Justia Contracts Opinion Summaries

In April 2008, plaintiff American Asphalt sued CMX for professional negligence and breach of implied warranty. On October 1, 2008, the superior court issued an order informing plaintiff that if it did not file a motion to set as required by Ariz. R. Civ. P. 38.1(e), the case would be placed on the inactive calendar after January 20, 2009 and dismissed without further notice after March 23, 2009. American did not file a motion to set and the case was dismissed without further notice on April 29, 2009. Plaintiff moved to set aside the dismissal, contending that its failure to comply with Rule 38.1(a) was excusable because it had substituted counsel around the time of the Rule 38.1(d) filing deadline. The superior court denied the motion. The court of appeals affirmed, finding no excusable neglect partly because the court's order provided notice as required by the rule. On review, the Supreme Court vacated the court of appeals' decision and remanded, holding that a notice issued several months prior to placing the case on the inactive calendar does not comply with the rule because the rule requires contemporaneous notice when a case is placed on the inactive calendar.

This lawsuit stemmed from a failed venture between OverDrive, Inc. (OverDrive), a leader in the field of digital media distribution, and Baker & Taylor, Inc. (Baker & Taylor), a leading distributor of physical media, where OverDrive alleged numerous claims against Baker & Taylor contending that Baker & Taylor breached its exclusive distribution agreement with OverDrive and that it was disclosing OverDrive's proprietary trade secrets and confidential information. The court held that OverDrive's conversion, fraud, and "Breach of Contract - Exclusivity and Non-Compete Provisions" claims survived, as did OverDrive's claims for misappropriation of trade secrets and "Breach of Contract - Confidentiality Obligations", which were not challenged in this motion. The court held, however, that all other counts in OverDrive's complaint were dismissed.

This case stemmed from petitioner's rates filed with the Federal Energy Regulatory Commission (FERC) for its Michigan oil pipeline where petitioner agreed with two of its three shippers to restrict rate increases for a three-year moratorium period. At issue was the initial rate petitioner must use to calculate its new annual ceiling levels. Petitioner argued that after the end of the moratorium period, its ceiling levels should be calculated as if its maximum rates had been set under FERC's indexing methodology all along. In contrast, FERC would simply pick up the rates where the settlement agreement left off, using the last rate under the agreement as the initial rate for the period after the agreement. The court held that neither the agreement nor the relevant regulations clearly laid out how to determine the rates petitioner could charge now that the three-year period had past. Therefore, finding both the agreement and the regulations ambiguous, the court deferred to the reasonable views of FERC and denied petitioner's petition for review.

At issue in this case was whether the trial court abused its discretion when it concluded that Defendants Richco Construction, Inc. (Richco) and Ronald Richards, Jr. were personally notified of the default judgment against them and denied their motion to set aside that judgment. The suit arose from a contractual relationship between Plaintiff Lawrence M. Clarke, Inc. (Clarke) and Defendant. Clarke worked on a residential subdivision in 2003, and hired Richco as a subcontractor to work on the sewer system. Richco's work did not satisfy the local governing municipality, and after efforts to repair were unfruitful, Clarke contracted with another party to finish the work. Clark filed a breach of contract and fraud complaint against Richco. The process server attempted to serve Richco at its business address on file with the state, but Richco had vacated the premises and left no forwarding address. Clarke continued in its efforts to locate Richco and refiled its complaint. The trial court permitted alternative service through mailing notice to last-known addresses and a classified advertisement in the local paper. With no response, Clarke moved for a default judgment that the court granted. Upon review of the trial court record, the Supreme Court found that the trial court abused its discretion by finding that Richco was personally notified, and that Richco was entitled to relief from the default judgment. The Court reversed and remanded the case back to the trial court for further proceedings.

In 1995, David Bushard and Steven Reisman formed a partnership called PressEnter. After Bushard dissolved the partnership in 1999 he withdrew from its day-to-day operations. Reisman continued to run day-to-day operations and to direct PressEnter to pay partnership distributions to both partners. In 2004, Reisman started taking a salary. In 2007, Bushard filed a complaint against Reisman and PressEnter, alleging breach of fiduciary duty and unjust enrichment and demanding a money judgment, including the amount of Reisman's salary. Reisman counterclaimed with two counts of unjust enrichment, damage to business reputation, and breach of the duty of good faith and fair dealing. The trial court concluded that the dissolution of PressEnter resulted in a wind-up, ordered the equal distribution of PressEnter's profits to both partners, and granted summary judgment in favor of Bushard. The court of appeals affirmed. On appeal, the Supreme Court affirmed, holding (1) the distribution of PressEnter's profits and losses was governed by Wis. Stat. 178.15, and Reisman's equitable arguments were insufficient to overcome the plain language of the statute; and (2) because there was no genuine dispute of material fact, the circuit court appropriately ordered summary judgment in favor of Bushard.

