Articles Posted in Contracts

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The First Circuit affirmed the district court’s determination that, under Puerto Rico law, Caribbean Seaside Heights Properties, Inc.’s suit for breach of contract against Erikon LLC, its former investment partner, was barred by a release that Seaside had executed earlier in Erikon’s favor. In 2006, the parties executed an agreement to sell their real estate project. As part of that agreement, Seaside and Erikon each agreed to execute releases in favor of the buyer and in favor of each other. When Erikon later refused to pay Seaside reimbursement for expenses Seaside had purportedly incurred in connection with the project, Seaside initiated this suit. The district court granted summary judgment for Erikon, finding the release both valid and applicable. The First Circuit summarily affirmed, holding that the release executed by Seaside provided Erikon with a defense against this action, substantially for the reasons articulated by the district court. View "Caribbean Seaside Heights Properties v. Erikon LLC" on Justia Law

Posted in: Contracts

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The First Circuit affirmed the district court’s motion to dismiss Plaintiff’s complaint against Nordstrom, Inc. alleging that Nordstrom had improperly obtained money from her and other Massachusetts consumers and requesting that a court order Nordstrom to restore this money and enjoin Nordstrom from continuing to violate Massachusetts law. Plaintiff’s claims were based on her purchase of a cardigan sweater for $49.97 at a Nordstrom Rack outlet store in Boston, Massachusetts. The sweater’s price tag listed both the purchase price and a higher “Compare At” price of $218. Plaintiff claimed that the sweater was never sold for $218 but, rather, that Nordstrom uses the “Compare At” price tags to mislead consumers about the quality of its items. On appeal, Plaintiff challenged the dismissal of her Mass. Gen. Laws ch. 93A claim and her common law claims for fraud, breach of contract, and unjust enrichment. The First Circuit affirmed, holding (1) because Plaintiff did not adequately allege that she suffered a legally cognizable injury, her Chapter 93A claims for damages and injunctive relief were both properly dismissed; and (2) the district court did not err in dismissing Plaintiff’s remaining claims. View "Shaulis v. Nordstrom, Inc." on Justia Law

Posted in: Consumer Law, Contracts

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The First Circuit affirmed the district court’s dismissal of Plaintiff’s claims against Kohl’s Department Stores, Inc. alleging that the “comparison prices” on Kohl’s price tags were entirely fictional and selected to mislead consumers about the quality of the products sold by Kohl’s. Plaintiff filed suit alleging that Kohl’s had improperly obtained money from her and other Massachusetts consumers in violation of Massachusetts statutory and common law. Plaintiff requested that a court order Kohl’s to restore this money and enjoin the store from continuing to violate Massachusetts law. The First Circuit (1) affirmed the dismissal of Plaintiff’s claims for damages and injunctive relief and her common law claims for fraud, breach of contract, and unjust enrichment for the reasons stated in Shaulis v. Nordstrom, Inc., No. 15-2354, slip op. at 5-32 (1st Cir. July 26, 2017), also decided today; and (2) affirmed the district court’s denial of Plaintiff’s motion for leave to file a second amended complaint, holding that the district court did not err in denying the motion. View "Mulder v. Kohl's Department Stores, Inc." on Justia Law

Posted in: Consumer Law, Contracts

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The First Circuit vacated the judgment of the district court granting summary judgment for Defendant on Plaintiff’s breach of contract claim. Plaintiff, a South Carolina resident, brought this diversity suit against Defendant, a Puerto Rico company, alleging that Defendant breached his employment agreement by unilaterally terminating it early. Plaintiff sought damages for unpaid base salary and anticipated commissions on real estate sales. The district court found that Plaintiff’s employment was void because Plaintiff was effecting real estate broker duties without a license under Puerto Rico law. The First Circuit remanded the case for further proceedings, holding that summary judgment was inappropriate where it was disputed whether Defendant was aware that Plaintiff did not have a broker’s license at any relevant time and whether some of the work Plaintiff performed and intended to perform was permissible without a broker’s license. View "Farthing v. Coco Beach Resort Management, LLC" on Justia Law

Posted in: Contracts

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The arbitrator did not manifestly disregard the law and did not exceed his powers in concluding that the dispute in this case could not be arbitrated as a matter of law. Plaintiff Mountain Valley Property, Inc. (MVP) purchased a comprehensive insurance package (the program) from Applied Underwriters, Inc. (AU). As part of the program, MVP entered into a reinsurance participation agreement with Applied Underwriters Captive Risk Assurance Co., Inc. (AUCRA) that contained a mandatory arbitration clause and a Nebraska choice-of-law clause. MVP later filed a complaint against AU, AUCRA, and Applied Risk Services, Inc. (collectively, Applied) alleging breach of contract and various tort claims arising from its participation in the program. The district court referred the claims against AUCRA to arbitration. The arbitrator concluded that the dispute could not be arbitrated as a matter of law due to the McCarran-Ferguson Act and the Nebraska Uniform Arbitration Act. AUCRA unsuccessfully moved to vacate the arbitration award under the FAA and to transfer the case to the District of Nebraska. Applied appealed from the denial of the motion to vacate. The First Circuit affirmed, holding that the arbitrator did not manifestly disregard the law and did not exceed his powers. View "Mountain Valley Property, Inc. v. Applied Risk Services, Inc." on Justia Law

