Justia Commercial Law Opinion Summaries

CS manufactures and sells X-ray and metal detection devices for use in public facilities around the world. Tecapro is a private, state-owned company that was formed by the Vietnamese government to advanced technologies into the Vietnamese market. In 2010, Tecapro purchased 28 customized AutoClear X-ray machines from CS for $1,021,156. The contract provides that disputes shall be settled at International Arbitration Center of European countries for claim in the suing party’s country under the rule of the Center. Tecapro initiated arbitration proceedings in Belgium in November 2010. In December 2010, CS notified Tecapro of its intention to commence arbitration proceedings in New Jersey. In January 2011, CS filed its petition to compel arbitration in New Jersey and enjoin Tecapro from proceeding with arbitration in Belgium. The district court concluded that it had subject matter jurisdiction under the U.N.Convention on the Recognition and Enforcement of Foreign Arbitral Awards, that it had personal jurisdiction over Tecapro, and that Tecapro could have sought to arbitrate in Vietnam and CS in New Jersey. The latter is what happened, so “the arbitration shall proceed in New Jersey.” After determining that it had jurisdiction under the Federal Arbitration Act, 9 U.S.C. 1, the Third Circuit affirmed. View "Control Screening LLC v. Technological Application & Prod. Co." on Justia Law

Joseph purchased the BP franchise in 2006 for $400,000. In 2009, Sasafrasnet purchased BP’s interests in the land and a Dealer Lease and Supply Agreement, becoming lessor and franchisor. The DLSA authorizes Sasafrasnet to terminate if Joseph fails to make payment according to EFT policy, causing a draft to be dishonored as NSF more than once in 12 months; Sasafrasnet is not obligated to extend credit, but did deliver fuel before collecting payment. There were several instances of NSF EFTs; Sasafrasnet began to require payment in advance. Later, Sasafrasnet allowed Joseph to resume paying by EFT within three days of delivery, but established a $2,500 penalty for any NSF and stated that pre-pay would resume if he incurred two more NSFs. There were additional NSFs, so that Joseph had incurred nine for amounts over $20,000 and three for amounts over $45,000. Sasafrasnet gave Joseph 90 days’ notice that it was terminating his franchise, listing the NSFs and failing scores on a mystery shopper inspection as bases for termination. Joseph sued under the Petroleum Marketing Practices Act, 15 U.S.C. 2801. The district court denied a preliminary injunction to prevent the termination. The Seventh Circuit reversed, holding that the statute requires additional findings.View "Joseph v. Sasafrasnet, LLC" on Justia Law

Defendant United Polychem, Inc. (UPC) and Lynne Van Der Wall (collectively, Appellants) and Plaintiff Westlake Petrochemicals, LLC (Westlake) appealed different results of a jury trial. At the core of the trial was an agreement between UPC as buyer and Westlake as seller of ethylene, a petroleum product. The jury found that (1) the parties had formed a binding contract, (2) UPC breached that contract, and, as a result, (3) UPC was liable to Westlake for $6.3 million in actual damages and $633,200 in attorneys fees. The district court also held Van Der Wall jointly and severally liable under the terms of a guaranty agreement. The Fifth Circuit Court of Appeals affirmed in part and reversed and remanded in part, holding (1) a binding contract was established, (2) the district court applied the incorrect measure of damages, and (3) Van Der Wall, as UPC's president, was not jointly and severally liable with UPC for the jury verdict under the terms of the guaranty. The Court vacated the damages award and remanded for the district court to calculate the damages under Tex. Bus. & Com. Code Ann. 2.708(b). View "Westlake Petrochemicals, LLC v. United Polychem, Inc." on Justia Law

