Justia Contracts Opinion Summaries

PFG and Acuvest had an agreement (later terminated) under which guaranteed Acuvest’s customers that Acuvest would conform its conduct to CEA mandates. Acuvest advised Prestwick with respect to an investment on which it suffered a substantial loss. Prestwick sued PFG, Acuvest, and two of Acuvest’s principals, alleging violations of the Commodity Exchange Act (CEA), 7 U.S.C. 1, a breach of fiduciary duty against the Acuvest defendants, and a guarantor liability claim against PFG. Prestwick argued that termination of PFG’s guarantee of Acuvest’s obligations under the CEA did not terminate protection “for existing accounts opened during the term of the guarantee.” The district court awarded summary judgment to PFG and dismissed the remaining defendants with prejudice so that Prestwick could appeal. The Seventh Circuit affirmed, stating that contracts between the parties were definitive and rejecting Prestwick’s assertion public policy and estoppel to overcome a decision that the guarantee agreement was properly terminated. View "Prestwick Capital Mgmt., Ltd. v. Peregrine Fin. Grp., Inc." on Justia Law

Steven Johnson appealed an order compelling discovery of his federal income tax returns, and a judgment canceling a contract for deed and dismissing his action for specific performance against Sandra Mark, individually and as personal representative of the estate of Jeanne Johnson, and Stuart Johnson and Scott Johnson. Upon review of the matter, the Supreme Court concluded the district court did not abuse its discretion in compelling discovery, in canceling the contract for deed, and in dismissing the action for specific performance. View "Johnson v. Mark" on Justia Law

The Fund is a multi-employer trust fund under the Taft-Hartley Act, 29 U.S.C. 186, and the Employee Retirement Income Security Act, 29 U.S.C. 1001. Blue Cross is a Michigan non-profit corporation; its enabling statute authorizes the State Insurance Commissioner to require it to pay a cost transfer of one percent of its “earned subscription income” to the state for use to pay costs beyond what Medicare covers. In 2002 the Fund converted to a self-funded plan, and entered into an Administrative Services Contract with Blue Cross, which states that Blue Cross is not the Plan Administrator, Plan Sponsor, or fiduciary under ERISA; its obligations are limited to processing and paying claims. In 2004 the Fund sued, claiming that Blue Cross breached ERISA fiduciary duties by imposing and failing to disclose a cost transfer subsidy fee to subsidize coverage for non-group clients. The fee was regularly collected from group clients. Self-insured clients were not always required to pay it. Following a first remand, the district court granted class certification and granted the Fund summary judgment. On a second remand, the court again granted judgment on the fee imposition claim and awarded damages of $284,970.84 plus $106,960.78 in prejudgment interest. The Sixth Circuit affirmed. View "Pipefitters Local 636 Ins. Fund v. Blue Cross & Blue Shield of MI" on Justia Law

In 1990 Plummer, a recognized expert in horse-breeding and the tax consequences of related investments, created the Mare Lease Program to enable investors to participate in his horse-breeding business and take advantage of tax code provision classification of horse-breeding investments as farming expenses, with a five-year net operating loss carryback period instead of the typical two years, 26 U.S.C. 172(b)(1)(G). Plummer’s investors would lease a mare, which would be paired with a stallion, and investors could sell resulting foals, deducting the amount of the initial investment while realizing the gain from owning a thoroughbred foal. If they kept foals for at least two years, the sale qualified for the long-term capital gains tax rate, 26 U.S.C. 1231(b)(3)(A). Between 2001 and 2005, the Program generated more than $600 million. Law and accounting firms hired by defendants purportedly vetted the Program. Plummer and other defendants began funneling Program funds into an oil-and-gas lease scheme. It was later discovered that the Program’s assets were substantially overvalued or nonexistent. Investors sued under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c), also alleging fraud and breach of contract. The district court granted summary judgment and awarded $49.4 million with prejudgment interest of $15.6 million. The Sixth Circuit affirmed, stating that there was no genuine dispute over any material facts. View "West Hills Farms, LLC v. ClassicStar Farms, Inc." on Justia Law

In a declaratory judgment action, the issue before the Supreme Court was whether the circuit court erred when it found a commercial general liability (CGL) policy provided coverage when a brick face was damaged by improper cleaning after the insured general contractor completed its installation. After review, the Court concluded the policy did not provide coverage. View "Bennett & Bennett Construction v. Auto Owners Insurance" on Justia Law

