Justia Contracts Opinion Summaries

Plaintiffs, current and former customers of AT&T, filed a class action against AT&T, alleging unjust enrichment and and breach of contract. AT&T responded by seeking to enforce an arbitration agreement contained in its contracts with plaintiffs. The district court refused to enforce the arbitration agreement on state-law unconscionability grounds, relying primarily on the agreement's class-action waiver provision. The court reversed the district court's substantive unconscionability ruling where the FAA preempted the Washington state law invalidating the class-action waiver. The court remanded for further proceedings related to plaintiffs' procedural unconscionability claims for the district court to apply Washington choice-of-law rules.

In 2008, MDS purchased a vessel and executed a note in favor of FirstBank, secured by a preferred ship mortgage, under an agreement that required that they maintain insurance. In 2009, Customs and Border Protection seized the vessel as part of a drug enforcement action. The search and seizure damaged the vessel, significantly decreasing its value. Customs notified FirstBank, which initiated an administrative forfeiture proceeding, intervened in the criminal case, obtained voluntary dismissal of the indictment against the vessel, then submitted an insurance claim for "loss of the vessel including, without limitation, the value of the Bank's collateral, legal fees incurred in attempting to secure its release, as well as any applicable costs and interests." The insurer denied the claim. The district court granted FirstBank partial summary judgment and awarded $74,512.50 in attorneys' fees for costs and expenses incurred in securing release of the vessel and defending the validity of the policy. The First Circuit affirmed, finding no genuine issues of material fact.

Vicor manufacturers electronic equipment, including power converters. Ericsson designs, manufactures and sells electronic equipment, including radio base stations (RBSs) used to operate cellular telephone towers and networks. Ericsson purchased Vicor power converters for use in RBSs sold to wireless providers worldwide. The power converters began failing due to a manufacturing change in a component computer chip. Severe outages occurred in wireless networks. Ericsson sued Vicor and obtained a settlement of $50 million. Vicor's insurers paid $13 million. Vicor sought the additional $37 million. A jury awarded $17.3 million. The district court reduced the verdict by $4 million. The First Circuit vacated. The policies refer to "loss of use of property that is not physically injured." The district court should fashion jury instructions making clear that classic loss of use damages (lost profits or rental value of substitute property) incurred while repairs are pending may be recovered, but the actual costs of repairs may not. The court also may instruct the jury regarding the duty to mitigate loss and explain that costs of reasonable mitigation measures are recoverable, provided that the mitigation measures are distinguishable from ordinary repairs and result in a net savings.

The collective bargaining agreement was scheduled to expire. During negotiations, the union disclaimed representation of the company's employees and terminated the collective bargaining process. The company then withdrew from the multiemployer pension plan. The pension fund imposed withdrawal liability and assessed $57,291.50, 29 U.S.C. 1399. The company demanded indemnification from the union pursuant to the collective bargaining agreement, which stated: "The Union shall indemnify the Company for any contingent liability which may be imposed under the Multiemployer Pension Plan Amendments Act of 1980." The district court concluded that an arbitration provision was enforceable. The arbitrator ordered the union to pay. The district court upheld the award. The Sixth Circuit affirmed, rejecting an argument that it would violate public policy for a union to indemnify an employer for any contingent liability to a pension plan established under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1381-1461.

Metropolitan National Bank (MNB) loaned Grand Valley Ridge several million dollars for the completion of a subdivision. After Grand Valley failed to make its interest payments, MNB filed a petition for foreclosure. Grand Valley and Thomas Terminella, a member of Grand Valley (collectively, Appellants), filed an amended counterclaim alleging various causes of action. During the trial, the circuit court granted Appellants' motion to take a voluntary nonsuit of their claims of negligence and tortious interference with contract. The circuit court held in favor of MNB. The court subsequently granted MNB's petition for foreclosure and awarded a judgment against Appellants. Thereafter, Appellants filed a complaint alleging their original nonsuited counterclaims and adding additional claims. MNB moved to dismiss Appellants' complaint and filed a motion for sanctions. The circuit court granted both motions. The Supreme Court affirmed, holding, inter alia, (1) because Appellants brought claims clearly barred by the statute of limitations, the circuit court did not abuse its discretion in awarding sanctions; and (2) the circuit court properly granted summary judgment for MNB on Grand Valley's nonsuited issues based on the applicable statute of limitations.

