Justia Contracts Opinion Summaries

Plaintiff worked in a luggage factory in France that was owned by Samsonite. Samsonite was controlled by an investment group led by Bain Capital, LLC. Bain wanted to shut down the factory, and to avoid paying millions of dollars in post-termination benefits to the laid-off employees of the factory, Bain and Samsonite hired a third party, HB Group, to buy the factory. In 2007, a French court ordered the judicial liquidation of the factory. Because HB Group had no resources to pay Plaintiff and her coworkers, Plaintiff commenced this putative class action in 2012 seeking to hold Bain liable for losses suffered by the factory’s workers as a result of the sale and liquidation. The district court dismissed the complaint as untimely under the relevant three-year statute of limitations. The First Circuit affirmed, holding that there was no basis to conclude that the statute of limitations was tolled in this case. View "Abdallah v. Bain Capital, LLC" on Justia Law

Kingdomware is a VA-certified service-disabled veteran-owned small business. The Small Business Act, 15 U.S.C. ch. 14A, states that small businesses generally will receive “a fair proportion of the total purchases and contracts for property and services for the Government.” Veteran-Owned Small Businesses (VOSBs) and Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) are expressly recognized in the Small Business Act and the Federal Acquisition Regulation (FAR), 48 C.F.R. ch. 1, which implements the Office of Federal Procurement Policy Act, 41 U.S.C. ch. 7. Agency-specific contract regulations are stated in the Veterans Affairs Acquisition Regulation (VAAR), 48 C.F.R. ch. 8. In 2012, the VA decided to implement an Emergency Notification Service in medical centers. The VA contracting officer chose to use the General Services Administration (GSA) Federal Supply Schedule (FSS) to procure the needed services, and awarded the contract to a FSS vendor which was not a VOSB. Kingdomware filed a bid protest with the Government Accountability Office (GAO), which rejected the VA’s argument, and issued a recommendation that the VA cancel the award. The VA did not acquiesce. The Claims Court upheld the VA determination, interpreting 38 U.S.C. 8127(c), concerning use of restricted competition, as not creating a mandatory set-aside. The overarching policy of the FAR generally demands ‘full and open competition,” which is deemed satisfied by FSS contracts. The FAR specifies that an agency is encouraged to obtain goods and services from FSS contractors before purchasing from commercial sources, which include privately owned VOSBs and SDVOSBs. The Federal Circuit affirmed. View "Kingdomware Techs, Inc. v. United States" on Justia Law

The issue this case presented to the Supreme Court stemmed from litigation involving the dissolution of an anesthesiology practice. Plaintiffs Angel Cancel, M.D., Pravin Jain, M.D., Grace Duque-Dizon, M.D., and Monajna Sanjeev, M.D. were shareholders in the now-defunct Central Georgia Anesthesia Services, P.C. (CGAS), which was at one time the exclusive anesthesiology provider at a Macon hospital owned and operated by The Medical Center of Central Georgia, Inc. According to Plaintiffs' complaint, beginning in 2001, Plaintiffs Cancel and Jain discovered what they believed were billing irregularities within the practice, which they brought to the attention of their fellow shareholders and officials at The Medical Center over a period of time between 2001 and 2003. In 2003, The Medical Center announced its intention to restructure its anesthesiology department, after which CGAS shareholders voted to terminate CGAS' contract with The Medical Center. The Medical Center subsequently began recruitment of physicians for its restructured department and eventually selected several former CGAS physicians to join it. None of the four Plaintiffs were selected, and their affiliation with The Medical Center ended. The Medical Center had entered into an exclusive services contract with The Nexus Medical Group, LLC, which was comprised of the former CGAS physicians, and some non-CGAS physicians, who had been selected by The Medical Center for its restructured anesthesiology department. Alleging that the restructuring at The Medical Center and formation of Nexus were effectuated as part of a scheme to expel Plaintiffs from their practice in retaliation for bringing to light the billing issues, Plaintiffs filed suit seeking damages for breach of fiduciary duty, fraud, and other claims. Several years of discovery, and various motions for summary judgment were filed and hearings were held. In 2011, the trial court issued an order granting summary judgment to Defendants on all of Plaintiff Cancel's claims. Cancel appealed this order. Prior to the filing of Cancel's notice of appeal, the trial court issued a second order, denying Nexus' motion for summary judgment as to the remaining Plaintiffs. After the filing of the notice of appeal, the trial court issued the last of its summary judgment orders, denying the motions filed by the CGAS Defendants and The Medical Center Defendants as to the remaining Plaintiffs. Nexus and the CGAS Defendants filed a notice of cross-appeal, challenging the orders denying them summary judgment. A few days later, the Medical Center Defendants filed their own notice of cross-appeal. The Court of Appeals consolidated the appeal and cross-appeals and issued a single opinion in which it affirmed the grant of summary judgment against Cancel; reversed the denial of summary judgment against Nexus; and dismissed the cross-appeals of the CGAS Defendants and the Medical Center Defendants. Dismissal of the cross-appeals was premised on the Court of Appeals' conclusion that it had no jurisdiction to consider them because they sought to challenge orders issued after the filing of Cancel's notice of appeal. Upon review, the Supreme Court concluded that the appellate court had jurisdiction, and erred in holding otherwise. Accordingly, the case was reversed and remanded for further proceedings. View "Sewell v. Cancel" on Justia Law

