Justia Contracts Opinion Summaries

In early 2020, Robert Goodrich liquidated his stock portfolio due to concerns about the financial market's reaction to the COVID-19 pandemic, resulting in significant financial losses. Goodrich had an investment account with U.S. Trust Bank of America Private Wealth Management, managed by Matthew Lettinga. Despite advice from Lettinga to avoid liquidation, Goodrich insisted on selling his portfolio. Goodrich later sued Lettinga and Bank of America, claiming gross negligence, breach of fiduciary duty, and violations of the D.C. Securities Act, arguing that he was not adequately informed of the risks involved in liquidating his portfolio.The U.S. District Court for the District of Columbia dismissed Goodrich's claims of gross negligence and violations of the D.C. Securities Act, finding them implausibly pleaded. The court allowed the breach of fiduciary duty claim to proceed but later granted summary judgment in favor of the defendants, concluding that Goodrich had explicitly instructed the sale of his portfolio, which precluded liability under the terms of the investment agreement.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and affirmed the District Court's decisions. The appellate court held that the investment agreement's exculpatory clauses were enforceable and that Goodrich's explicit instruction to liquidate his portfolio shielded the defendants from liability. The court also agreed that Goodrich failed to plausibly allege scienter, a necessary element for his claims under the D.C. Securities Act, and found no abuse of discretion in the District Court's limitation of discovery to the dispositive issue of whether Goodrich instructed the sale. View "Goodrich v. Bank of America N.A." on Justia Law

InfoDeli, LLC and Breht C. Burri (collectively, InfoDeli) brought a lawsuit against Western Robidoux, Inc. (WRI), Engage Mobile Solutions, LLC, and other defendants, including members of the Burri family and several companies. InfoDeli alleged copyright infringement, tortious interference, and violations of the Missouri Computer Tampering Act (MCTA). The dispute arose from a joint venture between InfoDeli and WRI, where InfoDeli created webstores for clients, and WRI provided printing and fulfillment services. The relationship deteriorated when WRI hired Engage to replace InfoDeli's webstores, leading to the lawsuit.The United States District Court for the Western District of Missouri granted summary judgment to the defendants on the copyright infringement claim, dismissed or tried the remaining claims before a jury, which found in favor of the defendants. The district court also granted in part and denied in part InfoDeli's sanctions motion and awarded attorney’s fees and costs to the defendants. InfoDeli appealed these decisions.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court affirmed the district court's grant of summary judgment on the copyright infringement claim, finding that InfoDeli failed to show that the nonliteral elements of its webstores were protected by copyright. The court also upheld the district court's denial of InfoDeli's motion for summary judgment on CEVA's conversion counterclaim, finding it was timely under Missouri law. Additionally, the court affirmed the district court's denial of InfoDeli's posttrial motions for judgment as a matter of law and a new trial as untimely.The Eighth Circuit also reviewed the sanctions imposed by the district court and found no abuse of discretion in the amount awarded or the decision not to impose additional sanctions under Rule 37(e). Finally, the court upheld the award of attorney’s fees and costs to the defendants, finding that the district court did not abuse its discretion in its assessment. The court affirmed the district court's decisions in all respects. View "InfoDeli, LLC v. Western Robidoux, Inc." on Justia Law

