Articles Posted in Contracts

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This case concerned remedies in various appeals arising from claims for breach of contract and fraud. The Ninth Circuit held that the district court's orders on July 26, 2010, and October 8, 2013, affirming defendants' right to recover restitution, were sound; in regard to the December 17, 2014 order, the district court erred in allowing the judgment creditor to recover in restitution in light of Ward v. Sherman, 100 P. 864 (Cal. 1909); the judgment creditor's challenges to the October 8, 2013 order denying the judgment creditor's request for rescission of its quota share reinsurance agreement was rejected; the May 19, 2015 order granting in part and denying in part defendants' motion to recover post-appeal attorneys' fees under California Civil Code 1717 was reversed; and because the judgment creditor's restitution award was reversed, the district court's July 14, 2015 order denying defendants' motion to retax costs was reversed and remanded for reconsideration. View "PSM Holding Corp. v. National Farm Financial Corp." on Justia Law

Posted in: Contracts

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This case concerned remedies in various appeals arising from claims for breach of contract and fraud. The Ninth Circuit held that the district court's orders on July 26, 2010, and October 8, 2013, affirming defendants' right to recover restitution, were sound; in regard to the December 17, 2014 order, the district court erred in allowing the judgment creditor to recover in restitution in light of Ward v. Sherman, 100 P. 864 (Cal. 1909); the judgment creditor's challenges to the October 8, 2013 order denying the judgment creditor's request for rescission of its quota share reinsurance agreement was rejected; the May 19, 2015 order granting in part and denying in part defendants' motion to recover post-appeal attorneys' fees under California Civil Code 1717 was reversed; and because the judgment creditor's restitution award was reversed, the district court's July 14, 2015 order denying defendants' motion to retax costs was reversed and remanded for reconsideration. View "PSM Holding Corp. v. National Farm Financial Corp." on Justia Law

Posted in: Contracts

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The Ninth Circuit affirmed the district court's judgment for EpiCept in an action brought by doctors, alleging claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud. The doctors' claims relate to two patents for a non-FDA approved drug (NP-2) and EpiCept's failure to develop those patents into FDA-approved drugs. The doctors' arguments mainly center on the jury's determination that the doctors materially breached their contract with EpiCept by failing to disclose that Dr. Flores treated burn patients with NP-2. The panel held that the district court did not abuse its discretion in formulating the jury instructions, or in determining that the jury's verdict was not against the clear weight of the evidence; neither the jury instructions given in this case nor the evidence presented at trial warrant the do-over the doctors demanded; the district court's response to the jury's question also did not merit a new trial because the jury's question was essentially factual and the district court's answer appropriately directed the jury to consider its original instructions and the evidence presented at trial; and because the panel affirmed the jury's finding that the doctors materially breached the contract, the district court's exclusion of the doctor's damages expert was necessarily harmless. View "Crowley v. EpiCept Corp." on Justia Law

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An arbitration provision in a maritime insurance policy is enforceable despite law in the forum state assertedly precluding its application. This case concerned the scope of insurance coverage Galilea bought for its yacht. The Ninth Circuit held that the Federal Arbitration Act (FAA), 9 U.S.C. 1-16, applied to the insurance policy but not the insurance application. In this case, the insurance application was not a contract, but the insurance policy was a contract subject to the FAA because the FAA constituted established federal maritime law for maritime transactions; federal maritime law was not precluded by Montana law under the McCarran-Ferguson Act, 15 U.S.C. 1012; and federal maritime law was not precluded by Montana law under M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972). The panel also held that the parties have delegated arbitrability issues to an arbitrator. Therefore, the panel affirmed the district court's order finding the policy's arbitration clause enforceable and affirmed the district court's order granting the Underwriters' motion to compel arbitration as to certain causes of action. The panel affirmed in part, reversed in part, and remanded. View "Galilea, LLC v. AGCS Marine Insurance Co." on Justia Law

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Plaintiff filed suit challenging the constitutionality of Arizona's revocation-on-divorce (ROD) statute after she remained the beneficiary of her ex-husband's IRA account when he died. The Ninth Circuit held that the district court correctly determined that an Arizona state court would disregard the choice-of-law provision in the Plan and instead apply Arizona's ROD statute; the application of the ROD statute was not preempted by federal statutes and regulations governing IRAs; the district courts erred when they denied plaintiff standing; and the California district court did not abuse its discretion in transferring the case to Arizona under 28 U.S.C. 1406(a) on the grounds that it lacked personal jurisdiction over the Estate. Although it disagreed with the district court's holding that plaintiff lacked standing, the panel affirmed the dismissal of the constitutional challenge to the application of Arizona's ROD statute in the allocation of the proceeds of the ex-husband's IRA. View "Lazar v. Kroncke" on Justia Law

Posted in: Contracts, Family Law

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The Ninth Circuit reversed the dismissal of a putative class action seeking refunds of baggage fees based on preemption by the Airline Deregulation Act, 49 U.S.C. 1301 et seq. Plaintiff filed suit, alleging various breach of contract claims, seeking a refund of a $15 baggage claim fee, because her bag did not arrive on time and was consequently delivered to her the next day. American Airlines v. Wolens is controlling as to plaintiff's breach of contract claim. In this case, because plaintiff's claim was for breach of contract of a voluntarily assumed contractual undertaking, and she pleaded breach of contract, the claim was not preempted by the Airline Deregulation Act as construed by Wolens. View "Hickcox-Huffman v. US Airways" on Justia Law