Losing money on every box fan it sold, Lakewood authorized CAM to practice Lakewood’s patents and put its trademarks on completed fans. Lakewood was to take orders; CAM would ship to customers. CAM was reluctant to gear up for production of about 1.2 million fans that Lakewood estimated it would require during the 2009 season. Lakewood provided assurance by authorizing CAM to sell the 2009 fans for its own account if Lakewood did not purchase them. Months later, Lakewood’s creditors filed an involuntary bankruptcy petition against it. The court-appointed trustee sold Lakewood’s business. Jarden bought the assets, including patents and trademarks. Jarden did not want Lakewood-branded fans CAM had in inventory, nor did it want CAM to sell them in competition with Jarden’s products. Lakewood’s trustee rejected the executory portion of the CAM contract, 11 U.S.C. 365(a). CAM continued to make and sell Lakewood fans. The bankruptcy judge found the contract ambiguous, relied on extrinsic evidence, and concluded that CAM was entitled to make as many fans as Lakewood estimated for the 2009 season and sell them bearing Lakewood’s marks. The Seventh Circuit affirmed, rejecting an argument that CAM had to stop making and selling fans once Lakewood stopped having requirements. View "Sunbeam Prods, Inc. v. Chicago Am. Mfg." on Justia Law

Plaintiff sought damages resulting from a delayed delivery of perishable food items from Puerto Limón, Costa Rica to San Juan, Puerto Rico. The district court dismissed as time-barred by the statute of limitations in the Carriage of Goods by Sea Act, 46 U.S.C. 30701. The First Circuit affirmed,rejecting and argument that the parties meant to incorporate COGSA solely for the purpose of limiting the carrier's liability to $500, per COGSA's limitation of liability provision and equitable arguments. View "Greenpack of PR, Inc. v. Am. President Lines" on Justia Law

After the company began to fail, plaintiffs, co-founders and shareholders of Environamics, which designed, manufactured, and sold pumps and sealing devices, sought investors to satisfy its debt. SKF learned that Environamics had developed and patented a "universal power frame" that SKF had been trying to develop for some time, and repeatedly expressed interest in acquiring Environamics. Environamics began to share confidential business information with SKF, stopped seeking out new distribution channels and ceased looking for other opportunities to pay its debt. They gave SKF an irrevocable option to purchase all outstanding Environamics stock and made SKF exclusive marketer and reseller of Environamics products. SKF paid Environamics $2 million. The relationship deteriorated as Environamics required additional financing. Because of SKF’s rights and requirements, plaintiffs made personal guarantees to obtain financing from Wells Fargo. Eventually Environamics filed for bankruptcy. Plaintiffs, responsible for roughly $5 million in personal guarantees on the Wells Fargo loan, sued under an estoppel theory. The district court granted SKF summary judgment. The First Circuit affirmed, finding no specific, competent evidence of any promise made by SKF to buy Environamics on terms other than those of the Option on which plaintiffs could reasonably have relied View "Rockwood v. SKF, USA, Inc." on Justia Law

Plaintiff-Appellant Flying Phoenix Corporation appealed a district court’s dismissal of its claims against Defendants North Park Transportation Company and R&L Carriers Shared Services (the carriers), with prejudice, for lack of subject matter jurisdiction. Flying Phoenix purchased a machine designed to package fireworks for sale to end users from Defendant Creative Packaging Machinery, Inc. The machine arrived severely damaged. Creative Packaging was responsible for shipping the machine to Flying Phoenix. Creative Packaging used R&L Carriers Shared Services to ship from North Carolina to Wyoming. The bill of lading limited the period for filing claims with a carrier to nine months, and limited the time for filing civil suit to two years and one day following denial of a claim. At some point during the delivery, R&L Carriers transferred the machine to North Park Transportation Company to complete delivery to Flying Phoenix. Three days after the machine was delivered, Flying Phoenix filed a claim with North Park based on damage to the machine. Roughly two weeks later, North Park inspected the machine and confirmed that it was damaged. A little less than a month later, North Park and R&L Carriers notified Flying Phoenix that its claim was denied, citing evidence that the shipment was issued with insufficient packaging or protection. Flying Phoenix renewed its claim approximately six months later, in November 2007, and the carriers again denied the claim, asserting that the machine was "used" and inadequately packaged. On appeal, Flying Phoenix argued that the district court erred by holding that (1) its claims were based on the bill of lading, and (2) it was bound by the terms of the bill of lading even though it was not a party and did not consent. Upon review, the Tenth Circuit affirmed the dismissal of Flying Phoenix's claims: "Flying Phoenix claim[ed] that, although it was listed as consignee on the bill of lading, it never saw the bill of lading until after the limitations period lapsed. It argue[d] that, since it did not know the terms of the carriage, it should not be bound. [The Court found] no precedent for Flying Phoenix’s position, and Flying Phoenix [did] not direct [the Court] to any. There is no suggestion in the record that Flying Phoenix ever sought a copy of the bill of lading but was denied access, and it is well-established that a party may not sit idly by, making no effort to obtain obviously necessary documents, and then claim ignorance. Lack of diligence precludes equitable intervention." View "Flying Phoenix Corp. v. Creative Packaging Machinery" on Justia Law

