Justia Civil Procedure Opinion Summaries

The case revolves around a dispute over attorney's fees in a Social Security disability benefits case. The plaintiff, Christian Arnold, was represented by the law firm Binder & Binder. After Arnold was determined to be disabled and entitled to past-due benefits, the law firm requested attorney's fees under 42 U.S.C. § 406(b), based on a contingency fee agreement Arnold had signed. However, the district court reduced the requested fees by nearly sixty percent, arguing that the full request would result in a "windfall" for the law firm, which was prohibited by statute. Binder & Binder appealed this decision.The case was initially heard by an administrative law judge (ALJ) who concluded that Arnold was not disabled. Arnold appealed this decision to the district court, which remanded the case back to the ALJ. On remand, the ALJ ruled in Arnold's favor, and the Social Security Administration issued a Notice of Award to Arnold for past-due benefits. Binder & Binder then moved for attorney's fees in the district court under 42 U.S.C. § 406(b), based on their contingency fee agreement with Arnold. The district court, however, reduced the requested fees.The United States Court of Appeals for the Seventh Circuit reviewed the case and concluded that the district court had abused its discretion by not basing its analysis primarily on the contingency agreement before considering the reasonableness of the request. The Court of Appeals vacated the district court's decision and remanded the case for further proceedings consistent with its opinion. The court emphasized that the contingency fee agreement should be the starting point for determining reasonableness under § 406(b), and any reduction should be justified based on relevant factors such as the claimant's satisfaction with their attorney's representation, the attorney's expertise and efforts expended, and the uncertainty of recovery and risks of an adverse outcome. View "Arnold v. O'Malley" on Justia Law

A group of medical providers sued a former employee for breach of an employment agreement. The employee counterclaimed, alleging he was owed unpaid wages and bonuses. The providers initially raised "failure to state a claim" as their sole affirmative defense. However, after nearly four years of litigation, they attempted to argue for the first time that the contract was illegal and therefore void. The lower court found that the providers had waived this affirmative defense and issued a judgment in favor of the employee. The providers appealed, and the Court of Civil Appeals reversed, concluding that the lower court had abused its discretion by refusing to consider the providers' claim of illegality.The Supreme Court of the State of Oklahoma disagreed with the Court of Civil Appeals. It held that the trial judge did not abuse her discretion in striking the providers' last-minute effort to raise a new affirmative defense. The court noted that the providers had failed to raise the illegality defense in their initial responsive pleading and did not seek to amend their answer in a timely manner. Furthermore, the providers did not raise the illegality defense until after the trial court had already awarded summary judgment to the employee on the issue of breach of contract, more than ten months after the close of discovery, more than nine months after the lower court's deadline for filing dispositive motions, and almost four years after the original lawsuit was filed. The court concluded that the record was sufficient to support a finding that the providers' delay was unjustified and prejudicial. The court vacated the opinion of the Court of Civil Appeals, affirmed the trial court's order striking the illegality affirmative defense, and remanded the case to the Court of Civil Appeals to resolve any remaining undecided issues raised in the appeal. View "Tulsa Ambulatory Procedure Center v. Olmstead" on Justia Law

The case involves a putative class action of approximately 2,000 payees who received structured settlement annuities to resolve personal injury claims. The plaintiffs, Renaldo White and Randolph Nadeau, alleged that defendants Symetra Life Insurance Company and Symetra Assigned Benefits Service Company wrongfully induced them to cash out their annuities in individualized “factoring” arrangements, whereby they gave up their rights to periodic payments in return for discounted lump sums.The district court certified two nationwide classes under Federal Rule of Civil Procedure 23. The first class consisted of all persons who were annuitants of a structured settlement annuity (SSA) issued by Symetra and who subsequently sold to a Symetra affiliate the right to receive payments from that SSA in a factoring transaction. The second class was a subclass of the first, consisting of all members of the class whose contract defining the annuity at issue included language explicitly stating that the annuitants lack the power to transfer their future SSA payments.The United States Court of Appeals for the Ninth Circuit reversed the district court’s certification of the two nationwide classes. The court held that individual issues of causation will predominate over common ones when evaluating whether defendants’ acts and omissions caused the plaintiffs to enter factoring transactions and incur their alleged injuries. The court also held that the district court erred in certifying the nationwide subclass of plaintiffs whose original settlement agreements with their personal injury tortfeasors contained structured settlement annuity (SSA) anti-assignment provisions. The record indicates that the annuitants hail from a wide array of different states, and some of the settlement agreements have choice of law provisions denoting the law of a state other than the location where the contract was executed. The apparent variations in state law on the enforceability of anti-assignment provisions in SSAs and the need to apply multiple state laws to the subclass raised a substantial question of whether individual issues predominate and how the matter can be fairly managed as a class action. View "WHITE V. SYMETRA ASSIGNED BENEFITS SERVICE COMPANY" on Justia Law

