Justia Contracts Opinion Summaries

The Union sought to set aside an arbitration award that ruled in favor of the MADA and several member car dealerships. At issue was the transition between the 2006 collective bargaining agreement (CBA) and the 2010 CBA and its impact on above-scale time allowances for hybrid car warranty and recall work. The district court granted defendants' motion to dismiss under Rule 12(b)(6). The court agreed with the district court and found that the arbitrator was "warranted" in determining the CBA's plain language to be "silent or ambiguous with respect to the disputed issue - how the above-scale time allowances could be legitimately terminated." With MADA's attorney's unrebutted testimony and the letters documenting other dealerships' similar conduct to help the parties' past practice with respect to the ambiguous CBA language at issue, the court concluded that the arbitration award drew its essence from the CBA. Therefore, the court found no basis to vacate the arbitration award. The court affirmed the district court's order granting MADA's motion to dismiss with prejudice. View "Garage Maintenance, etc. v. Greater Metropolitan, etc., et al." on Justia Law

Corning hired Hyundai, an ocean shipper, to transport thin glass sheets for use in televisions and computer monitors from the U.S. to Asia. Although it is not clear when the damage occurred, damage was noted when Hyundai unloaded the containers from flatcars operated by its subcontractors (Norfolk Southern Railway and BNSF, another rail carrier). Corning had no role in selecting and no relationship with the subcontractors. There were opinions that the damage was caused by movement of the railcars, not by packing, but the actual cause was not established. Corning’s insurer paid Corning $664,679.88 and filed suit. The district court held that the case would proceed solely under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 11706, apparently reasoning that the damage undisputedly occurred while the cargo was in the possession of a rail carrier. The court found that a Subcontracting Clause did not immunize the rail carriers from suit, but obligated Corning to indemnify Hyundai for any resultant claims by a subcontractor against Hyundai arising out of the same facts. The court held that a $500-per-package limit of liability did not apply to the rail carriers or Hyundai. After a jury trial, the court found Hyundai and the railroads liable, but denied prejudgment interest. The Sixth Circuit affirmed the judgment against Hyundai, reversed and vacated judgments against the railroads, and remanded for reconsideration of prejudgment interest.View "CNA Ins. Co. v. Hyundai Merch. Marine Co., Ltd." on Justia Law

The issue before the Supreme Court in this case centered on whether a subcontract for the maintenance of aircraft required a contractor to turn to a subcontractor for all maintenance the contractor needs to fulfill a contract with the United States Army. The contractor, DynCorp International, LLC, contended the contract did not create an exclusive relationship between the parties and it could send aircraft to other maintenance providers. The subcontractor, Stevens Aviation, contended the contract was a requirements contract under which DynCorp had to send all aircraft requiring maintenance to Stevens. Stevens moved for a partial summary judgment on the issue, the trial court granted the motion, and the court of appeals reversed and granted partial summary judgment to DynCorp. Upon review of the matter, the Supreme Court reversed the court of appeals' decision in part and affirmed in part, holding the contract was a requirements contract for certain aircraft. View "Stevens Aviation v. DynCorp International" on Justia Law

Plaintiff retained Defendant, a law firm, to represent Plaintiff in an action against other parties. After Plaintiff settled the underlying suit, Plaintiff filed a breach of contract action against Defendant, alleging that Defendant breached its duty of undivided loyalty and failed to follow Plaintiff’s instructions in the underlying lawsuit. The trial court characterized the allegations against Defendant as sounding in legal malpractice and granted Defendant’s motion for summary judgment on the ground that Plaintiff’s claim was barred by the statute of limitations applicable to legal malpractice claims. At issue on appeal was whether Plaintiff’s cause of action was one for malpractice, to which a three-year statute of limitation applied, or contract, to which a six-year statute of limitations applied. The appellate court affirmed. The Supreme Court affirmed, holding that the trial court correctly characterized Plaintiff’s claim as sounding in legal malpractice. View "Meyers v. Livingston, Adler, Pulda, Meiklejohn & Kelly, P.C." on Justia Law

An Insured obtained an insurance policy to reimburse its expenses in regaining control of an oil well in the event the well blew out. The well subsequently blew out and caught fire. The Insured represented to the Insurer that it owed 100 percent working interest in the well, andthe Insurer paid claims accordingly. After the Insurer discovered that the Insured might have possessed less than 100 percent working interest in the well, the Insurer filed a lawsuit for a return of its payments under breach of contract and equity claims. The court of appeals entered summary judgment in favor of the Insurer on its equity claims, but a different court of appeals overturned the prior rulings, concluding that the Insurer had no equitable right to reimbursement. The Supreme Court agreed with the court of appeals that the Insurer could not proceed on its equity claims but for different reasons, holding that because the insurance contract addressed the Insured’s conduct, the Insurer could not rely on its equity claims. Remanded to the court of appeals to address the contract claims. View "Gotham Ins. Co. v. Warren E&P, Inc." on Justia Law

