Justia Contracts Opinion Summaries

Plaintiff and Defendant entered into a series of agreements pursuant to which (1) Defendant agreed to transfer the management and, at the option of Plaintiff, the ownership of two automobile repair shops to Plaintiff; and (2) Plaintiff had the option to purchase the realty on which the shops were located on the condition that Plaintiff was in compliance with the terms of the agreements. When Plaintiff sought to exercise the options, Defendant refused to convey the properties, asserting that Plaintiff had not strictly complied with the agreements’ terms. The trial court determined that Plaintiff was entitled to specific performance of the options because it had substantially complied with the terms of the agreements. The Appellate Court reversed, concluding (1) the agreements were subject to a strict compliance standard, rather than a substantial compliance standard; and (2) Plaintiff had not strictly complied with the agreements' terms. The Supreme Court reversed, holding that the trial court (1) properly applied a standard of substantial rather than strict compliance with the terms of the parties’ agreements in resolving Plaintiffs’ claim; and (2) properly determined that Plaintiff was entitled to specific performance of the options because it had substantially complied with the terms of the parties’ agreements. View "Pack 2000, Inc. v. Cushman" on Justia Law

Miller-Davis Company was an "at risk" contractor for the Sherman Lake YMCA's natatorium project. Miller-Davis hired defendant Ahrens Construction, Inc., as a subcontractor to install similar roof systems on three rooms, including the natatorium. After nearly a decade of litigation and alternative dispute resolution proceedings, the indemnification contract underlying the troubled natatorium roof in this case was brought before the Supreme Court. The Court previously held that the six-year period of limitations of MCL 600.5807(8) applied to the parties’ indemnification contract. Upon further review, the Court held that the indemnity clauses in the parties’ subcontract applied here, because the plain language of the indemnification clauses extended to Ahrens’s failure to undertake corrective work as obligated by the subcontract. Furthermore, because the Sherman Lake YMCA made a "claim" upon Miller-Davis which triggered Ahrens’s liability under the indemnity clauses, Ahrens’ failure to indemnify caused the damages Miller-Davis sustained in undertaking the corrective work itself. Finally, the Court held that Miller-Davis’ claim was not barred by the six-year statute of limitations found in MCL 600.5807(8). Rather, Miller-Davis’ breach of contract claim for Ahrens’s failure to indemnify is distinct from its breach of contract claim based on Ahrens’s failure to install the roof according to specifications, and Miller-Davis’s indemnity action necessarily accrued at a later point. The Court reversed that portion of the Court of Appeals’ opinion discussing Miller-Davis’s indemnity claim, and remanded this case to the Circuit Court for entry of judgment in Miller-Davis’s favor and to determine whether Miller-Davis is entitled to attorney’s fees under the relevant indemnification clauses. View "Miller-Davis Co. v. Ahrens Construction, Inc." on Justia Law

This case arose from a dispute between CoreTel and Verizon regarding their respective responsibilities under an interconnection agreement (ICA), a private contract that implements duties imposed by the Telecommunications Act of 1996, 47 U.S.C. 151 et seq. Each party contended that the other improperly billed it for various services. The district court granted summary judgment in Verizon's favor on each claim. The court concluded that CoreTel was entitled to summary judgment in its favor on both its and Verizon's claims for declaratory relief relating to Verizon's facilities charges where the ICA entitled CoreTel to order entrance facilities for interconnection at TELRIC. The court remanded for consideration of CoreTel's claim for injunctive relief. The court affirmed the district court's grant of summary judgment on CoreTel's facilities claims where the facilities CoreTel provided were not entrance facilities under ICA 1.25 and CoreTel pointed to no provision of the ICA that authorized it to simply levy facilities charges for any piece of equipment that handled Verizon's traffic. The court affirmed the district court's grant of summary judgment in Verizon's favor on CoreTel's reciprocal compensation claims. Finally, the court affirmed the district court's grant of summary judgment in Verizon's favor on Verizon's switched-access claims. View "CoreTel Virginia, LLC v. Verizon Virginia, LLC" on Justia Law

