Justia Contracts Opinion Summaries

Camden National Bank filed a complaint for foreclosure against Ilene Weintraub. Weintraub brought several counterclaims against the bank, including violations of the Maine Consumer Credit Code, breach of contract, and a claim for intentional infliction of emotional distress, alleging that she suffered injuries as a direct and proximate result of the abuse conduct of the Bank’s collections department and an accusation of criminal conduct. The Bank filed a special motion to dismiss requesting dismissal of several claims based on Maine’s anti-SLAPP statute, but failing to request dismissal of the breach of contract claim. The superior court concluded that the anti-SLAPP statute prohibits selective dismissal of claims and that Weintraub met her burden of demonstrating a prima facie case of actual injury and causation. The Supreme Judicial Court affirmed, holding that the trial court (1) erred in holding that the anti-SLAPP statute did not allow for selective dismissal of some, but not all, of Weintraub’s counterclaims, but the error was harmless; and (2) did not err in concluding that Weintraub met her burden of showing prima facie evidence of causation. View "Camden Nat’l Bank v. Weintraub" on Justia Law

Plaintiff, the insured of Dairyland, sustained bodily injury and property damage while operating his motorcycle. After paying plaintiff all proceeds to which he was entitled under the Dairyland policy, and after plaintiff had settled with the tortfeasor's insurer, Dairyland sought and obtained subrogation from the tortfeasor's insurer for the property damages that it previously paid to plaintiff. Plaintiff then demanded Dairyland pay him the funds it obtained on its subrogation claim. When Dairyland refused, plaintiff filed suit for breach of contract and bad faith. The court concluded that the made whole doctrine does not apply to preclude Dairyland from retaining the funds it received from its subrogation claim because the equities favor Dairyland: (1) Dairyland fully paid plaintiff all he bargained for under his Dairyland policy, which included the policy's limits for bodily injury and 100% of plaintiff's property damage; (2) plaintiff had priority in settling with the tortfeasor's insurer; and (3) if Dairyland had not proceeded on its subrogation claim, plaintiff would have had no access to additional funds from the tortfeasor's insurer. The court also concluded that Dairyland did not act in bad faith. Accordingly, the court reversed the court of appeals decision in all respects. View "Dufour v. Progressive Classic Ins. Co." on Justia Law

In August 2005, D.R. Horton, Inc. completed construction of the Smiths' home, and the Smiths closed on the property and received the deed. Thereafter, the Smiths experienced a myriad of problems with the home that resulted in severe water damage to the property. D.R. Horton attempted to repair the alleged construction defects on "numerous occasions" during the next five years, but was ultimately unsuccessful. In 2010, the Smiths filed a construction defect case against D.R. Horton and seven subcontractors. In response, D.R. Horton filed a motion to compel arbitration. The Smiths opposed the motion, arguing, inter alia, that the arbitration agreement was unconscionable and therefore unenforceable. The circuit court denied D.R. Horton's motion to compel arbitration, finding that the arbitration agreement was unconscionable. D.R. Horton appealed, but finding no error in the circuit court's decision, the South Carolina Supreme Court affirmed. View "Smith v. D.R. Horton, Inc" on Justia Law

Caudill, the owner of a real estate brokerage, sued Keller Williams for breach of a 2001 franchise contract. Caudill's position as Regional Director of Keller Williams was terminated in 2010; her franchise was terminated in 2011. The suit settled with an agreement including a prohibition against disclosure of its terms, except to tax professionals, insurance carriers, and government agencies; those recipients had to promise to keep them in confidence. Any violation entitled the victim to damages of $10,000. Months later, Keller Williams issued an FDD (Franchise Disclosure Document) to about 2000 existing or potential franchisees and other parties, describing Caudill’s lawsuit in detail. The FDD was not required by the Federal Trade Commission under 16 C.F.R. 436.2(a). Caudill sought $20 million (2000 x $10,000) in damages. The district judge rejected her claim, noting that under Texas law a liquidated damages clause is enforceable only if “the harm caused by the breach is incapable or difficult of estimation and … the [specified] amount of liquidated damages is a reasonable forecast of just compensation.” The Seventh Circuit affirmed. It is unreasonable to suppose, without evidence, that the dissemination of the FDD caused Caudill a $20 million loss. Although the burden of proving that a liquidated damages clause is actually a penalty clause is on the defendant, Keller Williams established that there was no basis for the requested damages. View "Caudill v. Keller Williams Realty, Inc." on Justia Law

After Ozark was sold to Mobilex, Mobilex filed suit against defendant to enforce the non-compete and confidentiality agreements defendants had signed with Ozark. The district court granted summary judgment to defendants on the basis that a personal services contract cannot be assigned to a subsequent employer under Missouri law without the employee’s contemporaneous consent. The court adopted the majority rule and held that covenants not to compete can be assigned to a successor employer without contemporaneous consent. In this case, the non-compete agreements precluded only working in the field of medical diagnostics or soliciting business from certain clients within a specified geographical area. A reasonable jury, looking at the facts in the record, could find that defendants did not agree to the non-compete and confidentiality agreements because of Ozark’s unique characteristics. Because the court found that the non-compete and confidentiality agreements at issue here were not personal services contracts and could be assigned without the consent of defendants, the court reversed and remanded for further proceedings. View "Symphony Diagnostic Serv. v. Greenbaum" on Justia Law

