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

In 2009, Paramount contracted with the RSAs, cellular-service providers: Paramount would provide billing services and the RSAs would pay Paramount $1.05 per month for each customer billed. The contract had an initial three-year term, with continual renewal for two-year terms, unless a party gave six months’ notice. The RSAs could end the agreement before the end of a term, but would have to pay Paramount “all projected monthly fees based on the number of unexpired months remaining on” the term. The contract did not guarantee a minimum number of billings, nor did it require the RSAs to use Paramount exclusively. In 2011, the RSAs sent Paramount a letter explaining that they were switching billing companies and would want assistance. The RSAs would “send an official notice … when [they] want[ed] the system shut down.” For a year, Paramount continued to serve the RSAs while helping them transfer records. Before the transfer was finished, the initial, three-year term ended, and the contract renewed. In 2013, the RSAs stopped using Paramount, with a year remaining on the renewed term. The RSAs sought a declaratory judgment, Paramount counterclaimed for breach of contract. The Eighth Circuit affirmed summary judgment in favor of Paramount, finding that the RSAs owe about $260,000 in liquidated damages. View "RSA 1 Ltd. P'ship v. Paramount Software Assocs." on Justia Law

AVR, an Israeli corporation, and Interton, a Minnesota corporation, produce hearing aid technology, and entered into an Agreement, giving Interton a 20 percent interest in AVR. During negotiations, they discussed integrating AVR's DFC technology into Interton's products, and Interton's purchase of AVR's W.C. components. The Agreement incorporated terms indicating that the Agreement would be governed by the laws of the State of Israel and that “Any dispute between the parties relating to (or arising out of) the provisions of this Agreement … will be referred exclusively to the decision of a single arbitrator … bound by Israeli substantive law.” AVR commenced arbitration in Israel. Interton participated, but believed that disputes concerning DFC and W.C. were separate and not subject to arbitration. The Israeli Supreme Court rejected Interton's objection to the scope of arbitration, citing the "relating to (or arising out of)" language. An Israeli arbitrator awarded AVR $2,675,000 on its DFC and W.C. claims, plus fees and expenses. After the award became final in Israel, in accordance with the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. 201, AVR successfully petitioned the district court for recognition and enforcement in the US. The Eighth Circuit affirmed. The Convention does not allow Interton to relitigate the scope of arbitration in an American court. View "AVR Commc'ns, Ltd. v. Am. Hearing Sys., Inc." on Justia Law

Graham sold insurance for American Family from 1988 until 2011. In 1996, they entered into an Agent Agreement. In 2010, following a customer complaint, American Family concluded that Graham had increased coverage and added endorsements without customer permission, increasing premiums; improperly applied multi-vehicle discounts to accounts with only one car; and changed vehicle-rating symbols used to assign risk and determine appropriate premiums for automobile insurance. American Famly terminated the Agreement. Weeks later, Graham formed an independent agency and sent letters to approximately 1,500 of his former American Family customers telling them he no longer represented American Family and had signed an agreement not to solicit or induce former customers for one year, but was not prohibited from serving needs not covered by American Family. Graham stated he now represented over 50 companies and could offer clients “more choices, expanded coverage, and excellent rates” that might be “better suited for your needs.” If a former customer contacted Graham, the customer was asked to sign a “non-inducement form.” American Family sued. Graham counterclaimed for wrongful termination. American Family asserted that Graham’s conduct qualified as “dishonest,” obviating the need for notice under the Agreement. The Eighth Circuit affirmed enforcement of a stipulated damages clause in the Agreement, in favor of American Family. View "Am. Family Mut, Ins. Co. v. Graham" on Justia Law

