Justia Contracts Opinion Summaries

In 1992, Plaintiff was convicted of a felony drug offense. In 2006, Plaintiff applied to the Fairfax County School Board for a teaching position and disclosed her prior conviction on her application. The Board subsequently hired Plaintiff as a special education teacher. In 2012, the school system’s Assistant Superintendent for Human Resources determined that, pursuant to Va. Code 22.1-296.1(A), Plaintiff’s 2006 hiring had been in error because her conviction made her ineligible for employment by the Board. The Board subsequently filed a complaint seeking a declaratory judgment that section 22.1-296.1(A) made Plaintiff ineligible for hire. The circuit court entered an order declaring that the Board lacked authority to hire Plaintiff under section 22.1-296.1(A). The Supreme Court affirmed, holding that the Board lacked authority to make the contract, and therefore, the contract was void ab initio. View "Butler v. Fairfax County School Board" on Justia Law

David Zerfas swerved to avoid a deer carcass in his lane of travel and lost control of his vehicle. Zerfas died after his vehicle was hit by oncoming traffic. Zerfas’s wife, Stacey, sought uninsured motorist benefits with their automobile insurance company, AMCO Insurance Company, alleging that an unidentified driver left the deer carcass in the lane of travel, which caused Zerfas to lose control of his vehicle. AMCO denied Stacey’s claim on the grounds that Stacey would not legally be entitled to recover damages from the unidentified driver. Stacey subsequently brought a breach of contract action against AMCO. The circuit court granted summary judgment in favor of AMCO, concluding that the unidentified driver did not have a legal duty to Zerfas to remove the carcass or warn of its existence. The Supreme Court affirmed, holding that no common law or statutory duty existed between the unidentified driver and Zerfas, and therefore, the circuit court did not err in granting AMCO summary judgment. View "Zerfas v. AMCO Ins. Co." on Justia Law

Sand Specialties & Aggregates, LLC, and Lampkin Construction Company entered into a contract under which Sand Specialties was to sell certain sand mining equipment to Lampkin Construction. The equipment was delivered, but the full contract price was never paid. Sand Specialities filed suit against Lampkin Construction for replevin and damages. After a trial, the judge entered a directed verdict in favor of Sand Specialities as to ownership of the equipment, and the jury awarded Sand Specialities damages. Lampkin Construction appealed, arguing that the trial court misinterpreted the terms of the sales contract, and that the trial court made several prejudicial errors, including allowing the jury to consider evidence of damages for missing equipment. Finding no reversible errors, the Supreme Court affirmed the judgment against Lampkin. View "Lampkin Construction Co., Inc. v. Sand Specialties & Aggregates, LLC" on Justia Law

Cincinnati Insurance issued a liability policy to Painters, which allowed the insured to add an “additional insured” by oral agreement, if that agreement preceded the occurrence and “a certificate of insurance ... has been issued.” No permission from Cincinnati is required, if the insureds have a relationship consistent with the policy. Painters was hired to paint Vita’s premises and orally agreed to add Vita as an additional insurer. Painters’ worker fell, before there was any written confirmation of the oral agreement, and remains in a coma. In a suit by the insurer, seeking a declaration that Vita was not covered based on a certificate issued to Vita the day after the accident, the court granted summary judgment in favor of Cincinnati. The Seventh Circuit reversed. Summary judgment was premature. The policy is ambiguous. A certificate could be regarded a prerequisite to coverage of the additional insured, but also could be intended merely to memorialize the oral agreement. The policy could also mean that the oral agreement must be memorialized in writing before the insured can file a claim. Oral agreements are valid contracts and the policy is explicit that an oral agreement is sufficient to add an insured. The certificate is not a contract, but “a matter of information only” that “confers no rights upon the certificate holder.” View "Cincinnati Ins. Co. v. Vita Food Prods, Inc." on Justia Law

James Armour’s employment contract with AM General LLC entitled him to payment of a long-term incentive plan (LTIP). When Armour retired, he was to receive a lump sum LTIP payment, but instead he started receiving quarterly installment payments in the form of checks. AM General attempted to make the final installment payment with a subordinate promissory note. Armour rejected the Note and requested full payment. Thereafter, AM General filed a complaint seeking a declaratory judgment that it had not breached the LTIP portion of its agreement with Armour. Armour counterclaimed, asserting that AM General breached the employment agreement by failing to pay Armour the full LTIP payment when it was due and claiming that, by attempting to pay the remaining portion of the LTIP payment with a promissory note, AM General breached the duty of good faith and fair dealing. The trial court entered summary judgment in favor of Armour. The Court of Appeals reversed, finding a genuine issue of material fact with regard to how “payment” could be made under the LTIP provision of the agreement. The Supreme Court granted transfer and affirmed the grant of summary judgment, holding that AM General breached its employment agreement with Armour because the Note did not constitute payment under the employment agreement. View "AM General LLC v. Armour" on Justia Law

