Justia Contracts Opinion Summaries

At issue in this case were the attorney's fees earned in a wrongful death civil litigation settlement, and two law firms' dispute over who was entitled to how much. Richard Eazor was killed and Lynn Sharp was injured in a single automobile accident in Clearfield County. Eazor’s estate and Sharp sued each other, with Sharp contending that Eazor drove the vehicle when the accident occurred and Eazor’s estate alleging that Sharp was the driver. Progressive Insurance Company, the liability carrier for Sharp, retained counsel to represent both parties as defendants in the respective actions, while Sentry Insurance, the carrier for Eazor, remained potentially liable for underinsured motorists’ coverage payable to the person deemed to be the passenger in the vehicle. Attorney William Weiler, Jr., entered his appearance on behalf of the Eazor estate. Later that year, Weiler became associated with the law firm of Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C., (“Meyer Darragh”). Attorney Scott Millhouse of Meyer Darragh subsequently became primarily responsible for the case and drafted a proposed settlement agreement, which was sent to all counsel, but was never signed. Shortly thereafter, Weiler resigned from Meyer Darragh. Upon his departure, he agreed that Meyer Darragh would receive two-thirds of the attorney’s fees arising from the Eazor estate litigation, and that he would retain one-third of the fees. Weiler subsequently became affiliated with the law firm of Malone Middleman, P.C. (“Malone Middleman”). The Eazor estate decided to discharge Meyer Darragh and seek representation from Weiler and Malone Middleman. Malone Middleman took over the case and entered into a contingency fee agreement with the estate, providing that the firm would represent the estate in exchange for one-third of the proceeds of any settlement reached before suit was filed. The contingent fee agreement did not address the payment of attorney’s fees to Meyer Darragh. Further, Malone Middleman did not agree in writing or otherwise to protect the fee purportedly earned by Meyer Darragh. The Pennsylvania Supreme Court granted allocatur to examine the propriety of the Superior Court’s holding that a Meyer Darragh was entitled to breach of contract damages against Malone Middleman. The Supreme Court reversed, holding that under the specific facts presented here, any recovery that may have been due to Meyer Darragh would lie in quantum meruit, and not breach of contract. As such, the Court reversed and remanded. View "Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C. v. Malone Middleman, P.C." on Justia Law

Stresscon Corporation, a subcontracting concrete company, filed suit against Travelers Property Casualty Company of America, alleging, among other things, that Travelers acted in bad faith, unreasonably delaying or denying its claim for covered insurance benefits; and Stresscon sought awards of two times the covered benefits along with fees and costs, as prescribed by statute. Stresscon’s claims for relief arose from a 2007 serious construction accident which was caused by a crane operator employed by a company that was itself a subcontractor of Stresscon. Stresscon’s general contractor, Mortenson, sought damages from Stresscon, asserting Stresson’s contractual liability for the resulting construction delays, and Stresscon in turn sought indemnification from Travelers. Travelers petitioned for review of the court of appeals’ judgment affirming the district court’s denial of its motion for directed verdict in a lawsuit brought by its insured, Stresscon. Much as the district court had done, the appellate court rejected Travelers’ contention that the no-voluntary-payments clause of their insurance contract relieved it of any obligation to indemnify Stresscon for payments Stresscon had made without its consent. Instead, the court of appeals found that the Colorado Supreme Court's opinion in "Friedland v. Travelers Indemnity Co.," (105 P.3d 639 (2005)) had effectively overruled the Court's prior “no voluntary payments” jurisprudence to the contrary and given Stresscon a similar opportunity. The Supreme Court reversed, finding that its adoption of a notice-prejudice rule in "Friedland" did not overrule any existing “no voluntary payments” jurisprudence. The Court declined to extend a notice-prejudice reasoning to Stresscon’s voluntary payments, made in the face of the no-voluntary-payments clause of its insurance contract with Travelers. View "Travelers Prop. Cas. Co. v. Stresscon Co." on Justia Law

