Justia Contracts Opinion Summaries

Plaintiff sued the Union for damages caused by a work stoppage conducted by the Union in alleged violation of the collective bargaining agreement. The district court entered summary judgment without reaching the merits holding that the dispute was subject to arbitration under the contract. Plaintiff appealed. The court held that, in this case, the employee oriented grievance machinery in the parties' contract qualified and limited the universe of claims and grievances subject to arbitration, and the language negated the intention that the employer's claim for damages must be submitted to arbitration. Accordingly, the district court's grant of summary judgment was reversed and the case remanded for further proceedings.

Plaintiff, a development company, brought an action against Defendants, several entities including the City, alleging Defendants had violated the Connecticut Antitrust Act by engaging in an illegal conspiracy in restraint of trade. The trial court granted Defendants' motion to strike Plaintiff's amended complaint on the ground that the complaint failed to allege an antitrust injury. The appellate court affirmed. The Supreme Court affirmed, holding that Plaintiff's allegation that Defendants took bribes and kickbacks in exchange for steering public contracts did not state a cognizable antitrust claim, and therefore, the appellate court and trial court properly granted Defendants' motions to strike Plaintiff's amended complaint.

The Travelers Indemnity Company of Connecticut appealed a judgment in which it was ordered to pay $251,913.91 to Willie A. Miller. Smith House Movers, Inc. (Smith), was hired was hired to move houses located in the path of road construction to be performed. Miller entered into a contract with Smith to purchase one of the houses and to move it from Red Bay to Vina. The contract provided that Smith was to move the house, pour a foundation, and place the house on the new foundation. Smith cut the house into two pieces and delivered the first piece. However, the foundation was improperly poured and did not fit, and the house had been damaged in the move. Ultimately Miller had to hire another company to complete the move and repair the damage. Miller then sued Smith alleging breach of contract, negligence and wantonness. Smith did not answer or appear, and Miller moved to a default judgment against Smith. In an attempt to collect the amount of the default judgment, Miller sent a copy to Smith's general liability insurer, Travelers. As Miller tried to get Travelers to respond to its demand, Miller learned that Smith had declared bankruptcy. Two years following the default judgment, the bankruptcy trustee lifted its stay on Smith's affairs to allow him to collect on the default judgment to the extent that the insurance coverage would allow. Travelers subsequently denied the claim. Miller then sued Travelers for payment. Travelers moved for summary judgment to dismiss Miller's claim, arguing that the general liability policy did not provide coverage based on the terms in the policies. The trial court denied the motion, and eventually entered judgment against the company. Travelers then appealed to the Supreme Court. The issue before the Court was whether the notice of the original lawsuit was timely. The Court found that because Miller's knowledge of Smith's certificate of insurance from the underlying lawsuit put Miller on notice that he should have notified Travelers of the default judgment. As such, the Court concluded that Miller was barred from recovering under Smith's policies. The Court reversed the trial court and remanded the case for further proceedings.

Plaintiffs Ronald Browning and Susan Browning, Bubba Beck and Debbie Beck, Allen Caprara and Pam Caprara, Bobby Fayet and Cindy Fayet, David Kennamer and Brad Kennamer, Steve Russell and Melinda Russell, and Gary Strickland and Jennifer Strickland sued Jeff Cornelius, among others, alleging various claims related to investments they made in corporations in which Cornelius was allegedly a principal. The trial court entered a default judgment against Cornelius based upon his purported failure to appear for his deposition, awarding the plaintiffs a total of $975,000 in damages. Cornelius moved the trial court pursuant to Ala. R. Civ. P. Rule 60(b) to set aside the default judgment, arguing that he had not received notice that the motion for a default judgment had been filed. After a hearing, the trial court denied Cornelius's motion to set aside the default judgment, and Cornelius appealed. Upon review, the Supreme Court concluded that the trial court's judgment was inconsistent with due process and was therefore void. Cornelius was entitled to have the default judgment set aside, and accordingly, the Court reversed the trial court and remanded the case for further proceedings.

GE Capital Aviation Services, Inc., (now known as GE Capital Aviation Services, LLC), Pemco World Air Services, Inc., and Alabama Aircraft Industries, Inc. have fiercely litigated a commercial-contract dispute since 2004 in which each party alleged breach-of-contract and fraud claims against the other. The parties entered an agreement for the conversion, maintenance and inspection of aircraft leased through GE Capital. GE Capital and Pemco each sought punitive damages in addition to compensatory damages. The litigation culminated in a jury trial that lasted approximately three weeks. The jury returned a verdict in favor of Pemco on all of its claims, awarded Pemco $2,147,129 in compensatory damages and $6,500,000 in punitive damages, and returned a verdict in favor of Pemco on all of GE Capital's counterclaims. GE Capital appealed the jury verdict and the trial court's order denying GE Capital's postjudgment motions. GE Capital did not appeal the judgment in favor of Pemco on its counterclaims. Upon review, the Supreme Court reversed the trial court's order denying GE Capital's motion for a JML as to Pemco's fraud claims and its breach-of-an-implied-contract claim. The Court also reversed the trial court's order denying GE Capital's motion for a new trial. The case was remanded for further proceedings.

