Justia Contracts Opinion Summaries

Certain individuals who worked for American Chemical Society (ACS) founded Leadscope Inc. and later received a patent for technology similar to that on which they worked while at ACS. ACS filed a lawsuit against Leadscope. A newspaper subsequently published an article about the suit quoting ACS's counsel. In pertinent part, the jury returned verdicts in favor of Leadscope on its counterclaims for defamation and unfair competition. The court of appeals affirmed. The Supreme Court (1) upheld the appellate court's decision affirming the trial court's denial of ACS's motion for judgment notwithstanding the verdict (JNOV) on the unfair competition claim, holding (i) a party alleging a claim for unfair competition must show the action is baseless and the opposing party had the intent to injure the party's ability to be competitive, and (ii) the jury instructions here did not meet that test, but the jury could not reasonably have made any other determination with proper instructions; and (2) reversed the appellate court's finding that the trial court properly overruled ACS's motion for JNOV on Leadscope's counterclaim for defamation, holding (i) ACS's statements were not defamatory, and (ii) a client is vicariously liable for its attorney's defamatory statements only if the client ratified the statements. View "Am. Chem. Soc'y v. Leadscope, Inc." on Justia Law

In 2007 the Postal Service awarded Tip Top a contract under which the Postal Service would assign individual projects by issuing work orders. In 2009, the Postal Service issued a work order to replace the air conditioning system at the Main Post Office in Christiansted, Virgin Islands, for the price of $229,736.92. As a result of that work Tip Top submitted a claim and request for an equitable adjustment under the Contract Disputes Act, 41 U.S.C. 7101-7109, in the amount of $34,553.77, consisting of a subcontractor’s price for a change, plus 10% profit, 4% insurance, and 4% gross receipts tax, plus $9,655 for “Preparation Costs & Extended Overhead” and $2,745 for “Legal Fees.” The Postal Service Board of Contract Appeals ruled that Tip Top was entitled to recover $2,565. The Board ruled that Tip Top was not entitled to recover the balance of the amount claimed because it had failed to demonstrate that the costs at issue were incurred as a result of the change order. The Federal Circuit reversed and remanded, with directions to grant the appeal in its entirety. The ruling was based upon an error of law and not supported by substantial evidence. View "Tip Top Constr., Inc.v. Donahoe" on Justia Law

Zaloudek Grain Company held a workers' compensation policy with CompSource Oklahoma for approximately ten years prior to 2011. Zaloudek was required each year to provide payroll audit information to CompSource. The audit information was used to determine the proper premium for each year. CompSource sent a notice in late 2010 to Zaloudek requesting audit information. In January, 2011, Zaloudek's policy was renewed for all of 2011 through January 1, 2012. On January 18, 2011, CompSource sent another letter requesting Zaloudek provide the necessary payroll audit information, but Zaloudek was unresponsive. Subsequently, CompSource sent Zaloudek a notification to inform the company that the process of canceling its policy would begin if CompSource did not receive the audit information. The audit information was not provided; CompSource ultimately canceled the policy when Zaloudek ignored several subsequent requests. CompSource issued a refund for payments made under the policy. Later that summer, two teenage workers were seriously injured in the grain auger at Zaloudek's facility. CompSource did not accept the company's new insurance application because it was incomplete and was not signed by an owner of Zaloudek. Zaloudek sued a few weeks following the rejection of its application, asking for a judgment against CompSource for breach of contract and bad faith and further requested declaratory relief in the form of an order requiring CompSource to provide workers' compensation coverage. Zaloudek filed a motion for summary judgment claiming CompSource lacked legal justification for terminating its policy and requested orders to establish there was no lapse in coverage and requiring CompSource to provide coverage for its two injured employees. Zaloudek further requested a finding that CompSource was in breach of contract. CompSource moved for summary judgment, arguing Zaloudek was not covered at the time of the incident and its policy was properly canceled. Zaloudek filed a counter-motion for summary judgment asserting CompSource should be estopped from denying coverage because it retained premiums and acted in a manner toward Zaloudek consistent with continued coverage. The trial court issued an order dismissing Zaloudek's bad faith claim but left pending its claims for breach of contract and declaratory relief. CompSource appealed. After its review, the Supreme Court concluded that CompSource was authorized to cancel a policy for an insured's failure to participate in the audit. The Court remanded the case for further proceedings on the other contract issues raised. View "Zaloudek Grain Co. v. CompSource Oklahoma" on Justia Law

The issue in this case was whether the parties' dispute over a provision in their lease for a shopping center store had to be resolved under the arbitration provision in the lease or whether it could have been resolved by a proceeding in district court. The disputed provision provided that landlord KWD River City Investments, L.P. would not alter the exterior of the shopping center without the consent of tenant Ross Dress for Less. KWD admitted that it allowed another tenant to alter the shopping center's exterior at that tenant's store location without Ross' consent. However, KWD maintained that Ross unreasonably withheld its consent in violation of the consent provision. KWD contended that the unreasonableness of Ross' refusal to consent was demonstrated by Ross conditioning its consent upon KWD making exterior alterations to benefit Ross. KWD then filed declaratory judgment action in district court to resolve the dispute. Ross filed a motion to compel arbitration. The trial court denied the motion to compel arbitration. On appeal, the Court of Civil Appeals reversed. KWD petitioned the Supreme Court to review the opinion of the Court of Civil Appeals. Upon review, the Court vacated the Court of Civil Appeals opinion and affirmed the trial court's denial of the motion to compel arbitration. View "KWD River City Investments, LP v. Ross Dress for Less, Inc." on Justia Law