Summit Construction filed a lawsuit against Jay Koontz and Jennie L. Kennette for breach of contract and unjust enrichment, alleging nonpayment for work performed on Mr. Koontz’s home based on an oral agreement. The work included an addition to the home and extensive renovations to the existing structure. The District Court rejected both claims, determining that there was no enforceable oral contract between the parties and that Summit did not sufficiently prove its damages for the unjust enrichment claim.The District Court found that the parties had not mutually agreed to sufficiently definite terms for an oral contract. The court noted that the project progressed without a clear understanding of the scope of work, how it would be paid for, and who would be responsible for payment. The court also found that Summit's invoices did not clearly define the terms of the contract. Furthermore, the court concluded that Summit had failed to prove the amount by which Mr. Koontz was unjustly enriched, i.e., its damages.Upon appeal, the Supreme Court of Wyoming affirmed the District Court's decision. The Supreme Court agreed that Summit had failed to show the existence of an enforceable oral contract with either Mr. Koontz or Ms. Kennette. The court also agreed with the lower court's finding that Summit had failed to establish its damages to a reasonable degree of certainty, which is necessary for an unjust enrichment claim. View "Summit Construction v. Koontz" on Justia Law

The case involves PB Legacy, Inc., a Texas-based shrimp breeding company, and American Mariculture, Inc., a Florida-based company that operated a shrimp breeding facility. PB Legacy had a contract with American Mariculture to breed shrimp. However, PB Legacy failed to fulfill its contractual obligations, including removing its shrimp from the facility on time. When American Mariculture threatened to harvest the abandoned shrimp, PB Legacy sued in state court. After a failed attempt to resolve the dispute, American Mariculture used the shrimp to launch a competing company, American Penaeid, Inc. PB Legacy then sued American Mariculture, Penaeid, and their CEO, Robin Pearl, in federal court, alleging conversion, defamation, trade secret misappropriation, breach of contract, unfair competition, and unjust enrichment.The case proceeded to a jury trial in the United States District Court for the Middle District of Florida. During the trial, the district judge had to leave before the jury returned its verdict. The parties agreed to have a magistrate judge receive the verdict. However, the magistrate judge also responded to several jury questions and rejected a request for clarification about the verdict. The jury awarded $4.95 million in damages to PB Legacy on each of their federal and state trade secret claims. Post-trial motions were filed and denied.The case was appealed to the United States Court of Appeals for the Eleventh Circuit. The defendants argued that the magistrate judge lacked authority to preside over the last three days of trial because the parties did not consent to the magistrate judge’s exercise of Article III authority. The court agreed, stating that while the parties had consented to the magistrate judge receiving the verdict, they had not consented to the magistrate judge performing non-ministerial duties such as responding to jury questions and rejecting a request for clarification about the verdict. The court vacated the judgment, remanded for a new trial, and dismissed the cross-appeal as moot. View "TB Foods USA, LLC v. American Mariculture, Inc." on Justia Law

The case involves a dispute between the Florida Division of Emergency Management (the Division) and a private company, Essential Diagnostics, LLC, over a contract for the purchase of COVID-19 test kits. The Division contracted with Essential Diagnostics to buy 200,000 COVID-19 test kits for $2.2 million. However, Essential claimed that the Division ordered 600,000 tests but only paid for 200,000. The Division, on the other hand, insisted that it only ever agreed to buy 200,000 tests and that it paid for them in full. Essential assigned its rights under the contract to Global Integrated Concepts, which sued the Division in Florida state court. However, the state court dismissed the complaint. Subsequently, Global and two other parties involved in the transaction sued the Division in federal district court in North Carolina, seeking to recover the same $4.4 million Global sought as damages in its state court suit.The Division moved to dismiss the suit on the grounds of sovereign immunity. The district court denied the motion to dismiss, concluding that the Division waived its sovereign immunity by contracting with the plaintiffs. The Division appealed this decision.The United States Court of Appeals for the Fourth Circuit vacated the district court’s order and remanded the case for further proceedings. The appellate court found that the district court erred in concluding that the Division waived its sovereign immunity by contracting with the plaintiffs. The court clarified that the rules governing waiver of federal-law sovereign immunity in federal court come from federal law, not state law. The court concluded that the district court failed to distinguish between the defenses and immunities a State might enjoy under state law and the constitutionally protected sovereign immunity that States enjoy from suit in federal court. The court also rejected the plaintiffs' argument that the court lacked jurisdiction over the appeal. View "Global Innovative Concepts, LLC v. State of Florida, Division of Emergency Management" on Justia Law

