident and won over $12 million in a suit against the other driver. To recover the judgment, Plaintiff sued that driver’s insurance company on the theory that it acted in bad faith toward its insureds. The jury returned a verdict in the insurer’s favor, but Plaintiff argued that the district court abused its discretion by failing to give his proposed jury instruction.   The Eleventh Circuit reversed the district court’s ruling explaining that the district court’s instruction omitted the state law relevant to this theory of liability. The court explained that the district court instructed the jury on bad faith resulting from the failure to settle a claim. But Florida law provides—and Plaintiff argued at trial—that bad faith is also present when an insurance company fails to advise an insured about settlement offers and likely litigation outcomes. Further, Plaintiff’s proposed jury instruction correctly stated the legal basis for his failure-to-advise theory of liability, and the district court’s failure to give that instruction to the jury caused him prejudice. View "Dustin C. Brink v. Direct General Insurance Company" on Justia Law

Plaintiff’s spouse was a medical doctor employed by NCHMD, Inc., which is a subsidiary of NCH Healthcare System, Inc. NCHMD’s human resources staff helped the spouse complete enrollment paperwork for life insurance benefits through an ERISA plan. Plaintiff was the primary beneficiary under the plan, and NCH Healthcare was the named plan administrator. After Plaintiff’s spouse died, Plaintiff filed a claim for benefits with the plan’s insurance company. The insurance company refused to pay any supplemental benefits because it had never received the form. Plaintiff sued NCHMD and NCH Healthcare, asserting a claim under ERISA, 29 U.S.C. Section 1132(a)(1)(B). The district court granted Defendants’ motion to dismiss and denied Plaintiff leave to amend.   On appeal, the Eleventh Circuit reversed the district court’s ruling. The court wrote that at issue is whether Section 1132(a)(3) creates a cause of action for an ERISA beneficiary to recover monetary benefits lost due to a fiduciary’s breach of fiduciary duty in the plan enrollment process? The court answered “yes”, and explained that under the court’s precedents, a court may order typical forms of equitable relief under Section 1132(a)(3). As the Supreme Court and many sister circuits have recognized, courts in equity could traditionally order an “equitable surcharge”— that a fiduciary pay a beneficiary for losses caused by the fiduciary’s breach of fiduciary duty. Accordingly, the court held that a beneficiary of an ERISA plan can bring a lawsuit under Section 1132(a)(3) against a fiduciary to recover benefits that were lost due to the fiduciary’s breach of its duties. View "Raniero Gimeno v. NCHMD, Inc., et al." on Justia Law

Plaintiffs-homeowners Dylan O’Malley-Joyce and Eileen Nash appealed a superior court order granting the summary judgment motion filed by defendant Travelers Home and Marine Insurance Company (the insurer), on their claims for damages and declaratory relief. The insured residence was damaged by two leaks — one in November 2017 and the other in early January 2018. The homeowners filed claims under the policy as to both leaks. Thereafter, the parties disagreed about the cost and scope of repairs. In November 2018, the insurer sought to settle the parties’ dispute by providing a contractor “who [was] willing and able to complete the work” and by “paying up to the replacement cost figures on the [contractor’s] estimates less the deductibles for each of the claims.” The policy’s appraisal provision provided, in pertinent part, that if the parties “fail to agree on the amount of loss, either may demand an appraisal of the loss.” Because the parties were unable to reach an agreement, the insurer demanded that they participate in the appraisal process set forth in the homeowners’ policy. In November 2019, the homeowners brought a two-claim complaint against the insurer. In one claim, the homeowners sought a declaratory judgment, and in the other, they sought damages for “breach of contract, bad faith, statutory violations.” Because, on appeal, the homeowners did not contest the grant of summary judgment on either their claim for declaratory judgment or their claim that the insurer violated certain statutes, the New Hampshire Supreme Court focused solely on their claims for breach of contract and breach of the implied covenant of good faith and fair dealing. Because the homeowners filed neither an objection to the insurer’s summary judgment motion nor a motion to reconsider the trial court’s order, the Supreme Court determined they failed to preserve their appellate arguments for review. Nonetheless, the Court reviewed their arguments for plain error, and finding no plain error, the Court affirmed. View "O'Malley-Joyce v. Travelers Home & Marine Insurance Co." on Justia Law

The Supreme Court reversed the decision of the court of appeals upholding that trial court's determination that the plaintiff homeowner's award of attorneys fees and costs under Tenn. Code Ann. 20-12-119(c) was limited to those incurred after the date the defendant contractor filed an amended countercomplaint, holding that the lower courts erred.Plaintiff and Defendant entered into a contract for the renovation of a residence. Plaintiff later filed a complaint alleging breach of contract and violation of the Tennessee Consumer Protection Act. Defendant filed an amended countercomplaint asserting breach of contract. The trial court dismissed all of Plaintiff's claims and then dismissed the countercomplaint. On appeal, Plaintiff challenged the attorney fee and costs award granted by the trial court. The court of appeals affirmed. The Supreme Court vacated the trial court's award of attorney fees and costs, holding that the fees and costs recoverable by Plaintiff in connection with the dismissal of Defendant’s breach of contract claim are not limited to those incurred after the amended countercomplaint was actually filed. View "Donovan v. Hastings" on Justia Law