Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

A company that provides employee training filed suit against a client, claiming breach of contract based both on alleged failure to pay a gain sharing fee and breach of confidentiality provisions.It sought an accounting for disclosures or uses of its materials inconsistent with the copyright license provided by the agreement. The court granted summary judgment for the client. The First Circuit affirmed, finding that the training company did not support its figures with respect to the fee or the breach of confidentiality.

Plaintiff, who signed documents presented by her husband without reading them, sought damages and to rescind two mortgages ostensibly encumbering titles to her residence in Massachusetts and a retreat in Maine. Her husband allegedly misrepresented the nature of the documents, which were powers of attorney. She claims she did not receive documents required by the Truth In Lending Act, 15 U.S.C. 1635 and the Massachusetts Consumer Credit Cost Disclosure Act, Mass. Gen. Laws ch. 140D 10.1. The trial court dismissed, reasoning that notices to the husband were sufficient under the powers of attorney. The First Circuit vacated. The district court improperly made findings of fact on a motion to dismiss, in concluding that the powers of attorney suffered from identical scriveners' errors and should be read as if their expiration dates were May 31, 2009 (not 2008).

The heirs of a composer, who died in 2003, sued a music publisher and a performance rights society, with which the composer had contracted in 1995 with respect to four songs. The defendants failed to supply royalty reports as required by the contracts. The district court award the maximum statutory damages for the copyright infringements pursuant to 17 U.S.C. 504(c)(1). The First Circuit affirmed, rejecting many of the defendants' arguments as not properly raised and, therefore, waived.

The company sought a preliminary injunction against a former employee to prohibit violation of his employment agreement by competition with the company, solicitation of its customers and remaining employees, and use of information gained while employed. The court granted a preliminary injunction as to the confidential information, but not as to competition or solicitation. The First Circuit affirmed, applying the law of Massachusetts. The contract limited the employee for only one year, which has passed. When the period of restraint has expired, even when the delay was substantially caused by the time consumed in legal appeals, specific relief is inappropriate and the injured party is left to his damages remedy.

Plaintiff designs, manufactures, and sells computer mice and, in 1995, contracted with defendant to manufacture the products in bulk. The agreement identifies the "Product" as inventions, designs, methods and related information concerning computer mouse products and precludes defendant from disclosing, using, or copying "Confidential Information," or manufacturing, or otherwise commercially exploiting the Product, or developing other products derived from the Product. In 2009, defendant began to make near copies using plaintiff's production tooling, Plaintiff claimed violation of the New Hampshire Uniform Trade Secrets Act, N.H. Rev. Stat. 350-B:1 to -B:9 and breach of contract. The district court entered a preliminary injunction, ordering defendant to stop production of the copies. The First Circuit affirmed, holding that the relief was appropriate, based on the record.

In 2004, defendant had the used boat inspected. Although he could not test the engine, a certified marine surveyor concluded that the boat was good for cruising around Puerto Rico and coastal waters. Plaintiff, a first-time boat owner, purchased the boat "as is" for $38,000. During the next few years there were a number of problems; all repairs were done by defendant. Plaintiff paid $16,139.34 for repairs, $3,195.20 for towage and $2,990.00 for wharfage and insurance. During a period of 32 months, the boat was undergoing service or was otherwise unuseable for about nine months. Plaintiff filed claims under admiralty law and Article 1802 of the Puerto Rico Civil Code. The district court found that defendant breached its duty to a workmanlike performance upon which plaintiffs had a right to rely. The First Circuit reversed. Defendant was not liable; there was no evidence that its acts or omissions were the cause of the chronic problems. The court also vacated the award of damages for negligent infliction of emotional distress and pain and suffering under state law.

Plaintiff, a resident of Nevada, negotiated an oral contract with defendant, a citizen and resident of Israel. Defendant worked for one of plaintiff's companies, a Delaware corporation with offices in Massachusetts and Israel, from 1996-2000 and claimed that the agreement entitled him to a 12 percent investment in plaintiff's casino venture. Plaintiff claimed that defendant was entitled to 12 percent of net from high-tech sector investments recommended by defendant and filed a declaratory judgment action. On remand after reversal of dismissal for forum non conveniens, the district court ruled in favor of plaintiff. The First Circuit affirmed, first holding that defendant's contacts with Massachusetts were sufficient for jurisdiction. The district court properly placed the burden of proof on defendant, the natural plaintiff who would have had the burden of proving his affirmative claim to the 12 percent option in a damages action; the burden of proof was, nonetheless, not dispositive. The record supported the finding that there was no meeting of minds on the option.

Former employees of defendants participated in the Capital Accumulation Plan, under which they received portions of their earned commissions in the form of Citigroup stock, received at a 25% discount and on a tax-deferred basis. The stock was subject to a two-year vesting period during which transfer was restricted and rights would be forfeited if the employee resigned. Plaintiffs alleged that the CAP forfeiture provision violated the Colorado Wage Claim Act, Colo. Rev. Stat. 8-4-103 and Louisiana's labor statute, La. Rev. Stat. 23:631(A)(1)(a), 23:634(A) and breach of employment contracts, breach of the CAP contract, conversion, and unjust enrichment. The district court dismissed, based on a previous decision involving similarly-situated plaintiffs. The First Circuit affirmed. The Colorado law applies only to compensation that is "earned, vested, and determinable." The Louisiana law does not apply because the stock was not "then due" when the plaintiffs resigned. There was no breach of contract, hence no conversion; the claims of unjust enrichment failed because of the existence of a contract.

Plaintiff obtained a mortgage in 1999 and refinanced four times over six years, each time pulling out more equity. The last refinancing and a mortgage obtained for a new house, (the first house was for sale), were based on documents inaccurately describing plaintiff's income and position. Plaintiff, who claimed to be unaware of the inaccurate information, defaulted on payments. The district court rejected his suit, alleging a violation of Mass. Gen. Laws ch. 93A (unfair or deceptive practices), unjust enrichment, a violation of the implied covenant of good faith and fair dealing, negligence, and entitlement to rescission of the loan and an injunction ordering the removal of the loan from his credit history. The First Circuit affirmed dismissal of the covenant claim relating to one loan, the negligence claim, and the rescission/equitable relief claim, but vacated dismissal of the other claims. Whether plaintiff or the loan officer deliberately falsified the loan application and whether default was foreseeable are questions of fact suitable for trial.

The hospital engaged a contractor for renovations and expansion. Before occupancy the hospital noted problems with the flooring in operating rooms; the contractor completed some repairs. After the project was complete, new problems continued to appear and the contractor repeatedly repaired the floors. All of the problems documented by January 2005, the expiration of a one-year warranty period, were repaired. The contractor continued to perform repairs through early 2006, when the hospital conducted its own investigation and replaced the floors at a cost of $398,070, without involving the contractor. The cost was higher than the original installation because of the need for containment systems so that the facility could continue to operate. A jury awarded $331,835 in damages on the warranty plus pre-judgment interest. The First Circuit affirmed. A reasonable jury could find that the problems were due to faulty workmanship or materials for which the contractor was responsible under the warranty, that the hospital properly invoked the warranty, and that the hospital was not required to give the contractor the option of doing the job.