The Ministry of Defence of the State of Kuwait entered into three contracts with Joseph M. Naffa and his fictitious law firm, Naffa & Associates, LLP, for legal advice and representation in real estate transactions. The Ministry later discovered that Naffa was not authorized to practice law in the United States and that he had kept a credit meant for the Ministry from one of the real estate transactions. The Ministry sued Naffa and his firm for breach of contract and conversion of funds.The United States District Court for the Eastern District of Virginia dismissed the Ministry's claims under Rule 12(b)(1), ruling that the Ministry had not pleaded damages sufficient to meet the amount in controversy requirement for federal court jurisdiction. The court also held that the agreements did not require Naffa to be a licensed attorney and that the Ministry could not show that it did not receive legal advice or that its outcome would have been different if it was represented by a licensed attorney.The United States Court of Appeals for the Fourth Circuit reversed the district court's decision. The appellate court held that the district court erred in dismissing the Ministry's claims for lack of subject matter jurisdiction because the complaint contained sufficient allegations to invoke the court's diversity jurisdiction. The court concluded that the Ministry had pleaded damages of at least $635,000, an amount that substantially exceeds the statutory minimum for federal court jurisdiction. The court vacated all other determinations made by the district court and remanded the case for further proceedings. View "Ministry of Defence of the State of Kuwait v. Naffa" on Justia Law

A general contractor, Graycor Construction Company Inc., was involved in a dispute with a subcontractor, Business Interiors Floor Covering Business Trust, over unpaid invoices for flooring work performed on a movie theater project. Business Interiors submitted three separate applications for periodic payments, which Graycor neither approved nor rejected within the time limit set by the Prompt Pay Act. As a result, the applications were deemed approved under the Act. Business Interiors sued Graycor for breach of contract and other claims in the Superior Court. The Superior Court granted Business Interiors's motion for summary judgment on its breach of contract claim and entered separate and final judgment. Graycor appealed.Graycor argued that the original contract was not a "contract for construction" within the meaning of the Act, and that it had a valid impossibility defense due to its failure to pay. The Supreme Judicial Court held that the Act defines its scope broadly, and the subcontract at issue was a "contract for construction" under the Act. The Court also held that common-law defenses are not precluded by the Act, but a contractor that does not approve or reject an application for payment in compliance with the Act must pay the amount due prior to, or contemporaneous with, the invocation of any common-law defenses in any subsequent proceeding regarding enforcement of the invoices. As Graycor sought to exercise its defenses without ever paying the invoices, it could not pursue the defenses. The Court also vacated and remanded the rule 54 (b) certification to the motion judge for reconsideration. View "Business Interiors Floor Covering Business Trust v. Graycor Construction Company Inc." on Justia Law

The case involves Brian Frye, a homeowner who claimed that his property had suffered damage due to underground mine subsidence. He submitted a claim to his home insurer, Erie Insurance Company, and notified the Board of Risk Insurance and Management (BRIM) of the damages. Both Erie and BRIM investigated the claim, but both denied it, stating that the damage was not due to mine subsidence. Frye then sued Erie for breach of contract and other claims. The Circuit Court of Ohio County granted summary judgment to Erie, concluding that Erie functioned as BRIM’s agent in the adjustment of Frye’s claim. Frye moved the court to alter or amend that judgment, arguing that it threatened the constitutionality of certain West Virginia statutes.The Supreme Court of Appeals of West Virginia vacated the lower court's decision and remanded the case for further proceedings. The court found that the lower court erred by failing to notify the Attorney General of the constitutional questions raised in Frye’s motion to alter or amend the summary judgment order. The court concluded that the appropriate remedy was to vacate the lower court’s order denying Frye’s motion and to remand the matter to permit the lower court to notify the Attorney General of these proceedings in accordance with Rule 24(c) of the West Virginia Rules of Civil Procedure. View "Frye v. Erie Insurance Company" on Justia Law

In 2020, Albert Omstead contracted BPG Inspection, LLC to inspect a property he and his wife, Jessique Omstead, intended to purchase. The contract included a one-year limitation clause preventing Mr. Omstead from suing BPG Inspection or its employees more than one year after the inspection. After the inspection, the Omsteads purchased the property. Over a year later, Mr. Omstead died when a retaining wall on the property collapsed. Mrs. Omstead filed a wrongful death suit against BPG Inspection and one of its inspectors.The trial court found the one-year limitation unenforceable, but the Court of Appeals reversed this decision. The Supreme Court of Georgia granted review to consider whether the Court of Appeals erred in approving the one-year limitation and whether the limitation is void as against public policy.The Supreme Court of Georgia affirmed the Court of Appeals' decision. The court found that the one-year limitation was enforceable and not void as against public policy. The court rejected Mrs. Omstead's arguments that the limitation only applied to contract claims and not claims involving bodily injury or wrongful death, that the limitation functioned as a “contractually-effectuated statute of repose,” and that the limitation impermissibly voided “professional standards of conduct.” The court concluded that the one-year limitation did not violate OCGA § 13-8-2 (b) and was not void as against public policy. View "OMSTEAD v. BPG INSPECTION, LLC" on Justia Law