Justia Contracts Opinion Summaries

Brian Beck, Audrey Mahoney, David and Felice Oppenheim, Patty Brown, and others brought an action in the Oakland Circuit Court against Park West Galleries, Inc., and others, alleging, inter alia, breach of contract and fraud. Defendant Park West Galleries, Inc. (Park West) sold art on various cruise ships traversing international waters. Plaintiffs purchased art from Park West on multiple occasions over the course of several years while on different cruise ships in different locations. The issue this case presented for the Michigan Supreme Court's review centered on whether an arbitration clause included in invoices for plaintiffs’ artwork purchases applied to disputes arising from plaintiffs’ previous artwork purchases when the invoices for the previous purchases did not refer to arbitration. The Court agreed with plaintiffs that the arbitration clause contained in the later invoices could not be applied to disputes arising from prior sales with invoices that did not contain the clause. Each transaction involved a separate and distinct contract, and the facts did not reasonably support a conclusion that the parties intended for the arbitration clause to retroactively apply to the previous contracts. Accordingly, the Supreme Court reversed that part of the Court of Appeals judgment that extended the arbitration clause to the parties’ prior transactions that did not refer to arbitration. The case was remanded back to the Court of Appeals for consideration of the issues raised in plaintiffs’ appeal that the Court did not address to the extent those issues relate to claims that are not subject to arbitration. In all other respects, leave to appeal was denied because the Court was not persuaded that it needed to review the remaining questions presented. View "Beck v. Park West Galleries, Inc." on Justia Law

Malin filed suit against OSA for the balance of its unpaid invoices for work, services, materials, and supplies that it had provided to OSA at the request of Con-Dive. The court affirmed the district court's denial of OSA's motion to vacate the attachment, concluding that, under Texas law, title to the bunkers at issue passed to OSA on delivery. OSA held title to the bunkers at the time of Malin's attachment, and title to property unquestionably suffices as an attachable interest under Supplemental Admiralty Rule B. Therefore, the district court had personal jurisdiction over OSA by virtue of the attachment of the bunkers on the vessel that it had chartered. The court affirmed the district court’s determination that no material issues of fact exist as to whether OSA received and ratified the invoices, including their interest and attorneys fees provisions. Thus, the court concluded that the district court committed no error in granting summary judgment for Malin. The court affirmed the judgment. View "Malin Int'l Ship Repair v. Oceanografia, S.A. de C.V." on Justia Law

Pursuant to Public Contract Code section 7107, when a project owner pays a direct contractor the amount it had previously withheld as retentions, the direct contractor must pay its subcontractors their share of the retention within seven days or face penalties. The court concluded that, in this case, the decision by the owner to stop withholding future retentions and pay full progress payments to the contractor was not equivalent to a payment by the owner of past retentions under section 7107. Accordingly, the court concluded that the subcontractor is not entitled to late payment penalties under section 7107. The court affirmed the trial court's judgment. View "Blois Construction v. FCI/Fluor/Parsons" on Justia Law

In 1998 IGF bought Continental’s crop-insurance business at a price to be determined at either side’s option by the exercise of a put or call. In 2001 Continental exercised its put option; under the contractual formula, IGF owed Continental $25.4 million. Around that same time, IGF sold its business to Acceptance for $40 million. The Symons, who controlled IGF, structured the purchase price: $16.5 million to IGF; $9 million to IGF's parent companies Symons International and Goran in exchange for noncompetition agreements; and $15 million to Granite, an affiliated Symons-controlled company, for a reinsurance treaty. Continental, still unpaid, sued for breach of contract and fraudulent transfer. The court found for Continental and pierced the corporate veil to impose liability on the controlling companies and individuals. The Seventh Circuit affirmed, finding Symons International liable for breach of the 1998 sale agreement; Symons International, Goran, Granite, and the Symons liable as transferees under the Indiana Uniform False Transfer Act; and the Symons liable under an alter-ego theory. The Symons businesses observed corporate formalities only in their most basic sense. The noncompetes only made sense as a fraudulent diversion of the purchase money, not as legitimate protection from competition. The reinsurance treaty. which was suggested bySymons and outside industry norms, was unjustified and overpriced. View "Cont'l Cas. Co. v. Symons" on Justia Law

The State and International Business Machines, Corp. (IBM) entered into a ten-year, $1.3 billion Master Services Agreement (MSA) to modernize and improve Indiana’s welfare eligibility system. The State terminated the MSA in less than three years, stating that performance issues on the part of IBM constituted a material breach of the MSA. Both parties sued each other for breach of contract. The trial court determined that the State failed to prove that IBM materially breached the MSA. The Supreme Court reversed the trial court’s finding that IBM did not materially breach the MSA, holding that, under the circumstances of this case, IBM’s collective breaches were material in light of the MSA as a whole. View "State v. Int’l Bus. Machines Corp." on Justia Law