TXU Portfolio Management Company (TXU) entered into a contract with FPL Energy, LLC to receive electricity and renewable energy credits (RECs) from wind farms owned by FPL. After FPL failed to provide the electricity and RECs, TXU filed a breach of contract action against FPL. FPL counterclaimed, arguing that TXU failed to provide it with sufficient transmission capacity. The trial court granted two partial summary judgments declaring (1) the contracts required TXU to provide transmission capacity, and (2) the contracts’ liquidated damages provisions were unenforceable. After a jury trial on the remaining issues, the trial court entered take-nothing judgments for both parties. The court of appeals reversed both summary judgment rulings. The Supreme Court (1) affirmed the court of appeals’ holding that TXU owed no contractual duty to provide transmission capacity; but (2) reversed the portion of the court of appeals’ judgment regarding liquidated damages, holding that the liquidated damages provisions applied only to RECs and were unenforceable as a penalty. Remanded for a determination of damages. View "FPL Energy, LLC v. TXU Portfolio Mgmt. Co., L.P." on Justia Law

In 2011, the district court filed a decree dissolving the marriage of Brenda Rice and Dale Rice that incorporated a property settlement agreement (“agreement”) previously entered into by the parties. Dale died one week later. At the time of his death, Dale owned two life insurance policies, both of which listed Brenda as the primary beneficiary. Brenda subsequently filed claims for the proceeds of the policies. The personal representative of Dale’s estate moved to enforce the dissolution decree, claiming that under the agreement, Brenda relinquished her beneficiary interests in the life insurance policies. The district court ordered Brenda to withdraw her claims under the policies and to renounce her rights to any property or interest in Dale’s estate and proceeds from any insurance policies on Dale’s life. The Supreme Court affirmed, holding (1) as a matter of law, Brenda relinquished all rights to Dale’s life insurance policies in the agreement, which was incorporated into the divorce decree; and (2) therefore, the district court did not err when it enforced the dissolution decree and ordered Brenda to withdraw claims to Dale’s life insurance policies. View "Rice v. Web" on Justia Law

Clay Merches petitioned the Alabama Supreme Court for a writ of mandamus to direct the trial court to dismiss claims against him for lack of personal jurisdiction. The underlying case concerned a missing flatbed trailer owned by Builders Transportation, a Tennessee company. The plaintiffs were Alabama residents. The complaint alleged that the parties had entered into a contract in which Builders Transportation and Dwight Bassett (employee of Builders Transportation) had agreed to pay the plaintiffs $10,000 in return for information about the location of the missing trailer. The plaintiffs further alleged that Builders Transportation and Bassett had breached that contract by failing to pay the plaintiffs $10,000 for the information given about the trailer, which was located in a field in Hale County. Instead of receiving $10,000, the plaintiffs were arrested in Hale County and charged with receiving stolen property and conspiracy to commit theft of property. Those charges were later dismissed. In July 2012, the plaintiffs amended their complaint to add Merches, an employee of Builder Transportation as a defendant. The claims and factual allegations made against Merches in the amended complaint were the same as those made against Builders Transportation and Bassett. Upon review, the Supreme Court concluded Merches lacked sufficient contact with Alabama to support the trial court's exercise of personal jurisdiction over him. Accordingly, the Court issued the writ. View "Brantley v. Bassett" on Justia Law

Ann Shannon was the sole member of a limited liability company (LLC). In 2004, Shannon signed a lease for commercial space with the property’s owner, Rick Pannell, on behalf of the LLC. In 2005, the LLC was administratively dissolved. In 2006, Shannon and Pannell entered into a release of the old lease and a new lease. The new lease expressly stated that the LLC was the tenant and was signed by Shannon but did not mention Shannon’s company capacity in any direct way. Pannell subsequently sued for breach of the lease, naming the LLC and Shannon individually. Shortly after, the LLC was reinstated. The circuit court concluded that Shannon was entitled to immunity from personal liability and awarded Pannell damages against the LLC under the lease. The court of appeals affirmed. The Supreme Court affirmed, holding (1) based on the facts of this case, Shannon did not directly obligate herself because she clearly signed the lease in her representative capacity and the lease was expressly with the company; and (2) Shannon could not be personally liable under Kentucky’s Limited Liability Company Act or under the theory that she exceeded her authority as an agent of the LLC during the dissolution. View "Pannell v. Shannon" on Justia Law

Appellant was severely injured in an automobile collision in Kentucky while driving a truck for Miller Pipeline Corporation. Appellant received workers’ compensation benefits and settled with the tortfeasor and then sought to recover the remainder of his damages from underinsured motorist (UIM) coverage in Miller’s policy with Zurich American Insurance Company. Zurich denied coverage because Miller had allegedly rejected UIM coverage in Kentucky. The trial court ultimately granted summary judgment in favor of Zurich, concluding that the inclusion of UIM coverage in the policy was a mutual mistake by Miller and Zurich. The court of appeals affirmed. The Supreme Court reversed, holding that the doctrine of mutual mistake was erroneously applied by the courts below. Remanded for an order granting Appellant’s motion for partial summary judgment on the issue of UIM coverage. View "Nichols v. Zurich Am. Ins. Co." on Justia Law