Plaintiff and Defendant were competitors. Plaintiff sued Defendant for tortious interference with Plaintiff’s non-solicitation agreements with employees. Five days after receiving a settlement offer from Defendant, Plaintiff filed its designation of expert witnesses. After Defendant filed its own expert designations, Plaintiff sent a letter “accepting” Defendant’s settlement offer. Defendant refused to pay the previously agreed-to amount based on fraudulent inducement and failure of consideration. Plaintiff amended its pleadings to assert a breach of contract claim based on the alleged settlement agreement. The trial court granted Plaintiff’s summary judgment motion on the breach of contract claim. The court of appeals reversed, concluding that no settlement agreement existed because Plaintiff had not accepted all of the offer’s material terms. The Supreme Court reversed, holding that the evidence established that Plaintiff accepted Defendant’s offer. Remanded. View "Amedisys, Inc. v. Kingwood Home Health Care, LLC" on Justia Law

Plaintiff sought insurance coverage for gastric lap band surgery. Defendant, a health-care insurer that covered Plaintiff by virtue of Plaintiff’s husband’s employment with the federal government, refused to cover the full cost of the surgery. Plaintiff brought tort and breach of contract claims against Defendant in the Puerto Rico Court of First Instance. Defendant removed the action to the federal district court, asserting, inter alia, that the Federal Employees Health Benefits Act of 1959 (FEHBA) completely preempted Plaintiff’s local-law claims, thus conferring original jurisdiction on the federal court. Defendant then moved to dismiss the case, arguing that the FEHBA demanded exhaustion of administrative remedies. Plaintiff, in the meantime, requested that the district court remand the case to the Court of First Instance. The district court (1) denied Plaintiff’s motion to remand, holding that the FEHBA completely preempted Plaintiff’s claims and, thus, federal jurisdiction attached; and (2) dismissed the action for Plaintiff’s failure to exhaust administrative remedies. The First Circuit Court of Appeals reversed the district court’s judgment of dismissal and its order denying remand, holding that the court erred in concluding that the FEHBA afforded complete preemption. View "Lopez-Munoz v. Triple-S Salud, Inc. " on Justia Law

Southeast Construction, L.L.C. ("SEC") appealed a Circuit Court order enforcing, a previous judgment entered by that court based on an arbitration award in favor of WAR Construction, Inc ("WAR"). Upon review of the facts of this case, the Supreme Court affirmed in part, reversed in part, and remanded for further proceedings. The Court concluded the circuit court erred in finding in a January 9 order that "all liens and claims against SEC ... from WAR's subcontractors/suppliers that filed a lien on the project ... ha[d] been released and/or adequate security ha[d] been provided." Furthermore, the Court concluded the circuit court erred in finding that WAR had "attempt[ed] to comply with what the Supreme Court ordered the circuit court to implement as of May 13, 2011," and that WAR was entitled to have the interest owed under the arbitrators' award and the May 9 judgment calculated from that date. View "Southeast Construction, L.L.C. v. WAR Construction, Inc. " on Justia Law

This case arose from a contract between Roanoke Healthcare Authority (doing business as Randolph Medical Center) and Batson-Cook Company, a general contractor, to renovate the medical center, located in Roanoke. Batson-Cook received written notice from Roanoke Healthcare that work on the renovation project had been suspended. Batson-Cook notified one of its subcontractors, Hardy, of the suspension and stated that "[t]he contract has been suspended by [Roanoke Healthcare] through no fault of Batson-Cook ... or its subcontractors. [Roanoke Healthcare] is currently out of funding and has subsequently closed the facility while seeking a buyer." Liberty Mutual, the project's insurer, alleged in its answer that Roanoke Healthcare failed to pay Batson-Cook $241,940.51 for work performed pursuant to the contract. Batson-Cook sent Hardy a change order the change order deducted from the subcontract the $147,000 in equipment and materials another subcontractor Hardy hired, Johnson Controls, Inc. (JCI), had furnished for the renovation project and for which it has not received payment. JCI notified Liberty Mutual, Roanoke Healthcare, Batson-Cook, and Hardy by certified letters of its claim on a payment bond. The letters identified Batson-Cook as the general contractor and Hardy as the debtor. Liberty Mutual denied the claim. JCI sued Liberty Mutual, alleging JCI was entitled to payment on the payment bond Liberty Mutual had issued to Batson-Cook. Upon review, the Supreme Court concluded JCI was a proper claimant on the payment bond. Therefore, the circuit court erred in entering a summary judgment in favor of Liberty Mutual and denying JCI's summary judgment motion. View "Johnson Controls, Inc. v. Liberty Mutual Insurance Company " on Justia Law