Posted in: Contracts

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In this business dispute, Plaintiff K’s Merchandise Mart, Inc. challenged orders by the district judge granting summary judgment for Defendants William Weinstein and Frank Morton and requiring Plaintiff to pay Defendants $35,000 in sanctions. The First Circuit affirmed the summary judgment rulings but vacated the sanctions order and remanded for reconsideration of the sanctions matter, holding (1) summary judgment was properly granted on Plaintiff’s claims for fraudulent inducement, breach of the implied covenant of good faith and fair dealing, and breach of contract; and (2) the judge erred when he ordered sanctions against Plaintiff rather than against its attorneys. View "Eldridge v. Gordon Brothers Group, LLC" on Justia Law

Posted in: Business Law, Contracts

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Disappointed by the limited fruits of its multimillion-dollar investment with Abbott Laboratories (Abbott), John Hancock Life Insurance Company (Hancock) sued, seeking to recover damages under its contract with Abbott or, alternatively, to rescind the contract. At issue in this appeal was a contract provision that the parties viewed disparately either as a liquidated damages provision - and thus enforceable - or a penalty - and thus unenforceable. The district court concluded that the provision at issue was unenforceable. The First Circuit reversed this holding and affirmed the district court’s judgment in other respects, holding (1) Abbott failed to carry its burden of proving that the key provision was a penalty rather than a valid and enforceable liquidated damages provision; and (2) the district court did not err in striking Hancock’s prayer for rescission where Hancock recovered damages under the contract for Abbott’s breach of the contract. View "John Hancock Life Insurance Co. v. Abbott Laboratories" on Justia Law

Posted in: Contracts

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A final determination of liability but not damages in arbitration can satisfy the final requirement of Article V(1)(e) of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards when the parties have agreed to submit the issue of liability to the arbitrator for a distinct determination prior to a separate proceeding to assess damages. At issue in this appeal was the district court’s judicial recognition of an English arbitrator’s determination of joint contract liability against the seller and the renovator of a building. The parties agreed to bifurcate litigation of the liability and damages issues. Accordingly, the district court treated the liability judgment, which was decided before the damages issues, as final and thus entitled to judicial recognition. Specifically, the district court held the contractor for the renovation work bound as a party to the agreement providing for arbitration of disputes. The renovator and contractor appealed, claiming that the arbitrator’s judgment of liability in the bifurcated arbitration proceeding lacked the finality required for judicial confirmation of a foreign arbitral award under 9 U.S.C. 207. The First Circuit affirmed, holding that the arbitrator’s liability judgment was final in this instance and that the contractor could indeed be subjected to arbitration. View "University of Notre Dame (USA) in England v. TJAC Waterloo, LLC" on Justia Law

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The Autoridad de Energia Electrica de Puerto Rico (PREPA) executed six contracts for the delivery of fuel oil. Vitol, Inc. was a party or assignee to the six contracts, each of which included a choice of law and forum selection clause stating that disputes concerning the contract shall be litigated in Puerto Rico state courts. After PREPA learned that Vitol, S.A. had pled guilty to first degree grand larceny it filed a complaint in a Puerto Rico Court against Vitol, Inc. and Vitol, S.A. alleging that two oil supply contracts it held with Vitol, Inc. were null due to Law No. 458 of December 29, 2000 and the Puerto Rico Civil Code. Invoking diversity jurisdiction, Defendants removed the claim to federal court. PREPA then filed a second complaint in a Commonwealth court regarding four additional oil supply contracts. The two cases were consolidated in federal court. The district court remanded the case to the Commonwealth court, concluding that the forum selection clauses applied to the dispute and, therefore, that the unanimity requirement of 28 U.S.C. 1446(b)(2)(A) could not be satisfied. The First Circuit affirmed, holding that remand was proper because the forum selection clauses were enforceable, and therefore, the unanimity requirement could not be met. View "Autoridad de Energia Electrica v. Vitol, Inc." on Justia Law

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This dispute between two businesses led to Plaintiff filing suit in federal court alleging various claims under Massachusetts law, two of which remained at issue on appeal. Those two claims were for breach of implied contract and violation of the Massachusetts catch-all consumer protection statute, Mass. Gen. Laws ch. 93A. The district court denied Defendant’s motion for judgment as a matter of law on Plaintiff’s implied contract claims and on its chapter 93A claims. The jury found Defendant liable for breach of implied contract and for knowing and willful violation of chapter 93A. The First Circuit affirmed, holding (1) the evidence in the record was sufficient to sustain the jury’s verdict; and (2) Defendant offered no meritorious argument for why the district court erred in submitting Plaintiff’s chapter 93A claim for damages to a jury in federal court. View "Full Spectrum Software, Inc. v. Forte Automation Systems, Inc." on Justia Law

Posted in: Consumer Law, Contracts