Justia Contracts Opinion Summaries

This case arose when Robert Morrison, Jr. pleaded guilty to, among other things, four counts of assault and battery on a public employee (the arresting police officer) and the officer consequently brought a civil suit against Morrison for his injuries. Morrison and Metropolitan Property and Casualty Insurance Company (Metropolitan) subsequently applied for direct appellate review on the issue of whether Metropolitan had a duty to defend and indemnify Morrisson in the civil suit. The court held that an exclusion in a liability policy for "intentional and criminal acts" applied where the insured intended to commit the conduct that caused injury and where the conduct was criminal. The court also held that a guilty plea did not negate an insurer's duty to defend, even where the duty to defend would be negated by a criminal conviction after trial, because a guilty plea was not given preclusive effect and was simply evidence that the insured's acts were intentional and criminal. The court further held that one of the consequences of such a breach of its duty to an insured by failing to provide a defense was that, in determining whether the insurer owed a duty to indemnify the insured for the default judgment, the insurer was bound by the factual allegations in the complaint as to liability. The court finally held that, because the judge based her conclusion that Metropolitan had no duty to indemnify in large part on Morrison's guilty pleas and because the judge determined that Metropolitan had no duty to indemnify without first determining whether it owed a duty to defend at the time of the default judgment, the court vacated the declaratory judgment and set aside the allowance of Metropolitan's motion for summary judgment as well as the denial of Morrison's motion for partial summary judgment. Accordingly, the court remanded for further proceedings.

Defendant and her husband (Duckworths) purchased two automobile policies and one motorcycle insurance policy from plaintiff (State Farm) where all three insurance contracts contained "anti-stacking" provisions that precluded recovery of uninsured motorist benefits under any policy other than that covering the damaged vehicles. The Duckworths subsequently moved to Florida, where the husband was struck and killed by an uninsured motorist while driving the motorcycle covered under the Maryland policy. State Farm consequently brought this action in the district court, seeking a declaratory judgment that it had satisfied its contractual obligations to the husband's estate. At issue before the district court was the applicability of the public policy exception to Florida's choice of law rule in disputes over contract terms. The district court declared that State Farm had satisfied its contractual obligations to the husband's estate and dismissed defendant's counterclaims. Taking into account all of the undisputed facts, and assuming that defendant informed a State Farm representative that the Duckworths' move from Maryland to Florida would be "permanent," the court held that State Farm still did not receive reasonable notice sufficient to trigger the public policy exception. The court held that, even if defendant informed the representative as alleged, her later actions overwhelmingly indicated to State Farm that the Duckworths' move was not necessarily permanent and that, consequently Maryland law would continue to govern the Duckworths' policies. Therefore, the issue of fact upon which defendant's appeal rested was immaterial and, as State Farm was deprived of reasonable notice, judgment as a matter of law was proper.

Plaintiff designs, manufactures, and sells computer mice and, in 1995, contracted with defendant to manufacture the products in bulk. The agreement identifies the "Product" as inventions, designs, methods and related information concerning computer mouse products and precludes defendant from disclosing, using, or copying "Confidential Information," or manufacturing, or otherwise commercially exploiting the Product, or developing other products derived from the Product. In 2009, defendant began to make near copies using plaintiff's production tooling, Plaintiff claimed violation of the New Hampshire Uniform Trade Secrets Act, N.H. Rev. Stat. 350-B:1 to -B:9 and breach of contract. The district court entered a preliminary injunction, ordering defendant to stop production of the copies. The First Circuit affirmed, holding that the relief was appropriate, based on the record.

Plaintiff Yvette Bouffard appealed a trial court's denial of her request for a declaratory judgment that she was entitled to uninsured motorist (UM) insurance coverage under her umbrella insurance policy issued by Defendant State Farm Fire & Casualty Company. Plaintiff was injured in 2006 from a car accident. She recovered $250,000 from the other party's insurer and her UM coverage under her personal automobile policy. Because her damages exceeded this sum, Plaintiff sought UM coverage under her umbrella policy. State Farm denied the claim because UM coverage was rejected on her original insurance application. The trial court found that Plaintiff authorized her husband to go to the insurance agency to purchase insurance for both of them, and that because the husband did not elect UM coverage, Plaintiff ratified his decision when she failed to object after reviewing the application in the car or after the policy arrived in the mail. Upon review, the Supreme Court found that the record supported the trial court's conclusion that the husband acted as Plaintiff's agent in rejecting UM coverage and affirmed the court's decision to deny Plaintiff declaratory relief.

