Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Articles Posted in Contracts
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Boor and Edson owned Brava, which had intellectual property and technical knowledge related to composite roofing. Wildhawk inquired about purchasing Brava. Boor proposed “an exclusive license for manufacturing current roofing products” with “a right of first refusal on all new product [d]evelopments.” The parties executed asset purchase and license agreements. Wildhawk paid $4 million and obtained an automatic license to “any Improvements” to the technology, whether patentable or not. Before executing the agreement, the parties removed a “New Product” section as required by Wildhawk’s lender but entered into an oral agreement for a right of first refusal. Wildhawk retained Boor and Edson as paid consultants, with non-compete agreements.Boor notified Wildhawk: “As per our handshake agreement” we offer you first right of refusal “on the below products.” The parties entered into a confidentiality and nondisclosure agreement regarding “possible R&D ‘new or enhanced product’ agreements.” They negotiated but failed to reach an agreement. Boor and Edson formed Paragon while Boor was still employed by Wildhawk. Paragon began producing the new products.Wildhawk sued. The district court granted Wildhawk a preliminary injunction, prohibiting Paragon from manufacturing or selling composite roofing. The Eighth Circuit vacated. Wildhawk had a fair chance of proving the defendants violated the agreement but the district court erred in rejecting an equitable estoppel defense. Wildhawk waited until Paragon had been producing the products for 10 months before making its claim, failing to show either reasonable diligence or harm that cannot be compensated by damages. View "Wildhawk Investments, LLC v. Brava I.P., LLC" on Justia Law

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The Eighth Circuit affirmed the district court's judgment on a jury verdict in favor of S&H in an action brought by S&H against Bad Boy, alleging that Bad Boy's termination of its farm equipment dealership agreement was an unlawful breach of contract and a violation of Missouri's outdoor power equipment statute, Missouri Revised Statutes Section 407.898.In regard to the breach of contract claim, the court concluded that the evidence was sufficient for a reasonable jury to find that there was mutual assent as to the size and measurement of the protected territory, and there was sufficient evidence that a reasonable jury could have chosen S&H's theory about the cause of the lost profits. The court also concluded that the evidence was sufficient to support S&H's outdoor power equipment statute claim. The court rejected claims of evidentiary errors and jury instruction errors, affirming the award of attorneys' fees, expenses, and costs. View "S&H Farm Supply, Inc. v. Bad Boy, Inc." on Justia Law

Posted in: Contracts
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Plaintiff, the owner of TLDI, filed suit against MultiPlan and PHCS, alleging numerous causes of action, including those relevant to this appeal—breach of contract and a right to an award of attorneys' fees. The Eighth Circuit affirmed the district court's denial of attorneys' fees, concluding that the Network Agreement's indemnity clause does not permit recovery of attorneys' fees in this dispute between the contracting parties.However, the court reversed the district court's holding that plaintiff's conduct waived the contractual amendment-in-writing requirement, concluding that waiver and modification have been pleaded adequately. Furthermore, even assuming arguendo that Multiplan presented evidence sufficient to establish the presumption of receipt, plaintiffs countered with evidence that it was not received. Finally, the court concluded that alterations in position suffice as to consideration. In this case, the revised fee schedule together with the increased potential patient pool changed the obligations of both parties. View "Crutcher v. MultiPlan, Inc." on Justia Law

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After Midwest failed to meet its sales quota for two or more consecutive quarters, Exactech terminated its Agency Agreement with Midwest. The Agreement contained a non-compete provision entitling Midwest to Restricted Period Compensation (RPC) after termination. Midwest filed suit seeking, among other things, a declaratory judgment as to the amount of RPC.The Eighth Circuit reversed the district court's judgment, concluding that the district court did not apply the plain and ordinary meaning of Paragraph 5.D.ii as required by Minnesota law. Furthermore, nothing in the remainder of the Agreement contradicts the plain meaning of Paragraph 5.D.ii. There is no claim of unilateral or mutual mistake and the court remanded for further proceedings. View "Midwest Medical Solutions, LLC v. Exactech U.S., Inc." on Justia Law

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Plaintiff filed a class action complaint against Farm Bureau, alleging breach of contract and seeking a declaratory judgment. Plaintiff's breach of contract claim was based, in part, on an alleged violation of Arkansas Insurance Rule and Regulation 43, which he claimed was incorporated into the policy. The district court granted Farm Bureau's motion to dismiss for failure to state a claim. Plaintiff then filed a motion to clarify whether the order also disposed of the common law breach of contract theory, which the district court dismissed.The Eighth Circuit agreed that the Arkansas regulation that Farm Bureau allegedly violated is not incorporated into plaintiff's policy, and thus he cannot use it as the basis for a breach of contract claim. However, because plaintiff also states a breach of contract claim based on the policy language, the court reversed in part. In this case, plaintiff alleges that "a 9% reduction on a used vehicle is not typical and does not reflect market realities," and that dealers' actual practice is not to inflate prices above market value because of the "intense competition in the context of internet pricing and comparison shopping." The court explained that, if this is true, then Farm Bureau did not consider the truck's fair market value. Rather, it considered an artificially lower value, in breach of its contractual duty and thus plaintiff stated a claim for breach of contract based on the policy language. Finally, the court denied plaintiff's motion to certify questions of law to the Arkansas Supreme Court. View "Smith v. Southern Farm Bureau Casualty Insurance Co." on Justia Law

