Justia Contracts Opinion Summaries

Bromberg Rosenthal filed a complaint against Coralie Kurstin in district court, seeking a judgment for the balance of fees owed by Kurstin under an employment agreement in which Kurstin hired Bromberg to represent her in her divorce. During pretrial skirmishing, Bromberg issued a deposition subpoena to Kurstin's present counsel. Kurstin's counsel filed a motion to quash the subpoena, asserting the attorney-client privilege, and also filed a motion for a protective order. The district court denied both motions and ruled that the attorney-client privilege had been waived. Kurstin appealed. The court of special appeals dismissed the appeal as premature, concluding that collateral order doctrine precluded the appeal. The Court of Appeals affirmed, holding the intermediate appellate court correctly concluded that the circuit court's denial of the motion to quash was not immediately appealable because the issue (1) was inextricably intertwined with the merits of the action, and (2) will be reviewable on appeal from a final judgment.

This case stemmed from a Mutual Strike Assistance Agreement (MSAA) that was entered into by defendants (grocers) where the MSAA included a revenue-sharing provision (RSP), providing that in the event of a strike/lockout, any grocer that earned revenues above its historical share relative to the other chains during the strike period would pay 15% of those excess revenues as reimbursement to the other grocers to restore their pre-strike shares. At issue was whether the MSAA was exempt from the antitrust laws under the non-statutory labor exemption, and if not, whether the MSAA should be condemned as a per se violation of the antitrust laws or on a truncated "quick look," or whether more detailed scrutiny was required. The court held that the MSAA between the grocers to share revenues for the duration of the strike period was not exempt from scrutiny under antitrust laws and that more than a "quick look" was required to ascertain its impact on competition in the Southern California grocery market. Given the limited judicial experience with revenue sharing for several months pending a labor dispute, the court could not say that the restraint's anti-competitive effects were "obvious" under a per se or "quick look" approach. Although the court concluded that summary condemnation was improper, the court expressed no opinion on the legality of the arrangement under the rule of reason. Accordingly, the judgment was affirmed.

Defendant, a technology company that sold data centers, appealed the district court's judgment on a jury verdict in favor of plaintiff, a company that purchased defendant's fiber management systems and intelligent fiber systems, in plaintiff's suit for breach of contract and fraudulent inducement. At issue was whether the district court erred in denying its motion for judgment as a matter of law. The court held that because plaintiff failed to present sufficient evidence that defendant had no intent to perform under the "best efforts" provision of the contract and failed to present any evidence of damages on its other claim, the judgment of the district court was reversed and remanded to the district court to enter judgment in favor of defendant. Accordingly, the court did not reach the other issues raised by defendant on appeal.

In 1999, four employees of a Domino Sugar refinery sued parent company Tate & Lyle North America Sugars, Inc. (T&L) for damages from noise exposure during their employment with T&L between 1947 and 1994. Continental Casualty Insurance Company insured T&L with eight general liability policies. Each of the policies contained exclusions for bodily injury to employees arising out of the course and scope of their employees. In one of the eight policies, the exclusion was deleted by a special endorsement effective in 1975. After T&L notified Continental of the lawsuit, Continental retained defense counsel to defend T&L. In 2001, 125 new plaintiffs were added to the suit, and the complaint was amended to allege noise exposure from 1947 to 2001. At some point, trial was continued to allow for settlement. In 2003, without Continental's consent, T&L settled with 1 of 15 "flights" of plaintiffs for $35,000 per plaintiff. After that settlement, Continental was notified. One month later, Continental withdrew from the defense, disclaiming its liability based on a mistaken belief that all of its policies contained the exclusions for injuries to employees. In the subsequent years following the first settlement, additional plaintiffs were added. In 2004, the trial court granted partial summary judgment to T&L, finding that Continental had waived its right to rely on its policy exclusion defenses for "first flight" plaintiffs. The issue before the Supreme Court centered on Continental's exclusions and its disclaiming liability for subsequent plaintiffs. Upon careful consideration of the trial court record, the Court held that an insurer's breach of the duty to defend does not result in a waiver of all coverage defenses when the insured seeks indemnity under the policy. In this case, Continental had disclaimed coverage at the time more plaintiffs were added to the lawsuit, and did not provide a defense to those claims. Therefore, waiver principles did not apply. Continental was only liable to T&L in indemnity on a pro rata basis for the exposures that took place during the coverage period. The Court remanded the case for a determination of whether twelve remaining plaintiff-flights met the settlement criteria.

In 1995, Charles and Charlene Ebinger contracted with Venus Construction Corporation to build a home. The couple moved into their new residence in 1997. In 2003, the Ebingers filed suit against Venus alleging defects in the home's foundation. Venus sought indemnification from one of its subcontractors. At issue in this case is whether the construction company's third-party demand against its subcontractor was time-barred by state law that established a peremptive period for actions against residential building contractors. The peremptive period was established originally at ten years, but subsequent amendments shortened its duration. A 1999 amendment reduced the period to seven years; a 2003 amendment reduced it to five years. Upon consideration of the trial record and the applicable legal authority, the Supreme Court found that the latest version of the statute applied in this case (2003). Consequently, the court held that the construction company's right to indemnity from its subcontractor was extinguished and its third party demand was perempted.