Appellee, which manufactures and distributes specialized products for use in the defense, security, and aerospace industries, entered into a consultant agreement with Appellant, under which Appellant agreed to identify buyers for Appellee’s products. Three years later, Appellee acquired the rights to manufacture and sell RH1280B field-programmable gate array (“FPGA”)s, which are semiconductor integrated circuits that are used in satellites and other space equipment. Operating under the terms of the consultant agreement, Appellant found customers for RH1280B FPGAs, accepted delivery of the PFGAs, and resold the goods to its customers. Before Appellant accepted delivery, however, Appellee warned it that the RH1280Bs failed to meet certain specifications. Appellant subsequently refused to pay an outstanding balance of $1,800,000, alleging that Appellee breached its express warranty regarding the performance characteristics of the RH1280B. Thereafter, Appellee terminated the consultant agreement. The district court granted summary judgment in Appellee’s favor. The First Circuit Court of Appeals affirmed, holding that, under the circumstances of this case, the district court correctly granted summary judgment in Appellee’s favor. View "BAE Sys. Info. & Elec. Sys. Integration, Inc. v. SpaceKey Components, Inc." on Justia Law

Alfa Life Insurance Corporation ("Alfa") and Brandon Morris, an agent for Alfa, appealed a judgment entered against them following a jury verdict for Kimberly Colza, the widow of Dante Colza. In 2010, Morris met with Dante to assist him in completing an application for a life-insurance policy. There was disputed evidence as to whether Morris asked Dante whether he had had a moving traffic violation, a driver's license suspended, or an accident in the prior three years, it was undisputed that Morris entered a checkmark in the "No" box by that question. The evidence indicated that Dante applied for the Preferred Tobacco premium rate. Dante named Kimberly as the beneficiary under the policy. At the close of the meeting, Kimberly wrote a check payable to Alfa for $103.70, the monthly Preferred Tobacco premium rate. Kimberly testified at trial that Morris informed them that Dante would be covered as soon as they gave Morris the check. Dante was later examined by the medical examiner. During the examination, Dante informed the examiner that his family had a history of heart disease and that he had had moving traffic violations within the past five years. The day after he had his medical examination, Dante was killed in an accident. Two days later, Alfa received the medical examiner's report, which indicated that Dante's family had a history of heart disease, that Dante's cholesterol was above 255, and that Dante had had moving traffic violations in the past five years. In light of the report, Alfa's underwriters determined that Dante was not eligible for the Preferred Tobacco rate for which he had applied; rather, the proper classification would have been the Standard Tobacco rate (which had a higher premium). Additionally, in light of the moving vehicle violations, Dante was a greater risk to insure and a "rate-up" of $2.50 per $1,000 worth of coverage was required. Alfa notified Kimberly by letter that no life-insurance coverage was available for Dante's death "because no policy was issued and the conditions of coverage under the conditional receipt were not met." Kimberly sued Alfa seeking to recover under the terms of the conditional receipt (an acknowledgment of the policy). She alleged, among other claims, that Alfa had breached the contract and had acted in bad faith when it refused to pay life-insurance benefits on Dante's death. Kimberly also sued Morris, alleging, among other claims, that he had negligently failed to procure insurance coverage for Dante. After a trial, the jury found that Alfa had breached the contract and had in bad faith refused to pay the insurance benefits due, and that Morris had negligently failed to procure insurance. Upon review, the Supreme Court concluded Alfa and Morris were entitled to a judgment as a matter of law on those claims, and the trial court erred by submitting the claims to the jury for consideration. View "Alfa Life Insurance Corporation v. Colza " on Justia Law

AllianceOne Receivables Management Inc. instituted a collections action against William Carl Lewis Jr. and then voluntarily dismissed it. Lewis claimed he was entitled to attorney fees as the "prevailing party" under RCW 4.84.250 and .270 since under RCW 4.84.270 a defendant is a prevailing party when the plaintiff "recovers nothing." The district court denied Lewis' fee request, holding that there is no prevailing party for the purposes of an award of attorney fees when the plaintiff voluntarily dismisses the action. Finding no reversible error, the Supreme Court affirmed. View "AllianceOne Receivables Mgmt., Inc. v. Lewis" on Justia Law