Justia Contracts Opinion Summaries

This appeal arose from the City's contract with Ambac to provide municipal bond insurance. The City filed suit against Ambac alleging that Ambac breached an agreement to provide a credit enhancement, that there was error in the principal cause, that Ambac acted in bad faith, and that the City had detrimentally relied on Ambac’s representations and assurances regarding the value of its credit enhancement product. The district court granted Ambac's motion to dismiss. The court concluded that the district court did not err in dismissing the City's breach of contract claim because the district court properly interpreted the Policy and because the City’s argument that it created a written and oral contract with Ambac for credit enhancement is not plausible based on the facts alleged. The court also concluded that any error about what the City was purchasing when it paid Ambac in excess of six million dollars was a unilateral error by the City because of the clear language of the Policy, and any unilateral error by the City about what it was purchasing from Ambac was not reasonable or excusable. Because the City’s proffered error is unreasonable, it does not vitiate consent. Because the City has failed to establish the existence of a larger credit enhancement agreement between it and Ambac, the City’s bad faith claim concerning this purported agreement necessarily fails. Finally, the court affirmed the district court's dismissal of the City's detrimental reliance claim where the City and Ambac are sophisticated parties that engaged in arm’s length negotiations with respect to this bond offering. Accordingly, the court affirmed the judgment. View "New Orleans City v. AMBAC Assurance Corp." on Justia Law

The court originally remanded this case to the district court for additional fact-finding to establish complete diversity of citizenship between all plaintiffs and all defendants with instructions to reenter summary judgment if federal subject-matter jurisdiction could be properly established. After dismissing a nondiverse plaintiff it found was not a real party in interest to this case, the district court reentered its earlier grant of summary judgment in favor of the insurer on all claims. The court affirmed the district court's dismissal of PMI Delaware and its grant of summary judgment to Lexington. The court concluded that the district court's dismissal of PMI Delaware pursuant to FRCP 21 as a "nominal or formal party" was proper because the district court found that though PMI Delaware was a named insured on the Insurance Policy, PMI Delaware would not be entitled to any portion of a successful judgment against Lexington because PMI Florida, not PMI Delaware, was the party against whom Blue Cross had filed suit and PMI Florida, not PMI Delaware, was the only party that made a claim for coverage to Lexington. Further, PMI Delaware was not even a party to the underlying Blue Cross contract, which provided healthcare coverage only to PMI Florida’s leased employees. Further, the court affirmed the district court's holding that Lexington owed no coverage to PMI Florida. Here, the court saw no contractual ambiguity; the Insurance Policy issued by Lexington explicitly excludes the coverage sought by PMI Florida. Therefore, the district court properly granted summary judgment to Lexington on PMI Florida’s claims for breach of contract and declaratory judgment. Finally, the district court properly granted summary judgment to Lexington on its claim of negligent misrepresentation where no jury could reasonably find that Yoohoo justifiably relied on the statement at issue as an indication that there would be coverage under the policy. View "Payroll Mgmt., Inc. v. Lexington Ins. Co." on Justia Law

The underlying coverage dispute arose from the supplying of a defective ingredient for incorporation into Wisconsin Pharmacal Company (Pharmacal) probiotic supplement tablets. Pharmacal brought this action against Jeneil Biotech, Inc. and Nebraska Cultures of California, Inc. (the Insureds) and the Netherlands Insurance Company and Evanston Insurance Company (the Insurers), alleging numerous tort and contract claims. The Insurers moved for summary judgment, arguing that their respective insurance policies did not cover any damages that arose out of the causes of action against the Insureds. The circuit court granted the Insurers’ motions for summary judgment, determining that the facts of this case did not trigger the Insurers’ duties to defend. The court of appeals reversed, concluding that the policies provided coverage. The Supreme Court reversed, holding that there was no “property damage” caused by an “occurrence” in this case, and even if there were, certain exclusions in both policies applied to negate coverage. View "Wis. Pharmacal Co., LLC v. Neb. Cultures of Cal., Inc." on Justia Law

Plaintiff, a black male of African descent who had a medical degree from the University of the West Indies, was terminated from his employment with Mount Auburn Hospital while completing the first year of his residency. Plaintiff filed a ten-count complaint against the Hospital and three physicians who supervised his work, asserting employment discrimination and breach of contract, among other claims. The Appeals Court reversed as to the discrimination and breach of contract claims. The Supreme Judicial Court vacated the judgments in favor of Defendants on Plaintiff’s claims for employment discrimination and breach of contract, holding that Defendants were not entitled to summary judgment and that Plaintiff presented sufficient evidence to allow a jury to hear his claims. View "Bulwer v. Mount Auburn Hospital" on Justia Law

The underlying action in this case took place in a California court and resulted in a jury award of compensatory damages of $22.3 million in favor of Sierra Railroad Company and against Patriot Rail Company LLC. The jury also awarded punitive damages and exemplary damages in favor of Sierra. Sierra moved to amend the California judgment to add Gary Marino, the former Chairman, President and CEO of Patriot Rail, as a judgment debtor. Marino subsequently commenced this action seeking advancements of attorneys’ fees and expenses for the claims asserted against him in the post-judgment motion. The Court of Chancery granted summary judgment in favor of Marino, holding that Marino was entitled to some, but not all, of the fees and expenses that he has and will incur defending against the post-judgment motion. View "Marino v. Patriot Rail Co. LLC" on Justia Law

