Justia Contracts Opinion Summaries

Sunoco, the owner and operator of several petroleum-refining facilities, purchased electric service from Toledo Edison. The contract between the two companies permitted arrangements that differed from the standard rate schedules. BP Oil Company, which owns a competing refined located next to Sunoco's refinery, also had a contract with Toledo Edison. Both contracts contained 'most favored nation' clauses, which allowed Sunoco and BP to utilize any "arrangement, rates or charges" for their facilities that Toledo Edison had given to the other. At issue was whether Sunoco could invoke the clause to extend the duration of its contract with Toledo Edison to match the duration of BP's contract with Toledo Edison, which would result in a $13 million savings for Sunoco. The commission found the clause did not allow Sunoco to extend the duration of its contract. The Supreme Court reversed, holding that under the plain language of the clause, the word "arrangement" encompasses all non-price terms of a competitor's contract. Because duration is a non-price term of contract, it is subject to the clause.

Defendant appealed the district court's award to plaintiff of prejudgment interest at the statutory rate of five percent to the date of its final judgment where plaintiff initially sued defendant for fraud and breach of contract in connection with the sale of securities. At issue was whether defendant's deposit of plaintiff's damages into the registry of the district court should prevent the accrual of prejudgment interest at the statutory rate after that date. Because such a result would be inconsistent with the purpose of prejudgment interest and would undermine the rule applied to awards of prejudgment interest by the Supreme Court of Texas, the court affirmed the judgment of the district court.

The union contracts state that a cost-of-living allowance will be applied to offset health insurance costs for hourly-rated employees and not be applied to hourly wage rates. The contracts state that the COLA will be equal to 1¢ per hour for each full 0.3 of a point change in the Consumer Price Index calculation. An employer was calculating the COLA on a weekly basis and maintained that the adjustment was only $0.08 per week; the union argued that the adjustment should be calculated at $3.20 per week ($0.08 x 40 hours per week). In November 2008, an arbitrator rejected management's argument that the contracts included a scrivener's error and that the COLA should be calculated on a weekly, rather than hourly basis.The district court entered summary judgment in favor of the unions. The Eleventh Circuit affirmed. The Labor Management Relations Act, 29 U.S.C. 185, preempts employers' state law fraud counterclaims. An attempt to assert a federal common law "fraudulent procurement" defense was barred by the three-month limitations period for challenging the arbitrator's award.

The Department of Justice issued a request for quotations for an automated recruiting and staffing system, providing that conflicting provisions would be considered as exceptions to the terms of the RFQ, and noting that any exceptions could adversely impact the evaluation rating. Plaintiff's bid included exceptions relating to confidentiality of data and how payments would be made, among other matters. Plaintiff's program obtained a higher score on a performance test. The DOJ disqualified plaintiff's bid and accepted intervenor's bid, stating that plaintiff's slight technical advantage did not justify the higher price and that plaintiff's exceptions were unacceptable. The government accountability office, claims court, and Federal Circuit upheld the decision. The contracting officer was not required to engage in discussions about the exceptions before disqualifying the bid and acted rationally in disqualifying the bid. The officer was entitled to rely on a certification of compliance with RFQ terms for the bid that was accepted and rationally accepted that bid.

A jury in the district court concluded that plaintiff did not breach its homeowners insurance policy with defendants and that one defendant had committed fraud when applying for the policy. Defendants appealed a district court order denying their motion for summary judgment and motions in limine and granting plaintiff's motion that defendants order and pay for additional transcripts on appeal. The court held that defendants were not entitled to estopp plaintiff from defending itself because genuine issues of material fact existed regarding whether the one defendant applied for the policy in good faith. The court held that the district court appropriately permitted plaintiff's customer service representative to testify as to her recollection of the defendant's statements. The court further held that the district court acted within its discretion in permitting plaintiff to defend itself via section 33-15-403, MCA, by allowing the customer service representative to testify about the defendant's alleged fraudulent statements. Accordingly, the district court did not abuse its discretion in denying defendants' motion in limine. The court finally held that the district court did not abuse its discretion in ordering additional transcripts under Montana Rule of Appellate Procedure 8(3)(b).

