Justia Contracts Opinion Summaries

After Clark and Sullivan Constructors (C&S), a general contractor, solicited bids for a public works project, Dynalectric, a subcontractor, submitted a bid to perform electrical work on the project. C&S incorporated Dynalectric's bid into its bid for the contract, and C&S was awarded the project. Subsequently, Dynalectric repudiated its obligations to C&S. C&S sued Dynalectric in district court under various theories of liability, including promissory estoppel. The district court entered judgment for C&S on its promissory estoppel claim and awarded C&S $2,501,615 in damages, which represented the difference between Dynaletric's bid and the amount C&S paid the three replacement contractors to complete the work. Dynalectric appealed, contending that the district court applied the incorrect measure of damages. The Supreme Court affirmed, holding (1) the determination of the appropriate measure of damages in any given case turns on considerations of what justice requires and the foreseeability and certainty of the particular damages award sought; and (2) the presumptive measure of damages for a general contractor that reasonably relies on a subcontractor's unfulfilled promise is the difference between the nonperforming subcontractor's original bid and the cost of the replacement subcontractor's performance.

Donovan Donald (Don) was incapacitated in an accident and received several treatment in Kalispell Regional Medical Center (KRMC). Later, a dispute arose between Don's estate and KRMC over KRMC's acceptance or rejection of Medicaid's payments for Don's care. KRMC filed liens against the Estate. The Estate, in turn, sued KRMC and MASH, a company that had provided Medicaid application forms to the Estate, under several theories of liability. The district court granted Defendants' motions for summary judgment. The Supreme Court affirmed, holding the district court (1) did not err in granting summary judgment to KRMC and MASH; (2) correctly interpreted and applied the Montana Medicaid Act; (3) correctly awarded KRMC prejudgment interest but incorrectly included interest KRMC received from its interest-bearing account; and (4) did not abuse its discretion by awarding KRMC attorney fees and costs. Remanded with instructions to offset the prejudgment interest award by the amount of interest KRMC received from the interest-bearing account.

In 2004, defendant had the used boat inspected. Although he could not test the engine, a certified marine surveyor concluded that the boat was good for cruising around Puerto Rico and coastal waters. Plaintiff, a first-time boat owner, purchased the boat "as is" for $38,000. During the next few years there were a number of problems; all repairs were done by defendant. Plaintiff paid $16,139.34 for repairs, $3,195.20 for towage and $2,990.00 for wharfage and insurance. During a period of 32 months, the boat was undergoing service or was otherwise unuseable for about nine months. Plaintiff filed claims under admiralty law and Article 1802 of the Puerto Rico Civil Code. The district court found that defendant breached its duty to a workmanlike performance upon which plaintiffs had a right to rely. The First Circuit reversed. Defendant was not liable; there was no evidence that its acts or omissions were the cause of the chronic problems. The court also vacated the award of damages for negligent infliction of emotional distress and pain and suffering under state law.

Plaintiff appealed from a judgment granting defendant's motion to dismiss as untimely plaintiff's complaint, which alleged breach of fiduciary duty, intentional misrepresentation, negligent misrepresentation, and conspiracy to commit those three offenses. At issue was whether the district court properly ruled that tolling of the untimely claims, on the basis of defendant's continuing concealment, was unwarranted. The court affirmed and held that the lawsuit, commenced on April 2004, arose from an injury suffered no later than June 2000 and therefore, was barred by the applicable statute of repose, Conn. Gen. Stat. 52-577. The court also held that plaintiff could not seek the safe harbor of equitable estoppel due to its failure to recognize that it was required to pursue its action. Accordingly, the court affirmed the judgment of the district.

This case involved a type of insurance fraud known as "Stranger Originated Life Insurance" (STOLI), "whereby," as plaintiff described, "high face amount insurance polices insuring senior citizens are obtained for the benefit of investors with no insurable interest in the life of the insured." At issue was whether the district court erred in applying the procured-by-fraud exception to the general rule that "rescission required the return of unearned premiums." The court held that, based on Minnesota Supreme Court precedents, the court affirmed the district court's decision recognizing plaintiff's right under the Minnesota law to retain the premiums paid on a fraudulently procured insurance policy. Accordingly, the judgment of the district court was affirmed.

A 1997 coal supply contract provided that "[a]ll disputes under" the agreement would be referred to arbitration in Charleston. The parties extended the 1997 Agreement until 2006, but disagree as to whether a series of emails effectuated extension through 2008. In July 2008, buyer and supplier signed a new contract with an increased price, providing for arbitration in Richmond and containing a merger clause. Buyer paid the higher price under protest, claiming that the 1997 agreement remained in effect and filed for arbitration in Charleston; supplier filed for arbitration in Richmond under the 2008 agreement. The Charleston panel found that the parties had extended the 1997 agreement and that the 2008 agreement was "a glaring breach" of the extension. The Richmond panel stayed proceedings. A Virginia district court dismissed supplier's suit. A West Virginia district court granted summary judgment for buyer. The Fourth Circuit upheld the West Virginia award under the Federal Arbitration Act 9 U.S.C. 10(a). The issue of which panel should decide the validity of the 2008 agreement was procedural, not jurisdiction, and did not require a decision in court. The Charleston panel based its jurisdiction on a plausible reading of the 1997 agreement.