At issue before the Supreme Court was an Asset Purchase Agreement. Portsmouth Regional Hospital was sold to the Hospital Corporation of America. A dispute arose over the meaning of certain terms and clauses in the purchase agreement. The Foundation for Seacoast Health sought to "repurchase" the hospital's tangible assets under certain conditions. The dispute arose when the Foundation sought to assert that right. The Foundation appealed the trial court’s determination that the clause under dispute in this case was intended to give the Foundation a right to purchase the Hospital only in the event of a sale to a third party. The Foundation argued that because of this error, the trial court also erred by failing to: (1) order specific performance of the Foundation’s contractual right to purchase the Hospital; (2) award monetary damages for the defendants’ material breach; and (3) award attorney’s fees for the remedy proceeding. Upon review of the contract in question, the Supreme Court affirmed all but the trial court’s attorney’s fee award. View "Foundation for Seacoast Health v. Hospital Corporation of America" on Justia Law

Plaintiff maintained a homeowners insurance policy with Insurer that excluded from coverage any claims for "injury arising out of the business pursuits" of Plaintiff. In 2011, a third party filed a complaint against Plaintiff, contending that Plaintiff published false and defamatory statements regarding the third party. In response to the complaint, Plaintiff tendered defense of the suit to Insurer, which declined to defend Plaintiff. Plaintiff then filed a complaint seeking a declaratory judgment that Insurer had a duty to defend him in the pending action by the third party. The superior court granted Plaintiff's motion for summary judgment. The Supreme Court vacated the judgment and remanded for entry of a summary judgment in favor of Insurer, holding that Insurer had no duty to defend Plaintiff because the third party suit was based entirely on activity falling within the policy's exclusion for Plaintiff's "business pursuits." View "Hardenbergh v. Patrons Oxford Ins. Co." on Justia Law

Plaintiff Robin Plaisted appealed a superior court order that dismissed her case against defendant Jeffrey LaBrie as untimely. The issue between the parties stemmed from the contract to sell real estate. Plaintiff wrote, and the defendant cashed, a check made out to "Jeff LaBrie" in the amount of $19,500. The check noted that it was "[f]rom R. Plaisted for full payment for 50% of 10 Nelson [Street] Property." Defendant, as president of Blue Star, signed a "Declaration of Ownership" stating that Blue Star granted to the plaintiff a fifty percent interest in the property. Two years later, Blue Star sold the property for a profit of $98,855.97 and wired the proceeds to a bank account "[f]or the benefit of Blue Star Consulting (Jeff LaBrie)." Plaintiff petitioned the trial court, seeking a declaration that she had been a one-half owner of the property, as well as an order requiring the defendant to pay her one-half of the sale proceeds. Finding no error in the trial court's determination that plaintiff's suit was time barred, the Supreme Court affirmed dismissal. View "Plaisted v. LaBrie" on Justia Law

After the parties failed to negotiate a franchise renewal agreement, Home Instead filed a declaratory judgment action against Friend. Friend subsequently filed this interlocutory appeal after the district court denied its motion for a preliminary injunction allowing it to continue operating as a franchisee of Home Instead during the pendency of the litigation. The court concluded that the franchise agreements at issue were ambiguous. Consequently, the district court erred in concluding that the contract was unambiguous and that, as a matter of law, the contract allowed Home Instead to raise the minimum performance requirement in renewal contracts. The district court's denial of Friend's motion for a preliminary injunction was an abuse of discretion because the district court based its denial on this erroneous legal conclusion. Accordingly, the court vacated and remanded for further proceedings. View "Home Instead, Inc. v. Florance, et al." on Justia Law

This case stemmed from a maritime contract entered into by Blue Whale and Development. Blue Whale filed a complaint in district seeking to attach property belonging to Development's alleged alter ego, HNA, in anticipation of a future arbitration award against Development pursuant to Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims. The court concluded that the district court properly applied federal maritime law to the procedural question of whether Blue Whale's claim sounded in admiralty, and the claim did sound in admiralty because it arose out of a maritime contract; the issue of the claim's prima facie validity was a substantive inquiry; however, the district court's application of English law to this question was improper because the charter's party's choice-of-law provision did not govern Blue Whale's collateral alter-ego claim against HNA; and drawing on maritime choice-of-law principles, the court held that although federal common law did not govern every claim of this nature, federal common law did apply here, primarily because of the collateral claim's close ties to the United States. Accordingly, the court remanded for reconsideration of the prima facie validity of Blue Whale's alter-ego claim under federal common law. View "Blue Whale Corp. v. Grand China Shipping Dev. Co., Ltd., et al." on Justia Law