Appellee sued appellant for breach of contract stemming from an agreement between the parties under which appellant would produce, package, and deliver a rice milk product to appellee. At issue was whether the district court erred in denying appellant's motion for new trial because the court failed to give jury instructions regarding the proper standard of breach of an installment contract and the law pertaining to delegation of a contract. Also at issue was whether the district court erred in denying appellant's motion for judgment as a matter of law because appellee failed to prove a breach of the entire installment contract. The court held that the jury instructions, taken together, fairly and adequately submitted the breach of contract issue to the jury and that the district court properly declined to instruct the jury on the issue of delegation because the issue was irrelevant to the case presented to the jury. The court also held that appellant failed to preserve the issue of whether there was insufficient evidence to prove a breach of the entire installment contract and therefore, the court had no power to review this issue. Accordingly, the judgment of the district court was affirmed.

Saint Francis Medical Center ("St. Francis") brought a class action suit against C.R. Bard, Inc. ("Bard"), a supplier of medical supplies, alleging that Bard's contracts with Group Purchasing Organizations violated the Sherman Act, 15 U.S.C. 1, 2, section 3 of the Clayton Act, 15 U.S.C. 14, and Missouri antitrust law, Mo. Rev. Stat. 416.121.1. At issue was whether the district court properly granted summary judgment for Bard. The court held that, based on the precedent of Concord Boat Corp. v. Brunswick Corp., and specifically Saint Francis's failure to identify a relevant submarket, the judgment of the district court granting summary judgment to Bard was affirmed.

Plaintiff alleged that the two vehicles that it purchased from defendant, a used Ford and a new 2008 Dodge, had mechanical problems and body damage. The parties disputed responsibilities for repairs. At issue was whether the court could rely upon testimony on appeal for a vacated default judgment hearing and whether the district court lacked personal jurisdiction over defendant. The court held that the district court afforded the parties sufficient opportunity to refute affidavits through depositions, interrogatories, and through witness testimony at a hearing. Defendant elected not to depose plaintiff's owner and opted not to cross-examine plaintiff's witnesses at a rescheduled hearing. Defendant waived its right to the hearing and presented its own evidence in the form of affidavits. Therefore, defendant's argument that the court must disregard certain testimony or any of plaintiff's affidavits presented to the district court was unconvincing. The court also held that the Montana court's exercise of personal jurisdiction over defendant through long-arm provisions did not offend traditional notions of fair play and substantial justice. Accordingly, the court reversed the district court's order and remanded for further proceedings.

Plaintiffs claimed they were fraudulently induced to sell their ownership interests in a company they co-owned with one of the defendants, and fraudulently induced to release defendants from claims arising out of that ownership. At issue was whether the appellate court erred in finding that plaintiffs' claims were barred by the general release they granted defendants in connection with the sale of their interest. The court held that the release was intended to bar the very claims that plaintiffs have brought and that plaintiffs failed to allege that the release was induced by any fraud beyond that contemplated in the release. The court also held that the fraudulent statements plaintiffs point to could not support a conclusion that the release was fraudulently induced, since plaintiffs alleged that they released defendants from claims relating to the sale of their Telmex Wireless Ecuador LLC units without conducting minimal diligence to determine the true value of what they were selling. The court further held that the appellate division majority was therefore correct in concluding that, fully crediting plaintiffs' allegations, they would not be able to prevail as a matter of law. Accordingly, the order of the appellate division was affirmed.

Plaintiffs executed a general agreement with defendant regarding management of their real estate business which contained a general release. At issue was whether the appellate court erred in dismissing plaintiffs' fraud cause of action. The court held that plaintiffs have failed to allege that the release was induced by separate fraud and failed to allege that they justifiably relied on defendant's fraudulent misstatements in executing the release. The court also held that plaintiffs, by their own admission, who were sophisticated parties, had ample indication prior to June 2005 that defendant was not trustworthy, yet they elected to release him from the very claims they now bring without investigating the extent of his alleged misconduct. Accordingly, dismissal of plaintiffs' fraud cause of action was therefore appropriate.