Justia Contracts Opinion Summaries

After Tenant moved into her apartment, her apartment and several adjoining units were severely damaged in a fire that originated in Tenant’s clothes dryer. Insurer paid Landlord’s insurance claim and then sued Tenant for negligence and breach of the Apartment Lease Contract. The jury found that Tenant breached the lease agreement and awarded $93,498 in actual damages and attorney’s fees from Insurer. Tenant filed a motion for judgment notwithstanding the verdict, asserting several grounds for avoiding enforcement of the contract. The trial court granted Tenant’s motion and rendered a take-nothing judgment. The court of appeals affirmed, concluding that the residential-lease provision imposing liability on Tenant for property losses resulting from “any other cause not due to [the landlord’s] negligence or fault” was void and unenforceable because it broadly and unambiguously shifted liability for repairs beyond legislatively authorized bounds. The Supreme Court affirmed in part and reversed in part, holding (1) the court of appeals properly rejected Tenant’s ambiguity defense; but (2) the court of appeals erred in invalidating the lease provision on public-policy grounds. Remanded. View "Philadelphia Indem. Ins. Co. v. White" on Justia Law

This appeal grew out of a conflict between the business models of Sprint Nextel Corporation and The Middle Man, Inc. Middle Man bought mobile telephones, including Sprint’s, and tries to resell them at a profit. Sprint brought a breach of contract lawsuit against Middle Man, and Middle Man counterclaimed seeking a declaration that its business model did not violate the contract that accompanied the purchase of Sprint telephones. The district court held as a matter of law that the contract unambiguously prohibited Middle Man from selling new mobile telephones purchased from Sprint regardless of whether they were active on Sprint’s network. In light of this holding, the district court: (1) granted judgment on the pleadings to Sprint on Middle Man’s counterclaim for a declaratory judgment; and (2) granted summary judgment to Sprint on its breach of contract claim, awarding Sprint nominal damages of $1. Middle Man appealed, contending that the entry of judgment on Sprint’s claim and Middle Man’s counterclaim was made in error and that the district court should have awarded judgment to Middle Man on both claims. The Tenth Circuit, after review of the contract at issue here, determined parts were ambiguous, and that the district court erred in ruling as a matter of law that it was not. As such, Sprint was not entitled to judgment on the pleadings or summary judgment. The district court's judgment was vacated and the matter remanded for further proceedings. View "Sprint Nextel Corp. v. Middle Man" on Justia Law

Alco, a vending machine company, contracted with B2B, a “fax broadcaster,” in 2005, and dealt with B2B and Macaw, a Romanian business, that worked with B2B. Each sample advertisement provided by B2B stated that the message was “the exclusive property of Macaw . . . , which is solely responsible for its contents and destinations.” According to Alco, B2B was to identify recipients from a list of businesses that had consented to receive fax advertising from B2B. Alco never saw this list, but believed that each business would be located near Alco’s Ohio headquarters, and had an existing relationship with B2B, so that the advertising would be “100 percent legal.” B2B broadcast several thousand faxes, advertising Alco. According to Alco, B2B did not inform Alco about the number of faxes, the dates on which they were sent, or the specific businesses to which they were addressed. After each broadcast, Alco received complaints of unauthorized faxes in violation of the Telephone Consumer Protection Act 47 U.S.C. 227(b)(1)(C), which it referred to B2B. Siding filed a purported class action against Alco. The district court rejected the suit on summary judgment. The Sixth Circuit reversed and remanded for determination of whether B2B broadcast the faxes “on behalf of” Alco, considering the degree of control that Alco exercised, whether Alco approved the final content, and the contractual relationship. View "Siding and Insulation Co. v. Alco Vending, Inc." on Justia Law

The National Labor Relations Board determined that Polycon had violated the National Labor Relations Act, 29 U.S.C. 158(a)(1), (5), by refusing to sign a collective bargaining agreement after agreeing to its terms because employees of Polycon were circulating a petition to decertify the union as their collective bargaining representative. The Seventh Circuit enforced its order, directing Polycon to sign the agreement and comply with its terms until it expires. The decertification petition may have been signed by a majority of the employees as early as May 9, and by May 22 clearly commanded a majority, but either date was too late for Polycon to repudiate a collective bargaining agreement to which the company had agreed on May 3. Polycon’s challenge bordered on the frivolous. Polycon could have asked for correction of any material mistakes before signing the contract but could not refuse to review and sign it because of the mere possibility that it contained a mistake. View "Polycon Indus., Inc. v. Nat'l Labor Relations Bd." on Justia Law

This was Defendants’ fourth appeal from a lawsuit in which Plaintiff obtained a $23 million judgment based on an an indemnification clause in an agreement. Plaintiff sought to secure payment on that judgment by bringing suit against Defendants. Defendants then began a series of attempts to evade payment to Plaintiff and to elude the power of the courts. As relevant to this appeal, Defendants violated a preliminary injunction, resulting in a civil contempt order entered by the district court. The contempt order included an escalating fines provision. The First Circuit affirmed the contempt order and remanded with directions to amend the sanction order so that the fines cease to accrue at some total amount. Defendants appealed the revised contempt order issued by the district court, arguing that the underlying preliminary injunction expired by its own terms so the district court could no longer coerce compliance with it. Defendants failed to raise this argument at any time prior to the present appeal. The First Circuit denied the appeal, holding that Defendants’ belated challenge was implicitly foreclosed by the Court’s prior decisions. View "AngioDynamics, Inc. v. Biolitec AG" on Justia Law

