Justia Civil Procedure Opinion Summaries

In Section 9(e) of a settlement agreement between Cox Communications and Sprint Corporation (T-Mobile U.S., Inc.'s predecessor-in-interest, Cox agreed that, before it offered wireless mobile services to its customers, it would enter into a “definitive” exclusive provider agreement with Sprint “on terms to be mutually agreed upon between the parties for an initial period of 36 months[.]” Cox and Sprint never entered into such a partnership. After T-Mobile finalized a purchase of Sprint in April 2020, the combined entity bid for Cox’s business, but Cox decided to partner with Verizon. After hearing that it would not be Cox’s exclusive partner, T-Mobile accused Cox of breaching the Settlement Agreement. Cox sued T-Mobile in Delaware's Court of Chancery, seeking a declaration that Section 9(e) was either an unenforceable “agreement to agree” or a Type II preliminary agreement requiring Cox and T-Mobile to negotiate in good faith. According to Cox, it was free to partner with Verizon because these good-faith negotiations failed. Shortly before trial, Cox also suggested that whatever Section 9(e) means, T-Mobile could not enforce it because the Settlement Agreement was between Cox and Sprint, and Cox never consented to an assignment. T-Mobile filed a compulsory counterclaim for breach of contract. In support of this claim, T-Mobile offered that Section 9(e) meant that, although Cox was not obligated to provide wireless mobile services, if it wished to do so, it had to first enter into an exclusive provider agreement with T-Mobile as the conceded successor-in-interest to Sprint. For T-Mobile, the failure of the parties’ attempt to negotiate the definitive terms of the agreement meant that Cox could not enter the wireless mobile market at all. The Court of Chancery agreed with T-Mobile and permanently enjoined Cox from “partnering with any mobile network operator other than T-Mobile to provide Wireless Mobile Service before entering into an agreement with T-Mobile. The Delaware Supreme Court disagreed with the Court of Chancery, finding the Settlement Agreement was a Type II preliminary agreement that obligates the parties to negotiate open items in good faith. The judgment was reversed, the injunction vacated, and the matter remanded so that the Court of Chancery could determine whether Cox and T-Mobile discharged their obligations to negotiate in good faith. View "Cox Communications, Inc. v. T-Mobile US, Inc." on Justia Law

Based upon its belief that Walmart has failed to comply with the terms of an injunction, Cuker sought to initiate contempt proceedings against Walmart, requesting supplemental damages for Walmart's post-verdict use of its trade secrets.The Eighth Circuit affirmed and concluded that the district court did not err in denying the request to commence contempt proceedings because Cukor had failed to make a prima facie case showing a violation of, or refusal to follow, a court order. In this case, Cuker's claim that the district court did not consider its arguments or evidence is belied by the record. Upon review of the record and Cuker's arguments, the court stated that Cuker's challenges to the district court's order go to the weight the court gave its evidence, not a failure to consider the evidence. View "Wal-Mart Stores, Inc. v. Cuker Interactive, LLC" on Justia Law

Sacks is a law firm with a 20-year history of working with the International Monetary Fund (IMF). In 2011, IMF hired Sacks to negotiate disputed claims of various contractors that worked on the renovation of its headquarters. The parties’ contract asserts IMF’s immunity from suit and provides that any disputes not settled by mutual agreement shall be resolved by arbitration. In a subsequent fee dispute between Sacks and IMF, Sacks filed a demand for arbitration with the AAA. The arbitration panel awarded Sacks $39,918.82 plus interest but denied Sacks’ claim of underpayment in connection with earlier work.Sacks sued the Fund, claiming that the award should be vacated pursuant to the D.C. Code as “the result of misconduct by the arbitrators.” IMF removed the case to federal court and moved to dismiss it on immunity grounds pursuant to its Articles of Agreement, given effect in the U.S. by the Bretton Woods Act, 22 U.S.C. 286h. Sacks asserted the contract waived immunity by expressly providing for arbitration pursuant to the AAA Rules, which contemplate courts’ entry of judgment on arbitral awards. The D.C. Circuit affirmed the dismissal of the suit. The AAA Rules and D.C. law contemplate judicial involvement in the enforcement of arbitral awards, so arguably the contract also does so but an international organization's waiver of the immunity must be explicit. The parties' contract expressly retains the IMF’s immunity, reiterating it even within the arbitration clause. View "Leonard A. Sacks & Associates P.C. v. International Monetary Fund" on Justia Law

