Justia Contracts Opinion Summaries

Plaintiff sustained injuries at a motel while he was on duty for Union Pacific Railroad Company. Plaintiff sued Union Pacific and the motel. The parties later settled. Thereafter, Union Pacific asserted a contractual right of subrogation to the extent of medical payments made on Plaintiff’s behalf by the Union Pacific Railroad Employees Health Systems. The contract created a lien or right of reimbursement if a third party is liable but not if Union Pacific is liable. The trial court concluded that Union Pacific did not have a valid lien, right of reimbursement or right of subrogation because it was party to the settlement. The Supreme Court affirmed, holding that, under the unambiguous terms of the contract, Union Pacific did not have a lien or right of reimbursement. View "Kasel v. Union Pacific R.R. Co." on Justia Law

The U.S. Court of Appeals for the Second Circuit certified a question of Delaware law arising out of an appeal from a decision issued by the U.S. District Court for the Southern District of New York. The question pertained to contract interpretation. Plaintiff-appellant NAF Holdings secured a contractual commitment of its contracting counterparty, defendant Li & Fung (Trading) Limited, to render a benefit to a third party. The counterparty breached that commitment. Could "the promisee-plaintiff bring a direct suit against the promisor for damages suffered by the plaintiff resulting from the promisor's breach, notwithstanding that (i) the third-party beneficiary of the contract is a corporation in which the plaintiff-promisee owns stock; and (ii) the plaintiff-promisee's loss derives indirectly from the loss suffered by the third-party beneficiary corporation; or must the court grant the motion of the promisor-defendant to dismiss the suit on the theory that the plaintiff may enforce the contract only through a derivative action brought in the name of the third-party beneficiary corporation?" The Delaware Supreme Court answered that under Delaware law, a party to a commercial contract who sues to enforce its contractual rights can bring a direct contract action under Delaware law. "Although the relationship of that party to the third-party beneficiary might well have relevance in determining whether the contract claim is viable as a matter of contract law, nothing in Delaware law requires the promisee-plaintiff's contract claim to be prosecuted as a derivative action. " View "NAF Holdings, LLC v. LI & Fung (Trading) Limited" on Justia Law

Krista Gilmore was employed by Excellence Community Management (ECM), an LLC, and signed an employment agreement containing restrictive covenants. The owners and operators of ECM later sold 100 percent of their membership interest in the LLC to First Services Residential Management Nevada (FSRM). Thereafter, Gilmore’s employment with ECM terminated, and Gilmore began working for Mesa Management, LLC. ECM sent Gilmore a cease-and-desist letter alleging that Gilmore violated her employment agreement by contacting ECM’s clients and soliciting them to hire Mesa. ECM filed a complaint seeking damages and injunctive relief against Gilmore and Mesa (collectively, Respondents). The district court denied ECM’s motion for a preliminary injunction, concluding that the agreement was not assignable to FSRM without Gilmore consenting to the assignment. The Supreme Court affirmed, holding (1) the sale of 100 percent of the membership interest in an LLC does not affect the enforcement of an employee’s employment contract containing a restrictive covenant because such a sale does not create a new entity, and therefore, ECM may enforce a restrictive covenant in Gilmore’s employment contract without Gilmore’s consent of assignment; but (2) ECM failed to show that it would suffer irreparable harm for which compensatory damages were not an adequate remedy if the district court did not enter a preliminary injunction. View "Excellence Cmty. Mgmt. v. Gilmore" on Justia Law

Plaintiffs Jourdan Rivers Estates, LLC (JRE) and Jourdan River Resort and Yacht Club (Yacht Club), filed suit for damages in December 2011 against Defendants Scott Favre, Cindy Favre, Jefferson Parker, and CB Partners, LLC d/b/a Cinque Bambini. CB Partners, LLC d/b/a Cinque Bambini was later dismissed from the action without prejudice. The complaint alleged multiple claims against Defendants, including slander of title; slander and/or defamation; trespass; nuisance; tortious interference with use of property; tortious interference with contractual relationships; harassment and intimidation of plaintiffs' agents and intentional infliction of emotional distress upon plaintiffs' agents; assault upon plaintiffs' agents; willful destruction of plaintiffs' property; negligence; gross, willful, and wanton negligence; malicious prosecution; unjust enrichment; false imprisonment; and any other applicable theory of law giving rise to a cause of action. Defendants moved to dismiss for failure to state a claim under Rule 12(b)(6) of the Mississippi Rules of Civil Procedure. The circuit court granted the motion in part and denied it in part. The circuit court dismissed all of Yacht Club's claims in relation to the claim(s) that Defendants made false representations to the Hancock County Board of Supervisors and/or Hancock County employees, finding that such allegations fell under the "Noerr-Pennington" doctrine, expressly adopted by the Mississippi Supreme Court. The circuit court dismissed JRE's claims of slander of title, slander and/or defamation; harassment; assault; and false imprisonment and intentional infliction of emotional distress because each claim constituted an intentional tort and was barred under the statute of limitations. The circuit court denied Defendants' motion to dismiss as to JRE's claims for trespass; nuisance; tortious interference with use of property; tortious interference with contractual relationships; willful destruction of property; negligence; gross, willful, and wanton negligence; malicious prosecution; and unjust enrichment. Plaintiffs thereafter petitioned for an interlocutory appeal. Because the Supreme Court found that Defendants' Rule 12(b)(6) motion should have been converted into a motion for summary judgment, as provided in Rule 56 of the Mississippi Rules of Civil Procedure, it reversed the circuit court's order granting the Rule 12(b)(6) motion and remanded for further proceedings. View "Jourdan River Estates, LLC v. Favre" on Justia Law

