Justia Commercial Law Opinion SummariesArticles Posted in Contracts
Fire Protection Service, Inc. v. Survitec Survival Products, Inc.
The Supreme Court held that the application the Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act, Tex. Bus. & Com. Code 57.001-.402, in this case did not violate the constitutional prohibition against retroactive laws in Tex. Const. art. I, 16.In the 1990s, Fire Protection Service, Inc. (FPS), orally agreed to be an authorized dealer and servicer of the life rafts manufactured by Survitec Survival Products, Inc. Nearly six years after the promulgation of the Act, which prohibits a supplier from terminating a dealer agreement without good cause, Survitec notified FPS that it was terminating their relationship. FPS sued for a violation of the Act. The district court entered judgment for Survitec. On appeal, the Fifth Circuit certified a question to the Supreme Court. The Supreme Court answered that the application of the Act to the parties' agreement does not violate the retroactivity clause in article I, section 16. View "Fire Protection Service, Inc. v. Survitec Survival Products, Inc." on Justia Law
Lyles v. Santander Consumer USA Inc.
The Court of Appeals answered a certified question of law by holding that Md. Code Comm. Law (CL) 12-1018(b) requires a credit grantor that is found to have knowingly violated Credit Grantor Closed End Credit Provisions (CLEC), CL 12-1001 et seq., to forfeit three times the amount of interest, fees, and charged collected in violation of the subtitle.This case concerned a borrower who purchased a motor vehicle and financed it by closed end credit pursuant to an agreement governed by CLEC. The federal district court issued a certified question of law regarding the calculation of damages under CL 12-1018(b). The Court of Appeals held that, based upon prior caselaw regarding CLEC, a plain language analysis of CL 12-1018(b), and a review of the pertinent legislative history, CL 12-1018(b) requires a credit grantor who has knowingly violated the CLEC to forfeit three times the amount of interest, fees, and charges collected in violation of CL 12-1018(b). View "Lyles v. Santander Consumer USA Inc." on Justia Law
EdgengG (Private), Ltd. v. Fiberglass Fabricators, Inc.
In this commercial dispute, the Supreme Court affirmed the final judgment of the superior court in favor of Defendants based on Plaintiffs' failure to comply with orders to provide discovery, holding that there was no error.The parties in this case executed a contract providing that Defendants would sell finished fiberglass products manufactured by Plaintiffs. Plaintiffs later filed a complaint alleging that Defendants had failed to pay upon delivery of goods and that Defendants conspired to deprive Plaintiffs of profits and sales commission. The trial justice eventually granted Defendants' motion for entry of final judgment, referencing Plaintiffs' failure timely to respond to discovery requests and their failure to comply with superior court orders. The Supreme Court affirmed, holding that the trial justice did not abuse his discretion when he dismissed Plaintiffs' complaint and entered judgment in favor of Defendants. View "EdgengG (Private), Ltd. v. Fiberglass Fabricators, Inc." on Justia Law
Cadence Bank, N.A. v. Elizondo
The Supreme Court reversed the judgment of the court of appeals affirming the decision of the trial court granting summary judgment in favor of Roy Elizondo and dismissing this action brought by Cadence Bank, N.A. for breach of a deposit agreement, breach of warranty under the Uniform Commercial Code (UCC), and common-law torts, holding that the lower courts erred.In response to a stranger's email for legal assistance, Elizondo, an attorney, deposited a cashier's check in his bank account then wired most of the funds to an overseas account. The check was dishonored, and the bank charged the transfer back to Elizondo, as allowed by the UCC and the parties' deposit agreement. When Elizondo refused to pay the overdrawn funds Cadence brought this action. The trial court granted summary judgment for Elizondo, and the court of appeals affirmed. The Supreme Court reversed, holding that the wire-transfer form failed to create the contractual duty urged by Elizondo. View "Cadence Bank, N.A. v. Elizondo" on Justia Law
Far East Aluminium Works Co., Ltd. v. Viracon, Inc.
