Justia Contracts Opinion Summaries

This case involves multiple causes of action based on allegations of bribery to procure construction sites. Plaintiff alleged that he and his company GRG were punished for refusing to participate in the corruption of municipal authorities. On appeal, the court concluded that GRG has met its summary judgment burden with respect to its Racketeer Influenced Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq., claims and has sufficiently supported those elements of its claims for tortious interference with business relations that the district court ruled on. The court affirmed the judgment dismissing HISD from liability for RICO and federal constitutional violations and state law claims; affirmed the judgment dismissing Defendant Marshall from liability for constitutional violations; reversed and remanded for further proceedings the summary judgment dismissing the RICO claims against the non-HISD defendants insofar as they allege injury covering the remainder of the 2009 job-order contract period; and reversed and remanded or further proceedings the summary judgment dismissing the claim against the non-HISD defendants for tortious interference with prospective business relations and the civil conspiracy claims. Accordingly, the court affirmed in part, reversed and remanded in part. View "Gil Ramirez Group, L.L.C. v. Houston Indep. Sch. Dist." on Justia Law

This case arose from a complicated series of transactions often called “fronting arrangements” in the insurance industry. Lincoln was awarded $16.5 million on its tortious interference claims against CSi and Alpha. The case involved the diversion of funds from a reinsurance arrangement involving insurer Lincoln and a claims administrator, U.S. Auto. Numerous issues were raised on appeal. The court affirmed: (1) the judgment entered against CSi and Alpha; (2) the grant of summary judgment on Lincoln’s conversion claims; (3) the denial of Lincoln’s cross-motion for summary judgment on its fiduciary duty claims; and (4) the denial of the motion to alter the judgment to include ZVN. The court also held that Lincoln forfeited the right to appeal the dismissal of its claims against Doug Maxwell asserting alter ego liability. The court reversed: (1) the refusal to alter the judgment to include Lincoln General’s breach of contract claim against U.S. Auto; (2) the grant of summary judgment on all the fiduciary duty claims that Lincoln appealed, including the claims for aiding and abetting; and (3) the tortious interference claim against Jim Maxwell. Accordingly, the court remanded for further proceedings. View "Lincoln Gen. Ins. Co. v. U.S. Auto Ins." on Justia Law

Cornhusker Casualty Company appealed a district court’s summary-judgment ruling, arguing that the district court incorrectly concluded that Cornhusker was estopped from asserting noncoverage as a defense to the claims of Shari and Steve Skaj. The Skajs cross-appealed the district court’s sua sponte entry of summary judgment against them on their counterclaim for attorneys’ fees. Vincent Rosty filed a cross-appeal too, alleging that the district court erred in granting summary judgment to Cornhusker on some of his tort-based counterclaims. R&R Roofing, Inc. was a Wyoming construction company primarily operated by Randy Rosty and Steven Rosty. R&R purchased a Cornhusker commercial liability policy listing “R&R” and “Randy Rosty” as the named insureds. Vincent, who was an R&R employee at that time, did not appear as a named insured under the Policy. Vincent drove R&R’s dump truck to the Skaj home to deliver roofing supplies. The truck was accidentally knocked into second gear, rolled forward toward Ms. Skaj as she approached, and pinned her against a parked motor home, injuring her. A laboratory test performed later that day detected the presence of marijuana and methamphetamines in Vincent’s bloodstream. The Skajs ultimately sued R&R, Steven, and Vincent, asserting several negligence claims. Counsel retained by Cornhusker to defend against the Skajs’ lawsuit sought and received an extension of “the answer deadline for all defendants.” Communication related to that request indicated that defense counsel at that point “d[id] not know if [she would] be representing all of the defendants.” Defense counsel filed an answer to the Skajs’ complaint on behalf of Steven and R&R only, noting, “I do not represent Vincent Rosty.” In filing its answer, Cornhusker did not attempt to advise Vincent of its decision at that time not to represent him. An entry of default against Vincent issued, and the non-defaulting defendants were dismissed from the litigation. The Skajs sought to recover a judgment as to Vincent. Cornhusker hired separate representation for Vincent who opposed the default-judgment proceedings. The state court issued a default-judgment order assessing a total in damages and costs of $897,344.24 against Vincent. One week after the default-judgment hearing, Cornhusker sent Vincent a letter purporting for the first time to deny coverage on grounds that Vincent was not a named insured to the R&R policy. Cornhusker repeated this ground in its declaratory judgment action in federal district court. Vincent responded by counterclaiming against Cornhusker, asserting various contract and tort theories. The Skajs filed their own counterclaim, seeking a declaration “that Cornhusker [was] required to pay the judgment in the underlying action." All parties filed motions for summary judgment, but the court announced that there would be no trial. It declared that Cornhusker was estopped from denying coverage to Vincent because Cornhusker had represented that it would provide a defense, never reserved its rights, and did not advise Vincent of its decision to deny coverage until more than sixteen months after the entry of default. Cornhusker appealed the district court's judgment. But finding no reversible error, the Tenth Circuit affirmed the court's judgment. View "Cornhusker Casualty Co. v. Skaj" on Justia Law

