Justia Contracts Opinion Summaries

Bluebonnet appealed the district court's grant of summary judgment for Wells Fargo on Bluebonnet's claim for rescission of contract. The court concluded that Bluebonnet has not demonstrated a genuine factual issue as to whether there is an error vitiating its consent to the swap agreement at issue and warranting rescission. The court's conclusion is supported by it's previous decision in Dameware Development, L.L.C. v. American General Life Insurance Co., in which the court held that there was no failure of cause constituting error or warranting rescission of a contract. Accordingly, the court affirmed the judgment of the district court. View "Bluebonnet Hotel Ventures v. Wells Fargo Bank, N.A." on Justia Law

Martin Linscott, Rolf Shasteen and Tony Brock formed the law firm Shasteen, Linscott & Brock (SLB). Linscott drafted a proposed shareholder agreement contemplating that if a shareholder left the firm, he would receive one-third of all fees from existing in-process cases. After Linscott left the firm, Linscott brought suit individually and derivatively on behalf of SLB against Shasteen and Brock seeking to recover one-third of attorney fees recovered from the SLB cases that existed at the time he withdrew as a shareholder. The district court ultimately concluded (1) the agreement was unenforceable under the statute of frauds; (2) the “unfinished business rule” had no application to this case; and (3) therefore, Linscott was not owed any attorney fees. The Supreme Court reversed, holding that the district court erred in (1) determining that the absence of any definition of the term “net fees” prevented the formation of an implied in fact contract; and (2) determining that the statute of frauds rendered any implied contract void. Remanded. View "Linscott v. Shasteen" on Justia Law

After Plaintiff purchased a used yacht, the yacht’s starboard engine failed beyond repair. Plaintiff sued Defendant-manufacturer, alleging several causes of action, including breach of the implied warranty of merchantability. The jury found Defendant liable only on the implied warranty claim. The trial court granted Defendant’s motion for judgment notwithstanding the verdict because Plaintiff was a subsequent purchaser of the used yacht and because Defendant disclaimed any implied warranty at the time of the first sale. The court of appeals reversed, holding that someone who knowingly buys used goods may still rely on an implied warranty from the manufacturer to the original buyer since the warranty passes with the goods. The Supreme Court affirmed, holding (1) Defendant could not rely on its purported express disclaimer of implied warranties issued at the first sale because it did not properly raise that defense in the trial court; (2) an implied warranty of merchantability, unless properly disclaimed, passes to subsequent buyers; and (3) therefore, Plaintiff was entitled to recover on his implied-warranty claim. View "MAN Engines & Components, Inc. v. Shows" on Justia Law

At issue in this case was which party was entitled to insurance funds under an insurance policy on a parcel of property that sustained water damage. Stanley Gurnick and Phoenix-Gurnick, RIGP claimed they owned the property as a result of a foreclosure sale. Navigant Credit Union claimed it was entitled to the funds as the named mortgagee/loss payee in the insurance policy. The superior court decided that Navigant was entitled to the insurance proceeds because the funds were personal property under the insurance contract and Navigant was named a loss payee under that contract. The Supreme Court affirmed, holding that the hearing justice correctly determined that Navigant was entitled to the insurance proceeds. View "R.I. Joint Reinsurance Ass'n v. O'Sullivan" on Justia Law

Plaintiffs agreed to lease medical diagnostic imaging equipments to Defendants for use in a medical imaging center. The center proved to be unsuccessful shortly after it opened, and Defendants defaulted on their payments. Plaintiffs filed a fourteen-count complaint against Defendants that included counts for replevin, breach of contract, breach of consent to sublease, and breach of sublease. Defendants counterclaimed for intentional misrepresentation, negligent misrepresentation, fraud and deceit, and a violation of Mass. Gen. Laws ch. 93A. The superior court granted summary judgment for Plaintiffs on all claims and counterclaims. The Supreme Court affirmed, holding that there were no genuine issues of material fact, and therefore, summary judgment was proper on Plaintiffs’ claims and Defendants’ counterclaims. View "Siemens Fin. Servs., Inc. v. Stonebridge Equip. Leasing, LLC " on Justia Law