The Eighth Circuit affirmed the district court's determination that a consequential-damages exclusion is enforceable in a contract for the sale of goods. The court concluded that the contract is clear that Viracon is not liable for consequential damages and found Far East's arguments to the contrary unpersuasive. In this case, the consequential-damages exclusion provision is not unconscionable under Minn. Stat. Sec. 336.2-719(3), and the alleged failure of the contract’s exclusive remedy has no effect on the enforceability of the consequential-damages exclusion. To the extent Far East’s indemnity claim survives the consequential-damages exclusion, it fails because there is no express contract obligating Viracon to reimburse it for the liability of the character involved. Finally, the court denied leave to amend. View "Far East Aluminium Works Co., Ltd. v. Viracon, Inc." on Justia Law
SodexoMAGIC LLC v. Drexel University
For 20 years, the vendor (SDM) provided food services at Drexel University in Philadelphia. In 2014 the university announced that it would competitively bid the contract for on-campus dining. The same vendor ultimately won that competition but about two years into the contract’s 10-year duration, the vendor sued the university for fraud, multiple breaches of contract, and alternatively for unjust enrichment. The university responded with fraud and breach-of-contract counterclaims. Only a few of the vendor’s breach-of-contract claims and portions of the university’s breach-of-contract claim survived summary judgment. The parties referred the remaining claims and counterclaims to arbitration and jointly moved to dismiss them. The district court granted that motion and entered final judgment, which the parties appealed, primarily to dispute the summary judgment ruling.The Third Circuit affirmed summary judgment in Drexel’s favor on SDM’s unjust enrichment and punitive damages claims, summary judgment in SDM’s favor on Drexel’s fraudulent inducement claim, and the district court’s decision to deny Drexel’s motion to strike declarations by SDM witnesses under the sham affidavit rule. The court vacated an order granting summary judgment to Drexel on SDM’s claims for fraudulent inducement, breach of contract for failure to renegotiate in good faith, and breach of a supplemental agreement for the Fall 2016 Semester. The surviving claims were remanded to the district court. View "SodexoMAGIC LLC v. Drexel University" on Justia Law
Air-Con, Inc. v. Daikin Applied Latin America, LLC
The First Circuit reversed the judgment of the district court requiring the parties to arbitrate their dispute in this case, holding that the district court erred in compelling arbitration.In 2000, Air-Con signed a written distribution agreement with Daikin Industries, LTD to be an authorized distributor in Puerto Rico of air conditioning and refrigeration equipment. The agreement contained an arbitration provision requiring the parties to arbitrate any disputes in Japan. Also in 2000, Air-Con established a distribution relationship with Daikin Applied Latin America, LLC, Daikin Industries' subsidiary. In 2018, Air-Con filed suit against Daikin Applied seeking injunctive relief and damages under Puerto Rico's Dealer Protection Act. After the case was removed to federal court Daikin Applied filed a motion to compel arbitration, arguing that the written agreement between Air-Con and Daikin Industries governed Daikin Applied's relationship with Air-Con. The district court agreed with Daikin Applied. The First Circuit reversed, holding that the district court erred in concluding that Air-Con agreed to arbitrate the claims at issue in this case. View "Air-Con, Inc. v. Daikin Applied Latin America, LLC" on Justia Law
Lakeside Surfaces, Inc. v. Cambria Co., LLC
Lakeside, a Michigan corporation, fabricates stone countertops in Michigan. Cambria a Minnesota LLC, is a nationwide manufacturer of countertop products. Lakeside buys “solid surface products” from manufacturers like Cambria. In 2011, the two companies executed a Business Partner Agreement (BPA) including a Credit Agreement, a Security Agreement, Order Terms and Conditions, Lifetime Limited Warranty, and a Business Operating Requirements Manual Acknowledgment Form. The BPA’s choice-of-law provision and forum-selection clause, in a single paragraph, state: This agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. Any proceeding involving this Agreement and/or any claims or disputes relating to the agreements and transactions between the parties shall be in the ... State of Minnesota. Pursuant to the BPA, Lakeside opened a fabrication facility in 2017. Discussions about Lakeside becoming Cambria’s sole Michigan fabricator led to Lakeside terminating the relationship.Lakeside filed suit in the Western District of Michigan, alleging breach of contract, violations of the Michigan Franchise Investment Law (MFIL), UCC violations, and promissory estoppel. The Sixth Circuit reversed the dismissal of the suit, finding the forum-selection clause unenforceable. MFIL’s prohibition on forum-selection clauses is a strong Michigan public policy and enforcing the forum-selection clause here would clearly contravene that policy. The MFIL claim is not Lakeside’s only claim, and the choice-of-law provision may be applied, as appropriate, to claims within its scope. View "Lakeside Surfaces, Inc. v. Cambria Co., LLC" on Justia Law
Kent Literary Club of Wesleyan University v. Wesleyan University
The Supreme Court reversed the judgment of the trial court in favor of Plaintiffs on all counts in this commercial dispute, holding that the trial court failed properly to instruct the jury regarding the legal effects of the parties' contract in this case and the proper means of calculating damages.Plaintiffs brought this action alleging promissory estoppel, negligent misrepresentation, tortious interference with business expectancies, and violations of the Connecticut Unfair Trade Practices Act (CUTPA), Con. Gen. Stat. 42-110a et seq., and seeking damages, injunctive relief, and attorney fees and costs. The jury returned a verdict for Plaintiffs on all counts. The Supreme Court reversed, holding (1) there was sufficient evidence for the jury to find Defendants liable; but (2) the trial court abused its discretion in issuing the injunction at issue, and the injunction was unenforceable. View "Kent Literary Club of Wesleyan University v. Wesleyan University" on Justia Law
Agrifund, LLC v. Heartland Co-op
The Eighth Circuit affirmed the district court's order granting summary judgment to Agrifund on the conversion claim Agrifund brought against Heartland. The court concluded that Heartland failed to exercise reasonable commercial standards of fair dealing, and Heartland does not qualify as a holder in due course. In this case, it would have taken minimal effort for Heartland to confirm, whether with the borrowers or with Agrifund, that Agrifund had been fully recompensed before accepting the payment at issue.The court also concluded that the Subrogation Agreement did not bind Heartland to the terms of the Note; the 14% contractual interest rate does not apply to the damages award; and the district court properly awarded pre-judgment interest at the rate required by Iowa law and post-judgment interest at the federal rate. Finally, the court concluded that Heartland is not liable for attorney fees as set forth in the Note, and there is no abuse of discretion in the district court's decision to deny Agrifund's request for attorney fees. Accordingly, the court affirmed the district court's award of damages and attorney fees. View "Agrifund, LLC v. Heartland Co-op" on Justia Law