Defendant Linus Poitra appealed a default judgment entered by the district court regarding a lease between Plaintiff Darrel Gustafson as lessee and Leon and Linus Poitra as lessors. Linus Poitra argued the district court did not have subject matter jurisdiction to enter the default judgment because the Poitras were members of the Turtle Mountain Band of Chippewa Indians, and the land subject to the lease is Indian-owned fee land located within the boundaries of the Turtle Mountain Indian Reservation. Linus Poitra argued the default judgment infringed upon tribal sovereignty because of cases pending in the Turtle Mountain Tribal Court. Upon review of the applicable legal authority and the evidence presented at trial, the Supreme Court vacated the default judgment finding that the district court did not have subject matter jurisdiction over the lease.

This case arose when plaintiff alleged that Citigroup, along with various rating agencies, airlines, and municipalities, conspired to block the use of her finance structure to issue Airline Special Facility bonds. Plaintiff subsequently appealed from a judgment of the district court dismissing her complaint and from the district court's order denying her postjudgment motion for reargument and reconsideration of the dismissal and for leave to replead. On appeal, plaintiff argued that the district court erred by, inter alia, dismissing the complaint without granting leave to replead, denying the postjudgment motion, and exercising supplemental jurisdiction to deny the remaining state law claims. The court held that the district court, in denying the postjudgment motions, applied a standard that overemphasized considerations of finality at the expense of the liberal amendment policy embodied in the Federal Rules of Civil Procedure. Accordingly, the court vacated the order denying the postjudgment motion and so much of the judgment as retained supplemental jurisdiction and dismissed plaintiff's state law claims. The court remanded for further proceedings.

Defendant entered into an Employment Agreement with his employer before the employer entered into a merger. After defendant was terminated by his employer and post-merger disputes arose as to the amounts his employer owed him, defendant filed a demand for arbitration under the Employment Agreement's arbitration provision. The employer commenced this action to enjoin the arbitration as preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The employer alleged federal question jurisdiction under 28 U.S.C. 1331 because the severance dispute "arises out of an [ERISA] employee benefit plan" and therefore state law claims were preempted, and supplemental jurisdiction under 18 U.S.C. 1367 over non-ERISA claims. The court considered ERISA's statutory language, purpose, and historical context and held that an individual contract providing severance benefits to a single executive employee was not an ERISA employee welfare benefit plan within the meaning of section 1002(1). The court also held that ERISA preempted state laws that "relate to" an employee benefit plan. Consequently, further questions arose because the Employment Agreement included two provisions that could "relate" to the Employment Agreement to other programs of the employer that were ERISA plans. As neither parties nor the district court considered this jurisdictional issue, the court remanded for further proceedings.

Appellants sued appellee under 49 U.S.C. 14103(a) for the reimbursement of fees associated with the loading and unloading of its trucks at appellee's facilities. Appellants subsequently appealed the district court's grant of summary judgment. The court concluded that the district court properly read section 14103(a) to preclude relief for unreimbursed "lumping" absent a plaintiff-trucker's affirmative showing that he or she was not reimbursed by either the shipper or the receiver. Therefore, the court affirmed the district court's order of summary judgment where appellants failed to identify any of its trucks whom a shipper had not already reimbursed.

Plaintiffs challenged the district court's conclusion that they, as agents of Beacon Maritime, Inc. (Beacon), were bound by Beacon's agreement to arbitrate disputes with Aban Offshore Limited (Aban). The court held that under settled principles of agency and contract law, plaintiffs were not personally bound by Beacon's agreement with Aban and therefore, the court reversed the district court's order compelling arbitration and remanded for further proceedings.

McKinnis Roofing and Sheet Metal and homeowner Jeffrey Hicks entered into two contracts. The first contract related to Hicks' roof, and the second contract related to copper awnings on Hicks' residence. McKinnis filed a complaint in the district court alleging that Hicks breached both contracts after Hicks refused McKinnis' demand for advance payment. After trial, he district court determined that Hicks had breached both contracts, awarding McKinnis damages in the amount of $4,419 with regard to the roofing contract and $789 with regard to the awning contract. McKinnis appealed, arguing that the district court erred in calculating the amount of damages to which it was entitled. Hicks cross-appealed and claimed that the district court erred when it determined that he breached the contracts. The Supreme Court reversed, holding that based on the facts and contract language, Hicks did not breach either contract.