Justia Contracts Opinion Summaries

Plaintiffs Managed Health Care Administration, Inc. ("MHCA"), and Alabama Psychiatric Services, P.C. ("APS") appealed the denial of their motion to compel Blue Cross and Blue Shield of Alabama ("Blue Cross") to arbitrate their claims. In 1986, Blue Cross contracted with APS, a subsidiary of MHCA, to provide mental-health services to Blue Cross's insureds. In 1991, Blue Cross's contract with APS was transferred to MHCA. In 1995, Blue Cross and MHCA entered into a new contract in which MHCA agreed to provide or arrange for mental-health services to Blue Cross's insureds. In 2006, Blue Cross and MHCA entered into yet another contract in which MHCA agreed to provide or arrange for mental-health services to Blue Cross's insureds. In late 2012, Blue Cross decided to replace MHCA, as its behavioral health benefits management vendor, with New Directions Behavioral Health, L.L.C. In 2013, Blue Cross and New Directions Behavioral Health, L.L.C. ("New Directions"), entered into a contract in which New Directions agreed to "arrange for the provision of all Covered Services to Members in accordance with the terms and conditions set forth in this Agreement," which gave New Directions authority to delegate certain services to third parties. pursuant to the authority granted it under the Blue Cross-New Directions 2013 contract and at the request of Blue Cross, New Directions entered into a contract which MHCA in which New Directions sub-delegated to MHCA certain of New Directions' obligations under the Blue Cross-New Directions 2013 contract. A disagreement arose concerning the amount of compensation MHCA was to receive for its services. In 2015, the plaintiffs sued Blue Cross and several fictitiously named defendants alleging fraudulent misrepresentation, fraudulent suppression, breach of an implied contract, and promissory estoppel, claims pertaining to plaintiffs' 2006 contract and for payments of delegated duties. After review, the Alabama Supreme Court concluded plaintiffs demonstrated they had a right to arbitration. The circuit court erred in denying the plaintiffs' motion to compel arbitration, and the Court reversed the circuit court's judgment denying the plaintiffs' motion to compel arbitration in its entirety. View "Managed Health Care Administration, Inc. v. Blue Cross & Blue Shield of Alabama" on Justia Law

Dow Corning Alabama, Inc., Dow Corning Corporation, Rajesh Mahadasyam, Fred McNett, Zurich American Insurance Company ("Zurich"), and National Union Insurance Company of Pittsburgh, PA ("National Union"), all petitioned the Alabama Supreme Court for a writ of mandamus directing the trial court to transfer the underlying declaratory-judgment action to the Montgomery Circuit Court pursuant to Alabama's forum non conveniens statute. Dow Corning Alabama hired Alabama Electric Company, Inc., an independent contractor, to perform the electrical installation of a vacuum system at Dow Corning Alabama's facility in Montgomery. The contract contained a forum-selection clause. An employee of Alabama Electric was injured while working at Dow Corning Alabama's Montgomery facility. The employee sued the Dow defendants, which in turn tendered their request for defense and indemnity to Alabama Electric and National Trust, both of whom denied coverage. Zurich and National Union settled the Montgomery lawsuit through mediation, and the case was ultimately dismissed. Later, Alabama Electric and National Trust filed an action with the Houston Circuit Court seeking certain declarations concerning their duties and obligations under the master contract and/or the National Trust policy regarding the settlement. The Dow defendants moved to transfer the declaratory judgment action from Houston to Montgomery County pursuant to the forum noon conveniens statute. The Alabama Supreme Court denied the writ application, finding the Dow parties did not satisfy their burden at the trial-court level of demonstrating that a change in venue from Houston County to Montgomery County was warranted under the interest-of-justice prong. View "Ex parte Dow Corning Alabama, Inc." on Justia Law