Plaintiff appealed the trial court's grant of summary judgment in favor of James Cameron and Lightstorm Entertainment, Inc. on claims that defendants fraudulently expressed interest in developing plaintiff’s science fiction story KRZ and used parts of that story in Cameron’s 2009 film Avatar. Avatar is a science fiction film set in the future on Pandora, a moon of a fictional gas giant planet, occupied by an indigenous species of humanoids called Na’vi and by humans affiliated with the Resources Development Administration, and its “Sec-Ops” security force. KRZ takes place in the future mostly on Europa, an ice-covered moon of Jupiter. KRZ tells the story of a corporate assassin who works for the Malloc super-corporation, which harvests organisms from ocean vents beneath Europa’s icy surface. To do so, the corporation uses humans as well as organic-bionic hybrid robots called “KRY’s,” which have “Y’s” on their foreheads and “limitation chips” that block emotions and free will. KRZ is a robot with a smaller limitation chip than KRY’s and is self-aware and self-motivated. The court concluded that plaintiff's contract and fiduciary duty claims failed because there was no similarity between the projects as a matter of law; plaintiff's fraud claims fail because he has not offered evidence raising a triable issue of material fact; and plaintiff's appeal of the trial court's denial of his motion for discovery sanctions is moot. Accordingly, the court affirmed the judgment. View "Ryder v. Lightstorm Enter." on Justia Law

Plaintiff a former SMU student, filed suit against the university, alleging nineteen causes of action stemming from his dismissal as a community advisor (CA). The only claim at issue on appeal, whether SMU breached a duty of good faith and fair dealing, was dismissed by the district court for failure to state a claim. The court agreed with the district court that plaintiff had not alleged facts that, taken as true, would give rise to the type of special relationship that creates a duty of good faith and fair dealing under Texas law; even assuming arguendo that the student-university relationship could possibly give rise to a duty of good faith and fair dealing, plaintiff’s allegations are not sufficient to show that such a relationship existed; none of plaintiff's theories demonstrate that his purported special relationship with SMU administrators existed before and independently of the immediate circumstances of the course of events that led to his dismissal as a CA; and plaintiff’s claims demonstrate at most the sort of unilateral, purely subjective sense of trust that Texas courts have determined is insufficient to convert an ordinary arm’s-length relationship into a special or confidential relationship. Accordingly, the court affirmed the judgment. View "Hux v. Southern Methodist Univ." on Justia Law

When the main Youngstown-area crushed-stone supplier discontinued production, RGI, a Sandusky quarry, approached Hardrives, Sabatine's asphalt paving company, to discuss jointly establishing a large RGI distribution center and Hardrives production plant. In 1998, RGI’s representatives and Sabatine produced a draft agreement, with contingencies, such as the minimum amount of stone Hardrives was to buy, low-cost railroad transportation, and government incentives; it stated that it was subject to RGI senior management approval. Sabatine was unable to convince Norfolk Railroad to establish access and enlisted Congressman Traficant’s help.Unbeknownst to RGI, Sabatine paid Traficant a $2,400 bribe and was later indicted. Ultimately, the parties arrived at an acceptable rail rate and selected a Youngstown site. Hardrives began bidding on larger projects and purchasing new equipment. All the agreed contingencies were fulfilled, except RGI had arguably not given explicit senior management approval. Sabatine called RGI about ordering a $1.5 million asphalt plant for the site. According to Sabatine, RGI gave him the go ahead. Sabatine purchased the plant. Two months later RGI told Hardrives that it would no longer participate in the joint venture. Hardrives began losing money, and by 2001, became Cranmark and sold to McCourt. In 2004, Cranpark sued, alleging breach of contract and promissory estoppel. In 2010, the court granted RGI summary judgment, based on the limitations period, and holding RGI’s representations were not unambiguous promises. On remand, RGI argued that Cranpark was not the “proper party” because it had sold everything, including the right to bring the cause of action, to McCourt. The court denied the motion. A jury awarded $15.6 million, but the court then held that Cranmark lacked standing. The Sixth Circuit reversed, stating that the court failed to timely call the proof-of-standing issue to counsel’s attention, once RGI finally squarely presented the issue. View "Cranpark, Inc. v. Rogers Group, Inc." on Justia Law

Defendant CarMax Auto Superstores California LLC (CarMax) advertised and sold cars as "certified" used vehicles. It sold a 2008 used Jeep Wrangler to plaintiff Jessica Brooks. CarMax had promoted the Jeep as a certified used vehicle, inspected the Jeep, made some repairs, and ultimately placed a signed "Certified Quality Inspection" document (the CQI Certificate) for the Jeep in the Jeep's glove box. The CQI Certificate remained in the glove box at all relevant times. Several months after Brooks purchased the Jeep, she drove it through a deep puddle and the engine was so severely damaged that it had to be replaced. She thereafter demanded (among other things) that CarMax rescind the purchase agreement and buy the Jeep back. When CarMax rejected her demands, she filed this action alleging it violated Vehicle Code section 11713.18, because neither the content of the CQI Certificate nor its method of delivery to her complied with CarMax's duties under section 11713.18. Brooks pleaded claims against CarMax under California's Consumer's Legal Remedies Act and Unfair Competition Law. The trial court ruled Brooks had suffered no damage from CarMax's alleged violations of section 11713.18, and therefore concluded she did not have standing to pursue claims under the CLRA or the UCL. Brooks argued on appeal to the Court of Appeal that reversal was warranted because she adequately demonstrated the type of damage necessary to prosecute a claim under the CLRA or the UCL or, alternatively, she was entitled to prosecute her claims under the CLRA or the UCL without showing any injury. Finding no reversible error, the Court of Appeal affirmed the trial court. View "Brooks v. CarMax Auto Superstores" on Justia Law

