Justia Contracts Opinion Summaries

Thirteen-year-old Efrain Ramos-Domingo was killed by a Union Pacific Railroad Company train. Two days later, Efrain's mother, Manuela Gonzalez signed a document releasing Union Pacific from liability for Efrain's death in exchange for $15,000. Manuela later filed a complaint in district court for wrongful death and breach of fiduciary duty. Union Pacific filed a motion to dismiss Manuela's complaint, arguing that the release barred Manuela's claims. The district court sustained the motion to dismiss with respect to the wrongful death claim but overruled the motion with respect to the fiduciary duty claim. The district court then granted Union Pacific's motion for summary judgment on the remaining claim, finding that there was no fiduciary duty owed by Union Pacific to Manuela. The Supreme Court affirmed in part and reversed in part, holding (1) the district court erred in dismissing Manuela's wrongful death claim because Manuela alleged facts that, if proved, could demonstrate that the release was void on the basis of its failure to represent a binding mutual understanding of the parties or was voidable as the product of fraud, overreaching or duress; and (2) the district court correctly concluded that Union Pacific owed no fiduciary duty to Manuela. Remanded.

Appellant Zebuleon Whitney collided with a bicyclist in his pick-up truck, seriously injuring the bicyclist. The bicyclist sought a settlement agreement in excess of the maximum coverage of the driverâs insurance policy. Appellee State Farm Mutual Automobile Insurance Company (State Farm) responded with an offer to tender policy limits, which the bicyclist refused. After a series of court proceedings in both state and federal court, Appellant sued his insurance company, complaining in part that his insurance company had breached its duty to settle. State Farm moved for partial summary judgment on a portion of the duty to settle claims. The superior court granted the motion. The parties then entered a stipulation by which Appellant dismissed all remaining claims, preserving his right to appeal, and final judgment was entered in the insurance companyâs favor. Because State Farmâs rejection of the bicyclistâs settlement demand and its responsive tender of a policy limits offer was not a breach of the duty to settle, the Supreme Court affirmed the superior courtâs grant of summary judgment to that extent. But because the superior courtâs order exceeded the scope of the insurance companyâs motion for partial summary judgment, The Court reversed the superior courtâs order to the extent it exceeded the narrow issue upon which summary judgment was appropriate. The Court remanded the case for further proceedings concerning the surviving duty to settle claims.

Defendant-Appellant Loren David appealed a district court's judgment confirming an arbitration panel's award of damages to James Valley Grain, LLC. In July 2007, James Valley and Defendant contracted to sell James Valley soybeans to be grown during the 2008 season. In August 2008, James Valley sued, alleging Defendant improperly cancelled the contracts in April 2008 and claiming damages for anticipatory repudiation, breach of contract and promissory estoppel. James Valley moved to compel arbitration, arguing the National Grain and Feed Association ("NGFA") Rules were incorporated into the contracts. Defendant opposed the motion, arguing that no valid arbitration agreement existed and, if there was a valid arbitration agreement, it was unconscionable and that James Valley waived arbitration by filing the complaint. The district court ordered arbitration, finding that the arbitration clause was properly incorporated, that the arbitration clause was not unconscionable and that James Valley did not waive its right to arbitrate by filing the complaint. The parties arbitrated the case before a panel from the NGFA. A hearing about confirmation of the arbitration award was held, and the district court confirmed the arbitration award. Defendant argued the district court erred by confirming the arbitration decision because a valid arbitration agreement did not exist, the arbitration agreement was unconscionable and the arbitration panel failed to properly apply the law and arbitration rules. James Valley argued Defendant waived his right to challenge the arbitration award because he did not move to vacate the award within the statutory time limit. Upon review, the Supreme Court affirmed the district court's judgment confirming the arbitration award.

Plaintiff, on behalf of himself and similarly situated individuals, brought an action against Chase, alleging that it increased his interest rates retroactively to the beginning of this payment cycle after his account was closed to new transactions as a result of a late payment to Chase or another creditor. The court had previously issued an opinion reversing the district court's dismissal of most of plaintiff's federal and state claims. However, Chase sought Supreme Court review of the court's decision and the Supreme Court reversed with respect to the federal claim and remanded for further proceedings. Consequently, the court withdrew its prior opinion and, consistent with the Supreme Court's ruling, affirmed the district court's dismissal of plaintiff's first cause of action under the Truth in Lending Act (TILA), 15 U.S.C. 1601-1615, for failure to notify of rate increase, as well as plaintiff's sixth cause of action for breach of contract for failure to notify him "of any change if required by applicable law." Although the Supreme Court's decision did not specifically address the court's ruling on plaintiff's state law claims, the court held: as Delaware law permitted the actions taken by Chase, the district court correctly concluded that plaintiff's second, third, and fourth state law causes of action were foreclosed; plaintiff's fifth cause of action failed to state a claim for consumer fraud under 6 Del. C. 2513(a); and plaintiff's seventh cause of action failed to state a claim for breach of an implied duty of good faith. Therefore, the court affirmed the judgment of the district court.

