Justia Contracts Opinion Summaries

At issue in this appeal was whether a cross-complaint filed by Connor Callanan against Charles Menken, Steven Menken, and Grizzly Designs, LLC, dba Brotherly Love (collectively “the Menkens”) was a SLAPP suit subject to a special motion to strike under Code of Civil Procedure section 425.16 (known as the anti-SLAPP statute). The Menkens were “engaged in the research and development of various cannabis based products intended for marketing in the burgeoning cannabis market space.” Marino and Callanan owned and operated a business called UHSE Media LLC that provided media, marketing, and consulting services to the cannabis industry. In May 2019, the Menkens entered into an “oral agreement” with Marino and Callanan for such consulting services and agreed to pay them $30,000 each. The Menkens claimed that Marino and Callanan were independent contractors rather than employees. Marino and Callanan were “permitted” to live at the Menkens’ “business location” “as they deemed necessary” in order to do their consulting work, but they “were at all times free to come and go as they determined necessary and for their own purposes.” They began living and working at the Menkens’ business location in late May 2019. The Menkens contended “the substantial majority” of the work Marino and Callanan did on the farm was related to their independent media and consulting business, but that by November 2019, Marino and Callanan were failing to perform media and consulting services and were instead spending most of their time harvesting and processing cannabis. Marino and Callanan also began demanding sums of money “they believed they were entitled to under California’s wage and hour laws.” At this point, the parties’ relationship “became openly hostile” and Marino and Callanan (allegedly) set fire to a building that was used as an office and sleeping quarters, causing over $100,000 in damages. The Menkens contended Callanan’s cross-complaint was a SLAPP suit because it was filed in retaliation for a cross-complaint they filed against Callanan, and they filed a motion under section 425.16 seeking to strike it. The trial court granted the motion, and Callanan appealed. After review, the Court of Appeal concluded Callanan’s cross-complaint was not a SLAPP suit because none of his claims arose from the filing of the Menkens’ cross-complaint. View "Callanan v. Grizzly Designs, LLC" on Justia Law

Plaintiff entered into a share purchase agreement with Defendants for the sale of her business, which agreement the parties later amended (the contract, or the amended agreement). Plaintiff filed suit in December 2019 in North Carolina state court, alleging that Defendants had not made interest and earnout payments as required under the amended agreement. Defendants removed the case to federal district court in the Middle District of North Carolina, where they argued that the state or federal courts in New York were the exclusive forums for Plaintiff’s complaint under the contract’s forum selection clause. Defendants also argued that Plaintiff’s claims were not yet ripe because, at the time the complaint was filed, all payments that were due under the contract had been made. The district court remanded the case to the North Carolina state court, and Defendants appealed.   The Fourth Circuit initially concluded that Plaintiff’s claims are ripe, both as originally pleaded and under the facts developed prior to the district court’s judgment. The court also agreed with the magistrate judge that Plaintiff’s claims do not relate to a setoff and that under the contract’s forum selection clause, the state or federal courts in New York are the exclusive forums for Plaintiff’s  claims. The court therefore vacated and remanded with instructions that the district court transfer this case to the Southern District of New York. View "Pamela Whitaker v. Monroe Staffing Services, LLC" on Justia Law

Union Pacific Railroad Company (“Union Pacific”) sought to end its operations in Palestine, Texas but has been unable to do so because of a 1954 Agreement between its predecessor and Defendants City of Palestine (“Palestine”) and Anderson County, Texas (“Anderson County”) has prevented it from leaving.   Union Pacific filed a motion for summary judgment, which the district court granted, holding that the 1954 Agreement was expressly and impliedly preempted. After the district court entered judgment, Palestine and Anderson County filed suit in Texas state court seeking to enforce the 1955 Judgment which had approved the 1954 Agreement.   Defendants appealed the district court’s grant of summary judgment for Union Pacific and the denials of their motion to dismiss for failure to join a necessary party, motion for judgment on the pleadings, and cross-motion for summary judgment.   The Fifth Circuit affirmed the district court’s ruling granting summary judgment for Union Pacific after determining that federal law preempts the statutorily mandated contractual agreements between the parties, both expressly and as applied. The court explained that there is no requirement for contemporaneous movement of property related to the rails for the regulation to be preempted. If the facilities or services—in any non-incidental way—relate to the movement of property by rail, they are preempted by the ICCTA.  Further, the court held that the district court properly determined that the Anti-Injunction Act does not bar Union Pacific from seeking declaratory relief. View "Union Pac. RR v. City of Palestine" on Justia Law