In 2000, plaintiff accepted the Gray law firm’s offer of employment as an associate attorney, including a provision requiring both parties to submit all disputes relating to the employment relationship to binding arbitration. In 2005, Gray merged into DLA Piper. In 2006, plaintiff signed a “Confidential Resignation Agreement and General Release of Claims.” DLA agreed to continue to provide insurance and other benefits until August 2006, when his employment would officially terminate. The Termination Agreement is silent concerning dispute resolution. Plaintiff later sued, alleging: breach of the implied covenant of good faith and fair dealing; breach of contract; promissory fraud; and constructive fraud, arguing that the firm had “undervalued” his benefits by computing them based on “artificially reduced salary figures.” DLA sought to compel arbitration. Plaintiff asserted the Termination Agreement constituted a novation, extinguishing the arbitration provision, and that even if the provision had survived, claims involving the benefit plan were not subject to arbitration. The court compelled arbitration. In 2013, the arbitrator determined DLA had breached the Termination Agreement and plaintiff had suffered emotional distress, and awarded $41,000 in contract damages plus interest, $45,000 in emotional distress damages, and $7,535.67 in costs. The court of appeal affirmed confirmation of the award. View "Jenks v. DLA Piper Rudnick Gray Cary" on Justia Law

Petitioner was terminated from her position as the Clerk-Treasurer of the Town of Hurlock two and one-half years after she entered into a written employment agreement with the Mayor-elect. Under the employment agreement, Petitioner was to serve a four-year term. Petitioner brought this action against Respondent, the Town, alleging breach of contract and seeking damages and other relief. The circuit court dismissed the complaint, concluding that the four-year term of employment in the agreement was inconsistent with the Town Charter and therefore ineffective. The Court of Special Appeals affirmed. The Court of Appeals affirmed, holding (1) the language of the Town Charter means that an official like the Clerk-Treasurer is an at-will employee; and (2) the Mayor and Council of Hurlock lacked authority under the Town Charter to enter into an agreement conferring a fixed term of employment in this case. View "Clough v. Mayor & Council of Hurlock" on Justia Law

Plaintiffs, 19 workers employed by Degeller, filed a class action suit on behalf of themselves and similarly situated Deggeller employees. The court concluded that the district court erred in dismissing the breach of contract claim where the workers’ allegation that Deggeller failed to pay the prevailing wage stated a valid claim for breach of their employment contracts. The court also concluded that the district court erred in dismissing the workers' claim for statutory damages under 26 U.S.C. 7434 because they alleged that Deggeller intentionally filed fraudulent tax documents on their behalf. Accordingly, the court reversed the district court’s Rule 12(b)(6) dismissals of these claims and vacate its decision under 28 U.S.C. 1367(c)(3) not to exercise supplemental jurisdiction over the Arkansas minimum wage claim. View "Cuellar-Aguilar v. Deggeller Attractions, Inc." on Justia Law

Plaintiffs (collectively, “Pegasus”) sued one defendant (“VarigLog”) for breach of contract and conversion and sought to hold other defendants (“MP defendants”) liable for VarigLog’s conduct on an alter ego theory. Pegasus served a notice to produce documents seeking electronically stores information (ESI) concerning Pegasus’s claims and VarigLog’s relationship with the MP defendants. VarigLog’s production was unsatisfactory to Pegasus. Supreme Court appointed a discovery referee to assist Pegasus and VarigLog in resolving the dispute. During the conferences it was established that computer crashes resulted in the loss of much of the ESI, and that data recovery efforts had proven unsuccessful. Pegasus moved for the imposition of spoliation sanctions against VarigLog and the MP defendants. Supreme Court granted the motion, concluding that the evidence was negligently destroyed. The Appellate Division reversed. The Court of Appeals reversed, holding that the Appellate Division erred in determining that Pegasus had not attempted to make a showing that the destroyed documents were relevant to its claim. Remanded to the trial court for a determination as to whether the evidence was relevant to the claims asserted against Defendants and for the imposition of an appropriate sanction should the trial court decide that a sanction is warranted. View "Pegasus Aviation I, Inc. v Varig Logistica S.A." on Justia Law

In IRB-Brasil Resseguros, S.A. v. Inepar Invs., S.A., the Court of Appeals held that, where parties include a New York choice-of-law clause in a contract, such a provision demonstrates the parties’ intent that courts not conduct a conflict-of-laws analysis. In the instant case, Plaintiff was a New York not-for-profit corporation that administered a retirement plan and a death benefit plan. Decedent was enrolled in both plans. Decedent named Appellants as beneficiaries. Both plans stated that they shall be governed by and construed in accordance with New York law. After Decedent died, a Colorado court admitted his will to probate. Plaintiff was unsure to whom the plan benefits should be paid after Decedent’s death and commenced a federal interpleader action against Decedent’s Estate, the personal representative (PR) of the Estate, and Appellants. A federal district court directed Plaintiff to pay the disputed funds to the PR, concluding that Colorado’s revocation law terminated any claims to the plans by Appellants. On appeal, the Second Circuit Court of Appeals certified questions to the Court of Appeals. The Court of Appeals answered by extending the holding in IRB to contracts that do not fall under Gen. Oblig. Law 5-1401 and clarifying that this rule obviates the application and both common-law and conflict-of-laws principles and statutory choice-of-law directives, unless the parties expressly indicate otherwise. View "Ministers & Missionaries Benefit Bd. v. Snow" on Justia Law