In 2010, JSR Mechanical (JSR) filed a complaint against Aireco Supply alleging breach of contract and negligence. Aireco filed an answer, but there were no further pleadings filed for the next four years. In 2014, under the authority of Va. Code 8.01-335(B), the circuit court entered a final order stating that the case was discontinued and stricken from the docket. In 2015, JSR filed a motion to reinstate the case. The circuit court denied the motion, concluding that just cause and sufficient grounds did not exist for granting Plaintiff’s motion. The Supreme Court reversed, holding that, once a plaintiff has complied with the timeliness and notice requirements of Va. Code 8.01-335(B), the circuit court does not have discretion to deny a procedural motion to reinstate a case that has been discontinued or dismissed pursuant to the statute based on lack of “good cause” or “just cause.” Remanded. View "JSR Mechanical, Inc. v. Aireco Supply, Inc." on Justia Law

Grupo Famsa, S.A. de C.V. (Grupo), a Mexican company, agreed to guarantee a commercial lease entered into between Famsa, Inc. (Famsa) and Uno LLC (Uno). When Famsa failed to comply with the terms of the lease, Uno filed a complaint against Famsa and Grupo for breach of the commercial lease and guaranty. Uno served Grupo through the procedures outlined in the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Convention). The Mexican Central Authority issued a certificate of proof of international service of process upon Grupo. Grupo filed a motion to quash service of process, arguing that service of process was constitutionally deficient. The district court denied Grupo’s motion to quash. Grupo subsequently petitioned the Supreme Court for a writ of prohibition seeking to prohibit the district court from exercising jurisdiction over Grupo. The Supreme Court granted the petition in part, holding (1) service of process on a foreign company pursuant to the Hague Convention does not satisfy constitutional due process when service depends solely upon a certificate of compliance issued by the foreign nation’s central authority; and (2) the district court failed to conduct the necessary fact-finding to determine whether service was constitutionally sufficient in this case. View "Grupo Famsa, S.A. de C.V. v. Eighth Judicial Dist. Court" on Justia Law

This case stemmed from a number of disputes that arose after the defendant corporation, Nuzzo Campion Stone Enterprises, Inc. (NCS), was purchased by its present owner. Plaintiff James Nuzzo alleged that he was owed $133,816 in unpaid commissions on orders that had been placed prior to his termination but not actually paid for by customers of NCS until after his termination. NCS filed a counterclaim for breach of contract, alleging that Plaintiff failed to indemnify NCS for certain amounts covered by the terms of an Asset Purchase Agreement signed by the parties. The trial justice concluded that Plaintiff was not entitled to the disputed commissions and that NCS was due nearly $17,000 for both “work in progress” and warranty work pursuant to the Agreement. The Supreme Court affirmed, holding (1) the trial justice did not err in determining that Plaintiff was not entitled to commissions for orders that had been placed, but not actually paid for, prior to Plaintiff’s termination; and (2) the trial justice did not make “fundamental mistakes regarding the contract and damages” relating to the counterclaim. View "Nuzzo v. Nuzzo Campion Stone Enters., Inc." on Justia Law

In the late 1990s, Robert James, acting on behalf of the Robert and Ardis James Foundation, agreed to advance more than $650,000 to Daniel Meyers to purchase shares of stock in a fledgling, privately held company that Meyers had cofounded in exchange for a portion of the proceeds of an eventual sale of those shares. The agreement did not discuss the timing of sale. Beginning in 2004, the foundation sought to bring the agreements to a close, but Meyers did not comply. In 2006, the foundation filed a complaint against Meyers seeking specific performance and damages. The superior court concluded that Meyers had committed a breach of the implied covenant of good faith and fair dealing and awarded damages based on a date of breach of July 31, 2006. The Supreme Judicial Court affirmed, holding that the trial court correctly found that Meyers committed a breach of the implied covenant and did not err in setting the date of breach at July 31, 2006. View "Robert & Ardis James Found. v. Meyers" on Justia Law