Appellants’ homeowners insurance policy with State Farm Fire and Casualty Company provided that State Farm will be only the “actual cash value” at the time of the loss of damaged property. Appellants brought a putative class action lawsuit against State Farm, claiming that State Farm breached the terms of Appellants’ policy when it calculated the actual cash value of damaged property. Specifically, Appellants alleged that State Farm’s practice of depreciating embedded labor costs breached State Farm’s duty to indemnify the insured for the actual cash value of the damaged property. The district court certified a question regarding the issue to the Supreme Court. The Court answered that, absent specific language in the insurance policy that identifies the method of calculating actual cash value, the trier of fact may consider, among many other factors, embedded-labor-cost depreciation when such evidence logically tends to establish the actual cash value of a covered loss. View "Wilcox v. State Farm Fire & Cas. Co." on Justia Law

The apartment building in which Tenants lived was damaged by a fire. For purposes of this appeal, the parties agreed that the fire was caused by Tenants’ negligence. Landlord’s insurer paid for the repairs to the building and then brought this subrogation action against Tenants in the name of Landlord to recover the money it paid to repair the damage caused by the fire. The district court granted summary judgment in favor of Tenants, determining that the parties did not reasonably expect that Tenants would be liable for the damage they caused. The court of appeals reversed, concluding that the lease agreement clearly reflected the parties’ intention that Tenants would reimburse Landlord for any damage caused by their negligence. The Supreme Court affirmed in part and reversed in part, holding (1) under the circumstances of this case, it is reasonable that Tenants should be liable for negligence they caused to the leased premises; but (2) the parties would not reasonably have expected that Tenants would be liable for damage to other property belonging to Landlord. Remanded. View "Melrose Gates, LLC v. Moua" on Justia Law

Beverage Systems of the Carolinas, LLC (Plaintiff) entered into an asset purchase agreement with Loudine Dotoli and two companies to purchase the assets, customer lists, and inventory of the companies. The parties executed a non-competition agreement (Agreement) that contained a provision permitting the trial court to revise its temporal and geographic limits that would otherwise render the Agreement unenforceable. Loudine’s wife, Cheryl, who was not a party to the Agreement, later formed Associated Beverage Repair, LLC. Plaintiff filed a complaint against Loudine, Cheryl, and Associated Beverage, alleging against Loudine breach of the agreement not to compete and against all Defendants tortious interference with contract, tortious interference with prospective economic advantage, and unfair and deceptive practices. Defendants answered that the Agreement was unenforceable by being overly broad in geographic scope. The trial court entered summary judgment for Defendants. The Court of Appeals reversed, concluding that the trial court erred in refusing to amend the Agreement and in granting summary judgment on Plaintiff’s remaining claims. The Supreme Court reversed, holding (1) the Agreement is unenforceable at law and cannot be saved, as parties cannot contract to give a court power that it does not have; and (2) the trial court properly entered summary judgment in Defendants’ favor on Plaintiffs’ remaining claims. View "Beverage Sys. of the Carolinas, LLC v. Associated Beverage Repair, LLC" on Justia Law

Linh Duc Duong, doing business as Classy Nails, appealed after a bench trial awarded Welch Construction & Excavating, LLC, $30,825, plus interest, for the balance due on a construction contract. Welch Construction sued Duong, alleging the parties contracted for Welch Construction to remodel a vacant retail space in Kirkwood Mall into a Classy Nails salon for $92,225. Welch Construction alleged it completed the work and Duong failed to pay the balance of $30,825 due under the contract. Duong answered and counterclaimed, denying he owed an outstanding balance under the contract and alleging Welch Construction breached the contract by failing to remodel the retail space in a timely and workmanlike manner according to his specifications. Duong claimed he was entitled to a setoff against any balance owed under the contract for his damages caused by Welch Construction's failure to complete the work before Thanksgiving 2013 and failure to construct the salon according to his specifications. Duong sought lost profits and damages for repairing the work according to his specifications. After review, the Supreme Court concluded the district court did not clearly err in finding: (1) the parties did not orally contract for a specific completion date for the construction project; (2) Welch Construction did not unreasonably delay completion of the project; and (3) Duong failed to establish his damages for costs to repair and lost profits for Welch Construction's claimed failure to complete the project according to his specifications. View "Welch Construction & Excavating, LLC v. Duong" on Justia Law

An individual and a company filed a putative class action suit alleging that United Parcel Service (UPS) overcharges customers for liability coverage against loss or damage for packages with a declared value of $300 or more. The complaint alleged breach of contract; sought declaratory relief (28 U.S.C. 2201); claimed violation of 49 U.S.C. 13708(b) (regulating billing and collecting practices for motor carriers); and, in the alternative, alleged unjust enrichment. The district court dismissed, agreeing with UPS that the language of the shipping contract at issue unambiguously precluded the plaintiffs’ interpretation. The Sixth Circuit affirmed with respect to 49 U.S.C. 13708(b), but reversed the dismissal of the remaining claims. Reasonable minds could differ on the correct interpretation of UPS’s Service Guide provision; the provision is at least ambiguous, so its meaning is a question of fact that is not properly answered by the court at this early stage in the proceedings. An unjust enrichment claim—that a benefit was unjustly conferred on UPS when customers paid an extra charge on packages despite UPS’s representations that it provided a portion of this service for free—is not precluded by his breach of contract claim. View "Solo v. United Parcel Serv. Co." on Justia Law