Justia Contracts Opinion Summaries

The issue before the Supreme Court in this case arose from an alleged breach of contract and bad-faith denial of Dr. Jack and Margaret Hoover’s homeowner’s insurance claim against United Services Automobile Association (USAA) following Hurricane Katrina. The trial judge granted USAA’s motion for directed verdict as to the Hoovers’ claims for: (1) the unpaid portion of losses; (2) mental anguish and emotional distress; and (3) punitive damages. The trial court further determined that there were issues of fact for the jury as to whether the Hoovers’ roof structure was damaged, and as to the Hoovers’ claim for additional living expenses. The jury found for the Hoovers and granted compensatory damages. The Hoovers appealed and USAA cross-appealed. After its review of the record, the Supreme Court found that trial court applied an incorrect legal standard and improperly shifted a burden of proof to the Hoovers. Therefore the Court reversed the directed verdict as to the unpaid damages, and remanded the case for a jury to determine whether USAA proved by a preponderance of the evidence that the unpaid loss was caused by an excluded storm surge. The trial court did not err, however, in directing a verdict for USAA as to the Hoovers’ claims for mental anguish, emotional distress, and punitive damages. View "Hoover v. United Services Automobile Association" on Justia Law

After Opal Corn was rear-ended by Martha Gafford, she settled with Gafford and Gafford's insurer. Opal and L.B. Corn subsequently filed an underinsured motorist (UIM) claim with their insurer, Farmers Insurance Company, for the remaining damages from the accident. The Corns then filed suit against Farmers and a driver and company also involved in the accident (collectively, Eden). The Corns settled their claims with Eden, but their settlement was for less than the limits of Eden's insurance policy. Farms refused to offer UIM benefits and moved for summary judgment, arguing that because the Corns had failed to exhaust Eden's liability policy, they had not triggered UIM coverage under their policy with Farmers. The circuit court entered summary judgment for Farmers, finding that, based on the exhaustion requirement of UIM coverage and the policy language, the Corns were not entitled to UIM benefits. The Supreme Court affirmed, holding (1) insured persons are required to exhaust all liability insurance policies of all tortfeasors before they are entitled to receive UIM benefits; and (2) under the terms of the policy, UIM coverage was not triggered until all policy limits had been exhausted. View "Corn v. Farmers Ins. Co., Inc." on Justia Law

After discovering that she had lung cancer that had spread to her brain, Killian underwent aggressive treatment on the advice of her doctor. The treatment was unsuccessful and she died. Her husband submitted medical bills for the cost of the treatments to her health insurance company. The company denied coverage on most of the expenses because the provider was not covered by the insurance plan network. The husband filed suit, seeking benefits for incurred medical expenses, relief for breach of fiduciary duty, and statutory damages for failure to produce plan documents. The district court dismissed denial-of-benefits and breach-of-fiduciary-duty claims, but awarded minimal statutory damages against the plan administrator. In 2012, the Seventh Circuit affirmed the dismissals, rejecting an argument that the plan documents were in conflict, but remanded for recalculation of the statutory damages award. On rehearing, en banc, the Seventh Circuit affirmed the denial of benefits and statutory penalties holdings, but reversed on the breach of fiduciary duty claim. The instructions given in plan documents were deficient and a reasonable trier of fact could rule in favor of Killian, based on telephone conversations in which Killian attempt to determine whether the physicians who were about to perform surgery were within the network. View "Killian v. Concert Health Plan" on Justia Law

Petitioners and Respondents owned adjoining parcels of property. After the parties purchased their properties, they learned they would be entitled to free gas from a well drilled on a property adjoining Respondents' property. In order to access this gas, Petitioners obtained permission from Respondents to install a gas line across Respondents' property. Several years later, Respondents demanded that Petitioners remove the gas line from their property. Petitioners refused to remove the gas line and filed a civil action seeking injunctive relief. The circuit court ordered Petitioners to remove the gas line, finding that Respondents properly withdrew their permission to cross their property and that Petitioners had no easement or continuing right to cross Respondents' property. The Supreme Court affirmed, holding that the circuit court did not err in finding (1) Respondents revoked their permission to place a gas line across their property; (2) Petitioners were not entitled to any easement across Respondents' property; and (3) removal of the gas line from Respondents' property was required. View "Wilson v. Staats" on Justia Law

In 2009, GameStop, Inc., which operated retail stores that sold video games and video gaming software, hired Petitioner as an assistant manager. When she began her employment, Petitioner received a store associate handbook. In a document included with the handbook was an arbitration agreement. Petitioner signed and dated an acknowledgment of the handbook and rules including arbitration. In 2011, Petitioner sued GameStop and some of its managers (collectively, GameStop) for wrongful discharge, sexual harassment, and intentional infliction of emotional distress, among other causes of action. The circuit court dismissed the complaint pending Petitioner's submission of her claims to final and binding arbitration. Petitioner appealed, arguing that she did not enter into a valid arbitration with GameStop or, in the alternative, the arbitration agreement was unconscionable and unenforceable. The Supreme Court affirmed, holding (1) Petitioner and GameStop entered into a valid agreement to arbitrate Petitioner's claims; and (2) the arbitration agreement was neither procedurally nor substantively unconscionable. View "New v. GameStop, Inc." on Justia Law

After South Louisiana Ethanol filed for bankruptcy, CHS filed suit contending that South Louisiana Ethanol's option contract with Plaquemines constituted the assignment of a litigious right under Louisiana law, entitling CHS to redeem the litigious right by reimbursing Plaquemines for the cost of the option contract plus interest. The district court granted Plaquemines's motion to dismiss. The court concluded that the sale fit within the statutory judicial-sale exception to redemption, as described by Bluefields S.S. Co. v. Lala Ferreras Cangelosi S.S. Co. and its predecessors. Accordingly, the court affirmed the judgment of the district court, holding that the law at issue did not apply to judicial sales. View "CHS, Inc. v. Plaquemines Holdings, L.L.C." on Justia Law