In 1989 Dominguez was arrested and in 1990 he was convicted of home invasion and sexual assault. In 2002 he was exonerated by DNA; in 2005 he received a pardon. Under Illinois law, his claim for malicious prosecution accrued in 2002. Under federal law, constitutional claims (42 U.S.C. 1983) accrued in 1989 and 2002. Wrongful arrest claims accrue on the date of arrest, but wrongful conviction claims accrue when conviction is invalidated. The Seventh Circuit affirmed an award of about $9 million for malicious prosecution and concealment of exculpatory evidence. The city has been insured by different companies and each asserted that the policy for another year applied. None provided a defense. The district court held that the issuer of the "occurrence" policy in force at exoneration must defend and indemnify. The Seventh Circuit affirmed. The city's misconduct occurred in 1989 and 1990, but the policy does not define the "occurrence" as misconduct by a law-enforcement officer. It defines the occurrence as the tort under state or federal law, and, in both, the tort occurs witn its last element, exoneration. Until then, Dominguez could not establish "malicious prosecution" or "violation" of section 1983.

In 2009, fire severely damaged the insureds' home. They submitted a claim to under their homeowners’ policy the next day. The insurer began requesting documents, authorizations, and interviews and learned that the insureds had at least two businesses, held numerous personal and business accounts, and were involved in several lawsuits. A fire investigator concluded that the fire was intentionally set. The insurer requested additional documents: detailed phone records, bank histories, tax returns, and mortgage information and reminded the insureds that proof of loss was due by May 2. The insurer granted extensions; on the day of the final deadline the insureds delivered almost 1,000 pages of documents. Several months later, the insurer had not received most of the requested documents or an explanation why they could not be produced. After initially acknowledging their failure to produce the documents, the insureds attempted to impose a deadline for settlement of the $2.6 million claim. The district court entered summary judgment for the insurer in the insureds' breach of contract suit. The Seventh Circuit affirmed. The insureds failed to perform the specific "duties after loss" listed in the policy.

Richard and Elaine Benson, Bill and Mary Bliven, Don and Annette Feist, Pat Lynch, and Lloyd and Donna Tribitt ("Bensons") appealed the grant of summary judgment that dismissed their claim that SRT Communications, Inc.,was contractually obligated to provide them post-retirement health and medical benefits. The Bensons are four retired employees of the Minot telephone business, their spouses, and Pat Lynch, the widow of a deceased retiree, Thomas Lynch. Richard Benson, Bill Blevin, Don Feist, Lloyd Tribitt, and Thomas Lynch worked for NSP before it sold its telephone business to Minot Telephone in 1991, and they all retired from Minot Telephone between 1991 and 1994, before Souris River purchased Minot Telephone from Rochester. With the exception of Don Feist, the retired employees belonged to Local Union No. 949 of the International Brotherhood of Electrical Workers when the labor union and NSP entered into a collective bargaining agreement in 1991. Feist previously had been a member of the labor union, but did not belong to the union when it entered into the 1991 collective bargaining agreement with NSP. The district court concluded the 1991 collective bargaining agreement expired on December 31, 1993, and although SRT Communications continued to provide post-retirement health benefits to the Bensons for over fourteen years after the expiration of the collective bargaining agreement, it did so as a matter of business discretion and not because of a contractual obligation. The district court dismissed the Bensons' claims against SRT Communications. Upon review, the Supreme Court affirmed the judgment, concluding the Bensons' action was governed by federal law and they failed to raise a disputed issue of material fact.

In an insurance coverage dispute, the court was required to determine, under Florida law, what constituted "property damage" under a post-1986 standard form commercial general liability (CGL) policy with products-completed operations hazard (PCOH) coverage. Specifically, whether such a policy issued to a general contractor for damage to the part of the completed project performed by a subcontractor, but not to any other project component, caused by a subcontractor's defective work. In light of Florida precedent addressing the scope of similar CGL policies, the court concluded that the policy provided no coverage in this case. Therefore, the court affirmed the judgment of the district court, holding that the damage at issue was not covered under the policy.

This appeal arose from a dispute between incumbent local exchange carriers that provide service in rural areas of North Carolina (RLECs) and commercial mobile radio service providers (CMRS Providers) in North Carolina. The CMRS Providers filed a complaint in the district court against the RLECs and the Commissioners of the NCUC in their official capacities, seeking review of several determinations made by the NCUC and, ultimately, the approval of portions of the interconnection agreements (ICA). The district court subsequently denied the CMRS Providers' motion for summary judgment and granted the RLECs' and the NCUC's motions for summary judgment. The district court also affirmed the NCUC's Filing of Composite Agreements (FAO) and approval order. Because the court ultimately agreed with the arguments advanced by the RLECs and the NCUC, the court affirmed the judgment of the district court.