Articles Posted in Contracts

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Calmare appealed the district court's judgment requiring it to pay $10,352,170.41 to GEOMC after a bench trial of a contract dispute concerning sales of medical devices. The Second Circuit affirmed the district court's ruling striking two affirmative defenses and five counterclaims. The court held that the district court was within its discretion in striking the two affirmative defenses. In this case, striking the sixth defense lacked any indication of what conduct by GEOMC or others might have been a defense to the breach of contract claim added by the second amended complaint, and the seventh defense lacked any indication of which party needed to be joined or why. The district court was also within its discretion in striking the four counterclaims against Radiant on the ground of prejudice and one counterclaims because it was factually and legally deficient. View "GEOMC Co., Ltd. v. Calmare Therapeutics Inc." on Justia Law

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NRP made preliminary arrangements with the City of Buffalo to build affordable housing on city‐owned land and to finance the project in part with public funds. The project never came to fruition, allegedly because NRP refused to hire a political ally of the mayor. NRP sued the city, the Buffalo Urban Renewal Agency, the mayor, and other officials The district court resolved all of NRP’s claims in favor of defendants. The Second Circuit affirmed. NRP’s civil RICO claim against the city officials is barred by common‐law legislative immunity because the mayor’s refusal to take the final steps necessary to approve the project was discretionary legislative conduct, and NRP’s prima facie case would require a fact-finder to inquire into the motives behind that protected conduct. NRP’s “class of one” Equal Protection claim was properly dismissed because NRP failed to allege in sufficient detail the similarities between NRP’s proposed development and other projects that previously received the city’s approval. NRP’s claim for breach of contract was properly dismissed because the city’s “commitment letter” did not create a binding preliminary contract in conformity with the Buffalo City Charter’s requirements for municipal contracting. NRP fails to state a claim for promissory estoppel under New York law, which requires proof of “manifest injustice.” View "NRP Holdings LLC v. City of Buffalo" on Justia Law

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US Bank appealed the district court's dismissal of its second amended consolidated complaint as untimely. The Second Circuit affirmed and held that ACE Secs. Corp. v. DB Structured Prods., Inc., 25 N.Y.3d 581 (2015), and Deutsche Bank Nat'l Tr. Co. v. Quicken Loans Inc., 810 F.3d 861, 868 n.8 (2d Cir. 2015), governed U.S. Bank's contractual claims in this case. The court held that the district court properly granted summary judgment to GreenPoint where the first two causes of action for breach of contract were untimely under settled New York law, because they were filed over six years after the statute of limitations began running. The court also held that the district court properly dismissed the third cause of action for indemnification under section 9 of the Flow Mortgage Loan Purchase and Warranties Agreement, because U.S. Bank's claim was in reality a repackaged version of its breach of contract claims. Finally, the court held that the fourth cause of action for breach of the indemnification agreements did relate back to the original filing for claims based on any of the Trusts, and was therefore untimely asserted. View "Lehman XS Trust v. Greenpoint Mortgage Funding, Inc." on Justia Law

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The Second Circuit affirmed the district court's judgment in an action against Direct Energy, alleging breach of contract, deceptive and unfair trade practices, and unjust enrichment. Plaintiff had entered into a consumer electricity contract with Direct Energy which initially guaranteed a fixed electricity rate. Consistent with the terms of the contract, the fixed‐rate plan was converted into a variable rate plan after the first twelve months. The court affirmed the district court's grant of summary judgment in favor of Direct Energy and held that, by the contract's plain terms, Direct Energy promised that the variable rate would be set in its discretion and that it would reflect "business and market conditions," a phrase which encompasses more than just procurement costs. Because plaintiff's claims under the Connecticut Unfair Trade Practices Act were entirely duplicative of his contract claim, they also failed. Finally, the court affirmed the district court's dismissal of plaintiff's unjust enrichment and Massachusetts unfair trade practices claims. View "Richards v. Direct Energy Servs., LLC" on Justia Law

Posted in: Consumer Law, Contracts

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The Second Circuit affirmed the district court's denial of SquareTrade's motion to compel arbitration in a putative class action seeking to hold SquareTrade accountable for alleged violations of consumer protection laws. The court agreed with the district court and held that the arbitration provision did not become part of the contract because plaintiff did not have reasonable notice of and manifest his assent to it. In this case, the consumer was presented with several documents including the Pre-Sale T&C, the body of the subsequent email, and the Post-Sale T&C, none of them specifically identified as the "Service Contract" governing the purchase, and all containing different sets of terms. Furthermore, the prior course of dealing between the parties did not convince the court that plaintiff was on inquiry notice of the arbitration provision. View "Starke v. SquareTrade, Inc." on Justia Law

