Justia Contracts Opinion Summaries

Matthew Moriarty, the defendant, appealed a Superior Court order dismissing his amended counterclaim against Evoqua Water Technologies LLC and Neptune-Benson, LLC. Moriarty's counterclaim sought declaratory relief and tort damages, alleging violations of a non-compete agreement he signed in 2010 while employed by Neptune-Benson, Inc. (NBI). Evoqua acquired Neptune-Benson in 2016 and hired Moriarty in 2017. The plaintiffs sued Moriarty in 2018 for breaching the 2010 agreement, among other claims, and obtained a preliminary injunction in 2019 to enforce the agreement.The Superior Court dismissed Moriarty's counterclaim, citing the litigation privilege for statements made during judicial proceedings. Moriarty's counterclaim included claims for emotional distress, declaratory judgments, constructive discharge, misrepresentation, and interference with business relations, based on alleged false testimony by an Evoqua executive during the preliminary injunction hearing.The Rhode Island Supreme Court reviewed the case and affirmed the Superior Court's dismissal. The Court held that the litigation privilege protected the executive's testimony, barring Moriarty's claims for emotional distress, misrepresentation, and interference with business relations. The Court also found Moriarty's declaratory judgment claim moot, as the non-compete agreement had expired in 2020, and his constructive discharge claim failed to state a valid cause of action. The Court concluded that Moriarty did not demonstrate that his working conditions were so intolerable that a reasonable person would feel compelled to resign. Thus, the dismissal of Moriarty's amended counterclaim was upheld. View "Evoqua Water Technologies LLC v. Moriarty" on Justia Law

In spring 2020, Czigany Beck, a full-time student at Manhattan College, paid tuition and a comprehensive fee for the semester. Due to the COVID-19 pandemic, the college transitioned to remote learning in March 2020, and Beck received only 46% of her education in person. Beck filed a class action lawsuit against Manhattan College, claiming breach of implied contract and unjust enrichment for not refunding a portion of her tuition and fees.The United States District Court for the Southern District of New York dismissed Beck's claims. The court found that the college's statements were not specific enough to constitute a promise for in-person classes or access to on-campus facilities. The court also ruled that the comprehensive fee was nonrefundable based on the college's terms, and thus Beck's unjust enrichment claim for fees was barred. The court granted summary judgment to Manhattan College on Beck's remaining unjust enrichment claim for tuition, concluding that the college's switch to online instruction was reasonable given the pandemic.Beck appealed to the United States Court of Appeals for the Second Circuit, arguing that the district court's judgment should be reversed based on the decision in Rynasko v. New York University. Manhattan College countered with decisions from the New York Supreme Court's Appellate Division, which supported affirming the district court's judgment. The Second Circuit identified a split between federal and state courts on New York contract-law principles and certified the question to the New York Court of Appeals: whether New York law requires a specific promise to provide exclusively in-person learning to form an implied contract between a university and its students regarding tuition payments. The Second Circuit reserved decision on Beck's appeal pending the New York Court of Appeals' response. View "Beck v. Manhattan College" on Justia Law

Myranda De la Cruz tripped on a pothole in a parking lot at a Mission Hills shopping center, which was managed by Triwell Properties. De la Cruz sued Mission Hills Shopping Center LLC and Triwell Properties (collectively referred to as Mission) for her injuries. Mission moved for summary judgment based on a contract between Mission and De la Cruz’s employer, a tenant in the shopping center. The contract contained an exculpatory clause relieving Mission from liability for negligent or wrongful acts. However, De la Cruz had not signed this contract.The Superior Court of Los Angeles County granted Mission’s motion for summary judgment, accepting the argument that the exculpatory clause in the contract applied to De la Cruz. The court did not address why De la Cruz, who was not a party to the contract, would be bound by its terms.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. The court held that the trial court erred in granting summary judgment because Mission failed to establish a legal basis for binding De la Cruz to a contract she had not signed. The court emphasized that contracts require mutual assent, and it was Mission’s burden to demonstrate why De la Cruz was bound by the contract. The appellate court exercised its discretion to consider De la Cruz’s argument, despite it not being raised in the trial court, due to the foundational nature of the legal error.The Court of Appeal reversed the judgment and remanded the case, instructing the trial court to enter a new order denying Mission’s summary judgment motion. The appellate court also awarded costs to De la Cruz. View "De la Cruz v. Mission Hills Shopping Center LLC" on Justia Law