Richard Orr and Sheldon Cook had a partnership agreement to conduct a cow-calf operation. The parties sold the cows and calves in the spring of 2007. Cook received $230,935 from the sale. Orr sued Cook, disputing the reimbursement amount Cook owed him from the sale and for the cost of feeding and caring for the cows during the winter of 2007. The trial court awarded Orr $41,614. The Supreme Court affirmed in part and reversed in part, holding (1) the trial court was not clearly erroneous in determining the value of the calves; (2) the trial court was not clearly erroneous in determining the amount of reimbursement Cook owed Orr for feed and veterinarian costs; and (3) the trial court did err in refusing to award Orr prejudgment interest because it was requested in a manner allowed by statute.

A limited partnership, POB Associates, was formed for the purpose of owning and operating a physicians office building. The partnership had two general partners. The allocation of POB Associates' profits and losses was governed by Article I, Section 1.06(b) of the partnership agreement, and for approximately 25 years the general partners annually allocated 98% of the limited partnership's profits and losses to the limited partners in accordance with the number of units held by each. In 2008, the general partners adopted a new allocation formula based on a new interpretation of Section 1.06(b), under which 46% of POB Associates' profits and losses were allocated to the limited partners and the remaining 54% was allocated to the general partners. Several limited partners sued the general partners, alleging breach of contract and breach of fiduciary duty and requesting a declaratory judgment regarding the allocation under the agreement. The circuit court granted summary judgment in favor of the general partners. The Supreme Court reversed the circuit court's grant of summary judgment, finding the partnership agreement capable of more than one meaning under the disputed facts of the case. Remanded.

This case involved the construction and application of a combined professional and general liability insurance policy issued by appellant to appellee where appellee requested a defense from appellant under the policy for a civil lawsuit. In that underlying suit, plaintiff alleged that while her mother was terminally ill, she consented to appellee's harvesting of some of her mother's organs and tissues after her mother's death and consented to the harvesting because appellee was a non-profit corporation. Appellee, instead, transferred the tissues to a for-profit company, which sold the tissues to hospitals at a profit. Appellee subsequently sought coverage under its general liability insurance with appellant and appellant denied coverage because the conduct alleged was outside the scope of the insurance policy's coverage. The court certified the following questions to the Supreme Court of Texas: (1) "Does the insurance policy provision for coverage of 'personal injury,' defined therein as 'bodily injury, sickness, or disease including death resulting therefrom sustained by any person,' include coverage for mental anguish, unrelated to physical damage to or disease of the plaintiff's body?" (2) "Does the insurance policy provision for coverage of 'property damage,' defined therein as 'physical injury to or destruction of tangible property, including consequential loss of use thereof, or loss of use of tangible property which has not been physically injured or destroyed,' include coverage for the underlying plaintiff's loss of use of her deceased mother's tissues, organs, bones, and body parts?"

The Federal District Court for the Northern District of Alabama certified a question to the State Supreme Court. The Court was asked whether the failure of an insured to give notice of a proposed settlement to an insurance company causes the insured to forfeit underinsured motorist coverage (UIM), regardless of the insuredâs actual knowledge of that coverage, and regardless of prejudice to the insurance company if the insured has a copy of the policy that contains the coverage. In 2007, Delbert and Lou Ann Downey were stopped at an intersection on their motorcycle when a vehicle driven by Wyndell Thompson failed to stop and hit them. At the time of the accident, multiple insurance policies were in force. The Downeys had underinsured motorist coverage. The Downeys, in consideration of $10,000 and while represented by counsel (but without having notified Travelers Property Casualty Insurance Company that they were doing so), executed a general release to discharge Mr. Thompson and his insurance company from all liability arising out of the accident. Subsequently, and with different counsel, the Downeys notified Travelers of the accident for the first time and that they were making a claim under their underinsured motorist policy. Travelers denied the claim and the Downeys sued. The Supreme Court found that the Downeys were at all relevant times in possession of the policy, and it clearly provided UIM coverage. However, the Downeys did not meet the threshold of showing any condition under which their lack of notice could be excused. "In other words, the Downeys have âforfeit[ed]â UIM coverage."

Petitioner Harold French appealed a decision of the New Hampshire Board of Auctioneers (Board) that sanctioned him for submitting a fictitious bid at an auction. In 2009, Petitioner attended an auction run by another auctioneer and registered as a bidder under his own name. Of the items for sale, Petitioner asked the auctioneer about a particular painting that had a set reserve price of $10,000. When the bid reached $9,000, Petitioner bid $9,500. He later testified before the Board that he did not intend to purchase the painting, but sought to protect the reserve and ensure the painting was sold. No one else bid on the painting. The owner believed he had waived the reserve when he had gestured to the auctioneer following Petitionerâs bid. The owner subsequently requested payment for the painting from Petitioner. However, the auctioneer told the owner that the painting did not sell because the reserve was not met. The owner filed a complaint with the Board, and the Board subsequently issued its sanction against Petitioner. Upon review, the Supreme Court found that the evidence presented against Petitioner supported the Boardâs findings and sanction. The Court affirmed the Boardâs decision.