Kentucky Spirit Health Care Plan, Inc. brought a declaratory judgment action seeking a ruling that it had a right to terminate its Medicaid managed care contract with the Finance and Administration Cabinet prior to the expiration of the contract without penalty. The trial court entered partial summary judgment in favor of the Cabinet. Both parties appealed. While the appeals were pending, the circuit court stayed Kentucky Spirit’s pre-trial discovery efforts relating to its rights under the Medicaid contract until resolution of the partial summary judgment appeals. The Court of Appeals granted Kentucky Spirit’s petition for a writ of prohibition against the circuit court judge prohibiting the judge from enforcing the order imposing the stay of discovery. The Supreme Court vacated the writ and remanded for entry of an order denying Kentucky Spirit’s petition for a writ of prohibition, holding that the circuit court did not abuse its discretion by temporarily staying discovery, as a stay of discovery was appropriate pending resolution of the threshold issues currently on appeal. View "Commonwealth v. Hon. Wingate" on Justia Law

Coppage Construction Company, Inc. filed a third-party complaint raising a number of contract, tort, and statutory claims against Sanitation District No. 1 (SD1), a public sewer utility serving three Northern Kentucky counties. SD1 moved to dismiss the third-party complaint on the grounds that it was entitled to sovereign immunity. The circuit court converted the motion to dismiss into a motion for summary judgment and granted the motion, concluding that SD1 was entitled to sovereign immunity because SD1’s “parent” entities - the three counties - were immune entities, and SD1 performed a function integral to state government. The Court of Appeals affirmed, describing SD1 as an “arm” of the three counties. The Supreme Court reversed the Court of Appeals and vacated the summary judgment order of the circuit court, holding that SD1 was not entitled to sovereign immunity because it was not created by the state or a county and does not carry out a function integral to state government. View "Coppage Constr. Co., Inc. v. Sanitation Dist. No. 1" on Justia Law

Charleston Auto Auction (Charleston Auto) is a wholesale auctioneer of automobiles. In 2008, an automobile dealer, A3 Auto Center (A3), sought to purchase three automobiles from other car dealerships (Sellers) and use Charleston Auto to facilitate the sale. Pursuant to a statutory requirement, A3 obtained a surety bond from CNA Surety. Charleston Auto located the three vehicles that A3 ultimately purchased. A3 paid Charleston Auto for the vehicles with three checks, which were eventually returned for insufficient funds. Charleston Auto sought reimbursement from its insurance carrier, petitioner Centennial Casualty Co. Petitioner paid Charleston Auto's claim and demanded reimbursement from CNA Surety pursuant to A3's surety bond. CNA Surety refused to pay, contending that the Dealer Bond Statute did not apply to the transaction as neither petitioner nor Charleston Auto was a "legal representative" who suffered a loss or damage. Petitioner then filed suit against CNA Surety, claiming that Charleston Auto was the "legal representative" of A3 and the Sellers and that Petitioner was subrogated to Charleston Auto's rights to seek damages under the Dealer Bond Statute. The trial court found that Petitioner was entitled to reimbursement under A3's surety bond, and CNA Surety appealed. The court of appeals reversed, finding that "[Charleston Auto] and [Petitioner] were not legal representatives of the Sellers" because Charleston Auto "did not stand in the shoes of the Sellers." Petitioner filed a petition for writ of certiorari contending that the court of appeals ignored the "legal representative" designation in the bills of sale and misapplied the plain language of the Dealer Bond Statute. The Supreme Court agreed, reversed and remanded. View "Centennial Casualty v. Western Surety Co." on Justia Law