This case stemmed from the collective bargaining activities of the International Longshore and Warehouse Union, Local 142 (Union) and the Pacific Beach Hotel (Hotel) where the Union filed numerous unfair labor practice charges with the Regional Director of Region 20 of the Board (Director). At issue was an injunction issued pursuant to section 10(j), 29 U.S.C. 160(j), of the National Labor Relations Act (Act), 29 U.S.C. 151 et seq. The court must determine whether the injunction should be affirmed on its merits and whether the district court had the power to issue the injunction in the first place. As a preliminary matter, the court held that the appeal was not moot because its resolution was crucial to a pending claim for retrospective monetary relief sought by the National Labor Relations Board (Board) against the Hotel in a civil contempt proceeding. The court held that the text of the Act, reinforced by the Board's longstanding practice under section 10(e), allowed the Board to assign the General Counsel final authority in deciding when to petition for injunctive relief under section 10(j) in particular unfair labor practice cases pending before the Board. The three other circuits that have addressed this question agreed that the district court could entertain section 10(j) petitions approved by the General Counsel pursuant to the authority granted him by the Board in December 2007. Although the court's reasoning differed somewhat from that in those cases, the court's conclusion with regard to the validity of the Board's 2007 delegation of litigation authority under section 10(j) was identical. With respect to the Board's power to file petitions under section 10(j), it was sufficient that a quorum of the Board in 2007 decided to assign decisions as to individual petitions to the General Counsel. Under the distinction explained in New Process Steel, L.P. v. NLRB, nothing in the Board's quorum requirement would cause the General Counsel's ability to file section 10(j) petitions to lapse after the Board's membership fell below a quorum. As for the merits of the injunction, the court concurred with the district court's assessment that the Board was likely to determine, and be affirmed by the court in so determining, that the Hotel engaged in violations of section 8(a)(1), (3), and (5) of the Act by refusing to bargain in good faith and excluding five union activists from the workforce. The district court likewise did not abuse its discretion in concluding that the other requisites for section 10(j) relief were met. Accordingly, the court affirmed the injunction.

Plaintiffs, former shareholders and the representative and attorney-in-fact for all shareholders of Kinexus Corporation (Kinexus), commenced this action asserting claims against Advent Software, Inc. (Advent) for breach of contract and unjust enrichment arising out of a December 31, 2001 agreement entered into by Advent to acquire Kinexus. Advent subsequently moved to dismiss the action because of Kinexus' failure to prosecute and Advent argued that dismissal with prejudice was appropriate under Court of Chancery Rules 41(b) and 41(e). The court held that Advent's motion to dismiss for failure to prosecute was denied where the court was not convinced that these circumstances necessitated dismissal because of the court's preference for resolving cases on the merits and because Kinexus appeared to have renewed their efforts to diligently prosecute the matter. Accordingly, counsel were requested to confer and to promptly submit a case scheduling order so that discovery could be completed and a trial date could be established.

Defendant Lockheed Martin Corporation d/b/a Lockheed Martin STS-Orlando (LMSTS) moved to bifurcate this action into a "Contract Interpretation Phase" and a "Damages Phase," and both LMSTS and plaintiff BAE Systems Information and Electronic System Integration Inc. (BAE) filed motions to compel. The court endorsed bifurcation where the litigation was indisputably complex and where both parties agreed, in principle, that bifurcation would be appropriate and have reached a substantial agreement regarding the issues to be determined during each phase of the action. Accordingly, the action was bifurcated into a "Contract Interpretation Phase" and a "Damages Phase." The court noted that bifurcation of the action effectively postponed the parties' need for much of the discovery they have requested. Accordingly, the court granted in part and denied in part BAE's and LMSTS' motions to compel. Finally, the court denied each party's request for attorneys fees because both BAE and LMST had good faith grounds for the positions taken.

This case arose when Del Monte Foods Company announced that it had agreed to be acquired by a consortium of Kohlberg Kravis Roberts & Co. L.P., Vestar Capital Partners, and Centerview Partners (collectively, Sponsors). A number of familiar entrepreneurial plaintiffs' firms filed putative class actions challenging the merger. Plaintiffs subsequently sought an interim award of attorneys' fees and expenses for causing defendants to issue supplemental disclosures and obtaining a preliminary injunction. The court held that the application for an interim fee award was granted with respect to benefits conferred by the Proxy Supplement. For those benefits, Lead Counsel was awarded fees and expenses of $2.75 million. Therefore, the court held that the application was otherwise denied without prejudice and could be renewed at a later time.