Justia Contracts Opinion Summaries

In 2010, Bail Bonds and Hamza jointly and severally secured a $75,000 appearance bond on behalf of Mohammed-Ali, an Ethiopian national (Hamza’s cousin), charged with smuggling a controlled substance, (khat), into the U.S., 18 U.S.C. 545. One condition of the sureties’ obligation was that Mohammed-Ali “comply with all conditions of release imposed by this court,” which included that he wear a GPS ankle bracelet. But 15 months later—at Mohammed-Ali’s request and without objection from the government—the court entered an order allowing him to remove the ankle bracelet. Neither counsel nor the court provided the sureties with notice of the motion or of the order. Mohammed-Ali fled to Ethiopia. The government sought judgment against the sureties. The district court granted the government summary judgment, reasoning that Bonds had constructive notice of the motion because it could have accessed the docket for Mohammed-Ali’s case, using the court’s electronic-filing system. The Sixth Circuit reversed. The risk the sureties agreed to accept was that Mohammed-Ali might flee notwithstanding his conditions of release, which included the ankle bracelet. That risk included the possibility that Mohammed-Ali might saw off bracelet and then flee. What the sureties did not accept was that the court would remove the bracelet for him. The purported “notice” was inadequate. View "United States v. Mohammed-Ali" on Justia Law

Between 2002-2006, Lucht purchased treated lumber for a deck on his vacation home in the Virgin Islands. The lumber allegedly decayed prematurely and he began replacing boards in 2010; he claims he did not discover the severity of the problem until the fall of 2011. Lucht sued the retailer, wholesaler, and treatment company of the lumber in February 2013, alleging a Uniform Commercial Code contract claim; a common law contract claim; a breach of warranty claim; a negligence claim; a strict liability claim; and a deceptive trade practices claim under the Virgin Islands Deceptive Trade Practices Act. The district court rejected the claims as time-barred. The Third Circuit affirmed, citing the “‘gist of the action doctrine,” which bars plaintiffs from bringing a tort claim that merely replicates a claim for breach of an underlying contract. View "MRL Dev. I, LLC v. Whitecap Inv. Corp" on Justia Law

Attorney Fleisher worked for two affiliated law firms. In 2013 Fleisher filed a written demand with the firms, claiming that when he retired, in 2011, he had accrued more than 90 weeks of unused vacation time and more than 322 days of unused sick leave, and that the firms were required by contract and by the Illinois Wage Payment and Collection Act, to pay him for those accruals. He estimated that he was owed about $950,000. The defendants sent a copy of Fleisher’s complaint to Hartford, seeking coverage under the “Employee Benefits Liability Provision” of their Business Owners Policy. It took five months for Hartford to reply that the matter was under consideration. Two months later Hartford denied coverage and sought a declaration that the insurance policy did not cover Fleisher’s claim, alleging that the failure to pay Fleisher was not the result of any negligent act, error, or omission in the administration of the employee benefits program, which was all that the policy covered. The district judge ruled that Hartford had no duty to defend under Illinois law and granted summary judgment. The Seventh Circuit affirmed, holding that delay was not a valid ground for estopping Hartford to deny coverage or a duty to defend. View "Hartford Cas. Ins. Co v. Karlin, Fleisher & Falkenberg" on Justia Law

Montgomery bought a Tassimo, a single-cup coffee brewer manufactured by Kraft Foods, expecting it to brew Starbucks coffee. After the purchase she struggled to find Starbucks T-Discs—single-cup coffee pods compatible with the brewer. The Starbucks T-Disc supply eventually disappeared as Kraft’s business relationship with Starbucks soured. Montgomery sued Kraft and Starbucks on behalf of a class for violations of various Michigan laws. After dismissing several claims and denying class certification on the rest, the district court entered judgment in Montgomery’s favor when she accepted defendants’ joint offer of judgment under FRCP 68. Montgomery appealed the dismissal of her breach of express and implied warranty claims, the denial of class certification on her consumer-protection claims, and the attorney’s fees awarded as part of the Rule 68 settlement (about 3% of what she had requested). The Sixth Circuit affirmed, noting that Montgomery did not purchase the item directly from defendants, for purposes of express warranty, and did not allege that the coffee maker was unfit for its ordinary purpose. View "Montgomery v. Kraft Foods Global, Inc." on Justia Law

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