The New Jersey Turnpike Authority (NJTA) solicited bids for a contract to repair bridges in the Newark Bay area. El Sol Contracting & Construction Corp. (El Sol) submitted the lowest bid, but the NJTA rejected it because the bid documents did not include a validly executed Consent of Surety (CoS) from Liberty Mutual Insurance Co. (Liberty). The CoS was signed by an attorney-in-fact whose Power of Attorney (PoA) only authorized her to sign the Proposal Bond, not the CoS. The NJTA awarded the contract to the second-lowest bidder, Joseph M. Sanzari, Inc.The Appellate Division reversed the NJTA’s decision, interpreting the bid specifications to require that the PoA be tethered only to the Proposal Bond, not the CoS. The court concluded that Liberty’s offer to modify the PoA language addressed the NJTA’s concerns and that the NJTA’s rejection of El Sol’s bid was arbitrary, capricious, and unreasonable.The Supreme Court of New Jersey reviewed the case and held that the NJTA did not act in an arbitrary, capricious, and unreasonable manner when it rejected El Sol’s bid. The court emphasized that the CoS is a critical component of the bidding process and must be validly executed. Since the PoA did not authorize the attorney-in-fact to sign the CoS, El Sol’s bid was incomplete. The court also noted that the NJTA’s past acceptance of similar documents did not estop it from rejecting El Sol’s bid once the defect was identified. The court reversed the Appellate Division’s decision, upholding the NJTA’s rejection of El Sol’s bid. View "In the Matter of Protest Filed by El Sol Contracting and Construction Corp., Contract T100.638" on Justia Law

Anthology, Inc. entered into a 10-year contract with Tarrant County College District (TCCD) in June 2022 to provide Enterprise Resource Planning products and services for approximately $42 million, plus annual fees. In October 2023, TCCD terminated the contract without cause, as permitted by the contract, but refused to pay the early termination fee and demanded a refund of about $1.7 million already paid. Anthology sued TCCD in the United States District Court for the Northern District of Texas, seeking a declaratory judgment and damages for breach of contract.TCCD moved to dismiss the case under Federal Rules 12(b)(1) and 12(b)(6), arguing four grounds: entitlement to immunity from suit under Texas law, state sovereign immunity, lack of diversity jurisdiction, and a statutory bar on recovering damages under Texas law. The district court granted TCCD’s Rule 12(b)(1) motion, dismissing Anthology’s claims without prejudice, based on TCCD’s entitlement to immunity from suit under Texas law, without addressing the other grounds for dismissal. Anthology appealed the decision.The United States Court of Appeals for the Fifth Circuit reviewed the case and found that the district court erred in its decision. The appellate court held that state-law immunity cannot limit the jurisdiction of federal courts, which is defined by the Constitution and Congress. Therefore, the district court should not have dismissed the case based on state-law immunity without first addressing the jurisdictional issues of state sovereign immunity and the absence of complete diversity. The Fifth Circuit vacated the district court’s judgment and remanded the case for further proceedings consistent with its opinion. View "Anthology v. Tarrant County College District" on Justia Law

Mullins Food Products, Inc. was sued in Illinois state court for violating the Biometric Information Privacy Act (BIPA). Mullins requested its liability insurer, Citizens Insurance Company of America, to defend the suit, but Citizens declined and instead filed a federal suit seeking a declaratory judgment that it had no duty to defend or indemnify Mullins based on exclusions in the commercial liability insurance policies issued to Mullins in 2015, 2016, and 2017. While the federal suit was pending, Mullins settled the state-court action.The United States District Court for the Northern District of Illinois agreed with Citizens that the policy exclusions relieved Citizens of the duty to defend or indemnify Mullins. Specifically, the court found that the Access or Disclosure of Confidential or Personal Information exclusion and the Recording and Distribution of Material or Information in Violation of Law exclusion barred coverage for BIPA claims. The district court also ruled against Mullins on its counterclaim for breach of contract, reasoning that Citizens' timely filing of the declaratory judgment action precluded a finding of breach.The United States Court of Appeals for the Seventh Circuit reviewed the case and vacated the district court's decision. The appellate court concluded that the Access or Disclosure exclusion in the 2016 and 2017 policies barred coverage for BIPA claims, but the Statutory Violations exclusion did not. Therefore, Citizens had a duty to defend and indemnify Mullins under the 2015 policy, assuming Mullins provided timely notice of the state-court action. The appellate court remanded the case for further proceedings to determine the timeliness of Mullins' notice and to address Mullins' claim for reimbursement of defense costs. View "Citizens Insurance Company of America v Mullins Food Products, Inc." on Justia Law