Employees of a Navy services contractor, SA-TECH, sued the contractor in California state court for violations of the state’s labor laws. Before and during that suit, SA-TECH sought guidance from the Navy as to whether California’s labor laws applied to it and its subcontractors, given the federal nature of its service contract. Those requests went unanswered. SA-TECH’s claim with its contracting officer under the Contract Disputes Act was denied. SA-TECH then sought declaratory relief on the questions: whether the modified understanding of California labor laws would control SA-TECH’s operations on Navy and Navy-chartered ships; whether SA-TECH would be permitted or required by the Navy, under its contracts, to pay any sleep-time over-time; and whether costs incurred by SA-TECH in settling the state-court litigation would be allowable costs under its current contract.The district court dismissed the complaint, citing lack of subject matter jurisdiction pursuant to the Contract Disputes Act’s exhaustion requirements, 41 U.S.C. 7103(a)(1)–(3). The Fourth Circuit affirmed. SA-TECH did not specifically assert any legal or contractual grounds entitling it to the Navy’s opinion on its agency status. Its other issues are monetary claims for which SA-TECH did not present a requested sum certain, as required to exhaust its remedies. View "Systems Application & Technologies, Inc. v. United States" on Justia Law

Banner Bank (“Banner”) provided a multimillion-dollar loan to James and Loree Smith and their business entities. As collateral, James Smith pledged several properties. Banner later contracted to release Loree Smith from all actions associated with the loan. When the loan entered default, Banner named Loree in this diversity action to foreclose on the collateral, notwithstanding the release. Loree brought a successful breach of contract counterclaim and recovered attorneys’ fees through Utah’s bad-faith fee-shifting statute. Banner appealed, arguing that every prong of the bad-faith statute was not met and the fee award was unreasonable. Finding that the judgment was final, the Tenth Circuit Court of Appeals exercised jurisdiction, but did not reach any of Banner’s specific statutory arguments. The Court reversed the fee award because it found Section 78B-5-825 was a procedural attorneys’ fees statute, so it could not be used to recover fees when a federal court sat in diversity. View "Banner Bank v. Smith, et al." on Justia Law

Wye sued Iraq. The district court denied Iraq’s motion to dismiss on sovereign immunity grounds and entered judgment in Wye’s favor years later. An intervening Fourth Circuit ruling rejected Iraq’s contention that none of the exceptions in the Foreign Sovereign Immunities Act, 28 U.S.C. 1602, applied to Wye’s breach of contract claims; because Wye alleged that it had engaged in acts inside the U.S. under the contract, the lawsuit could proceed under the second clause of the FSIA’s commercial activities exception, which abrogates foreign sovereign immunity with respect to claims that are “based upon . . . an act performed in the United States in connection with commercial activity of the foreign state elsewhere.”The D.C. Circuit vacated. Iraq’s participation in the trial did not implicitly waive its sovereign immunity. The law of the case doctrine does not require adherence to the Fourth Circuit’s conclusions. The D.C. Circuit concluded that section 1605(a)(2) does not apply to this case. A plausible basis for sustaining the district court’s jurisdictional ruling can be found in the commercial activity exception’s third clause, abrogating immunity if the action is “based upon . . . an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.” The district court is best positioned to determine whether Iraq’s breach of contract caused “direct effects” in the U.S. View "Wye Oak Technology, Inc. v. Republic of Iraq" on Justia Law