The Union claimed that the company breached the operative collective bargaining agreement by closing a manufacturing plants, after it had secured various concessions from the Union and sought damages and specific performance under section 301 of the Labor Management Relations Act, 29 U.S.C. 185. The district court entered judgment for the company. The Seventh Circuit affirmed, holding that the concessions did not require the Paris facility to be kept open beyond the expiration of the bargaining agreement. Although the "mid-term" agreement, containing the concessions, did not have an expiration date, it would not be reasonable to read it as requiring that the plant be kept open indefinitely.

Appellant appealed the bankruptcy court's approval of a multi-million dollar, global settlement in one of the largest Ponzi scheme bankruptcies in American history. The settlement had been substantially consummated and the appeal had been rendered largely moot. The court held that the bankruptcy court did not abuse its discretion in approving the settlement where the record upon which the bankruptcy court based its approval of the settlement was sufficient and where the settlement satisfied the Flight Transportation/Drexel factors. Accordingly, the order of the bankruptcy court approving the settlement was affirmed.

Central Mortgage Company (CMC) sued Morgan Stanley after mortgages for which CMC purchased servicing rights from Morgan Stanley began to fall delinquent during the early financial crisis of 2007. CMC subsequently appealed the dismissal of its breach of contract and implied covenant of good faith and fair dealings claims. The court held that the Vice Chancellor erroneously dismissed CMC's breach of contract claims on the basis of inadequate notice where CMC's pleadings regarding notice satisfied the minimal standards required at this early stage of litigation. The court also held that the Vice Chancellor erroneously dismissed CMC's implied covenant of good faith and fair dealings claim where the claims were not duplicative. Accordingly, the court reversed the Vice Chancellor's judgment dismissing all three of CMC's claims and remanded for further proceedings.

Plaintiff a law school faculty member living in Ohio, contracted with defendant (Nevada corporation, doing business in California) for publication of his manuscript, giving a Virginia address. Based on delays in publication, plaintiff sued for breach of contract, interference with contract and prospective advantage, defamation, intentional or reckless infliction of emotional distress, negligent infliction of emotional distress; misrepresentation, and fraud. After several motions, including default judgment and reinstatement, and discovery, defendant successfully moved to dismiss for lack of personal jurisdiction. The Sixth Circuit reversed and remanded. Defendant waived the personal jurisdiction defense and voluntarily submitted to the district courtâs jurisdiction, when its attorney entered a general appearance on its behalf.

Liberty Mutual sued Pella in the district court for declaratory judgment where the suit was sought to determine the scope of Liberty Mutual's obligation, under general commercial liability (GCL) policies issued to Pella, to reimburse Pella's defense costs in two underlying lawsuits. Both parties appealed the judgment of the district court. The court held that the district court did not err in concluding that Liberty Mutual's duty to reimburse Pella's defense costs should be determined by looking at the allegations in the complaint to determine if they stated a covered claim where Liberty Mutual would still have no duty to defend even if it had to reimburse defense costs in a suit where an "occurrence" was alleged but not yet an established fact. The court also held that because the underlying suits did not allege an "occurrence," Liberty Mutual did not owe Pella a duty to reimburse its costs in defending either action. Therefore, the court need not address Liberty Mutual's alternative argument. The court further held that the district court did not commit reversible error in granting summary judgment to Liberty Mutual. The court finally held that, in light of its conclusion that Liberty Mutual had no duty to reimburse Pella's defense costs in the underlying suits, the court need not address the issue of defense costs. Accordingly, the court affirmed the district court's grant of summary judgment to Liberty Mutual on Pella's bad-faith counterclaim. The court reversed the district court's order granting summary judgment to Pella on Liberty Mutual's claim for declaratory judgment and remanded with instructions to enter declaratory judgment in favor of Liberty Mutual.

Appellants Samantha Young and Rebekah Alley were injured while riding in a vehicle driven by Joshua Weeks. Appellants appealed from a judgment entered in the superior court in which the court held Weeks liable but permitted North East Insurance Company to rescind its automobile insurance policy on the vehicle Weeks was driving. Specifically, Young and Alley challenged the court's entry of summary judgment in favor of North East on its complaint seeking a declaratory judgment that it had no duty to defend or indemnify the driver because Weeks' mother had made material, fraudulent misrepresentations in applying for the automobile insurance. The Court of Appeals vacated the judgment, holding that genuine issues of material fact existed regarding whether Weeks' mother made a material, fraudulent misrepresentation to North East in obtaining the insurance policy. Remanded.