Plaintiffs William and Vivian Allen contracted defendant V and A Brothers, Inc. (V&A) to landscape their property and build a retaining wall to enable the installation of a pool. At the time, V&A was wholly owned by two brothers, Defendants Vincent DiMeglio, who subsequently passed away, and Angelo DiMeglio. The corporation also had one full-time employee, Defendant Thomas Taylor. After V&A completed the work, Plaintiffs filed a two-count complaint naming both corporate and individual defendants. The first count was directed solely to V&A and alleged that the corporation breached its contract with Plaintiffs by improperly constructing the retaining wall and using inferior backfill material. The second count was directed to the corporation and Vincent's estate, Angelo, and Taylor individually, alleging three "Home Improvement Practices" violations of the state Consumer Fraud Act (CFA). Before trial, the trial court granted the individual defendants' motion to dismiss the complaint against them, holding that the CFA did not create a direct cause of action against the individuals. Plaintiffs' remaining claims were tried and the jury returned a verdict in favor of plaintiffs on all counts, awarding damages totaling $490,000. The Appellate Division reversed the trial court's order dismissing the claims against the individual defendants under the CFA. The panel remanded the matter to determine whether any of the individual defendants had personally participated in the regulatory violations that formed the basis for Plaintiffs' CFA complaint. The panel precluded relitigation of the overall quantum of damages found by the jury in the trial against the corporate defendant. Upon review, the Supreme Court held that employees and officers of a corporation might be individually liable under the CFA for acts they undertake through the corporate entity. Furthermore, individual defendants are not collaterally estopped from relitigating the quantum of damages attributable to the CFA violations. The Court remanded the case for further proceedings.

Plaintiffs sued defendant over the sale of an automated hunting and fishing licensing system, alleging that defendant misrepresented the capabilities and costs of its software system, as well as information about key programming personnel. Both parties appealed the judgment of the district court, which awarded plaintiffs $965,000 and designated its post-trial order as a final judgment pursuant to Federal Rule of Civil Procedure 54(b). The court held that, due to the close factual and legal relationship between the fraud, warranty, and good faith and fair dealing claims, Rule 54(b) certification was inappropriate where plaintiffs' unadjudicated claims shared the same facts as the certified claims and where, under Missouri law, fraud and breach of warranty claims shared similar elements and the same conduct could support both theories. The court also held that the district court correctly dismissed defendant's cross-claim against Active Network, Inc. (Active Network) and its assessment of the equities was not clearly unreasonable. Accordingly, the court held that the district court properly certified its order dismissing the cross-claim against Active Network. As there was no final judgment on all claims or a proper 54(b) certification as to the claims between plaintiffs and defendant, the remainder of the appeals were dismissed without prejudice, and the case remanded for further proceedings.

After being diagnosed with fibromyalgia, chronic pain, anxiety, and depression, plaintiff was awarded long-term disability benefits under an employee benefit plan issued and administered by defendant. Benefits were discontinued about 24 months later, when defendant determined that plaintiff had received all to which she was entitled under the planâs self-reported symptoms limitation. Because plaintiff had retroactively received social security benefits, defendant also sought to recoup equivalent overpayments as provided by the plan. The district court dismissed. The Seventh Circuit reversed in part and remanded for reinstatement. The self-reported symptom limitation violates ERISA, 29 U.S.C., 1022; the policy sets out that long-term benefits will be discontinued after 24 months if disability is due to mental illness or substance abuse, but does not mention that the time limitation applies if a participantâs disability is based primarily on self-reported symptoms. The Social Security Act does not bar recovery of overpayments occasioned by receipt of social security benefits.

Plaintiff appealed from a judgment of the district court dismissing his complaint against his former employer, seeking monetary and equitable relief for alleged age discrimination in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. 621, et seq., and state law. At issue was whether the separation agreement between the parties was unenforceable because its provisions did not comply with the requirements of the Older Workers Benefit Protection Act (OWBPA), 29 U.S.C. 626(f), and applicable Equal Employment Opportunity Commission (EEOC) regulations, that the separation agreement be written in a manner calculated to be understood. The court held that the separation agreement was written in a manner calculated to be understood by the relevant employees of defendant. The court also rejected plaintiff's argument that summary judgment should have been denied because there were genuine issues of fact to be tried and that the separation agreement was unenforceable because plaintiff was not advised in writing to consult with an attorney. Accordingly, the judgment was affirmed.

One of the subsidiaries of Annett Holdings was a trucking company that employed Michael Vititoe as a driver. Vititoe was given a Comdata credit card to purchase fuel. Comdata had a written contract with Kum & Go that enabled the Kum & Go truck stop from which Vititoe purchased fuel to handle Comdata transactions. For four years, Vititoe used the Comdata credit card at the Kum & Go truck stop to obtain cash while reporting purchases of fuel. After the fraud was discovered, Vititoe was arrested and convicted of theft. Annett Holdings sued Kum & Go for negligence and breach of contract as an alleged third-party beneficiary of the contract between Kum & Go and Comdata. The district court granted summary judgment to Kum & Go, (1) finding the negligence claim was barred by the economic loss rule; and (2) rejecting the breach of contract claim on the ground that Annett was not an intended beneficiary of the contract. The Supreme Court affirmed, holding the district court did not err in granting summary judgment to Kum & Go on both claims.