After disputes arose between a general contractor and two of its subcontractors, an arbitrator awarded the subcontractors money for the labor and material they had provided the general contractor along with associated costs, attorneys' fees, interest, and other sums. The general contractor declared bankruptcy before paying up, and the surety company that issued a bond guaranteeing the subcontractors would be paid tendered amounts representing only the part of the awards that compensated for labor and material (and some interest). But the subcontractors (or in one case, the subcontractor's assignee) wanted the whole of the awards and sued in federal court to get it.   The district court sided with the surety and granted it summary judgment. The Eighth Circuit reversed and remanded the district court’s decision granting summary judgment to the surety. The court held that the bond at issue obligates the surety to pay not only for labor and material but also for other related items to which Plaintiffs’ subcontracts entitle them (or their assignees). The court explained that the bond provided that if the subcontractors were not paid in full, which is the case here, they were entitled to sums "justly due," which included costs, attorneys' fees and interest. View "Owners Insurance Company v. Fidelity & Deposit Company" on Justia Law

Técnicas Reunidas de Talara S.A.C., a Peruvian corporation, subcontracted with SSK Ingeniería y Construcción S.A.C., another Peruvian corporation, to provide electromechanical work on the refinery project. In response to a contract dispute, the arbitral panel issued a $40 million award to SSK. During the arbitration, two of Técnicas's attorneys withdrew and joined the opposing party’s law firm. More than a month later Técnicas objected in the International Court of Arbitration to alleged conflicts of interest held by the arbitrators, but its objection made no mention of the attorney side switching.   The district court agreed with Técnicas that a public policy against attorney side-switching exists in the United States but concluded that the public policy was not contravened in this case because there was no actual prejudice and Técnicas waived its objection. At issue on appeal concerns whether a party to an international arbitration can obtain a vacatur of an adverse arbitral award because two of its attorneys withdrew and joined the opposing party’s law firm during the arbitral proceedings.     The Eleventh Circuit affirmed the judgment. The court explained that Técnicas waived its right to complain. The court explained thatTécnicas, the losing party in the arbitration, had knowledge of the attorney side-switching but did not object until Técnicas received an adverse award more than a year later, The court wrote that its conclusion is consistent with the well-settled principle “that a party may not sit idle through an arbitration procedure and then collaterally attack that procedure on grounds not raised . . . when the result turns out to be adverse.” View "Tecnicas Reunidas De Talara S.A.C. v. SSK Ingenieria Y Construccion S.A.C." on Justia Law

The issue this appeal presented stemmed from a circuit court's grant of summary judgment to First American Title Company (First American) and its grant of a declaratory udgment to Pinehaven Group, LLC (Pinehaven), against Singing River Health System Ambulatory Services (AS). Singing River Health System (SRHS) informed AS that its real estate purchase from Pinehaven ten years before was void for lack of ratification by the Jackson County Board of Supervisors (the board). AS sought to void the purchase and to recover from Pinehaven and First American. The circuit court held that AS’s purchase from Pinehaven was valid and enforceable. Finding that no factual dispute that the contract was valid and enforceable existed, the Mississippi Supreme Court declined to address the other issues presented on appeal that were based on the alleged ratification requirement. "AS properly considered, approved, and executed the contract for its purchase of the Pinehaven property. As such, we affirm the circuit court’s decision that lack of ratification did not render the Pinehaven purchase void." View "SRHS Ambulatory Services, Inc. v. Pinehaven Group, LLC, et al." on Justia Law