Plaintiff Bjorn Myklatun and his company, Plaintiff Oil Innovation, brought claims of tortious interference, fraud, and civil conspiracy against Chemical Equipment and Specialties, Inc. (CESI); its parent company, Flotek Industries; Flotek president Todd Sanner; and former Flotek CEO Jerry Dumas. The district court granted partial summary judgment in favor of Defendants on the claim of tortious interference and one of Plaintiffs’ two theories of fraud. A jury entered a verdict in favor of all Defendants on the civil conspiracy claim. The jury also found in favor of Sanner and Dumas on the narrowed claim of fraud, but it found for Plaintiffs on the fraud claim against CESI and Flotek. Plaintiffs appealed, also raising various evidentiary and other challenges relating to their damages on the fraud claim, and they contended the jury’s verdict on the civil conspiracy and fraud claims was facially inconsistent and required a new trial. Because the Tenth Circuit agreed with the district court that Defendants were entitled to judgment as a matter of law, the Court did not address those other arguments. View "Myklatun, et al v. Halliburton Energy Services, et al" on Justia Law

Appellee Steven Wilson is a licensed optometrist, providing eye care services in Lowndes County as Wilson Eye Center (“WEC”). Appellees Cynthia McMurray, Jodie E. Summers, and David Price are also licensed optometrists employed by WEC. Prior to 2010, Spectera, Inc. had entered provider contracts ("Patriot contracts") with Wilson and McMurray and they became members of Spectera's panel of eye care providers. Summers was already on Spectera's panel of eye care providers. Under the Patriot contract, Spectera would reimburse appellees for the materials Spectera insureds used from WEC's inventory by paying appellees a fee for their materials' costs and by having Spectera insureds remit a materials copayment to appellees. Spectera decided to terminate its Patriot contracts and replace them with independent participating provider (IPP) agreements. After the trial court temporarily enjoined Spectera from enforcing its IPP agreement, Spectera sought to remove appellees Wilson, Summers, and McMurray from its approved panel of providers. The trial court enjoined Spectera from taking such action. Although Price was not on Spectera's provider panel, he alleged Spectera violated Georgia law by denying him membership on its panel because of his refusal to sign the IPP agreement. Upon considering the parties' cross motions for summary judgment, the trial court granted issued a permanent injunction precluding Spectera from enforcing the restrictions contained in the IPP agreement as to "any other licensed eye care provider on [Spectera's] provider panel" or those who had applied for admittance to the panel. Spectera appealed the trial court's decision to the Court of Appeals which affirmed in part and reversed in part. Upon review of Spectera's appeal, the Supreme Court concluded a portion of the IPP agreement violated Georgia law, and therefore sustained the Court of Appeals in one respect. However, because the IPP agreement did create the type of impermissible discrimination between classes of licensed eye care providers contemplated by the applicable law, the Court of Appeals was incorrect in concluding that the IPP agreement violated that particular subsection of the applicable law. Furthermore, the termination of any outstanding contracts with appellees Wilson, McMurray, and Summers should have been based on the lawful terms stated in the contracts and not based on a permanent court injunction. Therefore, the Supreme Court affirmed in part, reversed in part and remanded the case for further proceedings. View "Spectera, Inc. v. Wilson" on Justia Law

Stephen and Elizabeth Schultz contracted with Benchmark Builders, Inc. for the construction of a home. The Schultzes refused to close because they claimed the home was not built in conformance with the contract and Benchmark sued for specific performance or, in the alternative, for money damages for breach of contract. The Schultzes answered and filed a counterclaim for breach of contract seeking money damages for the return of earnest money they had paid and also for the value of certain fixtures they purchased and that had been installed in the home. They also sought attorney fees resulting from the alleged breach. The jury returned a verdict form that found for the Schultzes both as to Benchmark's claim and the Schultzes' counterclaim. The jury awarded the Schultzes zero dollars on the claim for light fixtures, zero dollars for return of the earnest money, and $16,555 on the claim for attorney fees. The Court of Appeals held the Schultzes were entitled, as the “prevailing party” to the award of attorney fees pursuant to the parties' contract and thus affirmed the award. The issue before the Supreme Court on appeal was whether the Court of Appeals erred in finding that the parties' contract allowed for an award of attorney fees to a party that recovered no money damages or other relief that it sought. Under the terms of the contract, the fact that the jury did not award actual damages did not mean the Schultzes could not be deemed the prevailing party to the lawsuit. The Supreme Court affirmed the appellate court's decision. View "Benchmark Builders, Inc. v. Schultz" on Justia Law

This appeal involved two separate actions that were consolidated. In the first action, a married couple raised allegations of fraud and other claims against Residential Finance Corporation (RFC), which had brokered two refinancings of the couple's residential mortgage. The first action was consolidated with a foreclosure case filed later against the couple. Appellant and RFC were named as third-party defendants in the foreclosure case. After consolidation, the case was bifurcated on the basis of subject matter for trial purposes and was scheduled to go to trial only on the refinancing issues. Judge Robert Nichols denominated Appellant as a codefendant in that trial. Appellant field an action for a writ of prohibition to prevent Nichols from requiring him to be a defendant in the trial. The court of appeals denied the writ. The Supreme Court affirmed, holding that Appellant could not establish the elements for a writ of prohibition, as Appellant had an adequate remedy at law and Nichols did not patently and unambiguously lack jurisdiction over Appellant. View "State ex rel. Shumaker v. Nichols" on Justia Law