Plaintiff Christina Brooksby demanded payment from Defendant GEICO General Insurance Company, her father's liability insurer, alleging that he negligently injured her by crashing the car in which she was riding. After GEICO refused Plaintiff's demand pursuant to an exclusion in its insurance policy with Father, she sued GEICO for a declaratory judgment establishing coverage. The district court dismissed Plaintiff's complaint for lack of standing, holding that Idaho has no common-law direct-action rule that would give an injured third party standing to sue her tortfeasor’s insurer absent some statutory or contractual authorization, and that Idaho's Uniform Declaratory Judgment Act does not confer standing where it does not otherwise exist. Plaintiff appealed. Upon review, the Supreme Court affirmed the district court’s grant of GEICO’s Motion to Dismiss pursuant to Idaho Rule of Civil Procedure 12(b)(6) because the Court concluded Plaintiff lacked standing to seek a declaratory judgment against GEICO. View "Brooksby v. GEICO" on Justia Law

Plaintiffs brought a declaratory action seeking a ruling that their insurance policies issued to defendants did not cover class claims brought in state court by Percic Enterprises. The state court complaint alleged that defendants violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227(b)(1)(C), by sending unsolicited fax advertisements. After a settlement was reached in the state action, the federal district court concluded that damages sustained by sending unsolicited fax advertisements in violation of the TCPA were covered under the advertising provision of the policies. The court affirmed, applying standard Minnesota principles of insurance contract interpretation where unambiguous words were given their plain, ordinary, and popular meaning, and ambiguous language was construed in favor of the insured. View "Owners Ins. Co., et al v. European Auto Works, Inc., et al" on Justia Law

A collective bargaining agreement governs the relationship between Acument and its retired employees. Prior to 2008, the company paid healthcare and life-insurance benefits to qualified retirees. When Acument ended these benefits in 2008, a class of 64 retirees claimed that the company had violated the CBA in violation of the Employee Retirement Income Security Act and the Labor Management Relations Act. The district court granted Acument summary judgment. The Sixth Circuit affirmed, characterizing the issue as “a matter of contract.” The relevant language states that the company “reserves the right to amend, modify, suspend, or terminate the Plan,” consisting of: retiree medical coverage; retirement income; disability income; and life insurance. View "Witmer v. Acument Global Tech., Inc." on Justia Law

Virginia Polytechnic Institute and State University (VPI) and Prosper Financial (Prosper) entered into a research contract. The contract provided two addresses in Florida for Prosper. VPI subsequently filed a complaint in Virginia for breach of contract. VPI attempted to secure service of process on Prosper through the Secretary of the Commonwealth. In its affidavit for service of process on the Secretary, VPI listed the address contained in the contract's notice provision as Prosper's last known address. After Prosper failed to file responsive pleadings, the trial court entered a default judgment against Prosper. Upon Prosper's motion, the trial court determined the order of default judgment should be set aside because service of process should have been attempted at both Florida addresses. The Supreme Court reversed and reinstated the final judgment against Prosper, holding (1) the use of one of the two Prosper addresses known to VPI was constitutional and satisfied the requirements of Va. Code Ann. 8.01-329(B), and therefore, the trial court's determination that both addresses were required was error; and (2) the trial court erred in setting aside the order of default judgment brought pursuant to Va. Code Ann. 8.01-428(D) without identifying its findings on the necessary elements of the action. View "Va. Polytechnic Inst. v. Prosper Fin., Inc." on Justia Law

These companion appeals arose out of a dispute between a government contractor, Preferred Systems Solutions, Inc. (PSS) and one of its subcontractors, GP Consulting, LLC (GP). PSS sued GP following GP's termination of its contract with PSS and its commencement of a subsequent contract with a PSS competitor. PSS alleged breach of contract, misappropriation of trade secrets, and tortious interference with contract, seeking injunctive as well as monetary relief. PSS was ultimately awarded $172,396 in compensatory damages based on the circuit court's finding that GP breached the noncompete clause in the parties' contract. Both parties appealed. The Supreme Court affirmed, holding that the circuit court did not err in (1) awarding damages to PSS for lost profits as a result of GP's breach of the noncompete clause; and (2) refusing to grant PSS injunctive relief, in concluding that PSS failed to prove tortious interference, and in dismissing PSS' trade secret claim. View "Preferred Sys. Solutions, Inc. v. GP Consulting, LLC" on Justia Law

Plaintiffs, owners of garaged lots in a subdivision, filed a complaint against the homeowners' association (HOA) alleging that the unequal treatment resulting from the HOA's assignment of parking spaces only to ungaraged lots in an amendment violated the subdivision's declaration of covenants, conditions, and restrictions (the Declaration). The circuit court determined that the amendment was invalid and ruled that the reservation of parking spaces in the common area for use solely by owners of ungaraged lots violated the Declaration. The court also found Plaintiffs were entitled to attorneys' fees. The Supreme Court affirmed in part and reversed in part, holding that the circuit court (1) did not err in ruling the Declaration requires that parking spaces in the common area be assigned equally among all lot owners; (2) did not err in ruling that the amendment was invalid; (3) erred in its award of certain compensatory damages but did not err in awarding other compensatory damages; and (4) did not err in ruling that Plaintiffs were entitled to attorneys' fees and in determining the amount of that award. Remanded for a determination of attorneys' fees incurred by Plaintiffs subsequent to the court's entry of the judgment appealed from. View "Manchester Oaks Homeowners Ass'n v. Batt" on Justia Law