Justia Contracts Opinion Summaries

Following a bench trial arising out of a joint venture contract between appellant Thomas Bagwell and appellees Bobby and Oretta Trammel, the trial court denied Bagwell's claim for specific performance of the contract but granted his claims for an equitable partition of real property jointly owned by the parties and dissolution of the joint venture. Bagwell challenged the trial court's final order on several grounds, but the Supreme Court found none sufficient to disturb the trial court's judgment. View "Bagel v. Trammel" on Justia Law

In 1997 Seagate recruited Dr. Shukh, a native of Belarus, to move to the U.S. Shukh executed Seagate’s standard Employment Agreement, assigning to Seagate all “right, title, and interest in and to any inventions” made while at Seagate. Seagate prohibited employees from filing patent applications for their inventions. During his employment, Shukh was named as an inventor on 17 patents. Shukh’s time at Seagate was tumultuous. His performance evaluations indicated that he did not work well with others due to his confrontational style. In 2009, Seagate terminated Shukh and 178 others. Shukh has not yet secured employment and claims that he was told that he would never find employment at certain companies with his reputation. Shukh alleges that Seagate wrongfully omitted him as an inventor from several patents relating to semiconductor technologies; that Seagate discriminated against and terminated him based national origin and in retaliation for complaining about discrimination. He sought correction of inventorship of the disputed patents under 35 U.S.C. 256. The district court held that Shukh had no interest in the patents based on the assignment; dismissed claims for rescission of his Employment Agreement, breach of contract, breach of fiduciary duty, and unjust enrichment; and rejected claims of reputational harm, retaliation, fraud, and discrimination on summary judgment. The Federal Circuit vacated with respect to correction of inventorship, but otherwise affirmed. There is a genuine dispute of material fact as to whether Shukh’s negative reputation is traceable to Seagate’s omission of Shukh as an inventor from disputed patents. View "Shukh v. Seagate Tech., LLC" on Justia Law

Witasick was covered by a disability policy and a business overhead expense policy. His claims against both policies were honored. A dispute arose concerning coverage of some claimed business expenses. After years of negotiation, the parties settled: the insurer agreed to pay more than $4 million and Witasick agreed to release known, unknown, and future claims. The settlement contained a covenant not to sue, based on “any conduct prior to the date the Parties sign this document, or which is related to, or arises out of” the policies. During negotiations, the U.S. Government notified Witasick that he was the target of a grand jury investigation related to fraud and business expense claims on his income tax returns. Witasick was indicted in 2007. To support its charge of mail fraud, the government relied on information and documents Witasick had submitted to the insurer. An employee of the insurer testified before the Grand Jury and at Witasick’s trial. Witasick was convicted on most counts, but acquitted of mail fraud, and was sentenced to 15 months’ imprisonment. In 2011, Witasick sued the insurer based on the policies and cooperation with the prosecution. The Third Circuit affirmed dismissal, finding the claims prohibited by the settlement agreement. View "Witasick v. Minn. Mut. Life Ins, Co." on Justia Law

Relator filed a qui tam action on behalf of the United States, twenty-five states, and the District of Columbia, naming his former employer as the defendant and asserting several claims under the False Claims Act (FCA) and analogous state statutes. Thereafter, Relator filed three amended complaints adding five defendants. Defendants filed motions to dismiss. Relator subsequently filed a fourth amended complaint, asserting that he had an absolute right to amend his complaint under Fed. R. Civ. P. 15(a)(1). The district court granted Defendants’ motion to strike the fourth amended complaint after construing Relator’s filings as a request for leave to amend, concluding that Relator had not established good cause for amending his complaint once again. The district court then dismissed the case with prejudice, concluding that the FCA’s public disclosure bar deprived it of jurisdiction over certain allegations and that, as to the remaining allegations, the third amended complaint failed to state a cognizable claim. The First Circuit vacated the judgment below and remanded, holding that the district court (1) did not err in concluding that Relator exhausted his one-time right to amend under Rule 15(a)(1); but (2) appraised Relator’s request for leave to amend under the wrong legal standard. View "D'Agostino v. ev3, Inc." on Justia Law

Defendants, an unlicensed residential builder; his businesses; and Denaglen Corp., a check-cashing service, appealed the Court of Appeals' decision to affirm the grant of summary judgment in favor of plaintiffs, homeowners who contracted to have their home restored following a flood. On appeal, this case raised four issues: (1) whether MCL 339.2412(1), which prohibited an unlicensed builder from "bring[ing] or maintain[ing] an action . . . for the collection of compensation," prevents an unlicensed builder from defending on the merits against claims asserted against him by a homeowner; (2) whether MCL 339.2412(1) provided a homeowner with an independent cause of action for damages arising from the statute's violation; (3) whether a contract for the services of an unlicensed builder was void ab initio or whether it may have some form of continuing legal existence; and (4) whether the trial court abused its discretion in refusing to set aside the default of defendant Denaglen Corp., the check-cashing service. In lieu of granting leave to appeal, the Supreme Court affirmed in part and reversed in part the judgment of the Court of Appeals and remanded the case for further proceedings. The Court found that the appellate court erred in granting summary judgment to the plaintiffs. While the Court of Appeals correctly held that MCL 339.2412(1) did not prevent an unlicensed builder from defending against a lawsuit on its merits and did not afford a homeowner an independent cause of action to seek damages for its violation. However, contracts between an innocent homeowner and an unlicensed residential builder were voidable by the homeowner and thereby effective in conveying rights and authorities to both parties and third parties. The Court of Appeals therefore erred when it declared the contract at issue void ab initio, "although that court's error was wholly understandable given the confusing state of applicable law." Finally, the trial court did not abuse its discretion by refusing to grant defendant Denaglen relief from its default. However, because the proper amount of damages remained in dispute, Denaglen was free to attempt to challenge the extent of its liability. View "Epps v. 4 Quarters Restoration, LLC" on Justia Law