Plaintiff contracted to sell a furniture business to Mendoza in 2004. Westernbank provided partial funding and obtained a first mortgage. To secure a deferred payment of $750,000, Mendoza signed a mortgage in favor of plaintiff and a contract under which plaintiff consigned goods with expected sales value of more than $6,000,000. An account was opened at Westernbank for deposit of sales proceeds. Plaintiff alleges that Westernbank kept funds to which plaintiff was entitled for satisfaction of Mendoza’s debts to Westernbank. Mendoza filed for bankruptcy and transferred its real estate to Westernbank in exchange for release of debt to the bank. Plaintiff agreed to forgive unpaid debts in order to obtain relief from the stay and foreclose its mortgage, then sued Westernbank, employees, and insurers, alleging violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961-68, and Puerto Rico law causes of action. After BPPR became successor to Westernbank, plaintiff agreed to dismiss the civil law fraud and breach of fiduciary duty claims and the RICO claim. The district court later dismissed remaining claims for lack of subject matter jurisdiction, declining to exercise supplemental jurisdiction over non-federal claims. The First Circuit affirmed. View "Fabrica de Muebles J.J. Alvare v. Inversiones Mendoza, Inc." on Justia Law

GMG contracted with Amicas to develop and license computer programs to accept information from a radiology patient management system established by Sage and send information to a billing system established by Sage. The warranty excluded any failure resulting from databases of GMG or third parties and warned that Amicas did not warrant that the software would meet GMG’s requirements. Amicas worked with Sage on the interfaces. GMG began using the programs and reported problems, eventually returning to its old method of manual processing, but did not inform Amicas of that decision or of persistent problems with the interface. GMG began negotiating with Sage to develop substitute software. When Amicas became aware of problems with the interface, it worked with Sage to resolve the concerns, but GMG sent Amicas a termination notice, citing failure to deliver a functional product. The district court found for Amicas on its breach of contract claim, rejected counterclaims, and awarded $778,889 in damages, $324,805 in attorneys’ fees, plus costs and interest. The Third Circuit affirmed, finding that Amicas satisfied its burden of proving performance and that GMG offered only conclusory allegations of noncompliance. View "Amicas, Inc. v. GMG Health Sys., LTD." on Justia Law

Ford provides a warranty, entitling buyers of new vehicles to have Ford repair or replace defective components at any Ford dealer, regardless of where they purchased the vehicle. Ford reimburses dealers, providing a mark-up of 40% over cost for most parts. However, under the New Jersey Franchise Protection Act, Ford must reimburse dealers for parts at the "prevailing retail rate," charged customers for non-warranty work. Ford implemented a Dealer Parity Surcharge to recoup the increased cost. Ford calculated, for each New Jersey dealer, the cost of increased warranty reimbursements and divided by the number of vehicles purchased by that same dealer. That amount constituted the surcharge added to the wholesale price of every vehicle. The Third Circuit affirmed summary judgment that DPS violated the NJFPA. Ford devised a new system, NJCS, under which Ford calculated its total cost of complying with the NJFPA and divided by the number of wholesale vehicles sold in the state. A dealer’s total NJCS increased in proportion to the number of vehicles it purchased, regardless of how many warranty repairs it submitted. The district court found that NJCS violated NJFPA. The Third Circuit reversed in part, holding that the scheme does not violate the statute. View "Liberty Lincoln-Mercury Inc. v. Ford Motor Co." on Justia Law