Articles Posted in Contracts

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The First Circuit affirmed the district judge’s order sending Appellant’s case to arbitration, holding that the arbitration agreement between the parties was enforceable and did not fail for lack of consideration or unconscionability. Appellant and his employer entered into an agreement outlining the terms for Appellant’s continued at-will employment, which included an arbitration agreement. After Appellant was fired, Appellant filed this federal court lawsuit against Appellees alleging that his discharged violated several federal and state laws. Appellees moved to dismiss the complaint and compel arbitration. In response, Appellant argued that the arbitration agreement was unenforceable for lack of consideration and that the agreement was unconscionable and thus, unenforceable. The district court granted Appellees’ motion, concluding that a valid and enforceable arbitration agreement existed between the parties. The First Circuit affirmed, holding that both Appellant’s consideration and unconscionability arguments failed. View "Britto v. Prospect CharterCare SJHSRI, LLC" on Justia Law

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The First Circuit reversed the decision of the district court denying Defendants’ motion to dismiss Plaintiff’s complaint and compel arbitration based on the parties’ signed arbitration agreement, holding that, contrary to the conclusion of the district court, Defendants’ offer of continued at-will employment was valid consideration for the agreement. Plaintiff’s complaint alleged that Defendants fired him in violation of the Family Medical Leave Act and the Rhode Island Parental and Family Medical Leave Act. Defendants filed a motion to dismiss the case and compel arbitration. The district court denied the motion, concluding that the agreement failed for lack of consideration. The First Circuit reversed, holding (1) the agreement was supported by adequate consideration; and (2) Plaintiff’s motion to supplement the record is denied. The Court remanded the case with instructions to grant Defendants’ motion to dismiss and compel arbitration. View "Conduragis v. Prospect CharterCARE, LLC" on Justia Law

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The First Circuit affirmed the district court’s judgment in favor of Stephen Elliott on his suit against American Capital Energy, Inc. (ACE) and its two principals (collectively, Appellants) claiming breach of contract and violations of the Massachusetts Wage Act, holding that Ellicott’s compensation constituted “wages” under the Wage Act and that the statute of limitations for his Wage Act claim was properly tolled. Elliott filed suit against Appellants seeking compensation for unpaid sales commissions. The jury found all three Appellants liable under the Wage Act and ACE liable for breach of contract. The First Circuit affirmed, holding (1) the jury could reasonably conclude that Ellicott’s sales commissions constituted wages under the Wage Act; (2) tolling the statute of limitations so as to allow Ellicott’s Wage Act claims against one of the principals was justified; and (3) the district court did not abuse its discretion in granting Ellicott’s motions in limine excluding evidence about whether Elliott had agreed to split his sales commissions. View "Ellicott v. American Capital Energy, Inc." on Justia Law

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At issue in this bankruptcy case was whether a defaulting subcontractor who has no contractual right to compensation is nonetheless entitled to an equitable recovery if the general contractor has benefited at the subcontractor’s expense. Insite, a bankrupt subcontractor, filed an adversary proceeding against Walsh, a general contractor, in bankruptcy court claiming that Walsh improperly withheld payments belonging to its bankruptcy estate. The bankruptcy court found the doctrine announced in Pearlman v. Reliance Insurance Co., 371 U.S. 132, 141-42 (1962), prevented Insite from gaining a property interest in the funds withheld by Walsh. The district court affirmed. The First Circuit vacated the judgment below and remanded, holding (1) the Pearlman doctrine did not address the primary issue in this case; and (2) while Insite was not due funds under its contract with Walsh, the bankruptcy and district courts must consider whether Walsh was benefited by Insite’s post-default performance in such a way that Insite had an equitable claim under Puerto Rico law. View "Insite Corp. Inc. v. Walsh Construction Co. Puerto Rico" on Justia Law

Posted in: Bankruptcy, Contracts

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In this case alleging several violations of federal and state discrimination laws the First Circuit affirmed the decision of the district court denying Defendant’s motion to stay the proceedings in district court and compel arbitration, holding that the contract to arbitration in between the parties was unenforceable. Plaintiffs - several individuals and the National Federation of the Blind - filed a complaint alleging that Defendant - the Container Store, Inc. - failed to utilize tactile keypads on its point-of-sale devices in its stores that could independently be used by customers who are blind in violation of federal and state discrimination laws. Defendant moved to compel arbitration, citing an arbitration provision in the terms and conditions of a loyalty program of which the individual plaintiffs were members. The district court denied the motion. The First Circuit affirmed, holding (1) based upon the lack of evidence that the in-store plaintiffs had any knowledge that arbitration terms applied to their enrollment in the loyalty program, Defendant failed to establish that an agreement to arbitrate was consummated between it and three of the four individual plaintiffs; and (2) the district court did not err in finding that the loyalty program agreement was illusory and therefore void. View "National Federation of the Blind v. Container Store, Inc." on Justia Law

