Justia Contracts Opinion Summaries

In this insurance dispute, the Supreme Judicial Court reversed the superior court’s allowance of the insurers’ motion for summary judgment, holding that the allegations in the underlying complaint were sufficient to trigger the insurers’ duty to defend the insured in the underlying action.The two insurers in this case had issued several general commercial liability policies to the insured. The insured was sued in federal court for improper advertising. The insurers denied coverage on the ground that a provision in the policies covering improper use of another’s advertising idea did not cover the claims raised in the action but, nevertheless, agreed to fund the insured’s defense under a reservation of rights. The insurers then sought a declaration that they were not obligated to defend the insured in the underlying action. The superior court granted summary judgment for the insurers. The Supreme Judicial Court reversed, holding that the policies that the insured purchased, which provided coverage in the event the insured was sued for alleged advertising injuries, covered the insured for the claims at issue in the underlying action. View "Holyoke Mutual Insurance Co. in Salem v. Vibram USA, Inc." on Justia Law

Conn Credit filed suit against TF Loan for breach of contract and TF Loan counterclaimed for breach. The Fifth Circuit reversed the district court's judgment in favor of Conn, holding that Conn's representations and warranties in Section 8.5 of the Sale Agreement were false because Conn's failure to refund canceled retail service agreement (RSA) accounts violated Section 1304.159(c) of the Texas Occupations Code. Therefore, Conn did not satisfy the condition precedent in Section 10.2, and its claim for breach of contract failed. The court also held that the district court erred as a matter of Texas law by imposing a prejudice requirement on TF Loan; Conn failed to show that anything in the Sale Agreement imposed a materiality requirement on the Section 10.2 condition; Conn failed to show that TF Loan waived the condition precedent in Section 10.2; and Conn's remaining claims failed. Finally, the court held that TF Loan was entitled to repurchase of accounts in the Bulk Sale and Deliveries One and Two with canceled RSAs. View "Conn Credit I, LP v. TF Loanco III, LLC" on Justia Law

Belsen Getty, LLC, a registered investment adviser owned by Terry Deru, obtained a claims-made financial-services-liability policy (the Policy) from XL Specialty Insurance Company covering Belsen Getty and its advisers for the period for one year. Under the policy, XL had no duty to defend. During the policy period James, Jenalyn, and Wade Morden brought claims against Belsen Getty and Deru alleging improper and misleading investment advice. XL denied coverage, asserting the Mordens’ claims and claims brought by the Securities and Exchange Commission (SEC) before the policy period concerned “Interrelated Wrongful Acts,” as defined by the Policy, and that the Policy therefore required treating the two claims as one claim made before the policy period. Belsen Getty and Deru then settled with the Mordens, assigning their rights against XL; and the Mordens sued XL in federal district court, raising the assigned claims that XL breached its covenant of good faith and fair dealing and its fiduciary duties to Belsen Getty and Deru in denying coverage under the Policy. XL counterclaimed that the Policy’s Interrelated Wrongful Acts provision precluded coverage. The Mordens moved for partial summary judgment on the counterclaim and on several of XL's affirmative defenses. XL moved for summary judgment based on the policy and for failure to prove bad faith or breach of fiduciary duty. The district court denied XL's counterclaim, but granted summary judgment on the bad-faith and fiduciary-duty claims. The Mordens appealed summary judgment against them on their bad-faith and fiduciary-duty claims and on the denial of their motion to amend their complaint to add a breach-of-contract claim. XL cross-appealed the summary judgment against it on its counterclaim that the Policy’s Interrelated Wrongful Acts provision barred all the Mordens’ claims. The Tenth Circuit reversed the denial of XL’s motion for summary judgment on its counterclaim: this reversal undermined the Mordens’ challenges to the summary judgment against them and the denial of their motion to amend. The Court therefore affirmed summary judgment against the Mordens on their claims and the denial of their motion to amend. View "Morden v. XL Specialty Insurance" on Justia Law

Packgen's customer, CRI, required a new type of intermediate bulk container (IBC) for a chemical catalyst used in refining crude oil into other petroleum products. The new IBC's outer surface consisted primarily of polypropylene fabric rather than metal; it could be collapsed for storage. CRI's catalyst is self-heating and can ignite when exposed to oxygen. Packgen engaged Berry to manufacture a laminate of woven polypropylene chemically bonded to aluminum foil, to strengthen the IBC’s exterior and serve as a barrier to oxygen, ultraviolet light, and infrared radiation. By April 2008, Packgen was selling an average of 1,261 IBCs per month to CRI and was making overtures to other petroleum refiners. While CRI personnel were lifting an IBC full of catalyst, the foil layer separated from the polypropylene, exposing the interior lining. Other failures followed, some resulting in fires. Packgen determined that foil laminate obtained from Berry was defective. CRI canceled pending orders and destroyed and refused to pay for IBCs that Packgen had provided. Word reached other potential Packgen customers. Packgen sued Berry. The First Circuit affirmed an award of $7.2 million in damages. Berry unsuccessfully demanded that Illinois National indemnify it for all but the first $1 million, which Berry’s primary liability insurer agreed to cover. The Seventh Circuit affirmed summary judgment in favor of Illinois National. The policy covers damages that Berry is required to pay “because of … Property Damage.” While some portion of the lost profits award might be attributable to property damage, Berry did not attempt to make that showing. View "Berry Plastics Corp. v. Illinois National Insurance Co." on Justia Law