An executive at a litigation funding company, Signal, resigned to start a competing business and sought legal advice from Signal’s outside counsel, Sugar Felsenthal Grais & Helsinger LLP. Signal sued the law firm and several of its attorneys, alleging legal malpractice, breach of contract, breach of fiduciary duty, and fraud. The district court dismissed some claims and granted summary judgment in favor of the defendants on the remaining claims. Signal appealed these rulings.The United States District Court for the Northern District of Illinois dismissed Signal’s breach of fiduciary duty claim and part of its fraud claim, allowing the legal malpractice, breach of contract, and fraudulent misrepresentation claims to proceed. The court also struck Signal’s request for punitive damages. During discovery, the court denied Signal’s motion to compel production of a memorandum prepared by one of the defendants. The district court later granted summary judgment in favor of the defendants on all remaining claims.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court’s rulings. The appellate court agreed that Signal failed to establish proximate cause and damages for its legal malpractice and breach of contract claims. The court also found that Signal waived its challenge to the summary judgment ruling on the fraudulent misrepresentation claim by not adequately addressing it on appeal. Additionally, the court upheld the district court’s decision to deny Signal’s motion to compel production of the memorandum, as Signal did not demonstrate that the document influenced the witness’s testimony. The appellate court concluded that the district court’s dismissal of the fraudulent concealment theory was harmless error and denied Signal’s motion to certify a question to the Illinois Supreme Court as moot. View "Signal Funding, LLC v Sugar Felsenthal Grais & Helsinger LLP" on Justia Law

PorterCare Adventist Health Systems had inadequate surgical-sterilization procedures for about two years, leading to over $40 million in liability from thousands of patients' claims. PorterCare sought coverage from AdHealth, its excess-liability insurer, for the full $40 million policy limit, arguing that the claims arose from one medical incident. AdHealth refused coverage, asserting that a medical incident covers injuries to a single person, not multiple people, and filed a complaint seeking a declaratory judgment. PorterCare counterclaimed for declaratory judgment and breach of contract.The United States District Court for the District of Colorado granted summary judgment to AdHealth, agreeing with its interpretation that a medical incident is limited to the acts or omissions causing injury to one person. The court found that AdHealth owed coverage only for the claims of a single patient that trigger the excess policy’s liability threshold, not for multiple patients' claims grouped together.The United States Court of Appeals for the Tenth Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the policy’s definition of “medical incident” unambiguously applies to the injuries of a single person. Therefore, AdHealth is liable only for individual claims exceeding PorterCare’s $2 million self-insurance retention, not for the aggregated claims of multiple patients. View "Adhealth, Limited v. PorterCare Adventist Health Systems" on Justia Law

In 2019, the Vermont Agency of Transportation (AOT) increased the rental fees for hangar space at state-owned airports. Five tenants, who own hangar facilities at the Northeast Kingdom International Airport and the Stowe-Morrisville State Airport, appealed the rate increases to the Transportation Board. They argued that the rent increase did not comply with the terms of their leases and was arbitrary. The leases allowed AOT to adjust rent based on the Consumer Price Index for All Urban Consumers (CPI-U), current market value for the land, and maintenance costs for the airport. The tenants contended that AOT improperly considered changes outside the previous lease term.The Transportation Board consolidated the tenants' appeals and reviewed the administrative records and memoranda submitted by both parties. The Board found that AOT had invested significantly in airport improvements and conducted a market-value analysis for leased space. However, the Board noted that details of the analysis were not included in the administrative record. The Board concluded that AOT was permitted to consider changes to market value and maintenance costs outside of the prior lease term but admonished AOT to provide a clearer analysis in the future.The tenants appealed to the Vermont Supreme Court, arguing that the rent increases were arbitrary and capricious due to a lack of transparent methodology. The Supreme Court affirmed the Board's conclusion that AOT could consider changes outside the prior lease term but reversed and remanded the decision concerning the fairness of the rent increases. The Court held that the Board should have sought a complete record from AOT to determine whether the rent levels were fair and conducted a new adjudication consistent with this opinion. View "In re State Airport Hangar Lease Disputes" on Justia Law