Plaintiff filed a complaint against Defendants alleging breach of fiduciary duty resulting from oppressive conduct, breach of fiduciary duty resulting from self-dealing, fraud in the inducement, and negligent misrepresentation. During trial, Plaintiff produced 155 pages of documents that had not been produced to Defendants during discovery. Defendants argued that they were denied a fair trial because the information contained in the documents would have permitted them to properly cross-examine Plaintiff. The district court dismissed the case with prejudice pursuant to Sup. Ct. R. Civ. P. 37(b) as a sanction for the mid-trial production of documents. The court subsequently denied Plaintiff’s motion to vacate the order of dismissal under Sup. Ct. R. Civ. P. 60(b). The Supreme Court affirmed, holding (1) the trial justice did not err in dismissing Plaintiff’s claim with prejudice pursuant to Rule 37; and (2) the trial justice did not abuse his discretion in denying Rule 60(b) relief. View "Joachim v. Straight Line Prods., LLC" on Justia Law

From 2005-2009, Assaf was medical director for Trinitiy's epilepsy clinic. Trinity terminated his employment; Assaf filed suit. The parties entered into a settlement agreement in 2010,under which Assaf would be employed by Trinity from 2009 until at least 2011 as Director of the Neuroscience Program. The position never materialized. Assaf obtained summary judgment on his claim for breach of that settlement agreement. Assaf sought lost salary for the years in which he was to have been employed under the agreement, and lost professional fees during that time. The court rejected the claim for lost professional fees ,holding that Assaf failed to provide an adequate estimate of the loss, then entered judgment without trial awarding Assaf his salary for 2009-2011 and compensatory damages totaling $172,759 plus $15,000 in attorneys’ fees. The Seventh Circuit reversed with respect to professional fees. On remand, Assaf sought to establish that his professional fees from EEG video monitoring and follow‐up of epilepsy patients decreased as a result of Trinity’s failure to rehire him. The court used a verdict form asking the jury “Did Dr. Assaf prove that he sustained damages as explained in these instructions.“ The jury responded “No.” Judgment was entered for Trinity. The Seventh Circuit affirmed. Assaf had no valid claim to damages for lost professional fees, so any errors were harmless. View "Assaf v. Trinity Med. Ctr." on Justia Law

Dual‐Temp installs refrigeration systems. A crucial component of such systems is the refrigeration control system (RCS), which regulates temperature, humidity, and ammonia levels and controls compressors and condensers. The RCS must maintain communication with the rest of the system to function properly. In 2006, Home Run Inn expanded its pizza manufacturing facility. Its general contractor, Milord, subcontracted with Dual‐Temp to update Home Run’s refrigeration system. Dual‐Temp solicited bids to design an RCS for the system and accepted Hench’s bid. The Hench RCS components were shipped to Dual‐Temp and installed by Dual‐Temp’s affiliate, Spur Electric. Problems began immediately. In April 2008, Milord demanded that Dual‐Temp replace the Hench RCS. Dual‐Temp paid Select $113,500 to remove the Hench RCS and to design, build, and install a replacement RCS; the new Select RCS has been operating and communicating properly since installation. Dual‐Temp filed suit, relying on circumstantial evidence that defendants supplied a defective RCS. The Seventh Circuit affirmed an award of damages and attorneys’ fees to Dual-Temp. Even if the Hench RCS operated properly for some time after startup, there was sufficient circumstantial evidence for a reasonable factfinder to conclude that the communication failures were caused by a defect in the Hench RCS. View "Dual-Temp of Ill., Inc. v. Hench Control, Inc." on Justia Law

CIT, a large finance company, leased credit‐card processing machines to businesses and individuals. The leases describe themselves as business rather than consumer contracts and contain a forum‐selection clause that requires any disputes to be litigated in Cook County, Illinois and governed by Illinois law. Each lease also required a personal guaranty, by the lessee, an agent of the lessee, or someone else. The leases were ultimately assigned to Pushpin, which filed suits in small‐claims courts in Cook County against more than 3000 of the guarantors of defaulted leases. The guarantors filed a class-action, claiming that in invoking the forum‐selection clause Pushpin hoped to induce default judgments, in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, and related torts. After remands, the district court accepted jurisdiction under the Class Action Fairness Act, 28 U.S.C. 1453(b), and dismissed on the merits. The Seventh Circuit affirmed: Any forum‐selection clause will be an inconvenience to a nonresident signer of the contract, so that the challenge amounted to urging a blanket prohibition of such clauses. View "Johnson v. Pushpin Holdings, LLC" on Justia Law

The Navy's Diego Garcia facility, a 10.5-square-acre Indian Ocean atoll, 1,800 miles east of Africa and 1,200 miles south of India, had no commercial or civilian infrastructure. In 2005, the Navy sought bids on a firm fixed-price contract for Diego Garcia support services, ranging from information technology to refuse collection. For contractor vehicles and equipment, “contractor-furnished fuel,” was to be provided by the Navy at the prevailing Department of Defense rate. DG21 submitted a bid and, for contractor-furnished fuel, arrived at “a significantly lower number of gallons than” reflected in the solicitation. DG21 indicated that if fuel rates varied from historical rates by 10% or more, it would request an equitable adjustment. The Navy clarified that the solicitation was fixed-price, “DG21 assumes the full risk of consumption and/or rate changes. Please price ... accordingly.” The Navy questioned the lack of an escalation clause. DG21 did not change its estimate or pricing, but removed the equitable adjustment reference. DG21’s $455,292,490 proposal was accepted. During the contract term, fuel prices rose dramatically, reaching a maximum of more than double the historical rate indicated in the solicitation. In 2011, DG21 requested an equitable adjustment, characterizing the fuel cost as a $1,171,475.90 contract “change” under FAR 52.243-4. The contracting officer and the Board of Contract Appeals rejected the request. The Federal Circuit affirmed. The cost increase was not a change to the contract triggering FAR 52.243-4; the contract allocated that risk to DG21. View "DG21, LLC v. Mabus" on Justia Law