Wild is the sole member of Braveheart, LLC, which is one of two members of another limited liability company, Catalyst. In 2008, Catalyst borrowed $500,000 from Laurus. Wild signed a personal guaranty as security for Catalyst's loan. The guaranty did not expressly extend Wild's promise to Laurus's "successors and assigns," but it also did not expressly prohibit assignment of the guaranty. Years later, Laurus assigned the Catalyst promissory note to Avnet as part of a forbearance agreement on a debt Laurus owed to Avnet. An attorney for Avnet contacted Catalyst demanding payment of the $500,000 loan plus interest. When Catalyst did not make any payments, Avnet's attorney contacted Wild and demanded that he honor his personal guaranty. When Wild did not honor the guaranty, Avnet filed suit. Catalyst did not respond; a $770,065.80 default judgment entered against the company. Wild contended his guaranty was a "special guaranty" (directed solely to a specific creditor) rather than a "general guaranty" and that a special guaranty could not be assigned under Iowa law. After examining Iowa law, the district court determined the Iowa Supreme Court would allow enforcement of Wild's personal guaranty by Avnet. The Eighth Circuit affirmed. View "Avnet, Inc. v. Wild" on Justia Law

Plaintiffs own mineral interests in Chalybeat Springs and granted 21 oil and gas leases based on those interests. EnerQuest and BP America are the lessees. The property interests in Chalybeat, including the leases at issue, are subject to a Unit Agreement that establishes how the oil and gas extracted from certain formations will be divided and provides for a unit operator with the exclusive right to develop the oil and gas resources described in the Unit Agreement. In the late 1990s, PetroQuest became the operator of the Chalybeat Unit. Unhappy with the level of extraction, lessors filed suit against EnerQuest and BP, seeking partial cancellation of the oil and gas leases on the ground that EnerQuest and BP breached implied covenants in the leases to develop the oil and gas minerals. The district court granted the companies’ motion for summary judgment, reasoning that the lessors had not provided EnerQuest and BP with required notice and opportunity to cure a breach. The Eighth Circuit affirmed, rejecting an argument that the plaintiffs’ earlier effort to dissolve the Chalybeat Unit constituted notice. View "Lewis v. Enerquest Oil & Gas, LLC" on Justia Law

Lariat and Tenant entered into a 10-year lease for operation of a restaurant. Debtor personally guaranteed Tenant's performance. Tenant was evicted in 2010 and obtained a judgment of $2,224,237.00, plus interest and attorney fees. In 2011, Lariat filed an involuntary chapter 7 petition against Debtor, which was dismissed by agreement. The same creditors filed suit against Debtor's wife. After the involuntary petition was dismissed, they added Debtor as a codefendant. The court held Debtor and his wife liable for fraudulent transfers ($795,098.00) and awarded interest and costs. In 2013, Debtor sued Lariat; the court dismissed, based on collateral estoppel. Appeal is pending. In 2014 Tenant filed a chapter 11 petition and an adversary proceeding against Lariat. The bankruptcy court dismissed the adversary proceeding. On the Trustee's motion, Tenant’s chapter 11 case was dismissed. Debtor filed his own chapter 11 petition. Lariat filed a proof of claim for $1,734,539.00. Debtor objected on grounds that the amount sought based on Debtor's personal guaranty under the lease exceeded the amount allowable under 11 U.S.C. 502(b)(6) and the amount sought based on fraudulent transfers was duplicative of, and subject to the same limitation as, sought based on thatl guaranty. Lariat filed an amended proof of claim for $1,610,787.00. The court capped Lariat's claim at $445,272.93. The Eighth Circuit Bankruptcy Appellate Panel remanded for recalculation of damages under the lease and of fees and expenses, but agreed that damages for fraudulent transfers were duplicative. View "Lariat Co., Inc. v. Wigley" on Justia Law

In 2003, the governors of Cedar Rapids Lodge obtained the rights to build an AmericInn franchise. The company used Lightowler as the project architect. Lightowler used a standard form agreement that specified that its terms would be governed by the law of North Dakota. After changes requested by the Fire Marshal and for compliance with franchise standards, Lightowler submitted revised plans in February, 2004. Construction began in January 2004. In July, 2004, Lidberg of AmericInn led a construction site visit attended by the governors, and Olson, a Lightowler engineer. Lidberg and Olson prepared reports detailing deficiencies. The last act performed by Lightowler on the project was a response to the contractor in September, 2004. Lidberg led a second site visit in October, 2004, produced a report identifying additional deficiencies, and sent it to Siebert and Lightowler. The hotel opened for business in December, 2004, but problems continued. In December, 2009 Cedar Rapids Lodge brought claims against its former governors and others involved in the hotel project and alleging professional negligence by Lightowler. The Eighth Circuit affirmed summary judgment in favor of Lightowler, concluding that the claim was barred by the statute of limitations under either North Dakota or Iowa law. View "Cedar Rapids Lodge & Suites, LLC v. Lightowler Johnson Assocs., Inc." on Justia Law