Brown filed a class action complaint, alleging that she contacted Defender by telephone in response to its advertisement for a home security system; that, during several calls, she provided Defender with personal information; and that Defender recorded those calls without her permission and without notifying her of the recording. Brown claimed violations of California Penal Code 632, which prohibits the recording of confidential telephone communications without the consent of all parties. Defender owned a commercial general liability insurance policy issued by First Mercury, covering “personal injury” and “advertising injury.” In a separate definitions section, the policy defined both “advertising injuries” and “personal injuries” as those “arising out of … [o]ral or written publication of material that violates a person’s right of privacy.” The parties eventually reached a settlement. Defender provided First Mercury with timely notice of the Brown suit. First Mercury denied coverage and refused to defend. The Seventh Circuit affirmed dismissal of Defender’s suit against First Mercury. Defender’s Policy requires “publication,” which was neither alleged nor proven. View "Defender Sec. Co. v. First Mercury Ins. Co." on Justia Law

Defendant Dennis Sallaz and Defendants-counterclaimants Glenn Trefren and Tradesman Contractors and Construction, LLC, (collectively “Appellants”) appealed the district court’s holding they could not recover breach of contract damages or obtain equitable relief for the failure of Plaintiff-counterdefendant Real Properties, LLC, to pay the full purchase price under an agreement for the sale and purchase of Real Homes, LLC. Although the district court found that the contract between Sallaz and Trefren, as sellers, and Real Properties, as buyer, was valid, it held that Real Properties’ performance of the contract was excused because of a material breach by the sellers. The district court held that equitable relief was not available because of the existence of the contract. Upon review, the Supreme Court concluded that the district court erred in dismissing the counterclaimants' claim for breach of contract. The district court's dismissal of count 3 of the counterclaim was vacated and remanded pending the outcome of reconsideration of count 1. View "Rice v. Sallaz" on Justia Law

Sentinel Insurance Company, Limited appealed a declaratory judgment entered in favor of Alabama Municipal Insurance Corporation ("AMIC") in this dispute between Sentinel and AMIC over which insurance company was responsible for providing primary insurance coverage in an underlying automobile-accident case. After reviewing the AMIC policy and the Sentinel policy, the Supreme Court concluded that the language in each was unambiguous as to which provided primary coverage: the AMIC policy provided primary coverage, and the Sentinel policy provided excess coverage. The Court held that the trial court erred in concluding that the Sentinel policy provided primary coverage. Therefore, the trial court's judgment was reversed, and the case was remanded for further proceedings. View "Sentinel Insurance Company, Ltd. v. Alabama Municipal Insurance Corp." on Justia Law

HKS a Texas architecture firm, provided services for a luxury hotel in Mammoth Lakes under an Agreement that contained a Texas forum selection clause, requiring mediation, and a Texas choice of law provision.The Agreement authorized HKS to hire “[c]onsultants.” Vita, a California landscape design firm, submitted to HKS a Contract incorporating the terms of the Agreement. Neither Vita or HKS signed the Contract, but Vita performed work in 2008, during the “design phase” and sent invoices to HKS. Owner began having financial problems before construction commenced, leaving HKS with unpaid bills for its own services and those provided by “consultants.” HKS obtained a judgment against Owner in 2010 in Texas for $1,617,073.70 but was unable to recover anything. In 2013, Vita sued HKS, alleging breach of contract; unjust enrichment; quantum meruit; and breach of the implied covenant of good faith and fair dealing, seeking $370,650.53. After answering the complaint, HKS moved to enforce the forum selection clause and dismiss. The court of appeal reversed dismissal. HKS established the existence of a contract between HKS and Vita containing a forum selection clause, but Code of Civil Procedure 410.42 prohibits enforcement of construction contract provisions requiring disputes between contractors and California subcontractors to be litigated outside California. View "Vita Planning & Landscape Architecture, Inc. v. HKS Architects, Inc." on Justia Law

Plaintiff was assured by Bank that he would qualify for and receive a small business, government-backed loan. After Plaintiff was notified that no government-backed loan was available and aware that he had various potential causes of action against Bank, Plaintiff nonetheless sought and obtained a new commercial loan from the Bank and subsequently expressly waived all offsets and defenses. More than six years after Plaintiff first became aware that no government-backed loan was available, he filed a complaint alleging that he obtained the commercial loan in reliance upon the Bank’s representation that the government-backed loan was forthcoming. Bank raised the statutes of limitation as an affirmative defense and filed a compulsory counterclaim to collect on the amount owed on the commercial loan. The trial court granted summary judgment for Bank. The Court of Appeals reversed. The Supreme Court reversed on the grounds that the undisputed facts showed that Plaintiff chose to obtain a new commercial loan after learning no government-backed loan was available and repeatedly reaffirmed his obligations under the commercial loan and expressly waived any offsets and defenses to the loan and against Bank. Remanded. View "Ussery v. Branch Banking & Trust Co." on Justia Law