In 2007, the Easthams entered into a five-year lease with Chesapeake, granting the right to extract oil and gas from the Easthams’ 49 acres in Jefferson County, Ohio. The Easthams were granted a royalty of one-eighth of the oil and gas produced from the premises. Until a well was commenced on the premises, the Easthams were entitled to “delay rental” payments of $10 per acre annually. The lease stated “Upon the expiration of this lease and within sixty (60) days thereinafter, Lessor grants to Lessee an option to extend or renew under similar terms a like lease.” In 2012, Chesapeake filed a notice of extension with the County Recorder and sent the Easthams a letter stating that it had extended the lease on the same terms for an additional five years, with a delay rental payment for $490.66. The Easthams later claimed that they did not read and did not understand the lease, but were not pressured into signing it. They filed a class action, seeking a declaration that the lease expired and that title to the oil and gas underneath the property be quieted in their favor. They claimed that the agreement did not give Chesapeake the option to unilaterally extend, but required that the parties renegotiate at the end of the initial term. The district court entered summary judgment for Chesapeake, concluding that the lease’s plain language gave Chesapeake options either to extend the lease under its existing terms or renegotiate under new terms. The Sixth Circuit affirmed View "Eastham v. Chesapeake Appalachia, L.L.C." on Justia Law

IDT Corp. and Tyco International Ltd. litigated and negotiated for fifteen years over the development and use of a telecommunications system. In 2004, IDT claimed that Tyco breached its obligation under a 2000 settlement agreement to negotiate additional agreements in good faith. The Supreme Court dismissed the complaint, concluding that IDT’s claim was unsupported by the record. After the Court’s decision, more negotiations took place. In 2010, IDT again sued Tyco for breach of contract and breach of the duty to negotiate in good faith. The Court of Appeals rejected IDT’s claim, holding that the parties’ obligation to negotiate in good faith came to an end without a breach by either party because the parties had reached a “good faith impasse.” View "IDT Corp. v Tyco Group, S.A.R.L." on Justia Law

The lawsuit underlying this action alleged that Glynis McCormack’s ward sexually and physically abused a younger boy. In this declaratory judgment action, the district court ruled that Metropolitan Property and Casualty Insurance Company, McCormack’s insurer, had a duty to defend McCormack in the underlying lawsuit. Metropolitan appealed, arguing that the alleged harmful conduct was excluded from coverage under the governing policy. The First Circuit affirmed, holding that, under the facts of this case, McCormack’s policy would cover the harm alleged in the complaint, and therefore, Metropolitan had a duty to defend McCormack in the underlying action. View "Metro. Prop. & Cas. Ins. Co. v. McCarthy" on Justia Law

The Administrators of the estates of two individuals killed in a single-engine airplane crash filed wrongful death actions against Honeywell International, Inc., the manufacturer of the plane’s autopilot system, alleging that Honeywell breached of the warranty of merchantability. The jury returned a verdict in favor of Honeywell. The Administrators appealed. The Supreme Court reversed, holding (1) the circuit court erroneously admitted hearsay statements in testimony regarding an accident investigation report prepared by the Mooney Airplane Company describing its investigation of the crash, and their admission was not harmless error; and (2) the circuit court abused its discretion in admitting certain opinion testimony and in allowing Honeywell’s counsel to make certain statements during closing argument. View "Harman v. Honeywell Int'l, Inc." on Justia Law

In 1987, Krauser, a periodontist, designed a dental implant system. He paid BHI’s predecessor to produce drawings and prototypes. In1991, the parties entered into a written agreement that specified that Krauser would develop new products for the company to produce and sell and that the drawings were “property of [BHI].” Krauser was entitled to royalties. Krauser obtained a patent covering one component of the system and listing Krauser as the inventor. The company subsequently secured patents covering dental implant systems, naming Shaw as the sole inventor. Krauser sued the company and Shaw for a declaration of ownership rights and for copyright and patent infringement. While the suits were pending, the company filed for bankruptcy, and Krauser filed claims in bankruptcy court. In a settlement agreement, Krauser granted the company a 10-year patent license and “all rights . . . [to] the dental implant system currently being manufactured.” The bankruptcy court approved the agreement. Later, several patents on dental implant systems issued to BHI. None listed Krauser as an inventor. Krauser alleged that BHI failed to pay the full amount of royalties or submit to required audits and claimed default. The district court granted BHI summary judgment, construing the settlement to apply only to implants being manufactured in 1996, not implants manufactured at the time of litigation, and finding that Krauser had no ownership rights. The Eleventh Circuit transferred the case “[b]ecause the Federal Circuit has exclusive appellate jurisdiction … relating to patents.” The Federal Circuit transferred the case back, noting that Krauser had dropped his claim of inventorship. View "Krauser v. Biohorizons, Inc." on Justia Law