A Delaware limited partnership, acting as the Members’ Representative for former members of a company, engaged in a merger agreement with a Delaware limited liability company. The merger agreement included specific notice requirements for indemnification claims, which required the acquiring company to provide written notice with reasonable detail and all available material written evidence of the claim. The agreement also stated that failure to comply with these requirements would result in forfeiture of the right to recover from the indemnity escrow fund.The Court of Chancery dismissed the Members’ Representative’s complaint, which sought a declaration that the acquiring company’s claim notice was invalid for failing to meet the contractual requirements. The court held that the notice was valid under the escrow agreement and dismissed the complaint, reasoning that the notice provided sufficient detail and was timely.On appeal, the Delaware Supreme Court reversed the Court of Chancery’s decision. The Supreme Court held that the merger agreement and escrow agreement should be read together as an integrated contractual scheme. The court found that the final sentence of the notice provision in the merger agreement created a condition precedent, requiring compliance with the notice requirements to avoid forfeiture of the right to recover from the indemnity escrow fund. The court determined that it was reasonably conceivable that the acquiring company failed to comply with the notice requirements, particularly the requirement to include all available material written evidence.The Supreme Court remanded the case to the Court of Chancery for further proceedings to determine whether the acquiring company’s noncompliance with the notice requirements could be excused. The court instructed the lower court to consider whether the notice requirements were a material part of the agreed exchange and whether excusing the noncompliance would result in a disproportionate forfeiture. View "Thompson Street Capital Partners IV, L.P. v. Sonova United States Hearing Instruments, LLC" on Justia Law

In 2014, Emergency Medical Care Facilities, P.C. (EMCF) filed a putative class action against BlueCross BlueShield of Tennessee, Inc. (BCBST), alleging breach of contract due to a cap on certain payments for medical services. The trial court denied class certification, and the Court of Appeals affirmed. EMCF then voluntarily nonsuited its claims. After a favorable ruling in a separate lawsuit against TennCare, EMCF refiled its case against BCBST, again seeking class certification.The trial court held that collateral estoppel precluded relitigation of class certification, but the Court of Appeals reversed, stating that the prior class certification denial was not final for collateral estoppel purposes because the case had been voluntarily nonsuited.The Supreme Court of Tennessee reviewed the case to determine whether the prior denial of class certification, affirmed on appeal, was entitled to preclusive effect. The Court held that the trial court's and appellate court's decisions denying class certification in the earlier case were final and binding for purposes of collateral estoppel. The Court reasoned that the class certification issue had been fully litigated and decided, and the decision was subject to appeal, which EMCF did not pursue further. Therefore, EMCF was precluded from relitigating the class certification issue in the refiled case.The Supreme Court of Tennessee reversed the Court of Appeals' decision and remanded the case to the trial court, reinstating the order striking the class action allegations against BCBST and VSHP. The Court emphasized that the denial of class certification, affirmed on appeal, was sufficiently final to warrant preclusive effect, preventing EMCF from seeking a do-over on class certification. View "Emergency Medical Care Facilities, P.C. v. BlueCross BlueShield of Tennessee, Inc." on Justia Law

Larry Lawson, former CEO of Spirit AeroSystems, Inc., retired and entered into a Retirement Agreement with Spirit, which allowed him to continue vesting in long-term incentive stock awards as if he were an active employee. This agreement was conditioned on his compliance with a non-competition covenant from his original Employment Agreement. Lawson later engaged with a hedge fund, Elliott Management, which was involved in a proxy contest with Arconic, a competitor of Spirit. Spirit deemed this a violation of the non-competition covenant and ceased payments and stock vesting under the Retirement Agreement.The United States District Court for the District of Kansas held a bench trial and found that Lawson had not violated the non-competition covenant, ruling in his favor. Spirit appealed, and the Tenth Circuit reversed, holding that Lawson had breached the covenant and remanded the case to determine the enforceability of the covenant under Kansas law.On remand, the district court found the non-competition covenant enforceable without applying the reasonableness test from Weber v. Tillman, concluding that the covenant was a condition precedent to the receipt of future benefits, not a traditional non-compete. The court severed the injunctive enforcement mechanism from the covenant, leaving only the condition precedent.The United States Court of Appeals for the Tenth Circuit affirmed the district court's judgment, predicting that the Kansas Supreme Court would not apply the Weber reasonableness test to a non-competition condition precedent to the receipt of future benefits. The court also denied Lawson's motion to certify the question to the Kansas Supreme Court, finding it unnecessary to resolve the issue. View "Lawson v. Spirit Aerosystems" on Justia Law

Dr. William Partin filed a lawsuit against Baptist Healthcare System, Inc. and Dr. Daniel Eichenberger after he resigned from his position. Partin alleged that Baptist and Eichenberger retaliated against him in violation of the Emergency Medical Treatment and Active Labor Act (EMTALA) and brought claims under Indiana law for breach of contract, tortious interference with contractual relations, and defamation. The dispute arose from Partin's treatment of a suicidal patient, J.C., in Baptist's emergency department, where Partin ordered procedures against J.C.'s will, leading to complaints from hospital staff.The United States District Court for the Southern District of Indiana granted summary judgment in favor of Baptist and Eichenberger. The court found that no reasonable jury could conclude that Partin engaged in EMTALA-protected activity or that he was retaliated against for such activity. The court also determined that Partin's breach of contract claim failed because the bylaws did not create a contractual relationship between Partin and Baptist, and his resignation was not under duress. Additionally, the court found no evidence to support Partin's claims of tortious interference with contract or defamation.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The appellate court held that Partin did not engage in EMTALA-protected activity and that his belief in reporting a potential EMTALA violation was not objectively reasonable. The court also agreed that the bylaws did not create a contract between Partin and Baptist and that Partin's resignation was voluntary. Furthermore, the court found that Baptist's actions were justified and not malicious, and that the statements made by Eichenberger and Marksbury were protected by qualified privilege and not made in bad faith. View "Partin v Baptist Healthcare System, Inc." on Justia Law

