Justia Civil Procedure Opinion Summaries

United Aeronautical Corporation and Blue Aerospace, LLC (collectively, Aero) filed suit against the United States Air Force and Air National Guard (collectively, USAF) in the U.S. District Court for the Central District of California. Aero alleges that USAF has for some time violated federal procurement regulations and the Trade Secrets Act by improperly using Aero’s intellectual property. The district court dismissed for lack of subject matter jurisdiction, concluding that the Contract Disputes Act (CDA), precludes jurisdiction over Aero’s action by vesting exclusive jurisdiction over federal-contractor disputes in the Court of Federal Claims.   The Ninth Circuit affirmed. The panel agreed with the district court that the Contract Disputes Act “impliedly forbids” jurisdiction over Aero’s claims by vesting exclusive jurisdiction over federal-contractor disputes in the Court of Federal Claims. A claim falls within the scope of the CDA’s exclusive grant of jurisdiction if (1) the plaintiff’s action relates to (2) a procurement contract and (3) to which the plaintiff was a party. Here, Aero’s claims that USAF improperly received and used MAFFS data (1) relate to the DRA, (2) the DRA is a procurement contract, and (3) Aero is a contractor for purposes of the DRA. The panel held that the test set forth in Megapulse, Inc. v. Lewis, 672 F.2d 959 (D.C. Cir. 1982), is limited to determining whether the Tucker Act—which grants exclusive jurisdiction to the Court of Federal Claims over breach-of-contract actions for money damages—“impliedly forbids” an ADA action because Megapulse addressed implied preclusion only pursuant to the Tucker Act, not pursuant to the CDA. View "UNITED AERONAUTICAL CORP., ET AL V. USAF, ET AL" on Justia Law

The petitioners here—two motorcycle dealerships who sought to enforce restrictive covenants against a former employee under Florida law— asked the Georgia Supreme Court to reconsider the application of a public-policy exception, citing recent changes in Georgia law that required a more flexible and permissive approach to enforcing restrictive covenants. When contracting parties choose the law of a jurisdiction other than Georgia to govern their contractual relations, Georgia courts generally honored that choice unless applying the foreign law would violate Georgia's public policy. Having taken a fresh look, the Supreme Court concluded that Georgia law remained "the touchstone for determining whether a given restrictive covenant is enforceable in our courts, even where the contract says another state’s law applies." After a careful review of Georgia decisional law and statutory history in this space, the Court found the Georgia legislature has codified this view, including with the recent enactment of the Georgia Restrictive Covenants Act. In this case, the trial court accepted the parties’ choice of Florida law to govern the employment contracts at issue without first determining whether the restrictive covenants in the contracts complied with the GRCA. The Court of Appeals reversed, and in doing so, correctly identified application of the GRCA as the first step in the analysis of whether the public-policy exception overrides the parties’ choice of foreign law. But because the Supreme Court set out a clear framework for that analysis in this opinion, it left it for the trial court to apply that framework in the first instance. The Court therefore vacated the decisions below for further review by the trial court. View "Motorsports of Conyers, LLC, et al. v. Burbach" on Justia Law

Westlands Water District (Westlands) appeals from a judgment of dismissal entered in a validation action filed pursuant to, inter alia, Code of Civil Procedure section 860 et seq. The subject matter was an anticipated contract between Westlands and the United States concerning the ongoing delivery of federal reclamation project water and repayment of certain financial obligations. The superior court declined to grant relief and ultimately dismissed Westlands’ validation action for multiple reasons. Most pertinently, the draft was found to be materially deficient in its failure to specify Westlands’ financial obligations under the anticipated contract.   The Fifth Appellate District affirmed the judgment. The court explained that the “Repayment Obligation” cannot be determined without knowing the “Existing Capital Obligation” and/or the contents of exhibit D. The “Existing Capital Obligation” cannot be determined without knowing the contents of exhibit D. In the absence of exhibit D, both terms are useless for purposes of determining Westlands’ financial obligations, i.e., “the scope of the duty and the limits of performance.” Moreover, as Westlands admitted during the motion proceedings, exhibit D was not merely omitted from the draft attached to the complaint. Despite being expressly incorporated into the contract by reference, exhibit D did not exist when the complaint and the December 2019 motion were filed. Even when the motion was heard, there was only meager parol evidence of estimates ranging from $200 million to $362 million. Given the circumstances, the court agreed the contract presented for validation was missing an essential term and, therefore uncertain, i.e., not sufficiently definite to be binding and enforceable. View "Westlands Water Dist. v. All Persons Interested" on Justia Law