Merchants Bank appealed a Circuit Court judgment in favor of Elizabeth Head on Merchants Bank's claim against her alleging breach of a promissory note. After the 2008 promissory note at issue was executed, Merchants Bank wired the $400,000 to Elizabeth's husband, David Head's, personal account. David testified that he then wrote a check distributing the funds to his real-estate-development company, Head Companies, LLC. The Heads renewed the 2008 promissory note in March 2009 and again in March 2010, in August 2010, in February 2011, and, finally, in July 2011. With the exception of the July 2011 renewal, each renewal was signed on page three by both David and Elizabeth. A box on page two was left blank. On the initial version of the July 2011 renewal of the note, however, Elizabeth signed in both the box on page two, indicating that she intended to "give [Merchants Bank] a security interest" in the Heads' personal residence, and at the end of the document on page three. signature on page two of the initial July 2011 note was "a mistake in the nature of a scrivener's error and [Merchants] Bank subsequently had the Heads execute a corrected note, which they did knowingly and voluntarily." Elizabeth presented no evidence to the contrary. The "corrected note" bore the same date as the initial July 2011 note and, like all the previous renewals, was signed by both David and Elizabeth on page three of the document only. The box on page two of the corrected July 2011 note was left blank. The Heads defaulted on the promissory note in April 2012. In September 2012, Merchants Bank sued the Heads, alleging breach of the promissory note and attaching to the complaint the initial July 2011 note as evidence of the debt. David did not answer the complaint, and Merchants Bank obtained a default judgment against him in the amount of $415,142.57 plus interest on the judgment. Elizabeth did answer the complaint, arguing that the note was unenforceable against her because she had signed the initial July 2011 note only to give a security interest in her and David's residence not "for the purpose of agreeing to pay the debt evidenced thereby" and because she had not received consideration for her signature on the note. Merchants Bank moved for a summary judgment against Elizabeth. That motion was denied. After a bench trial in March 2013, the circuit court entered a final judgment in favor of Elizabeth. Upon review, the Supreme Court held that Elizabeth renewed her obligations under the 2008 promissory note in the capacity of a maker in July 2011, and that her obligations under the 2008 promissory note were supported by valid consideration. It was undisputed that she and David defaulted on their obligations under the corrected July 2011 note. Thus, Elizabeth was liable to Merchants Bank on its claim of breach of promissory note, and the circuit court erred in entering a judgment in her favor. View "Merchants Bank v. Head " on Justia Law

This dispute arose from the lease of a commercial building from CRG to Smucker. The lease provided that, after its initial term, it would automatically renew unless Smucker provided written notice of its intent to terminate the lease 180 days prior to the end of the current term. When the termination notice to CRG arrive after the deadline, CRG refused to accept the notice and filed suit against Smucker. The court concluded that it would be unconscionable to hold Smucker to the renewal because Smucker had substantially performed its lease obligations. The court concluded that the district court erred in failing to treat the cancellation provision in this case as an option to terminate. The court also concluded that there was insufficient evidence to conclude as a matter of law that enforcing the terms of the lease against Smucker would cause Smucker such hardship as to make literal enforcement of the option unconscionable. Accordingly, the court reversed and remanded for further proceedings. View "Commercial Resource Group, LLC v. The J.M. Smucker Co." on Justia Law

After four people died from carbon monoxide poisoning while sleeping in a room above a pool heater in a motel, the motel sought coverage for the deaths from its insurer. The insurer denied coverage based on two provisions of the motel’s general liability policy, the absolute pollution exclusion and the indoor air quality air quality exclusion. The federal district court determined that the policy exclusions were ambiguous and interpreted the ambiguity in the motel’s favor. On appeal, the federal court of appeals certified questions of Nevada law to the Nevada Supreme Court. The Court answered the questions in the negative, concluding that neither the pollution exclusion nor the indoor air quality exclusion clearly excluded coverage for carbon monoxide exposure under the circumstances of this case. View "Century Sur. Co. v. Casino W., Inc." on Justia Law