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The First Circuit affirmed the district court’s dismissal of the complaint filed by the Narragansett Indian Tribe against federal and Rhode Island agencies concerning a highway bridge reconstruction over historic tribal land, holding that the Tribe’s claim was not the type of claim federal courts may adjudicate. The Tribe filed suit in federal district court alleging breach of contract and seeking declaratory and injunctive relief. The heart of the Tribe’s claim contended that the state of Rhode Island broke a promise made to the Tribe. The district court granted Defendants’ motions to dismiss, concluding (1) as to the federal defendants, none of the three statutes identified in the complaint waived the federal government’s sovereign immunity as to the Tribe’s claims; and (2) as to the state defendants, the Tribe alleged no basis to support the court’s exercise of jurisdiction. The First Circuit affirmed, holding (1) the National Historic Preservation Act does not waive the federal government’s sovereign immunity in connection with the bringing of this suit; and (2) as to the state agencies, the complaint lacked any basis for federal subject matter jurisdiction. View "Narragansett Indian Tribe v. Rhode Island Department of Transportation" on Justia Law

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The First Circuit affirmed the district court’s summary judgment findings, evidentiary rulings, and denials of various motions on claims brought by a member of the rock band BOSTON against a former BOSTON guitarist alleging trademark infringement and breach of contract and on the guitarist’s counterclaims alleging breach of contract and abuse of process. Donald Thomas Scholz sued Barry Goudreau alleging claims related to impermissible inferences that Goudreau had allegedly made regarding his former association with BOSTON. Goudreau counterclaimed. After the district court granted in part the parties’ respective motions for summary judgment, the remaining claims proceeded to trial. The jury found in favor of the respective defendants on the remaining claims. The parties cross-appealed. The First Circuit affirmed the district court and denied the appeals, holding that there was no error or abuse of discretion requiring reversal. View "Scholz v. Goudreau" on Justia Law

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The First Circuit vacated the district court’s grant of Liberty Mutual Insurance Company’s summary judgment motion in this case alleging that Liberty breached Plaintiff’s contractual rights by wrongfully denying his request for coverage under an insurance policy, holding that the district court’s reasoning in granting Liberty’s motion for summary judgment was flawed. Plaintiff argued in his complaint that Liberty improperly denied his coverage request under the Directors and Officers insurance policy that Liberty had issued to a Puerto Rico hospital where Plaintiff served as the medical director. The district court concluded that, under the policy, the “Claim” that would give rise to the “Loss” for which Plaintiff sought coverage should be “deemed first made” before the policy took effect and, therefore, was not covered by the policy. The First Circuit vacated the district court’s order granting Liberty’s summary judgment motion, holding that the “Claim” for which Plaintiff sought coverage from Liberty was not “first made” prior to the beginning of the policy at issue, and the district court wrongly construed the policy in concluding otherwise. View "Jimenez-Castaner v. Liberty Mutual Insurance Co." on Justia Law

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The First Circuit affirmed the judgment of the district court in favor of Defendant on several of her counterclaims against her business partner (Plaintiff) and awarding Defendant more than $400,000 in damages, ordering her to provide Plaintiff certificates of authenticity for two disputed pieces of artwork, and dismissing several of her remaining counterclaims, holding that there was no error in the district court’s rationale. Unsatisfied with the underlying judgment, Defendant raised a number of issues on appeal. The First Circuit addressed each issue and then affirmed, holding that the record reflected that the district court’s factual findings were supported by the evidence, that the court properly applied the law to the facts, and that it did not abuse its discretion. View "Rojas-Buscaglia v. Taburno-Vasarhelyi" on Justia Law

Posted in: Contracts

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The First Circuit reversed the district court’s grant of Uber Technologies, Inc.’s motion to compel arbitration in this putative class action brought by users of Uber’s ride-sharing service in the Boston area, concluding that Uber’s mandatory arbitration clause found in an online contract was unenforceable. In their complaint, Plaintiffs alleged that Uber violated a Massachusetts consumer-protection statute by knowingly imposing fictitious or inflated fees. Uber moved to compel arbitration based on its terms and conditions (the agreement), which contained an arbitration clause and was available to Uber App users during the registration process. The district court granted the motion and dismissed the case. The First Circuit reversed, holding (1) Plaintiffs were not reasonably notified of the terms of the agreement and consequently did not provide their unambiguous assent to those terms; and (2) therefore, Uber failed to carry its burden on its motion to compel arbitration. View "Cullinane v. Uber Technologies, Inc." on Justia Law