Justia U.S. 8th Circuit Court of Appeals Opinion SummariesArticles Posted in Contracts
Elijah Wells v. Creighton Preparatory School
Creighton Preparatory School expelled Plaintiff after he made lewd remarks about a teacher. Plaintiff sued Creighton under Title IX of the Education Amendments of 1972 on the theory that the school had discriminated against him by failing to perform an “adequate and impartial investigation.” The district court granted Creighton’s motion to dismiss. It first dismissed the Title IX claim because Plaintiff had failed to “allege [that] his sex played any part in the disciplinary process at all.” Then, with the federal question gone, it declined to exercise supplemental jurisdiction over Plaintiff’s breach-of-contract claim.The Eighth Circuit affirmed. The court explained that Plaintiff does not allege that Creighton faced external pressure to punish male students, much less gave in by expelling him. The court reasoned that without an allegation of that kind, the complaint fails to plausibly allege the sort of “causal connection between the flawed outcome and gender bias” required to make an erroneous outcome theory work.Further, the court wrote that treating men and women differently can support an inference of sex discrimination, but it requires identifying a similarly situated member of the opposite sex who has been “treated more favorably.” For Plaintiff, he had to find “a female accused of sexual harassment” who received better treatment. There are no female students at Creighton, an all-boys school, let alone any who have faced sexual-misconduct allegations. The court explained that to the extent that Plaintiff argues that believing them over him raises an inference of discrimination, there is nothing alleged that the school did so because of his sex. View "Elijah Wells v. Creighton Preparatory School" on Justia Law
Select Specialty Hospital v. Brentwood Hutterian, Brethren
After suffering a stroke, Mary, a member of the Brentwood Hutterite Brethren, received care at a Select Specialty Hospital. During her time at Select, she was covered by Brentwood’s insurance. But after Mary applied for and received Medicaid, it retroactively covered her time at Select. Select accepted $300,000 from Medicaid for Mary’s care—far less than it was expecting from Mary’s Brentwood insurance. Select sought payment from Brentwood, the Hutterite Brethren General Fund (the Fund), and South Dakota Medical Holdings Company (Dakotacare) for breach of contract. It also sought damages from Brentwood and the Fund for fraud and deceit. The district court granted summary judgment to Brentwood, the Fund, and Dakotacare. On appeal, Select argues that Brentwood and the Fund breached their contractual obligations by refusing to pay for Mary’s treatment. The Eighth Circuit affirmed. The court explained that Select has already accepted money from Medicaid “as payment in full” for Mary’s care. Under 42 C.F.R. Section 447.15, “the Medicaid agency must limit participation in the Medicaid program to providers who accept, as payment in full, the amounts paid by the agency.” The court wrote that as a Medicaid program participant, Select must follow this regulation. The central issue here is whether Section 447.15’s “payment in full” provision bars Select from pursuing third parties like Brentwood and the Fund after accepting payment from Medicaid. The court wrote that in its view, Section 447.15’s “payment in full” language is plain and unambiguous: Once Select accepted payment from Medicaid, it was paid in full for Mary’s care. View "Select Specialty Hospital v. Brentwood Hutterian, Brethren" on Justia Law
Commercial Bag Company v. Land O’Lakes, Inc.
Land O’Lakes and Commercial Bag entered into a “Packaging Materials Supply Agreement.” Under the Agreement, Land O’Lakes agreed to “make best reasonable efforts” to buy fifteen to twenty percent of its annual polypropylene bag volume from Commercial Bag. Due to concerns with the new manufacturer, however, Land O’Lakes decided to purchase a portion of its polypropylene bags from a domestic manufacturer instead. Land O’Lakes informed Commercial Bag of this decision, and said that it would “result in a discontinuation of the business relationship between Land O’Lakes and Commercial” for polypropylene bags. Land O’Lakes gave Commercial Bag 90 days’ notice that it was terminating the Agreement. Commercial Bag sued, alleging that Land O’Lakes breached the contract by terminating the Agreement without cause, reducing its purchases of polypropylene bags from Commercial Bag, and refusing to pay Commercial Bag’s invoice for plates and artwork. The district court granted summary judgment for Land O’Lakes. The Eighth Circuit affirmed. The court explained that it agreed with the district court that the term “Agreement” in Amendment #2 is not ambiguous. Land O’Lakes was permitted under the contract to terminate the agreement without cause. Amendment #1 added the “without cause” termination provision to Section 2 of the Agreement, and Amendment #2 did not remove that provision. So the “Agreement” to which Amendment #2 referred was necessarily the original agreement as amended by Amendment #1. The court concluded that because Commercial Bag produced no evidence that it actually incurred costs for plates and dies, the district court correctly granted judgment for Land O’Lakes on this claim. View "Commercial Bag Company v. Land O'Lakes, Inc." on Justia Law
James Prisk v. Travelers Indemnity Co. of America
Plaintiff sued Travelers Indemnity Company of America, seeking a declaration that an insurance policy between Travelers and the City of Hermantown authorizes up to $2,000,000 in coverage for his tort claim against the city. The district court granted summary judgment for Plaintiff, and Travelers appeals. The court concluded that the insurance policy limits the amount of Plaintiff’s recovery to $500,000 and therefore reversed the judgment. The court explained that under Minnesota law, a municipality is liable for its torts and those of its employees acting within the scope of their employment. But a municipality may obtain insurance coverage for damages “in excess of the limit of liability imposed by section 466.04,” and procurement of such insurance waives the statutory limit of liability. The court concluded that the insurance policy authorizes coverage up to only $500,000 for Plaintiff’s claim. The policy provides different limits for different types of liabilities. The policy provides a coverage limit of $2,000,000 for claims not subject to the statutory limit set forth in Minn. Stat. Section 466.04. But for claims subject to the statutory limit in Section 466.04, the endorsement expressly limits coverage to $500,000. The substance of this contractual arrangement is no different than if the parties agreed on two separate policies for the two different types of liability. Plaintiff’s claim for injuries arising from an automobile accident in Hermantown is subject to Minnesota’s $500,000 cap on municipal tort liability. View "James Prisk v. Travelers Indemnity Co. of America" on Justia Law
K.C. Hopps, Ltd. v. The Cincinnati Insurance Co.