Defendants and Plaintiff executed a purchase and sale agreement under which Defendants agreed to sell real property to Plaintiff. Later, Defendants’ attorney (“Attorney”) falsely told Plaintiffs that Defendants had received a higher offer for the property and to calculate its liquidated damages. Later, due to Attorney’s withholding of information before the closing, the parties were unable to close the sale. Plaintiff filed suit for specific performance. The superior court judge concluded that Defendants anticipatorily repudiated the agreement and that Attorney’s attempt to “scuttle the deal” at closing constituted an actual breach of the implied covenant of good faith and fair dealing. As a result, the court allowed Plaintiff to choose either compensatory damages, as provided by the agreement, or specific performance. Plaintiff elected to receive compensatory damages. Defendants appealed, contending that they did not commit an actual breach, and therefore, monetary damages were not available. The Supreme Court affirmed, holding that the trial judge did not err finding of an actual breach by Defendants, and therefore, the judge’s decision offering Plaintiff a choice of remedy was proper. View "K.G.M. Custom Homes, Inc. v. Prosky" on Justia Law

Plaintiff, an Indiana resident, was driving a semi-tractor trailer on behalf of Werner Transportation, a Georgia company, when he was injured in West Virginia after another truck hit his rig. Werner insured the truck under a policy from Empire Fire and Marine Insurance Co., which provided $5 million liability coverage. Empire, however, claimed that the policy included only $75,000 in underinsured motorist coverage. Applying Georgia law, the trial court granted summary judgment in favor of Empire, finding there was sufficient evidence that Werner made the affirmative choice to purchase underinsured motorist coverage in a lower amount than the liability policy limit. The court of appeals determined that Indiana law applied but nonetheless affirmed the trial court, concluding the evidence was sufficient under Indiana law to establish that Werner had explicitly rejected the default $5 million coverage limit and instead purchased coverage only in the amount of $75,000. The Supreme Court reversed, holding that the issue of whether Werner waived the higher liability limit for underinsured motorist insurance was “unsuitable for summary judgment and best left to the fact-finder.” View "Asklar v. Gilb" on Justia Law

When attorney Kent Rubens, now deceased, was a general partner in the law firm of Rieves, Rubens and Mayton (RRM) Rubens entered into an oral contingency-fee agreement for legal services rendered to Hotel Associates, Inc. (Hotel). Hotel later filed suit against RRM and other defendants, contending that the oral contingency-fee agreement was unenforceable as against public policy. RRM counterclaimed for breach of contract. The circuit court granted RRM’s motion for summary judgment on all of Hotel’s claims and on RRM’s counterclaim and awarded RRM prejudgment interest. The Supreme Court affirmed, holding that the circuit court did not err in (1) ruling that oral contingency-fee agreements are enforceable in Arkansas; (2) granting summary judgment for RRM because no material issues of genuine fact remained in dispute; and (3) granting RRM’s motion for prejudgment interest. View "Hotel Assocs. Inc. v. Rieves, Rubens & Mayton" on Justia Law

In 1996, the Air Force entered into a contract under which SUFI would install and operate telephone systems in guest lodgings on bases in Europe at no cost to the government; the Air Force agreed that SUFI network was to be the exclusive method available to a guest placing telephone calls at the lodging. The contract permitted SUFI to block other networks and required the Air Force to remove or disable preexisting Defense Switched Network (DSN) telephone lines in hallways and lobbies, but DSN phones remained in place. Call records showed that, with Air Force assistance, guests often placed multiple or lengthy individual calls. After the Air Force declined to implement controls to curb DSN and patched-call abuse, SUFI blocked guest-room access to the DSN operator numbers but permitted morale calls from lobby phones, monitored by sign-in logs. Air Force personnel failed to require guests to sign the logs and gave guests new DSN access numbers, to circumvent SUFI’s charges. After failed attempts to resolve the situation, including through the Armed Services Board of Contract Appeals, SUFI sold the telephone system to the Air Force for $2.275 million and submitted claims, totaling $130.3 million, to the contracting officer. The officer denied the claims, except for $132,922 on a claim involving use of calling-cards. The Board later awarded $7.4 million in damages, plus interest. In an action under the Tucker Act, 28 U.S.C. 1491, the Court of Federal Claims awarded $118.76 million in damages, plus interest. The Federal Circuit vacated in part and remanded for additional findings. View "SUFI Network Servs, Inc. v. United States" on Justia Law