Under Ohio Rev. Code 1333.85, suppliers manufacture or import alcoholic beverages and must sell their products to state-licensed distributors, who sell to retailers; supplier-distributor franchise agreements are protected from termination without just cause, except when a successor manufacturer acquires another manufacturer, the successor may terminate the franchise by repurchasing the distributor’s inventory and compensating for the diminished value of the distributor’s business that is directly related to the sale of the product terminated. NAB owned Labatt through nested holding companies. NAB's owners sold their interests to CCR. Months later, Ohio distributors of the Labatt brands received letters terminating their franchises, citing the section 1333.85(D) exception. In the distributors' suit, the court granted CCR summary judgment on a Takings Clause claim and a claim regarding the scope of section 1333.85(D), then determined the diminution of the values of the distributors. The Sixth Circuit affirmed rejection of the constitutional claims. At common law, businesses may enter into contracts that allow for termination and contracting parties have a right to breach a contract that is no longer advantageous, in an “efficient breach.” That common-law norm is abrogated by section 1333.85, with an exception. The state created and is free to take away that protection from termination. The court remanded the calculation of damages with instructions to deduct the distributors' projected profits for the time until the date when the franchise agreements are finally terminated View "Tri County Wholesale Distrib., Inc. v. Labatt USA Operating Co." on Justia Law

After seeking a mortgage modification under the Home Affordable Modification Program Plaintiff filed a complaint against Wells Fargo Bank, N.A. and Homeward Residential Inc., claiming breach of contract, unfair debt collection under Mass. Gen. Laws ch. 93A, and derivative equitable relief. A federal district court dismissed Plaintiff’s action in its entirety. The First Circuit vacated and remanded, holding that Plaintiff’s complaint sufficiently alleged that Defendants failed to offer her a mortgage modification in a timely manner and that Plaintiff had sufficiently pled damages for her Chapter 93A claim. On remand, the district court granted summary judgment in favor of Defendants. The First Circuit affirmed, holding that Plaintiff’s breach of contract and Chapter 93A claims failed, and therefore, her derivative claim for equitable relief failed as well. View "Young v. Wells Fargo Bank, N.A." on Justia Law

RSL Funding, LLC had arbitration agreements with three individuals (collectively, Individuals) who owned annuity contracts they agreed to sell to RSL or its designee. Neither RSL nor the Individuals had arbitration agreements with the companies that wrote the annuity contracts (collectively, MetLife). After MetLife refused to honor contracts by which the Individuals sold their annuities, RSL sued MetLife and the Individuals in the County Court at Law (CCL) for a declaratory judgment. A district court suit was also initiated involving the same parties and subject matter. The Individuals initially joined forces with RSL but disputes subsequently arose. RSL initiated arbitration with the Individuals and moved to stay the CCL suit pending completion of arbitration. The CCL denied the motion. The court of appeals affirmed, concluding that RSL waived its right to arbitrate through its litigation conduct in the trial courts. The First Circuit affirmed but on different grounds, holding (1) the court of appeals erred by determining that RSL waived its right to arbitrate by litigation conduct; but (2) RSL did not challenge a separate ground on which the trial court court have denied RSL’s motion to stay the litigation - that RSL failed to join its assignees in the arbitration. View "RSL Funding, LLC v. Pippins" on Justia Law

Popescu sued Apple for damages after he was fired by his employer, Constellium. He alleged that Apple took affirmative steps to convince Constellium to terminate him in retaliation for his resistance to Apple’s alleged illegal anti-competitive conduct. The court dismissed. The court of appeal reversed with respect to claims for intentional interference with contractual relations and for intentional interference with prospective economic advantage. An employee whose at-will employment contract is terminated as a result of a third party’s interference need not allege that the defendant’s conduct was independently wrongful to state a contract interference claim. Popescu was not required to allege that he was directly harmed by an independently wrongful act so long as he alleged (as he did) that Apple’s wrongful act interfered with his economic relationship with Constellium. View "Popescu v. Apple Inc." on Justia Law

Appellants, the owners of a tract of land in the Riva Ridge subdivision, submitted their plans to build a home and writer’s studio to the Riva Ridge Owners Association’s Site Committee. The Site Committee rejected the plans on the basis that some of Appellants’ home would be visible from some locations in other homes. Appellants filed a complaint against the Association and others (collectively, Appellees) alleging several causes of action. Appellants filed a separate complaint requesting a determination of the term “principal residence site” in the covenants. The district court granted summary judgment for Appellees on several issues. After a trial, the district court interpreted the phrase “principal residence site” in a way that required complete invisibility between the homes in the subdivision. The Supreme Court affirmed in part and reversed and remanded in part, holding that the district court (1) erred in its interpretation of the phrase “principal residence,” as the covenants only require that a principal residence be invisible only from a precise area of land on each tract; (2) erred in granting summary judgment on Appellants’ breach of contract and bad faith claims; and (3) properly determined that Appellants must seek permission from the Site Committee before planting any trees on their tract. View "Felix Felicis, LLC v. Riva Ridge Owners Ass’n" on Justia Law