Jefferson County awarded the first phase of its courthouse remodeling plan to a contractor. Two subcontractors aided in the repairs. While the repairs were underway, a fire severely damaged the courthouse. Jefferson County’s contract with the contractor incorporated an American Institute of Architects (AIA) standard form. The AIA contract waives subrogation rights for damages caused by fire “to the extent covered by property insurance.” Jefferson County filed a subrogation claim against the Contractors to recover damages caused to its property unrelated to repairs. Defendants moved for summary judgment, arguing that Jefferson County had waived its claim under the AIA waiver because its insurance policy covered all the damages. The County responded that the subrogation waiver applied only to construction-related damages. The trial court granted summary judgment for Defendants, concluding that Jefferson County had waived subrogation rights for all claims. The Supreme Court affirmed, holding (1) the plain language of the AIA contract restricts the scope of the waiver based on the source and extent of property insurance coverage, not the nature of the damages; and (2) the County agreed to waive its rights to bring this subrogation claim by relying on its existing “all-risk” property insurance policy that covered the work and all other losses suffered in the fire. View "Bd. of Comm’rs v. Teton Corp." on Justia Law

Plaintiff, a crew member aboard a supply vessel that was mud-roped to the Deepwater Horizon and was off-loading drilling mud on the night of the 2010 blowout, filed suit claiming that he sustained physical injuries when the explosion rocked the vessel and threw him against a bulkhead. On appeal, BP challenged the district court's judgment in favor of plaintiff where the district court, over BP's objection, enforced a putative settlement agreement against BP in plaintiff's favor. The court held that the parties formed a binding settlement agreement; the district court correctly excused plaintiff’s failure to sign the release document where BP's refusal to send plaintiff the release excused that failure; but the district court should have held an evidentiary hearing to determine whether plaintiff fraudulently induced BP into entering the settlement agreement. Therefore, the court affirmed the district court’s order in part, but vacated the judgment and remanded for further proceedings. View "Young v. BP" on Justia Law

Burford agreed to facilitate the purchase and sale of accounting practices for APS. The parties initially signed a contract assigning Louisiana to Burford. They later orally agreed that Burford should also cover Alabama, Mississippi, Tennessee, and Kentucky. APS terminated the contract. Burford sued for breach of contract; APS filed a counterclaim under the Lanham Act, 15 U.S.C. 1051, claiming that Burford started a rival business, “American Accounting Practice Sales,” after APS terminated his contract. APS obtained summary judgment on the contract claim, arguing that the contract was terminable at will. APS voluntarily dismissed its counterclaim with prejudice. As the prevailing party on the Lanham Act claim, Burford sought attorney fees. The district court denied the motion, reasoning that APS’s Lanham Act claim could have been pursued by a rational party seeking to protect its trademark. The Seventh Circuit reversed grant of summary judgment on the contract claim, but affirmed the denial of attorney fees. The contract provided that it could be terminated by APS only if Burford violated the terms of the agreement; even if it was indefinite in duration, the parties contracted around the default rule making such contracts terminable at will. View "Burford v. Accounting Practice Sales, Inc" on Justia Law

Randy Spalding filed suit against Stewart Title Guaranty Company, alleging breach of contract and vexatious refusal to pay in regard to a title insurance policy. After a jury trial, the circuit court entered an amended judgment in favor of Spalding. The Supreme Court affirmed, holding that the circuit court did not err in (1) overruling Stewart Title’s motions for directed verdict and judgment notwithstanding the verdict where the title insurance policy was not time barred and where Spalding made a submissible case as to the existence and amount of the damages for the breach of contract; (2) refusing to give Stewart Title’s proposed instruction concerning its statute of limitations defense; (3) admitting evidence from an appraiser in regard to damages sustained from the title defect under the policy; and (4) giving a certain jury instruction regarding the measure of damages. View "Spalding v. Stewart Title Guaranty Co." on Justia Law