The Court of Appeals held that an heirship judgment that conveyed mineral rights to a good faith buyer’s predecessor in interest was void for lack of jurisdiction. The issue presented for the New Mexico Supreme Court was whether the buyer was entitled to rely on the void judgment in its claim of bona fide purchaser status. In accordance with its Court’s decision in Archuleta v. Landers, 356 P.2d 443, the Court concluded that a party who purchases property sold under a judgment that is not void on its face is entitled to bona fide purchaser status. The Court further clarified that extrinsic evidence of lack of jurisdiction was not permitted to overcome the rights of a purchaser who properly relied upon the order of the court as “an authority emanating from a competent source.” Here, the Court held that Respondent Premier Oil & Gas, Inc. (Premier) was a bona fide purchaser, and affirmed the Court of Appeals. View "Premier Oil & Gas v. Welch" on Justia Law

PHH Mortgage Corporation (PHH) is the successor-in-interest to Ocwen Loan Servicing, LLC (Ocwen). PHH filed suit against Old Republic in district court, alleging a single cause of action for breach of contract. Old Republic filed a motion for summary judgment, arguing that PHH’s breach of contract claim failed as a matter of law because there was no defect in title to the Entire Southern Tract. The district court denied the parties’ cross-motions for summary judgment without reaching the merits of either motion. Rather, the district court construed the parties’ claims as a request for a declaration of title in the Entire Southern Tract. On this basis, the district court determined that any person claiming an interest in the Entire Southern Tract is a required party under Rule 19 and dismissed the case under Federal Rule of Civil Procedure 12(b)(7).   The Fifth Circuit vacated and dismissed. The court explained that the district court’s Rule 19(a) analysis is rooted in a misunderstanding of Texas law. Contrary to the district court’s conclusion below, Texas law draws a sharp distinction between a breach of contract action against a title insurance company and a trespass-to-try-title action. Further, the court explained that by deciding to dismiss this case based solely on its conclusions under Rule 19(a), the district court failed to do what “Rule 19 clearly requires a court to do: undertake an examination of the practical and equitable Rule 19(b) factors actually raised by the absence of a particular party in the case before it.” View "PHH Mortgage v. Old Republic National" on Justia Law

Plaintiff Phil Hagey appealed a judgment of dismissal entered following the sustaining of a demurrer to his second amended complaint without leave to amend. Plaintiff owned a home with a solar energy system (the system). At the time he purchased the home, the prior homeowner was party to a contract with a company, Kilowatt Systems, LLC (Kilowatt), which owned the system (the solar agreement). Among other terms, the solar agreement required the prior homeowner to purchase the energy produced by the system through monthly payments to Kilowatt. In the event of a sale of the house, the solar agreement afforded the prior homeowner three options. The prior homeowner and plaintiff agreed to an option which allowed prepayment of all remaining monthly payments and a transfer of all solar agreement rights and obligations to plaintiff, except for the monthly payment responsibility. In conjunction with the sale of the house, prepayment occurred and the parties entered into the requisite transfer agreement. At some later point in time, defendant Solar Service Experts, LLC began sending plaintiff monthly bills on Kilowatt’s behalf, demanding payments pursuant to the solar agreement. After receiving a bill, plaintiff spoke to a representative of defendant who told him he should not have received the bill and the issue would be resolved. Plaintiff received additional bills and at least one late payment notice which identified defendant as a debt collector. Plaintiff communicated with defendant’s representatives about the errors by phone and email, all to no avail. Plaintiff thereafter filed a class action lawsuit against defendant. The trial court concluded plaintiff did not, and could not, allege facts sufficient to constitute a consumer credit transaction, as statutorily defined. Plaintiff argued the court erroneously focused on the undisputed fact he did not owe the debt which defendant sought to collect and, in doing so, failed to recognize the Rosenthal Act applied to debt alleged to be due or owing by reason of a consumer credit transaction. To this the Court of Appeal agreed and reversed the judgment. View "Hagey v. Solar Service Experts" on Justia Law

In early 2020, following the outbreak of COVID-19, Los Angeles County passed the “Resolution of the Board of Supervisors of the County of Los Angeles Further Amending and Restating the Executive Order for an Eviction Moratorium During Existence of a Local Health Emergency Regarding Novel Coronavirus (COVID-19)” (the “Moratorium”). The Moratorium imposed temporary restrictions on certain residential and commercial tenant evictions. It provided tenants with new affirmative defenses to eviction based on nonpayment of rent, prohibited landlords from charging late fees and interest, and imposed civil and criminal penalties to landlords who violate the Moratorium. Id. Section V (July 14, 2021). Plaintiff, a commercial landlord, sued the County, arguing that the Moratorium impaired his lease, in violation of the Contracts Clause of the U.S. Constitution. The district court found that Plaintiff had not alleged an injury in fact and dismissed his complaint for lack of standing.   The Ninth Circuit reversed the district court’s dismissal. The panel held that Plaintiff had standing to bring his Contracts Clause claim. Plaintiff’s injury for Article III purposes did not depend on whether Plaintiff’s tenant provided notice or was otherwise excused from doing so. Those questions went to the merits of the claim rather than Plaintiff’s standing to bring suit. Plaintiff alleged that the moratorium impaired his contract with his tenant because it altered the remedies the parties had agreed to at the time they entered into the lease. The panel held that these allegations were sufficient to plead an injury in fact and to state a claim under the Contracts Clause, and remanded to the district court. View "HOWARD ITEN V. COUNTY OF LOS ANGELES" on Justia Law

