Justia Contracts Opinion Summaries

John Miller pled guilty to two counts of deliberate homicide. Miller later filed suit against James Goetz, the attorney that defended him, and arranged for Patrick Begley's limited representation in his claims against Goetz. Begley later withdrew from representing Miller. Miller then filed suit against Begley, alleging breach of contract, breach of the covenant of good faith and fair dealing, and fraudulent deceit. The district court granted summary judgment to Begley, finding that Begley had reasonably assisted Miller with his claims against Goetz and the dismissal of the Goetz claim was based on legal deficiencies unrelated to Begley's legal services. The Supreme Court affirmed, holding that the district court did not err in granting summary judgment to Begley as Miller failed to demonstrate genuine issues of material fact existed regarding his claims.

This was the second appeal in litigation arising from the Secretary of Health and Human Services' (HHS) decision not to enter into a self-determination contract with the Southern Ute Indian Tribe (Tribe). In an initial order, the district court ruled that HHS's decision was unlawful, granted summary judgment to the Tribe, and directed the parties to prepare a proposed order for injunctive relief. After the parties were unable to agree on the proposed order, the district court issued an interlocutory order in which it endorsed HHS's approach to the contractâs start date and contract support costs. The Tribe appealed, and the Tenth Circuit dismissed the appeal for lack of jurisdiction. On remand, the district court issued a final order, directing the parties to enter a self-determination contract including HHS's proposed language regarding the contract start date and contract support costs and denying the Tribeâs request for damages. Both parties appealed. Upon review, the Tenth Circuit affirmed the district court's determination that HHS was required to contract with the Tribe and regarding the contract start date, but reversed the court's decision regarding contract support costs.

Plaintiff appealed from the district court's grant of summary judgment to National Union with respect to his claims under the Texas Insurance Code (Insurance Code), Tex. Ins. Code Ann. 541.003, 541.051, 541.052, 541.061, and the Texas Deceptive Trade Practices Act (DTPA), Tex. Bus. & Com. Code Ann. 17.46, 17.50, asserting misrepresentation and unconscionability. At issue was the Description of Coverage documents that National Union sent to plaintiff regarding eligibility for permanent total disability benefits under two insurance policies. The court held that plaintiff's contention that he had insufficient notice of National Union's basis for seeking summary judgment on his misrepresentation claims was unsustainable. The court also held that the definition of permanent total disability in the Descriptions of Coverage was ambiguous. The court held, however, that the ambiguity did not rise to the level of a misrepresentation within the meaning of the Insurance Code or the DTPA. To the extent that the Insurance Code required additional information to clarify an ambiguity, the reference to the master policy as controlling adequately informed a reasonable person that an ambiguity in the Description of Coverage was not binding if it conflicted with the policy. The court further held that plaintiff's unconscionability claims failed where he had not offered any reasoning as to the relevance of certain evidence regarding allegations of unconscionable conduct and where the claims were premised on conduct that had occurred after his injury and well after the inception of coverage under the policies. Accordingly, the court affirmed the district court's grant of summary judgment.

The Union, representing certain employees at ExxonMobil's Baton Rouge refinery and chemical plant, brought suit to compel ExxonMobil to arbitrate two labor grievances pursuant to the parties' collective bargaining agreement. The court held that it was within the province of the courts to decide whether "a good faith claim by one party that the other party had violated a written provision" of the bargaining agreement had been asserted. The court also held that, in light of the clairty of the parties' agreement, the Union's claim that ExxonMobil violated Section 1131 of the agreement when the language of that section explicitly authorized its actions was not colorable and could not constitute a good faith claim within the meaning of the arbitration clause. The court agreed with ExxonMobil that Baton Rouge Oil & Chemical Workers Union v. ExxonMobil Corp foreclosed reliance on Section 1151 of the agreement as an independent basis for the arbitrability of the contracting-out grievance. The court further held that for the same reasons that the court held that the contracting-out grievance was not arbitrable under Section 1151, Section 1151 could not serve as a basis for requiring arbitration of the post-reduction claim. Accordingly, the court reversed the district court's grant of the Union's motion for summary judgment with regard to the contracting-out grievance, affirmed the district court's denial of the Union's motion for summary judgment with regard to the post-reduction grievance, and reversed the district court's denial of ExxonMobil's motion for summary judgment.

Trailer Bridge appealed the district court's grant of summary judgment in favor of Illinois National on Trailer Bridge's complaint, alleging that Illinois National failed to defend Trailer Bridge in an underlying antitrust action and thereby breached its commercial general liability insurance policy issued to Trailer Bridge for the year July 2004 to July 2005. The central issue on appeal was whether the CEO's statement triggered the duty to defend under the "personal and advertising injury" provision in the policy. After review and oral argument, the court held that the district court did not err in granting summary judgment for Illinois National for the reasons set forth in the district court's order, which the court adopted as its own. In particular, the court agreed with the district court's rejection of Trailer Bridge's argument that the CEO's statement deployed the advertising idea of "another." The court rejected Trailer Bridge's contention that the use of a co-defendant's idea could qualify as an "offense" under the policy. The underlying plaintiffs sought only antitrust damages; they did not seek to impose any legal obligations upon the insured to pay them damages "because of . . . advertising injury." No facts were alleged in the underlying complaint on the basis of which the underlying plaintiffs might have recovered damages "because of . . advertising injury"; and the underlying plaintiffs could not have recovered such damages because the allegedly misappropriated "advertising idea" was not that of the underlying plaintiffs, but rather was alleged to have been the advertising idea of other parties altogether.