Barry and Jacklynn Graham hired Bradshaw Renovations, LLC to renovate their home. They agreed on a contract with an initial estimate of $136,168.16, which was later revised to $139,168.16. The contract included provisions for revising estimates and required written approval for changes. Throughout the project, Bradshaw sent invoices that varied from the initial estimate, leading to the Grahams' concerns about billing practices. After paying $140,098.79, the Grahams disputed a final invoice of $18,779.15, leading to a legal dispute.The Iowa District Court for Polk County held a jury trial, which found in favor of the Grahams on their breach of contract and consumer fraud claims, awarding them $16,000 and $40,000 respectively. The court denied Bradshaw's claims for unjust enrichment and quantum meruit. Bradshaw's motions for directed verdict and judgment notwithstanding the verdict were also denied. The court awarded attorney fees to the Grahams for their consumer fraud claim.The Iowa Court of Appeals affirmed the jury verdict, the district court's denial of Bradshaw's posttrial motions, and the dismissal of Bradshaw's equitable claims. It also affirmed the attorney fee award but remanded for determination of appellate attorney fees.The Iowa Supreme Court reviewed the case and found that the Grahams did not present substantial evidence of consumer fraud as defined by Iowa Code section 714H.3(1). The court reversed the district court's ruling on the consumer fraud claim and remanded for entry of judgment consistent with this opinion. The court affirmed the district court's dismissal of Bradshaw's unjust enrichment and quantum meruit claims, as these were covered by the written contract. The court also upheld the $16,000 jury award for the breach of contract claim. View "Bradshaw Renovations, LLC v. Graham" on Justia Law

Kepali Group procured insurance for its fleet of vehicles through an agent at Brown & Brown of Florida, with Prime Property & Casualty Insurance Company issuing a commercial automobile policy for the period from January 23, 2019, to January 23, 2020. The policy included a provision for after-acquired vehicles, requiring notification within 30 days of acquisition for coverage. On December 6, 2019, a 2009 Toyota Sienna owned by Kepali was involved in an accident. Kepali had acquired the vehicle on September 30, 2019, and notified Brown to add it to the Prime policy. Prime issued a quote for the additional premium, but Kepali did not pay it, and Prime did not issue an endorsement for the vehicle.The United States District Court for the Southern District of Florida ruled that Brown was acting as Kepali’s agent, not Prime’s, when attempting to procure insurance for the 3985 Toyota. However, the court concluded that the vehicle was covered under the policy’s after-acquired auto provision because Kepali met the two conditions: Prime covered all of Kepali’s vehicles, and Kepali notified Prime within 30 days of acquiring the vehicle. The court ruled that Prime had a duty to defend Kepali and Mr. Rodriguez but deferred ruling on the duty to indemnify until the underlying suit was resolved. The court granted summary judgment against Kepali and Mr. Rodriguez on their reformation and promissory estoppel claims and dismissed the remaining claims as moot.The United States Court of Appeals for the Eleventh Circuit affirmed the district court’s ruling. The court held that the after-acquired auto provision did not require payment of an additional premium within 30 days for coverage to continue. The court also found that the premium audit provision allowed Prime to compute the final premium and bill Kepali, and that Prime failed to perform this audit or send a bill. Therefore, Prime could not terminate coverage for non-payment without following the policy’s cancellation procedures. The court concluded that Prime had a duty to defend Kepali and Mr. Rodriguez in the underlying state court action. View "Prime Property and Casualty Insurance Company v. Kepali Group, Inc." on Justia Law