K.C. Hopps, Ltd., sued its insurer, The Cincinnati Insurance Company, seeking coverage for lost business income incurred during the COVID-19 pandemic. Cincinnati moved for summary judgment based on K.C. Hopps’s inability to show physical loss or damage, which the district court denied. After the jury returned a verdict for Cincinnati, K.C. Hopps renewed its motion for judgment as a matter of law and moved for a new trial. The district court denied both motions. The Second Appellate District affirmed. The court explained that K.C. Hopps alleged that COVID-19 particles were present at its properties. The court wrote that has repeatedly rejected similar claims for COVID-19-related business interruptions because the insured did not sufficiently allege physical loss or damage. The court explained that even if K.C. Hopps could show actual contamination of its properties, any possible contamination was not the cause of its lost business income. K.C. Hopps did not limit its operations because COVID-19 particles were found at its properties—it did so because of the shutdown orders. K.C. Hopps remained open until government orders limited its operations. And even if its premises weren’t contaminated, K.C. Hopps “would have been subject to the exact same restrictions.” View "K.C. Hopps, Ltd. v. The Cincinnati Insurance Co." on Justia Law
Torri Houston v. St. Luke’s Health System, Inc.
Plaintiff, a former employee, sued on behalf of herself and similarly situated employees, claiming that St. Luke’s violated the Fair Labor Standards Act’s (“FLSA”) overtime provisions by failing to fully compensate employees for work performed. She also brought an unjust-enrichment claim under state law. The district court certified two classes with different lookback periods: (1) an FLSA collective comprised of employees who worked for St. Luke’s between September 2016 and September 2018, 1 and (2) an unjust-enrichment class comprised of all employees who worked for St. Luke’s in Missouri between April 2012 and September 2018. Houston also asserted individual claims, one under the Missouri Minimum Wage Law, and one for breach of her employment contract. The district court granted summary judgment to St. Luke’s on all claims. The Eighth Circuit vacated and remanded. The court explained that Plaintiff has raised a genuine dispute that the rounding policy does not average out over time. The court explained that no matter how one slices the data, most employees and the employees as a whole fared worse under the rounding policy than had they been paid according to their exact time worked. Here, the rounding policy did both. It resulted in lost time for nearly two-thirds of employees, and those employees lost more time than was gained by their coworkers who benefited from rounding. The court concluded that the employees have raised a genuine dispute that the rounding policy, as applied, did not average out over time. The district court, therefore, erred in granting summary judgment on the FLSA and Missouri wage claims. View "Torri Houston v. St. Luke's Health System, Inc." on Justia Law
H&T Fair Hills, Ltd. v. Alliance Pipeline L.P.