Plaintiffs Mary Hall, as personal representative of the estate of Adolphus Hall, Sr., and Anaya McKinnon, as personal representative of the estate of Wanzy Lee Bowman appealed the dismissal of their class-action claims against Environmental Litigation Group, P.C. ("ELG"). Plaintiffs alleged ELG agreed to represent hundreds of clients who had been exposed to asbestos, including their respective decedents. Plaintiffs alleged ELG charged its clients an excessive fee above and beyond the amount listed in their respective contracts. The trial court dismissed their case with prejudice. The Alabama Supreme Court disagreed with the trial court’s judgment, reversed and remanded. On remand, the trial court appointed a special master, who again recommended dismissal of plaintiffs’ claims. The trial court held that the attorney-employment agreement was ambiguous and that this ambiguity was fatal to the plaintiffs' class-allegation claims. Thus, the trial court dismissed the class claims before the class-certification process began. At this point in the proceedings and under the standard of review, the Supreme Court saw no ambiguity in the attorney-employment agreements, negating the trial court's contrary conclusion as to the individualized inquiry necessary with regard to the plaintiffs' contract claims. The Court therefore reversed the trial court's order dismissing the plaintiffs' claims for class-based relief and remanded the matter for further proceedings. View "Hall v. Environmental Litigation Group, P.C." on Justia Law

Rooftops sells tickets to view Cubs games and other events at Wrigley Field from the roofs of buildings it controls. Chicago has an ordinance allowing the rooftop businesses. Before the 2002 season, the Cubs installed a windscreen above the outfield bleachers, obstructing the views from rooftop businesses and sued Rooftops, claiming misappropriation of Cubs’ property by charging fees to watch games.The parties settled by entering into the License Agreement running through 2023. Rooftops agreed to pay the Cubs 17% of their gross revenues in exchange for views into Wrigley Field. The Agreement contemplated Wrigley Field's expansion. In 2013, the Cubs released a mock‐up of its proposed renovation, showing that rooftop businesses would be largely blocked by the construction. The city approved the plan over objections. Rooftops claimed that Cubs’ representatives used the threat of blocking views and other “strong-arm tactics” as leverage to force a sale, and sued, alleging: attempted monopolization; false and misleading commercial representations, defamation, false light, and breach of the non‐disparagement provision; and breach of contract. The court denied Rooftops’ motion for a preliminary injunction. The Seventh CIrcuit affirmed its dismissal of monopolization claims because Major League Baseball’s antitrust exemption applies; Rooftops failed to establish a plausible relevant market; and the Cubs cannot be limited by antitrust law from distributing their own product. The contract's plain language did not limit expansions to Wrigley Field's seating capacity. View "Right Field Rooftops, LLC v. Chicago Cubs Baseball Club, LLC" on Justia Law

In this breach of contract action brought by Kelly Armstrong (Plaintiff), a former student at Clarkson College (Defendant), the Supreme Court reversed the district court’s denial of Defendant’s motion to set aside a jury verdict in favor of Plaintiff in the amount of $1 million or, in the alternative, for a new trial. Plaintiff was placed on probation and then administratively withdrawn from the school. On appeal, Defendant argued that the district court erred by refusing to give Defendant’s requested jury instruction on Plaintiff’s alleged failure to fulfill a condition precedent by not exhausting the college’s grievance procedure. The Supreme Court agreed and remanded the case for a new trial, holding that the district court committed reversible error in failing to instruct the jury on the issue of Plaintiff’s alleged failure to fulfill a condition precedent by not exhausting Defendant’s grievance procedure. View "Armstrong v. Clarkson College" on Justia Law

The common-law rule in contracts that common-law rule that the release of one joint obligor on a promissory note operates to release all represents settled law in Nebraska and should have been applied by the district court in this case.Eric Cano brought this action against Michael Walker and Billy Claborn alleging that they had failed to pay amounts due on a promissory note, which imposed joint and several liability on Walker and Claborn. The district court entered summary judgment in favor of Cano. The court entered judgment on the promissory note. Thereafter, without the consent of Walker, Cano and Claborn entered into a stipulation that operated as an unconditional release of Claborn once he satisfied the terms of the stipulation. Walker filed a motion to discharge the judgment premised on the common-law rule that “[t]he unconditional release of one of several makers of a joint and several promissory note, without the consent of the other makers thereof, operates as a release of all.” The district court overruled the motion for discharge. The Supreme Court reversed and remanded with directions to grant the requested discharge, holding that, under the common-law rule, the unconditional release of Claborn from the judgment operated as a release of Walker. View "Cano v. Walker" on Justia Law