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The Second Circuit affirmed the district court's summary judgment dismissal of all claims in the Second Amended Complaint against defendants in an action stemming from construction projects with the U.S. Army Corps of Engineers. The court held that MES's claims failed to articulate any support for its accusations that Safeco breached its contractual obligations or engaged in bad faith or tortious conduct. The court noted that the claim that Safeco acted inappropriately by attending the cure meetings was particularly frivolous. In this case, MES failed to identify any good faith basis, in law or on the basis of the agreements at issue, for its assertion that Safeco had no right to take steps to meet its obligations under the surety bonds. The court sua sponte awarded Safeco double costs. View "M.E.S., Inc. v. Safeco Insurance Co. of America" on Justia Law

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Sleepyʹs purchased beds from the Select Comfort for resale in Sleepyʹs stores and suspected that Select Comfort was disparaging Sleepyʹs stores and the particular line of Select Comfort beds it sold. Sleepy’s sued, alleging slander per se, breach of contract, unfair competition, breach of the implied covenant of good faith and fair dealing, and the Lanham Act. After a bench trial, the district court dismissed. On remand, a different district judge entered a judgment for Select Comfort on the merits and concluded that attorneyʹs fees were warranted because the case was ʺexceptionalʺ under the Lanham Act. The Second Circuit vacated the dismissal of Sleepyʹs slander claims. That dismissal had been on the ground that the publication element cannot be met under New York law when the statement in question is only made to the plaintiffʹs representatives--”secret shoppers” sent into Select Comfort stores by Sleepy’s. The Second Circuit remanded for a determination of whether the plaintiff consented to the slanderous statements by engaging the secret shoppers. The district court was directed to apply the “Octane Fitness” standard for evaluating whether a Lanham Act claim is ʺexceptional.ʺ The district court erred by not sufficiently explaining or justifying the amount of the defendantsʹ attorneyʹs fees. View "Sleepy's LLC v. Select Comfort Wholesale Corp." on Justia Law

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A 1988 consent order settled a suit brought by plaintiff against past and then present members of the rock band known as Lynyrd Skynyrd, seeking to clarify each party's rights with respect to the use of the name "Lynyrd Skynyrd" and their rights to make films about the band and their own lives. In this case, the Second Circuit vacated the district court's judgment and vacated its permanent injunction prohibiting distribution of a film about the band and other related activities, holding that the terms of the consent order were inconsistent, or at lease insufficiently precise, to support an injunction. The court reasoned that, even though the injunction has allegedly been imposed as a result of private contract rather than government censorship, it nonetheless restrained the viewing of an expressive work prior to its public availability, and courts should always be hesitant to approve such an injunction. The court held that the injunction restricted the actions of an entity that was not a party to the contract that was alleged to be the source of the restriction; Cleopatra in this case. Furthermore, the film told a story about the history of the band, as well as the experience of Artimus Pyle with the band. The court held that provisions of a consent decree that both prohibit a movie about such a history and also permit a movie about such an experience were sufficiently inconsistent, or at least insufficiently specific, to support an injunction. View "Ronnie Van Zant, Inc. v. Cleopatra Records, Inc." on Justia Law

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Paysys Atos non‐exclusive rights to use Paysys software and to grant licenses for that software within a specified territory. The agreement provided that in litigation with respect to a territorial violation, the prevailing party would be entitled to an award of its reasonable attorneys’ fees. Paysys sued Atos for breach, alleging multiple violations of those territorial restrictions. Three years later, 12 of Paysys’s 13 claims had been dismissed. Paysys sought a dismissal with prejudice of its remaining breach of contract claim, offering to provide Atos a perpetual, global software license. Atos asserted that it would consent if the court recognized Atos as the “prevailing party.” Paysys argued that if such a condition were imposed, it should be entitled to withdraw its motion. The district court granted Paysys’s motion on the condition that it pay Atos’s attorney’s fees, finding that Atos had succeeded in getting most of Paysys’s claims dismissed. The court held that Paysys was not entitled to withdraw its motion because the fee‐shifting obligation was a contractual one. The Second Circuit vacated. Paysys was entitled to an opportunity to withdraw its motion rather than acquiesce to the court’s terms. When a plaintiff files a motion for dismissal under Rule 41(a)(2), it takes on the risk is that its motion will be denied, not that the motion will carry additional consequences to which the plaintiff does not consent. View "Paysys International, Inc. v. Atos IT Servs. Ltd." on Justia Law

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The Second Circuit reversed the district court's denial of Defendant Emmons and Wallace's post-trial motion for judgment as a matter of law, and the corresponding entry of judgment following a jury verdict in favor of plaintiff on his claims against defendants for tortious interference with contract under New York law. The court held that there was insufficient evidence for a reasonable juror to have found at least two elements of plaintiffs claims where the jury's intent finding that defendants purposefully targeted particular contracts was wholly without support, and there was no evidence that anyone stopped performing under a specific contract because of anything said or done by defendants. Accordingly, the court remanded with directions to enter judgment for defendants. View "Conte v. Emmons" on Justia Law

Posted in: Contracts