The Ninth Circuit reversed the district court's grant of summary judgment for Paramount in an action under section 301 of the Labor Management Relations Act. AFM filed suit alleging breach of Article 3 of the Basic Theatrical Motion Picture Agreement, a collective bargaining agreement, in connection with the motion picture, Same Kind of Different As Me, which was scored in Slovakia.The panel held that the district court misinterpreted Article 3 to apply only if a signatory producer employs the cast and crew shooting the picture; Article 3 functions as a work preservation provision that dictates when a signatory has to hire those musicians; and Article 3 applied when a signatory studio produces a motion picture and has authority over the hiring and employment of scoring musicians. The panel held that there was a disputed question of fact as to whether Paramount produced the movie and had sufficient authority over the hiring of scoring musicians such that Article 3 applied. Finally, the panel rejected Paramount's affirmative defense that Article 3 violated the National Labor Relations Act's "hot cargo" prohibition and reversed two of the district court's evidentiary rulings. View "American Federation of Musicians of the United States and Canada v. Paramount Pictures Corp." on Justia Law

The Supreme Judicial Court held that the trial judge did not abuse his discretion by allowing Defendant’s motion to dismiss on the ground of forum non conveniens because a Massachusetts choice of law provision in a confidentiality, nonsolicitation, and noncompetition agreement between the parties in this case was unenforceable.Defendant was employed in California by Plaintiff, a company headquartered in Massachusetts. Plaintiff signed an agreement as a condition of employment that declared that the agreement would be governed by Massachusetts law and that all lawsuits arising from the agreement would be brought in a Massachusetts court. When Defendant left to work for a California competitor, Plaintiff filed suit in the Massachusetts Superior Court. Defendant filed a motion to dismiss on the ground of forum non conveniens, and the trial judge allowed the motion. The Supreme Judicial Court affirmed, holding (1) where California substantive law would apply under choice of law principles and where the application of Massachusetts substantive law would violate California public policy favoring open competition and employee mobility, the Massachusetts choice of law provision was not enforceable; and (2) the trial judge did not abuse his discretion in deciding that this action should be dismissed on the ground of forum non conveniens. View "Oxford Global Resources, LLC v. Hernandez" on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the district court’s grant of summary judgment for Defendants in this contract dispute, holding that the district court correctly found that the contract at issue violated the corporate practice of medicine doctrine and was therefore unenforceable.Central Kansas Medical Center (CKMC) contracted with Dr. Stanley Hatesohl to provide family medicine services. The contract contained several postemployment covenants. Two years later, Plaintiff resigned and began practice family medicine at Great Bend Regional Hospital’s (GBRH) Central Kansas Family Practice (CKFP) clinic. CKMC sued Hatesohl for violating the postemployment covenants and GBRH and CKFP for tortiously interfering with the contract. The district court granted summary judgment for Defendants on the basis of the corporate practice of medicine doctrine, which forbids a corporation from hiring a physician to practice medicine that the corporation itself is not licensed to provide. The court of appeals reversed. The Supreme Court reversed, holding that the contract between Hatesohl and CKMC violated the corporate practice of medicine doctrine. View "Central Kansas Medical Center v. Hatesohl" on Justia Law

In this action seeking to collect amounts Plaintiff claimed were due on personal guaranties, the Supreme Court affirmed the judgment of the district court entering judgment on a jury verdict in favor of Plaintiff for the full amount sought, holding that there was no reversible error in the proceedings below.Specifically, the Supreme Court held (1) the district court did not err in granting Plaintiff’s motion for a directed verdict on certain affirmative defenses raised by Defendants; (2) there was no error or abuse of discretion in the jury instructions or in the admission of evidence concerning Defendants’ personal finances; and (3) the district court did not err in failing to grant Defendants’ motion for new trial based on the directed verdict and the admission of financial statements. View "Lindsay International Sales & Service, LLC v. Wegener" on Justia Law

This appeal concerned the guardianship of a ten-year-old child, Jane Doe II (“Jane”), whose parents passed away in 2017. A family friend petitioned for guardianship; Jane's aunt (twin sister of her mother) also petitioned for guardianship. A guardian ad litem recommended the friend be awarded temporary guardianship for Jane to finish the school year, then the aunt be permanent guardian. The friend appealed. The final decree appointing Aunt as Jane’s permanent guardian was vacated by the Idaho Supreme Court, which remanded the case for the magistrate court to conduct a hearing to determine whether Jane possessed sufficient maturity to direct her own attorney prior to a new trial. View "Western Community Ins v. Burks Tractor" on Justia Law

The Church’s Deacons recommended Lee as pastor under a 20-year agreement, subject to for-cause early termination. If the Church removed Lee without cause, it would be required to pay Lee salary and benefits for the unexpired term. The agreement specified that Lee could be terminated for cause if he “commits any serious moral or criminal offense” or if he became incapacitated; it allowed either party to terminate upon “material breach.” During a 2013 congregation meeting, Lee stated that “just cause” would occur if the Church was "not growing ... stagnant, ... not a better place,” and that “if [he did not] perform [his] duties well, [he would be] out.” Based on these statements, the congregation approved the agreement. In December 2014, Church leaders recommended voiding the employment contract, reporting that from 2013-14, there was a 39% decline in offerings, a 32% drop in Sunday worship attendance, a 61% decrease in registered members, a doubling of expenditures, and a decline in the quality of community outreach. Lee had scheduled but cancelled several meetings to discuss these issues. The congregation voted to terminate Lee’s employment. Lee sued, alleging breach of contract due to termination without cause, seeking $2,643,996.40 in damages. The Third Circuit affirmed rejection of the suit on summary judgment. Adjudication of Lee’s claim would impermissibly entangle the court in religious doctrine in violation of the First Amendment’s Establishment Clause. View "Lee v. Sixth Mount Zion Baptist Church of Pittsburgh" on Justia Law