Posted in: Aviation, Contracts

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Plaintiff filed a class action against C.H. Robinson, alleging misclassification claims regarding overtime pay requirements. On appeal, C.H. Robinson challenged the district court's denial of its motion to compel arbitration. The court rejected plaintiff's argument that the Incentive Bonus Agreement at issue was procedurally and substantively unconscionable. In regards to procedural unconscionability, the court concluded that, under California law, the degree of procedural unconscionability of such an adhesion agreement is low. In regard to substantive unconscionability, the court concluded that any argument that the judicial carve-out was not substantively unconscionable has been waived; the waiver of representative claims was not substantively unconscionable where the unenforceability of the waiver of a Private Attorneys General Act (PAGA), Cal. Labor Code 2698-2699.5, representative action does not make this provision substantively unconscionable; and the venue provision, confidentiality provision, sanctions provision, unilateral modification provision, and discovery limitations are not substantively unconscionable. Therefore, the court concluded that the dispute resolution provision is valid and enforceable once the judicial carve-out clause is extirpated and the waiver of representative claims is limited to non-PAGA claims, and the district court erred in holding otherwise. The court reversed and remanded. View "Poublon v. C.H. Robinson Co." on Justia Law

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Plaintiff filed a class action against Samsung, alleging that it made misrepresentations as to the performance of the Galaxy S4 phone. The district court denied Samsung's motion to compel arbitration based on an arbitration provision contained in a warranty brochure included in the Galaxy S4 box. Determining that its analysis is governed by California contract, rather than warranty, law, the court concluded plaintiff did not assent to any agreement in the brochure, nor did he sign or otherwise act in a manner that showed he accepted the arbitration agreement. The court concluded that Samsung failed to demonstrate the applicability of any exception to the general California rule that an offeree’s silence does not constitute consent. Therefore, in the absence of an applicable exception, California’s general rule for contract formation applies. The court also concluded that, under the circumstances of this case, Samsung's inclusion of a brochure in the Galaxy S4 box, and plaintiff's failure to opt out, does not make the arbitration provision enforceable against plaintiff. Finally, the court concluded that Samsung's argument that plaintiff agreed to arbitrate his claims by signing the Customer Agreement with Verizon Wireless is meritless. The court explained that Samsung is not a signatory to the Customer Agreement between Verizon Wireless and its customer. Furthermore, Samsung is not a third-party beneficiary to the Customer Agreement. Accordingly, the court affirmed the judgment. View "Norcia v. Samsung Telecommunications" on Justia Law

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Pure Wafer, a facility that cleans silicon wafers, filed suit against the City, challenging Ordinance No. 4856-1313. The Ordinance imposes limits on the pollutants that industrial users, like Pure Wafer, are permitted to discharge into the City’s sewer system. Pure Wafer claims that by enacting the Ordinance, the City impaired the obligation of its contract with Pure Wafer and committed at least two different breaches of contract. The district court entered judgment for Pure Wafer and awarded Pure Wafer a permanent injunction. The court concluded that the City has not impaired the obligation of its contract with Pure Wafer in violation of the Contracts Clause of the Constitution, because the Ordinance has not altered the ordinary state-law remedies to which Pure Wafer would otherwise be entitled if it successfully proves a breach of contract. The court explained that the City might very well have breached its contract but that does not necessarily mean it has violated the Contracts Clause. Therefore, the court reversed as to the Contracts Clause claim. The court agreed, however, with Pure Wafer's alternative claim that the City has breached the contractual obligations it undertook in the Development Agreement. In this case, the City agreed to accept such effluent as the parties knew Pure Wafer would need to discharge in order to maintain a viable business, and the City agreed to bear the financial risk that State-initiated regulatory changes would make complying with such promise more costly than it was when the parties entered into the Agreement. Therefore, the court concluded that the City may not force Pure Wafer to absorb the costs needed to bring the City into line with the terms of its Aquifer Protection Permit. The court explained that enforcing the Ordinance against Pure Wafer would eviscerate the benefit of Pure Wafer’s bargain; the City cannot do so without putting itself in breach of the Agreement. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Pure Wafer Inc. v. City of Prescott" on Justia Law

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In 1963, USPS and Bellevue’s predecessor-in-interest entered into a twenty-year initial lease with five options to renew the lease and an option to purchase certain property. When USPS attempted to exercise the purchase option, Bellevue refused to honor it. The district court granted summary judgment for USPS and ordered specific performance of the sale of the property. The court applied Washington’s heightened evidentiary standard for specific performance and held that USPS has shown clearly and unequivocally that it has a contractual right to purchase the property. Even under Washington law’s high standard for awarding specific performance, USPS successfully provided “clear and unequivocal evidence” that it exercised its options to extend the term of the lease in strict compliance with the terms of the lease, and that the lease therefore continued to exist through the time it also properly exercised its purchase option. Finally, the court agreed with the district court that the 1963 lease remained valid. Accordingly, the court affirmed the district court’s order granting summary judgment to USPS and compelling specific performance for the sale of the property. View "USPS v. Bellevue Post Office" on Justia Law

Posted in: Contracts