In a loan-and-supply contract, plaintiff agreed to provide defendant with a $150,000 loan that would be gradually forgiven over five years as defendant purchased specified quantities of motor-oil products from plaintiff. The typewritten contract included a handwritten note stating that the "Agreement will terminate after 225,000 gallons and 225,000 filters of Exxon/Mobil is purchased or 60 months, whichever comes first." Defendant stopped buying products from plaintiff after only two years, having purchased only 55,296 gallons and 61,551 filters. The district court entered summary judgment for plaintiff. The Seventh Circuit affirmed, rejecting an argument that the handwritten provision relieved plaintiff of any liability after 60 months (after July 1, 2008) regardless of the amount of product it purchased.

Plaintiff, a property owner within the Lee's Crossing subdivision, sought declaratory and injunctive relief and an award of monetary damages against Defendants, the Lee's Crossing Homeowners Association, the developer of the subdivision, and the general partner, alleging that the Association had perpetrated the misuse of power and other unlawful activities by permitting the developer and general partner to exercise authority under the Lee's Crossing Homeowners Association Declaration to unilaterally amend the Declaration's provisions to the detriment of the individual property owners within Lee's Crossing. At issue between the parties was whether certain provisions of the Virginia Property Owners' Association Act (POAA) restricted the declarant of a recorded declaration creating a property owners' association from unilaterally amending that declaration under its express term providing for such authority. The circuit court granted partial summary judgment in favor of Defendants, concluding that the POAA did not bar a declarant from providing in a declaration the power to unilaterally amend the declaration. The Supreme Court affirmed, holding that the circuit court did not err in concluding that the Declaration provision at issue was not inconsistent with the provisions of the POAA.

A limited liability company (MIC) was formed for the purpose of building and operating a hotel. The original members of MIC were a revocable trust (the Trust), trustee Michael Siska, and Thomas, Jane, and Jason Dowdy. Later, Thomas and Jane Dowdy transferred, without the Trust's involvement, MIC's assets to Milestone Development, the Dowdy's family company. The Trust filed an amended complaint derivatively on behalf of MIC against Defendants, Milestone and the Dowdys. In its amended complaint, the Trust claimed that the transfer of assets to Milestone was not in the best interests of MIC or its members and alleging, inter alia, breach of fiduciary duty, breach of contract, unlawful distribution, and conversion, and seeking to recover damages. The Trust, however, did not join MIC as a party to the derivative action. The circuit court dismissed the Trust's amended complaint, holding that the Trust lacked standing to maintain the derivative action on behalf of MIC because the Trust could not fairly represent the interests of the Defendant shareholders. The Supreme Court reversed, holding that it would not entertain the appeal on the merits because MIC was a necessary party to the proceeding and had not been joined. Remanded.

Plaintiff Fox Rest Associates (Fox Rest) was formed to purchase Fox Rest Apartments. Defendants in this case were George Little, Fox Rest's legal counsel through his law firm, George B. Little and Associates (GBL&A), George Little's wife, and GBL&A. This action took place after Mr. Little sold the Apartments without knowledge of Fox Rest and transferred a portion of the proceeds from the sale in an account he held with Mrs. Little. Unable to satisfy a previous judgment finding Mr. Little and GLB&A liable to Fox Rest for, inter alia, malpractice and double billing, Fox Rest filed this action against Defendants, seeking to void various transactions by Mr. Little as fraudulent conveyances and voluntary conveyances. The court granted Defendants' motion to strike, finding that Fox Rest did not present sufficient evidence in its case in chief to establish a prima facie case for its claims. The Supreme Court affirmed in part and reversed in part, holding that, except for a portion of the claims relating to the sale of certain equipment, the circuit court erred in striking Fox Rest's fraudulent conveyance and voluntary conveyance claims. Remanded.

Lawton Rogers, an attorney, and three associates (Plaintiffs) formed a partnership (the Firm) by signing a partnership agreement. Each Plaintiff signed a note securing his indebtedness with his interest in the Firm. Later, all four partners joined a new firm, and the Firm remained extant but inactive. Several years later, Rogers and his wife later filed an amended complaint against Plaintiffs, demanding repayment of the notes. Plaintiffs filed a separate complaint asserting that Rogers had overdrawn his capital account by $611,147 and that this amount was owed to the Firm under the partnership agreement. Plaintiffs sought a final accounting and judgment against Rogers in favor of the Firm, the distribution of the Firm's assets equally among the partners, and the judicial dissolution of the Firm. The circuit court consolidated the two cases and ultimately ordered the judicial dissolution of the Firm without performing an accounting and settlement of the partners' accounts. The Supreme Court affirmed in part and vacated in part, (1) remanding for an accounting and settlement of the Firm's assets and liabilities, and (2) affirming the portion of the circuit court judgment awarding Rogers unpaid interest on his $150,000 capital contribution to the Firm.