Recently in Contract Law Category

Possession may be nine-tenths of the law, but it’s unnecessary for a bank in Minnesota to possess a promissory note when it commences foreclosure.

Kenath Stein challenged the validity of both the foreclosure of his home by Chase Home Finance (Chase), and the redemption of his home by National City Bank (National), a junior lienholder. The Eighth Circuit Court of Appeals sided with the banks this week.

The NBA season is in jeopardy, and the Eighth Circuit Court of Appeals is to blame.

After weeks of union decertification talk, NBA players took action this week. On Monday, negotiations between players and owners ended, and the National Basketball Players Association (NBPA) voted to disband.

As members of the NBPA - a union - players were stuck in the collective bargaining process. Now that the players have elected to disband the NBPA, they can pursue an antitrust lawsuit against the NBA owners.

The Eighth Circuit Court of Appeals affirmed this week that Travelers Casualty and Surety Company did not have to cover Tactical Stop-Loss's losses stemming from a major shareholder's criminal scheme.

Tactical Stop-Loss and an affiliate (the Tactical Group) administer trust accounts for insurance companies that provide stop-loss coverage to employee benefit-plan sponsors. Tactical Group purchased a Crime Policy (Policy) from Travelers Casualty and Surety Company insuring against loss from theft or forgery by an employee "acting alone or in collusion with other persons."

Action to Collect on D&O Insurance Policy

In Wintermute v. Kansas Bankers Surety Co., No. 09-2806, an action claiming that a directors and officers (D&O) liability insurance policy obligated defendant to defend plaintiff in a criminal action brought against her, the court reversed summary judgment for defendant where 1) because the doctrine of res judicata would have foreclosed the claims plaintiff sought to add to her complaint, any amendment would have been futile; 2) looking beyond the allegations in the complaint would not result in a final adjudication requirement even though the policy contained no such requirement; and 3) missing from the facts stated in the indictment was an allegation that plaintiff received a personal gain to which she was not legally entitled.

Denial of SSI Benefits Affirmed

In Johnson v. Astrue, No. 10-1124, plaintiff's appeal from the district court's affirmance of the Social Security Commissioner's denial of his claim for Supplemental Security Income, the court affirmed where 1) the record of plaintiff's IQ was sufficiently developed, and the ALJ did not commit reversible error by failing to request that a doctor administer an IQ test; and 2) the residual functional capacity finding employed in the hypothetical to the vocational expert was acceptable, and the ALJ's finding based on the expert's response was supported by substantial evidence.

In Shelton v. Kennedy Funding, Inc., No. 09-1670, a breach-of-contract and fraud action arising out of the sale of an Arkansas cemetery and involving the alleged breach of a loan agreement, the court affirmed judgment for plaintiff where 1) the Estoppel Certificate at issue did not fall within the surety prong of the Arkansas Statute of Frauds; 2) a reasonable jury could find the certificate's terms were sufficiently definite to impose an obligation upon defendant to place $675,000 in an escrow account for plaintiff's benefit in the event of a default on the loan; and 3) projections of future events or conduct could not support a fraud claim as a matter of law.

In US v. Durham, No. 09-2951, the court affirmed in part defendant's sentence for knowingly receiving child pornography, holding that, if an oral sentence and the written judgment conflict, the oral sentence controls.  However, the court reversed in part on the ground that defendant presented "concrete evidence" of his ignorance of the pornography's distribution, and as a result, even under the stricter Dodd standard, the district court's application of the distribution enhancement was improper.

Capella University, Inc. v. Executive Risk Specialty Ins. Co., No. 08-2382, involved an action alleging that defendant-insurer owed a duty to defend plaintiff against a federal lawsuit brought by one of plaintiff's former students.  The court affirmed in part judgment for plaintiffs on the grounds that 1) the lawsuit was not subject to an exclusion in the policy as based upon, arising from, or in consequence of a prior or pending formal administrative proceeding; and 2) no unfair advantage to plaintiff or detriment to defendant would result from allowing a subsequent, accurate accounting of the fees and costs to form the basis for the award in this case. However, the judgment is reversed in part where plaintiff did not waive its right to statutory prejudgment interest.

Camishi v. Holder, No. 09-2503, involved a petition for review of the Board of Immigration Appeals (BIA) decision dismissing petitioner's appeal from the Immigration Judge's (IJ) order removing him from the U.S. to Albania.  The court denied the petition on the ground that, since the IJ denied the petition on an adverse credibility finding independent of the time bar, and the BIA affirmed the credibility finding, there was no prejudice and petitioner's due process rights under the Fifth Amendment were not violated.

Eyeblaster, Inc. v. Fed. Ins. Co., No. 08-3640, involved an action arising out of defendant's denial of coverage under two insurance policies.  The court of appeals reversed summary judgment for defendant on the grounds that 1) defendant failed to meet its burden to prove that the "sudden and accidental physical injury" exclusion in the policy applied; and 2) defendant owed a duty to plaintiff under its Errors or Omissions policy.

In re: Burival, No. 09-2483, concerned debtors' appeal from the bankruptcy appellate panel's (BAP) reversal of the bankruptcy court's order partially granting a creditor's claim for an administrative expense.  The court of appeals affirmed the BAP's order on the ground that 11 U.S.C. section 365(d)(3) unambiguously provided that a debtor must perform a rent obligation in full, until a lease is rejected.

In US v. Ross, No. 09-3879, the court of appeals affirmed defendant's sentence for conspiracy to distribute fifty grams or more of cocaine base, on the ground that defendant's 1994 conviction for attempted burglary is a felony conviction for a "crime of violence" under the guidelines, and the district court properly classified defendant as a career offender.

In US v. Morse, No. 08-3425, the Eighth Circuit affirmed defendant's conviction and sentence for filing false tax documents, on the grounds that 1) the district court did not err in denying defendant's motion to dismiss the indictment based on the doctrine of judicial estoppel; 2) defendant's due process rights were not violated because he was not subject to contradictory prosecution; and 3) good cause existed to keep the indictment sealed.

Related Resources

• Full Text of Eyeblaster, Inc. v. Fed. Ins. Co., No. 08-3640
• Full Text of In re: Burival, No. 09-2483
• Full Text of US v. Ross, No. 09-3879
• Full Text of US v. Morse, No. 08-3425