Farmer owned Arkat Nutrition, which owned the Plant One feed mill in Arkansas. Arkat Land owned Plant Two, which was leased to Arkat Nutrition, which produced animal feed. In 2007, a tornado damaged Plant One. Arkat decided not to repair the plant because its equipment had little useful life remaining. Debris from the tornado was removed, leaving scrap with potential value. Friedman made an oral contract with Farmer to act as a broker for the remaining Plant One equipment. Arkat Nutrition says that it was understood that it could also continue to attempt to find a buyer on its own. Friedman disagrees. Friedman sold some equipment and received a commission of $25,000. In 2010, Arkat Nutrition and Arkat Land transferred assets to a new company, Animal Nutrition, the equity interests of which were sold to Dad’s Products, which was not to be responsible for any investor or third-party claims against Animal Nutrition. Farmer claims that sale was planned since 2002. Dad’s later changed its name to Ainsworth and hired a third-party to remove remaining Plant One scrap. Friedman sued. The Eighth Circuit affirmed summary judgment in favor of the defendants, rejecting alter-ego claims and claims of unjust enrichment and promissory estoppel, and noting the limitations period. View "Friedman v. Farmer" on Justia Law

LoRoad, based in Oregon, negotiated to have GXV, based in Missouri, build a custom expedition vehicle. While the parties were exchanging drafts of an Agreement, LoRoad wired GVX $120,000, but subsequently expressed several concerns and requested revisions. GVX promised a final set of documents “incorporating everything we’ve come to agreement on” “for final review and then signatures, so we can get this thing moving.” After several disagreements, LoRoad stated “We do want you guys to create this vehicle however we are no where near having the documents done . . . and while you have our commitment in the form of a $120k deposit, that in no way means that you have an agreement with us until the final documents are signed, sealed and delivered properly.” The relationship further deteriorated and, with the project underway, LoRoad filed suit to compel arbitration, invoking the arbitration provision in the Agreement. GXV denied a valid, enforceable agreement to arbitrate. The district court held that LoRoad failed to accept the Agreement signed by GXV so that it could not enforce the arbitration provision in that Agreement. The Eighth Circuit affirmed. View "LoRoad, LLC v. Global Expedition Vehicles LLC" on Justia Law

Union Electric is a power company, and EIM is a trade-association-owned excess carrier for power companies. Union, as an association member, is a partial owner of EIM and is the named insured in a $100 million excess liability policy issued by EIM. Union and other power companies drafted the general form policy; Union negotiated the present policy with EIM. The policy requires that coverage disputes go through a mini-trial and arbitration. An exclusive forum-selection clause and a choice-of-law clause named New York. After failure of a Missouri reservoir caused extensive damage, Union paid to settle claims; EIM paid $68 million of the policy's $100 million limit. Union filed suit in Missouri seeking the remaining $32 million plus damages for breach of contract and vexatious refusal to pay. The district court dismissed, based on the forum-selection clause, The Eighth Circuit reversed and remanded for consideration of the relationship between the mini-trial requirement, the arbitration provision, and a public policy argument. On remand, the court denied the motion to dismiss, noting that arbitration agreements in insurance contracts are unenforceable under Missouri law and that contractual choice-of-law provisions have been held unenforceable if they would allow enforcement of such an agreement. The Supreme Court, in a different case, subsequently supported enforcement of contractual forum-selection clauses "[i]n all but the most unusual cases." Relying on that case, EIM moved for a transfer stating that it would not seek enforcement of the arbitration provision. The court held that the motion was not untimely and that the forum-selection clause was enforceable. The Eighth Circuit denied a writ of prohibition or mandamus to prevent the transfer, stating that Union did not establish entitlement to extraordinary relief. View "Union Elec. Co. v. Energy Mut. Ins. Ltd." on Justia Law