Rock Dental Arkansas PLLC and Rock Dental Missouri LLC (Rock Dental) operate dental clinics in Arkansas and Missouri. After Rock Dental’s insurer, Cincinnati Insurance Company (Cincinnati), denied coverage for Rock Dental’s claims for losses related to the COVID-19 pandemic, Rock Dental sued for breach of contract. The district court granted Cincinnati’s motion to dismiss for failure to state a claim.   The Eighth Circuit affirmed. The court explained that Rock Dental has failed to plausibly allege that COVID-19 physically damaged its properties or that removal of any virus from its properties was required. Further, Rock Dental has not shown that it is entitled to coverage under the Civil Authority Coverage. The court explained that coverage requires allegations of physical loss of or damage to properties other than Rock Dental’s clinics. Rock Dental’s complaint contains no such allegations. View "Rock Dental Arkansas PLLC v. Cincinnati Insurance Company" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the circuit court determining that Denise Schipke-Smeenk was not entitled to specific performance of an agreement she made with her husband that neither party would revoke their specific wills without the other's consent, holding that the circuit court erred in determining that the claim was not timely or properly presented.Denise and Neil Smeenk executed mutual wills in 2017 and the agreement at issue. In 2019, Neil executed a new will without Denise's consent. After Neil died, the circuit court appointed Denise as personal representative of Neil's estate and ordered the 2019 will to be probated. The circuit court denied Denise's motion seeking specific performance of the agreement, determining that the motion was not properly presented as a creditor claim and was untimely and that Denise was not entitled to specific performance. The Supreme Court reversed in part, holding that the circuit court (1) erred in determining that the claim was not timely and properly presented; but (2) correctly ruled that Denise was not entitled to specific performance. View "In re Estate of Smeenk" on Justia Law

Allen earned a Ph.D. in physics from Yale University in 1965 and embarked on a successful career in the aerospace industry. He retired in 2004 and granted a financial power of attorney to his daughter, Key, when he and his wife experienced declining health and he could no longer manage their finances. For several years Key used the power of attorney to make withdrawals from Allen’s investment accounts held by affiliated investment firms (Brown). Five years later Allen revoked the power of attorney and sued Brown, raising contract and fiduciary-duty claims under Maryland law. He alleged that Key’s withdrawals (or some of them) were not to his benefit and that the investment companies should not have honored them.The Seventh Circuit affirmed the dismissal of the suit. The Maryland Court of Appeals has clarified that a plaintiff may plead a claim for breach of fiduciary duty even when another cause of action (like breach of contract) is available to redress the conduct. . Still, the power of attorney shields Brown from liability for breach of fiduciary duty just as it does for breach of contract. Brown had no fiduciary obligation to refuse to carry out transactions authorized by the power of attorney. View "Allen v. Brown Advisory, LLC" on Justia Law

The issue this case presented for the Pennsylvania Supreme Court's review centered on whether Appellant’s legal malpractice claims against Appellees, her former attorneys, were barred under the Court’s decision in Muhammad v. Strassburger, McKenna, Messer, Shilobod & Gutnick, 587 A.2d 1346 (Pa. 1991), which held that a plaintiff could not sue his attorney on the basis of the adequacy of a settlement to which the plaintiff agreed, unless the plaintiff alleged the settlement was the result of fraud. Appellant, Dr. Ahlam Kahlil, owned a unit in the Pier 3 Condominiums in Philadelphia; the unit was insured by State Farm Fire and Casualty Company (“State Farm”). The Pier 3 Condominium Association (“Pier 3”) was insured under a master policy issued by Travelers Property Casualty Company of America (“Travelers”). In May 2007, Appellant sustained water damage to her unit as a result of a leak in the unit directly above hers, which was owned by Jason and Anne Marie Diegidio. Due to the water damage, Appellant moved out of her unit and stopped paying her condominium fees. Appellant filed suit against State Farm and Travelers, alleging breach of contract and bad faith, and against the Diegidios, alleging negligence. A year later, Pier 3 filed a separate lawsuit against Appellant for her unpaid condominium fees and charges. In affirming in part and reversing in part the trial court, the Supreme Court found that by finding Appellant’s claims were barred under Muhammad, the lower courts ignored other averments in Appellant’s complaint which did not allege fraud, but, rather, alleged legal malpractice by Appellees in allowing Appellant to enter into a settlement agreement in the Water Damage Case that subsequently precluded her from raising her desired claims in the Fees Case, while repeatedly advising Appellant that the settlement agreement would not preclude those claims. "[A]s our review of Appellant’s complaint demonstrates that she was not merely challenging the amount of her settlement in the Water Damage Case, but rather alleged that Appellees provided incorrect legal advice regarding the scope and effect the Travelers Release, we hold that Muhammad’s bar on lawsuits based on the adequacy of a settlement is not implicated in this case." View "Khalil v. Williams" on Justia Law