From 2006-2012 Packerland deceived at least one of its customers about the protein content of its Whey Protein Concentrate. Land O’Lakes purchased Packerland’s protein concentrate for use in making foods for calves and other young animals. Buyers infer protein levels from measuring nitrogen: a seller can add another nitrogen-rich substance to produce higher scores. The Ratajczaks, who owned Packerland, started adding urea to its protein concentrate. in 2006. Land O’Lakes suspected that the concentrate was high in nonprotein nitrogen but could not learn why; the Ratajczaks made excuses that Land O’Lakes accepted. The Ratajczaks sold Packerland in 2012. The new owner kept them as employees; they kept adding urea until the buyer learned what the truth. The Ratajczaks lost their jobs and settled for about $10 million before the buyer filed a complaint. Land O’Lakes stopped buying Packerland’s product and asserted claims of breach of contract, fraud, and violation of the Racketeer Influenced and Corrupt Organizations Act. Packerland’s insurers refused to defend or indemnify it or the Ratajczaks; the Ratajczaks’ personal insurer refused to indemnify them for their settlement with Packerland’s buyer. The district court dismissed Land O’Lakes’s suit and ruled in favor of the insurers. The Seventh Circuit affirmed, rejecting Land O’Lakes’ claim to treble damages under RICO and state-law and the Ratajczaks’ claims that Packerland’s insurers and their own insurers had to defend and indemnify them. View "Land O'Lakes, Inc. v. Ratajczak" on Justia Law

The Supreme Court affirmed the judgment of the circuit court in denying Seller specific performance of a contract for the sale of real property after finding that Seller failed to establish that he held marketable title. The Supreme Court held (1) the circuit court did not abuse its discretion by denying Seller’s motion in limine and admitting a substitute trustee’s deed, which rebutted Seller’s evidence that any dispute over ownership of the property had been resolved; (2) the circuit court did not err by granting Buyer’s motion to strike the evidence; and (3) the circuit court did not abuse its discretion by awarding Buyer attorney’s fees. View "Denton v. Browntown Valley Associates" on Justia Law

The Supreme Court reversed the circuit court’s determination that Owners Insurance Company did not have a duty to defend Lowery Construction & Concrete, LLC in an action filed by homeowners Tony and Stephanie Hague. The Hagues sued Lowery for breach of contract, breach of implied warranty, and negligent construction. Lowery filed a declaratory judgment action against Owners seeking a declaration that Owners had a duty to defend Lowery. The circuit court determined that coverage was excluded because the damage to the Hagues’ home was caused by Lowery’s defective work. The Supreme Court reversed, holding that Owners had a duty to defend Lowery because the Hagues’ complaint arguably stated a claim covered under Lowery’s commercial general liability policy. View "Lowery Construction & Concrete, LLC v. Owners Insurance Co." on Justia Law

The Supreme Court affirmed the district court’s dismissal of Homebuyer's construction defect claims against the Contractor that built his home on the ground that Homebuyer was not in privity with Contractor and had no right to sue as an assignee.Property Owner entered into an agreement with Contractor to build a house on the property and then assigned its rights to the home and the construction agreement to Company. Company then sold the home to Homebuyer but did not assign its interest in the construction agreement to Homebuyer. After discovering several purported construction defects, Homebuyer sued Contractor for breach of the construction agreement and breach of warranty. Homeowner was subsequently assigned Company’s interest in claims Company may assert against Contractor. The district court granted summary judgment to Contractor. The Supreme Court affirmed, holding that Homebuyer had no right to sue under Utah Code 78B-4-513 because he did not acquire a right to sue for breach of contract or warranty as an assignee - either at the time he purchased the home or at the time of the assignment. View "Tomlinson v. Douglas Knight Construction, Inc." on Justia Law