Alliance Pipeline L.P. (“Alliance”) entered into contracts with four states (“State Agreements”) as well as contracts with individual landowners in order to build a natural gas pipeline. The contracts with landowners provide easements for the pipeline right-of-way. In 2018, some landowners on the pipeline right-of-way filed a class-action lawsuit against Alliance. After the class was certified, Alliance moved to compel arbitration for the approximately 73 percent of plaintiffs whose easements contain arbitration provisions. Alliance appealed, arguing the district court erred by not sending all issues to arbitration for the plaintiffs whose easements contain arbitration provisions. The Eighth Circuit affirmed in part and reversed in part. The court explained that the district court that the damages issues are subject to arbitration for the plaintiffs whose easements contain an arbitration provision. Plaintiffs make two arguments against sending any issues to arbitration: (1) Plaintiffs’ claims cannot be within the scope of the arbitration provisions because the claims allege lack of compensation for “ongoing yield losses,” not “damages to crops” and (2) Plaintiffs’ claims arise under the State Agreements, which do not have arbitration provisions. The court found the arbitration agreements to be enforceable and to cover all issues. The court held that as to the arbitration class members, the claims should be dismissed without prejudice. As to the members of the class without arbitration provisions, the court saw no reason why these class members cannot proceed with the lawsuit in the normal course at the district court. View "H&T Fair Hills, Ltd. v. Alliance Pipeline L.P." on Justia Law
Steven Scaglione v. Acceptance Indemnity Ins Co
Following a shooting at a bar in downtown St. Louis, Missouri, Plaintiff, who was injured as a bystander, obtained a $2.5 million judgment against the bar’s owner and operator, Steven Scaglione. Plaintiff thereafter filed this equitable-garnishment claim against Scaglione and his insurer, Acceptance Indemnity Insurance Company (Acceptance). Scaglione filed cross-claims against Acceptance, alleging that it had, in bad faith, failed to defend or indemnify him and breached its fiduciary duty. Acceptance filed motions to dismiss both Plaintiff’s and Scaglione’s claims, which the district court granted based on the applicability of an assault-and-battery exclusion in Scaglione’s policy. In this consolidated appeal, both Plaintiff and Scaglione assert that the district court erred in dismissing their claims. The Eighth Circuit affirmed. The court explained that the district court did not suggest that the assault-and-battery exclusion did not apply solely because the purported victim was not the target. Accordingly, the court rejected this argument and concluded that the unambiguous policy language covers claims of injuries sustained by innocent bystanders arising out of an assault and battery. The court thus concluded that the policy exclusion applies. Further, the court concluded that Scaglione’s negligence was not independent and distinct from the excluded assault and battery. The court explained that the concurrent-proximate-cause rule thus does not apply, and, therefore, the exclusion bars coverage under the policy. Without coverage, Plaintiff and Scaglione cannot state a claim. The district court thus did not err in granting the motions to dismiss. View "Steven Scaglione v. Acceptance Indemnity Ins Co" on Justia Law
Dakota Energy Coop, Inc. v. East River Electric Power Coop., Inc.
Dakota Energy Power Cooperative, Inc., a member of East River Electric Power Cooperative, Inc., sought to withdraw from East River and to terminate the parties’ long-term power contract so that it could purchase electricity from another source. When East River resisted, Dakota Energy sued for anticipatory breach of contract and sought a declaratory judgment providing that it had a contractual right to withdraw from East River by way of a buyout. The district court granted summary judgment in favor of East River, and Dakota Energy appealed. The Eighth Circuit affirmed. The court explained that under the UCC, the terms of a written contract “may be explained or supplemented” by certain extrinsic evidence, including “usage of trade.” Dakota Energy’s proffered trade usage evidence would effectively add an entirely new provision to the WPC. Moreover, under the UCC, “the express terms of an agreement and any applicable . . . usage of trade must be construed whenever reasonable as consistent with each other.” Here, the express terms of the WPC—which provide that the agreement will “remain in effect” until December 31, 2075, and which contain no provision allowing for an early buyout—are inconsistent with any trade usage evidence suggesting something to the contrary. Therefore, the court concluded that the WPC unambiguously requires Dakota Energy to purchase all of its electricity from East River until December 31, 2075, and that no provision in the WPC or East River’s Bylaws allows for an earlier termination of that obligation. View "Dakota Energy Coop, Inc. v. East River Electric Power Coop., Inc." on Justia Law
Prospect ECHN, Inc. v. Winthrop Resources Corp.
Certain healthcare entities entered into a lease agreement and related lease schedules with Winthrop Resources Corporation (Winthrop). Prospect ECHN, Inc. (Prospect) purchased the healthcare entities’ assets and later sought to be released from their obligations to Winthrop. After negotiations failed, Prospect filed suit against Winthrop, alleging that the schedules must be recharacterized as security interests under the Uniform Commercial Code (U.C.C.), as adopted by Minnesota. If recharacterized as security interests, Prospect owns the equipment that Winthrop had leased to it and can argue that Winthrop must return any security deposits and excess payments. If the schedules are true leases, however, Prospect owes Winthrop the amounts due under the contracts. The district court granted summary judgment in favor of Winthrop, concluding that the agreement and schedules constitute true leases and that Prospect had breached them. The court awarded damages to Winthrop and determined that it was entitled to attorneys’ fees and costs. The Eighth Circuit affirmed. The court wrote that although the U.C.C. demands recharacterization under its bright-line test or when so compelled by the facts of the case, it does not demand so here, where the parties negotiated a lease agreement and related schedules that skirt the line of creating security interests without crossing it. Thus, the court concluded that the district court correctly granted summary judgment in Winthrop’s favor. Further, the court found no error in the award of damages in the amount of the unpaid lease charges and other amounts due, as well as in the amount of the accelerated lease charges. View "Prospect ECHN, Inc. v. Winthrop Resources Corp." on Justia Law