Virgin Valley Water District (the District) entered into a lease agreement with Paradise Canyon, LLC (Paradise Canyon) in 2011 to provide water shares for irrigating a golf course. The lease included a right of first refusal for Paradise Canyon to renew the lease, with the District having sole discretion to set rental rates after January 1, 2020. In 2019, the District increased the rental rate, leading Paradise Canyon to sue for declaratory relief and damages, alleging bad faith breach of the lease agreement.The Eighth Judicial District Court in Clark County granted partial summary judgment for Paradise Canyon on certain claims and set others for a jury trial. The jury found that the District had breached the lease in bad faith and awarded damages to Paradise Canyon. The District appealed the decision.The Supreme Court of Nevada reviewed the case and found that the lease agreement unambiguously granted the District sole discretion to set rental rates after January 1, 2020. The court held that the trial court erred in allowing the jury to interpret this unambiguous provision and in finding that the District breached the implied covenant of good faith and fair dealing. The Supreme Court also noted several procedural errors, including the trial court's improper judicial notice of its own factfinding, admission of prejudicial evidence, and unfair trial practices that limited the District's ability to present its case.The Supreme Court of Nevada reversed the portions of the trial court's judgment related to the interpretation of the lease renewal provisions and the jury's verdict on the rental rate and damages. The court affirmed the trial court's rulings on beneficial use and other uncontested matters. The case was remanded for further proceedings consistent with the Supreme Court's opinion. View "VIRGIN VALLEY WATER DIST. VS. PARADISE CANYON, LLC" on Justia Law

New England Country Foods, LLC (NECF) alleged that VanLaw Food Products, Inc. (VanLaw) intentionally undercut its business by promising to replicate NECF’s popular barbeque sauce and sell it directly to Trader Joe’s. NECF sued VanLaw in federal court, claiming tortious interference and other claims. The district court dismissed the case based on a clause in their manufacturing contract that limited damages. The United States Court of Appeals for the Ninth Circuit asked the California Supreme Court whether a contract clause that substantially limits damages for intentional wrongdoing is invalid under Civil Code section 1668.The district court dismissed NECF’s complaint, reasoning that the contract allowed only for direct damages and injunctive relief, while NECF sought lost profits, attorneys’ fees, and punitive damages. The court rejected NECF’s argument that section 1668 prevents limiting damages for future intentional conduct, stating it only prevents contracts that completely exempt parties from liability. NECF amended its complaint, but the district court dismissed it with prejudice, citing that parties may limit liability for breach of contract and that the contract did not bar all money damages but limited them to specific types NECF did not suffer. NECF appealed, and the Ninth Circuit sought guidance from the California Supreme Court.The California Supreme Court held that limitations on damages for willful injury to the person or property of another are invalid under section 1668. The court reasoned that the statute’s language and purpose, along with the policy against willful tortious conduct, support this interpretation. The court clarified that section 1668 does not preclude parties from limiting liability for pure breaches of contract absent a violation of an independent duty. The court’s decision ensures that parties cannot contractually limit their liability for intentional torts. View "New England Country Foods v. Vanlaw Food Products" on Justia Law

Intellectual Capitol, Inc., JMI Sports, and JMIS College, LLC (Appellants) obtained contracts through the state procurement process with the South Carolina Workers' Compensation Commission (WCC) and Clemson University (Respondents). Disputes arose under these contracts, leading Respondents to file Requests for Resolution of Contract Controversy with the Chief Procurement Officer (CPO) for the State of South Carolina. Appellants then filed separate declaratory judgment actions in circuit court, challenging the constitutionality of section 11-35-4230 of the South Carolina Code, which grants the CPO exclusive jurisdiction over state contract disputes.The circuit court granted Respondents' motions to dismiss the declaratory judgment actions, ruling that section 11-35-4230 placed exclusive jurisdiction over the State's contract disputes with the CPO. The court also dismissed Appellants' constitutional claims as premature due to their failure to exhaust administrative remedies. Appellants appealed this decision.The South Carolina Supreme Court reviewed the case and affirmed the circuit court's dismissal of the declaratory judgment actions, but modified the reasoning. The Supreme Court held that the contracts between Appellants and Respondents contained a clear choice-of-forum provision, which unambiguously gave the CPO exclusive authority to resolve disputes. By agreeing to this provision, Appellants waived their right to have their disputes decided by a court of the unified judicial system. Consequently, there was no justiciable controversy, rendering the constitutional challenge to section 11-35-4230 a purely academic exercise. The Supreme Court affirmed the circuit court's dismissal of the declaratory judgment actions, as there were no legal rights at issue. View "Intellectual Capital, Inc. v. Chief Procurement Officer" on Justia Law