Appellants and Appellees owned property on two sides of Hurricane Creek. Appellants alleged that Appellees and past owners of the property placed fill material in the floodway and floodplain of Hurricane Creek and that, since that time, Appellants had experienced an increased frequency and extent of flooding on their property. The parties subsequently reported to the trial court that they had reached a settlement. However, the proposed settlement contained a provision releasing claims Appellants “may have in the future.” Appellants disputed the scope of the release. The circuit court granted Appellee’s motion to enforce settlement agreement, concluding that the agreement and release encompassed the terms actually agreed on by the parties. The Supreme Court reversed, holding that the trial court’s grant of Appellee’s motion to enforce settlement was in error where there was no agreement between the parties as to the scope of the release. View "Billingsley v. Benton NWA Props., LLC" on Justia Law

Appellant, a family-owned retail clothing and footwear business with two stores in Massachusetts, had sold Nike footwear for approximately twenty-eight years before Nike notified Appellant that it was terminating the parties’ business relationship. Appellant sued Nike in Massachusetts state court, alleging contractual claims and a claim under Mass. Gen. Laws ch. 93A. Nike removed the suit to federal court and then moved to dismiss under Fed. R. Civ. P. 12(b)(6), alleging that its invoices included a forum selection clause requiring Appellant to file its claims in Oregon, not Massachusetts. The district court agreed and dismissed Appellant’s complaint. The First Circuit affirmed, holding that the forum selection clause was valid and enforceable, and the district court properly dismissed the present action. View "Carter's of New Bedford, Inc. v. Nike, Inc." on Justia Law

Leonor, a Michigan dentist, suffered an injury that prevented him from performing dental procedures. At the time of his injury, he spent about two-thirds of his time performing dental procedures and approximately one third managing his dental practices and other businesses that he owned. After initially granting coverage, his insurers denied total disability benefits after they discovered the extent of his managerial duties. Leonor sued, alleging contract and fraud claims. The district court granted summary judgment to Leonor on his contract claim, holding that “the important duties” could plausibly be read to mean “most of the important duties” and resolving the ambiguity in favor of Leonor under Michigan law. The Seventh Circuit affirmed, stating that the context of the policy language in this case permits a reading of “the important duties” that is not necessarily “all the important duties.” View "Leonor v. Provident Life & Accident Co." on Justia Law

The Wongs bought a hillside home in San Carlos for $2.35 million from the Stolers. Several months after they moved in, the Wongs discovered that they and 12 of their neighbors were connected to a private sewer system and were not directly serviced by the city’s public system. Believing they had been deceived, they sued the Stolers and the real estate agents who brokered the sale alleging various claims, including rescission. After the Wongs settled their dispute with the real estate agents for $200,000, a trial was held on the rescission claim only. Although the court found that the Stolers, with reckless disregard, made negligent misrepresentations to the Wongs, it declined to effectuate a rescission , but ordered the Stolers to be, for a limited time, indemnifiers to the Wongs for sewer maintenance and repair costs exceeding the $200,000 they obtained in their settlement with the agents. The court of appeal reversed, finding that the trial court declined to effectuate a rescission of the contract based on incorrect justifications and that its alternative remedy failed to provide the Wongs with the complete relief to which they were entitled. View "Wong v. Stoler" on Justia Law

OEpic and ALi agreed to cooperate in developing a power amplifier for use in wireless networking devices and entered into a nondisclosure agreement. Wong signed the agreement on Ali’s behalf. Later, Wong formed Richwave. OEpic continued to transfer intellectual property to Wong’s team based upon assurances that Ali’s rights and obligations under the agreement had been or would be assumed by Richwave. Richwave subsequently disclaimed any need for OEpic’s services; ALi disclaimed any further obligation to OEpic. Epic was formed, became successor to all of OEpic’s interest, and sued ALi, Richwave, and Wong, alleging that ALi had transferred certain of Epic’s intellectual property to Wong and Richwave in violation of the agreements between OEpic and ALi.. The trial court granted Wong and Richwave summary judgment on the ground that a settlement agreement with ALi barred remaining causes of action. The court of appeal reversed, noting that several other provisions of the settlement agreement containing the disputed release clause are not easily reconciled its seemingly broad language. The subsequent conduct of the contracting parties also appears inconsistent with intent to extend the release to unaffiliated third parties. View "Epic Commc'ns, Inc. v. Richwave Tech., Inc." on Justia Law

Following a casino investment venture gone awry, Balagiannis and Mavrakis entered into a settlement agreement: Mavrakis would pay Balagiannis $1.225 million. Balagiannis would dismiss pending federal court litigation with prejudice and withdraw the complaint he had filed against Mavrakis in the Greek legal system no later than September 28, 2012. Mavrakis made three of five agreed payments. In March 2012, Balagiannis sent a letter to a district attorney in Athens. The letter did not reference withdrawal of the complaint against Mavrakis, but requested “completion of the ongoing preliminary investigation.” After Balagiannis refused to confirm that he had withdrawn the Greek complaint, Mavrakis declined to make the final two payments ($925,000). In October 2013, Balagiannis filed suit alleging that Mavrakis breached the settlement agreement. Three months later (19 months after September 28, 2012), Balagiannis filed a declaration with the district court (filed in Greece), which may (or may not) have withdrawn the complaint in Greece. The district court held that Balagiannis failed to allege plausibly his compliance with the settlement agreement, and dismissed the suit. The Seventh Circuit affirmed. View "Reserve Hotels PTY Ltd v. Mavrakis" on Justia Law