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SMI, a supermarket retailer, and XPO, a logistics company, both appeal the district court's orders and judgment in a breach of contract and tort dispute arising out of the parties' business relationship.The Eighth Circuit concluded that the parties' agreement bars SMI from recovering non-direct damages from XPO; the Limitation of Liability Provision contractually limits both parties' liability to each other, but does not exonerate them, and is therefore not contrary to Missouri public policy; the Limitation of Liability Provision does not violate Missouri public policy simply because it prevents SMI from recovering its mitigation damages; there was no error in the district court's determination at summary judgment that three categories of SMI's claimed damages were consequential damages; there was no error in granting judgment as a matter of law on SMI's negligence counterclaim where SMI has not provided sufficient evidence to show that XPO breached a duty of care other than its contractual duty under the agreement; there was no error in the district court's determination that two emails SMI sought to exclude were protected by the attorney-client privilege; and there was no error in awarding statutory prejudgment interest to XPO.In regard to XPO's arguments on appeal, the court concluded that there was no error in the district court's denial of judgment as a matter of law on SMI's breach of contract counterclaim, and there was no error in the district court's determination that XPO was not entitled to attorney's fees under the agreement. View "Jacobson Warehouse Co., Inc. v. Schnuck Markets, Inc." on Justia Law

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Robert McGowen served as the president, was on the board of directors, and was a shareholder of MHCS, an account firm. After McGowen obtained a personal loan from Commerce Bank, Commerce attempted to secure McGowen's personal loan by his signature on a pledge that purportedly made his shares of stock in MHCS collateral, and Commerce also required that McGowen obtain MHCS’s signature on a document acknowledging the pledge. When McGowen defaulted, the parties disputed the enforceability of the pledge and the acknowledgement against MHCS.The Eighth Circuit concluded that MHCS has standing to seek a declaratory judgment regarding the pledge where MHCS has shown an injury in fact, traceability, and redressability. Under Iowa law, a shareholder cannot make a voluntary transfer of shares in a professional corporation unless both of the following are true: (1) the transfer is to the professional corporation to which the shares belong or to an individual who is licensed to practice in Iowa in the same profession the corporation is authorized to practice, and (2) the transfer is authorized by the shareholders. The court concluded that there is no evidence that the pledge can meet these requirements. The court further concluded that even if the pledge's illegality did not infect the acknowledgement, MHCS would still not be bound by the acknowledgement because McGowen did not have the authority to enter into it on MHCS's behalf. In this case, McGowen did not have actual or apparent authority. Accordingly, the court affirmed the district court's grant of summary judgment in favor of MHCS. View "McGowen, Hurst, Clark & Smith, PC v. Commerce Bank" on Justia Law

Posted in: Contracts
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Rodenburg purchased a Commercial Umbrella Liability Policy from Cincinnati. In the underlying action, a plaintiff filed suit against Rodenburg, asserting several theories including wrongful garnishment, tort-based claims, and violations of the Fair Debt Collection Practices Act (FDCPA). Rodenburg filed a claim under the policy for coverage of the underlying lawsuit, but Cincinnati denied coverage.The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Cincinnati, concluding that the policy did not provide coverage for the underlying lawsuit and Cincinnati had no duty to defend Rodenburg under the policy. In this case, the underlying complaint alleged "personal and advertising injury" that was not "caused by an 'occurrence.'" The court explained that any potential liability arose either directly or indirectly from conduct that was alleged to violate the FDCPA, however, and was thus excluded from coverage by the Violation of Statutes Exclusion. Therefore, Cincinnati did not breach its contractual duty to defend Rodenburg. View "Rodenburg LLP v. Cincinnati Insurance Co." on Justia Law

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After plaintiff left her employment at HKFS, she filed suit seeking a declaratory judgment that the restrictive covenants in her various employment contracts were unenforceable. HFKS brought counterclaims against plaintiff and a third-party complaint against plaintiff's new employer, Mariner.The Eighth Circuit reversed the district court's order preliminarily enjoining plaintiff from breaching the non-compete and nonsolicitation provisions in her employment contracts. The court agreed with plaintiff and Mariner that the non-compete provision did not survive her termination of the Employment Agreement. Because HKFS is not likely to prevail on the merits of its breach of contract claim with respect to the non-compete provision, the district court erred in enjoining plaintiff from violating that provision. In regard to the non-solicitation provision in plaintiff's contract, the court concluded that South Dakota law applies under the agreement's choice-of-law provision, and such provisions cannot prevent a former employee from accepting unsolicited business. Therefore, the non-solicitation agreement, in part, violates South Dakota law and public policy and it is at least in part unenforceable. The court remanded for further proceedings. View "Miller v. Honkamp Krueger Financial Services, Inc." on Justia Law

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The Eighth Circuit affirmed the district court's grant of summary judgment in favor of NPPD's wind-farm affiliates. NPPD contends that these affiliates breached their power purchase agreements (PPAs) by transferring control of their parent companys' ownership interests without NPPD's written consent.The court concluded that the Project Entities did not transfer their direct ownership interests to NRG or GIP and did not violate the change-of-control provision of the PPAs. The court also concluded that the transfer of the Project Entities' parent companies, from Edison to NRG to GIP, did not transfer the "direct ownership interests" of each of the Project Entities. Therefore, the Project Entities did not need to obtain NPPD's written consent for each of the transactions involving its upstream parent companies, and the transfer of the ownership interests at the parent company level did not trigger a change of control under the PPAs. The court also agreed with the district court's conclusion that the Project Entities did not violate the anti-assignment provisions by delegating performance of certain duties, because the Project Entities remain ultimately responsible for their obligations. Finally, the court concluded that the district court did not abuse its discretion in issuing a permanent injunction to prevent defendant from terminating the PPAs. View "Laredo Ridge Wind, LLC v. Nebraska Public Power District" on Justia Law

Posted in: Contracts