Husband Steven McAnulty was married twice: once to Plaintiff Elizabeth McAnulty, and once to Defendant Melanie McAnulty. Husband's first marriage ended in divorce; the second ended with his death. Husband’s only life-insurance policy (the Policy) named Defendant as the beneficiary. But the Missouri divorce decree between Plaintiff and Husband required Husband to procure and maintain a $100,000 life-insurance policy with Plaintiff listed as sole beneficiary until his maintenance obligation to her was lawfully terminated (which never happened). Plaintiff sued Defendant and the issuer of the Policy, Standard Insurance Company (Standard), claiming unjust enrichment and seeking the imposition on her behalf of a constructive trust on $100,000 of the insurance proceeds. The district court dismissed the complaint for failure to state a claim. Plaintiff appealed. By stipulation of the parties, Standard was dismissed with respect to this appeal. The only question to be resolved was whether Plaintiff stated a claim. Resolving that issue required the Tenth Circuit Court of Appeals to predict whether the Colorado Supreme Court would endorse Illustration 26 in Comment g to § 48 of the Restatement (Third) of Restitution and Unjust Enrichment (Am. L. Inst. 2011) (the Restatement (Third)), which would recognize a cause of action in essentially the same circumstances. Because the Tenth Circuit predicted the Colorado Supreme Court would endorse Illustration 26, the Court held Plaintiff has stated a claim of unjust enrichment, and accordingly reversed the previous dismissal of her case. View "McAnulty v. McAnulty, et al." on Justia Law

Appellant City of Newark sought review of a superior court order resolving appellees’ contractual indemnification obligations. The City sought a declaration from the superior court that appellees breached a settlement agreement between the parties and, under the terms of that settlement agreement, appellees had to indemnify the City for all its fees and costs associated with a 2019 subpoena and a separate declaratory judgment action appellees filed in 2019. The superior court held that appellees had to indemnify the City for the subpoena, but not the 2019 action. On appeal, the City contended the settlement agreement’s plain language obligated appellees to indemnify the City for the 2019 action, and the superior court erred in concluding otherwise. The indemnification provision at issue broadly required appellees to indemnify the City for any fees and costs it incurred in any proceeding related to appellees’ separate litigation against a third party in Pennsylvania. Appellees filed the 2019 action to clarify the City's obligation to cooperate with, and provide discovery in, that Pennsylvania litigation. In its summary judgment decision, the superior court denied the City's indemnification claim without expressly addressing whether the 2019 action was “related to” the Pennsylvania litigation. Because the City was entitled to indemnification under the plain terms of the parties' agreement, the Delaware Supreme Court reversed the superior court's decision. View "City of Newark v. Durkin, et al." on Justia Law

The General Council of the Assemblies of God (General Council) governed the Assemblies of God denomination. Its affiliate, the Mississippi District Council for Assemblies of God (District), governed the denomination’s local churches in Mississippi, including Gulf Coast Worship Center (GCWC) in Long Beach. In January 2017, Kevin Beachy, the pastor of GCWC, did not renew his credentials as an ordained pastor with the General Council, ultimately informing the District that he and GCWC intended to disaffiliate from the General Council. The District then informed Beachy that GCWC was being placed under District supervision. On March 19, 2017, the GCWC congregation voted to disaffiliate from the General Council. The congregation voted also to remove a reverter clause from its constitution and bylaws; this clause would have caused the GCWC’s property to revert to the District in the event that GCWC ceased operating as a “church body.” In November 2017, the District filed a chancery court petition for declaratory judgment and injunctive relief against Beachy and the GCWC board of trustees, Eddie Kinsey, Andre Mulet, and Kris Williams (collectively, Defendants). Both the District and Defendants moved for summary judgment. The trial court granted the District’s motion for summary judgment and denied Defendants’ motion. Defendants appealed. After review, the Mississippi Supreme Court determined that issues concerning disaffiliation, i.e., actions taken at the congregational meeting on March 19, 2017, and whether GCWC was under the District’s supervision, were church-governing matters. Thus, the ecclesiastical abstention doctrine deprived the chancellor of jurisdiction to address those claims. But the Supreme Court found genuine issues of material fact remained regarding ownership of property. Therefore, the Court reversed the chancellor’s grant of summary judgment to the District and remanded all issues concerning ownership of property for further proceedings. View "Beachy, et al. v. Mississippi District Council for Assemblies of God" on Justia Law