Li Meng ("Tenant") leased a commercial property from the Plaintiffs, Mohammad Rahimi and Tahereh Dinpajooh ("Landlords") in August, 2019 for the sole purpose of operating a massage business for a two year term. The parties specifically agreed in the written lease that Tenant use of the commercial space was for the sole purpose of conducting a massage business and Tenant was prohibited from using the space for any other purpose. The Landlords prohibited any use of the leased premises which could endanger life. The Landlords noted that even though Tenant was prohibited from any use of the premises which violated public law or governmental rule, the lease specified there would be no abatement of rent even if there was a loss of business arising from some future law. Landlords argued that Tenant's obligation to pay rent was not excused because of these lease provisions. In January, 2020, approximately five months after the parties executed the lease, the first case of the COVID-19 virus was reported within the United States and soon thereafter in Oklahoma. In March, the Oklahoma governor declared a state of emergency due to COVID-19 and businesses that were not part of critical infrastructure were ordered to close for a period of time. Tenant stated that she closed the business on March 19, 2020 after she and her sole employee became ill with symptoms of the COVID-19 virus. Tenant did not pay rent after March 2020, and she never re-opened her business. By June 2020, Landlords filed this action against the Tenant for past due rent and eviction. Tenant argued that rent was not due from April through August because performance of the contract had become impossible in light of the public health risk with massage which temporarily excused the payment of rent under the doctrine of frustration of purpose or impracticability. The court stated that the defense of impracticability was not a legitimate excuse for the nonpayment of rent and did not allow Tenant to present any evidence in support of this defense. The trial court awarded Landlords $6,400 in past due rent and granted them possession. The Oklahoma Supreme Court reversed the trial court, finding that the trial court erred when it did not allow Tenant to present evidence in support of the affirmative defense. View "Meng v. Rahimi" on Justia Law

Erick Pena filed a declaratory action against Viking Insurance Company of Wisconsin (“Viking”), alleging the automobile insurance policy he purchased was illegal because it provided illusory minimum limits of UIM coverage. Pena then filed a motion for summary judgment asking the court to declare that the UIM coverage was illusory. Viking filed a cross-motion for summary judgment, arguing that the policy was not illusory because it provided tangible benefits to a group of insured persons and that the offset provision in the policy complied with Idaho public policy. The district court granted Viking’s motion for summary judgment. Pena timely appealed. After review, the Idaho Supreme Court reversed, finding the policy at issue indeed provided illusory coverage. View "Pena v. Viking Insurance Company" on Justia Law

Appellant, defendant, and cross-complainant Earl Greif sold 10 acres of raw vacant land (Property) in Rancho Mirage to plaintiff-respondent Yardley Protective Limited Partnership, a family real estate investment partnership. A few days after Earl signed the purchase agreement (Purchase Agreement), he concluded he had sold the Property for less than its fair market value and attempted to back out of the sale. The Yardley partnership sued Earl, Earl’s wife, Shirley Greif, and Gabriel Nicholas Limited Liability Company (collectively GNLLC) to enforce the Purchase Agreement. Greif filed a cross-complaint against the Yardley partnership and one of its limited partners, Solail Ahmad (Yardley), later adding as cross-defendants Yardley’s real estate brokers, Desert Gate Real Estate, Inc. dba Four Season Realty (Desert Gate) and Desert Gate broker, Eddie Sanin (collectively Sanin). The trial court dismissed Greif’s third amended cross-complaint (Cross-complaint) on the eve of trial for failing to state any cause of action as a matter of law. After a lengthy court trial, the trial court entered judgment in favor of Yardley and against Greif and GNLLC. Greif filed three separate appeals. Rejecting Grief and GNLLC's contentions raised in the appeals, the Court of Appeal affirmed the trial court's judgment. View "Greif v. Sanin" on Justia Law

The dispute underlying this appeal began with the failure of Camille Village, LLC, the owner of an apartment complex, to deposit additional money in escrow for repairs after it was demanded by Lenders Federal National Mortgage Association and Barings Multifamily Capital, LLC. The Lenders held Camille Village to be in default, lengthy settlement negotiations failed, and the amount demanded for repairs increased dramatically after additional inspections. After a trial, the chancery court concluded that Camille Village was in default and had failed to prove the Lenders had acted in bad faith. Finding no reversible error, the Mississippi Supreme Court affirmed the trial court. View "Camille Village, LLC v. Federal National Mortgage Ass'n, et al." on Justia Law