Defendant-Appellant, The Siebel Living Trust Dated 7/27/93 (Trust), appealed a district court’s order denying the Trust’s motion to recover its attorney fees and costs pursuant to a real estate sales contract with Plaintiff-Appellee Michael J. Ward (Ward). In addressing the question of whether the Trust or Ward was the "prevailing party" (and thereby entitled to recover reasonable fees and costs under the contract), the Tenth Circuit followed Colorado law to review the competing claims of the parties to the contract. Although Ward recovered the commission he sought, he did not recover against the Trust. The Trust was successful defending itself from Ward's claims brought against it and, therefore, as between Ward and the Trust, the Trust prevailed. The Tenth Circuit reversed the district court and remanded the case for further proceedings.

This appeal concerned the maintenance of a suit for rescission under section 10(b) of the Securities and Exchange Act of 1934, 15 U.S.C. 78a et seq., by plaintiffs. The district court granted summary judgments to defendants on all claims and awarded defendants attorneys' fees. The court held that a plaintiff suing under section 10(b) seeking rescission must demonstrate economic loss and that the misrepresentation of fraudulent conduct caused the loss. In this case, the court found that the record revealed the rescission was not feasible. Yet employing a rescissionary measure of damages, plaintiffs could be able to convince the finder of fact that plaintiffs were entitled to relief. On that basis, the court reversed the district court's grant of summary judgment on plaintiffs' federal and state securities claims and remanded for consideration under rescissionary measure of damages. With respect to the statute of limitations issue, the court remanded for consideration in light of Merck & Co. The court affirmed the district court's judgment on plaintiffs' state law claims of common law fraud, negligent misrepresentation, mutual mistake, failure of a condition precedent, and unjust enrichment. The court vacated the district court's attorneys' fee award and dismissed the appeal of the award as moot.

Gene Shields, an agent for State Farm Insurance Companies, opened an account with Bankcorp Bank. The owner of the account was State Farm. Shields's office manager subsequently diverted funds that were due to be deposited into the account, and Shields allegedly suffered at least $77,925 in losses as a result of over 100 overdrafts on the account. Shields sued Bancorp Bank for negligence in failing to notify him of overdrafts. Bancorp moved to compel arbitration based on the account's arbitration clause. The circuit court denied the motion to compel, and Bancorp appealed. At issue on appeal was whether the parties' 2005 agreement to modify the contract entered into by the parties in 1982 controlled when Shields signed the agreement but State Farm was not a party to the contract. The Supreme Court affirmed, holding that the 2005 agreement, which contained the arbitration provision, was not binding because the agreement was entered into in contravention of the rights of the account owner, State Farm.

When Rita Fix's son and daughter-in-law, Jeff and Marie, secured a loan from the First State Bank of Roscoe by obtaining a warranty deed for the property, the Bank assured Fix she could retain possession of the house. After Jeff and Marie conveyed the house and property to the Bank, the Bank sold the property and sought to remove Fix from the house. Fix sued the Bank for, inter alia, intentional infliction of emotional distress (IIED). Meanwhile, Fix, Jeff, and Marie were indicted on multiple criminal counts. The State attorney who brought the charges and who represented the Bank civilly offered to dismiss the criminal charges against Fix if she would deed the house back to the Bank. Fix then amended her complaint to include a claim of abuse of process against the Bank. The trial court granted summary judgment against Fix on her IIED claim. A jury then returned a verdict finding the Bank liable for abuse of process but awarded no damages to Fix. The Supreme Court reversed on the abuse of process claim, holding that the trial court provided the jury with the incorrect legal standard for the recovery of emotional damages. Remanded for a new trial.

Delta Environmental filed a contract suit against Jonesboro Healthcare Center, alleging damages for the early termination of a five-year contract for services. The complaint was mistakenly filed in district court and alleged damages in excess of the district court's jurisdiction. The district court entered an order dismissing the case without prejudice due to a lack of subject-matter jurisdiction. On the same day, Delta filed the identical complaint in circuit court. Jonesboro moved to dismiss the complaint with prejudice based on a fatally flawed summons. Jonesboro argued in the motion that this would be the second dismissal in the case following a first dismissal that was a voluntary nonsuit and therefore should be a dismissal with prejudice pursuant to Ark. R. Civ. P. 41(b). The circuit court granted Jonesboro's motion but entered the current dismissal without prejudice, concluding that the previous dismissal in the district court did not trigger the two-dismissal rule. The Supreme Court affirmed, holding that the dismissal for lack of subject-matter jurisdiction was not the type of voluntary dismissal contemplated by rule 41(a), nor the type of involuntary dismissal contemplated by rule 41(b), and therefore, the circuit court did not err in its judgment.