In 2011, Seller sold a Company to Buyer under an Agreement. The Agreement contained provisions relating to tax consequences of change-of-control payments and professional fees that would be incurred that would reduce the Company’s tax liability. Seller argued before the Court of Chancery that Buyer breached the Agreement by not paying to Seller the full value of the tax savings. The Court entered judgment in favor of Seller in the $1,557,171, together with post-judgment interest at the legal rate, holding that, according to the intent of the parties as expressed in the Agreement as well as extrinsic evidence, Buyer owes Seller the value of the tax savings. View "Cyber Holding LLC v. CyberCore Holding, Inc." on Justia Law

Plaintiff sought a preliminary injunction against Defendant to secure its information rights under a governing agreement. The Court of Chancery denied the motion, concluding that there was not a sufficient showing of risk of irreparable harm to justify interim injunction relief. Plaintiff moved for reargument or reconsideration, arguing that the Court misapplied or misapprehended the law and the facts. The Court of Chancery denied Plaintiff’s motion for reargument, holding that Plaintiff failed to demonstrate that the Court’s decision regarding irreparable harm was the product of a misapprehension of the facts or a misapplication of the law. View "AM Gen. Holdings LLC v. Renco Group, Inc." on Justia Law

Plaintiff filed suit for breach of contract, negligence, wrongful foreclosure, and violations of the Texas Deceptive Trade Practices Act (DTPA), Tex. Bus. & Com. Code 17.50(a)(1)). On appeal, plaintiff challenged the district court's dismissal of her claims, as well as her motion to join a non-diverse defendant. The court concluded that the district court's dismissal of plaintiff's breach-of-contract claim was proper because she failed to allege any facts showing her own performance and did not refute the facts in documents referred to in her complaint, central to her claims, and attached to the motion to dismiss; the dismissal of the negligence claim was proper where any damages stemming from an alleged violation of those solely contractual duties are not redressable in tort; the wrongful-foreclosure claim was properly dismissed where plaintiff never alleged that Wells Fargo disposed of the house at a “grossly inadequate selling price,” nor does she allege that Wells Fargo fraudulently chilled the bidding at the foreclosure sale; and, where plaintiff bases her DTPA claims on Wells Fargo’s failure to make automatic withdrawals to pay the loan, such services cannot form the basis of a DTPA claim because they are incidental to the loan and would serve no purpose apart from facilitating the mortgage loan. Finally, in regard to the motion to join a non-diverse defendant, the district court applied the correct legal standard and its finding of fact were not clearly erroneous. Accordingly, the court affirmed the judgment. View "Villarreal v. Wells Fargo Bank, N.A." on Justia Law

Kara Alexander sued Vianna Stibal for fraud, breach of contract, and punitive damages. A jury awarded Alexander $111,000 on her contract claim, $17,000 on the fraud claim, and $500,000 in punitive damages. Stibal is the owner and operator of Nature Path, Inc. and the ThetaHealing Institute of Knowledge (THInK). In the beginning of 2008, THInK announced that it would offer a newly-created doctoral degree in ThetaHealing. students of ThetaHealing, including Alexander, began to question the validity of her doctoral degrees. In November of 2011, Alexander filed a complaint against Stibal, alleging breach of contract and fraud. During the trial, the district court denied Stibal’s motion for a directed verdict on the fraud and breach of contract claims. Following trial, Stibal moved for a new trial and for judgment notwithstanding the verdict (JNOV). The district court denied these post-trial motions, but reduced the punitive damages award to $384,000. On appeal, Stibal challenges the district court’s rulings on the contract, fraud, and punitive damages issues. After review, the Supreme Court reversed the district court’s order denying Stibal’s motion for JNOV on the contract claim. The Court vacated the district court’s judgment and remanded with directions for the district court to enter a new judgment reflecting our ruling on the contract claim and the reduction in punitive damages to $100,000. The Court affirmed in all other respects. View "Alexander v. Stibal" on Justia Law

Kindred Nursing Centers East, LLC, d/b/a 0791-Kindred Transitional Care and Rehabilitation-Whitesburg Gardens ("Whitesburg Gardens"), owned and operated a long-term care and rehabilitation facility. Whitesburg Gardens was sued by Lorene Jones, and appealed an order denying its motion to compel arbitration of Jones's claims. The Supreme Court reversed and remanded: Jones was mentally competent when she was admitted to and during her stay at the facility. Because precedent held that competent residents of nursing homes could be bound by arbitration agreements executed by their representatives, the Court held that Jones was so bound. Moreover, in view of the evidence indicating that Jones passively permitted her daughter Yvonne Barbour to act on her behalf in signing the admission forms and the lack of evidence indicating that Jones ever objected to Barbour's signing those forms, the Court held that Barbour had the apparent authority to bind Jones at the time Barbour signed the admission documents. Under these circumstances, Whitesburg Gardens proved the existence of a valid contract calling for arbitration. The trial court erred in denying the motion to compel arbitration. View "Kindred Nursing Centers East, LLC. v. Jones" on Justia Law