Contract Law News - U.S. Eighth Circuit
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Arbitration clauses are everywhere, and we write about them a lot. Whether it's Sirius XM, Indian tribe payday lenders, or cell phone companies, we've seen everything in arbitration cases.

Or so we thought.

Last month, the Missouri Court of Appeals upheld going to arbitration even after a customer was beaten and robbed in his own home by an employee. That's right: Even an incidental tort claim might be governed by the arbitration agreement. This is way worse than American Express charging extra fees.

In AT&T Mobility v. Concepcion, the U.S. Supreme Court told us that the Federal Arbitration Act overrides state contract law if a contract contains an arbitration clause. In American Express v. Italian Colors Restaurant, the Court upheld an arbitration agreement's class action waiver even when the cost of arbitrating a federal antitrust claim would exceed the recovery amount.

This approach has it critics. Notably, Judge Richard Posner said that class action waivers effectively eliminate litigation: "The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30."

Looking into my crystal ball, I foresee Alltel Communication v. Rosenow to be the Supreme Court's next class action/arbitration case.

Once in a while you come across a case that brings you back to your first year of law school contracts class. Earlier this month, the Eighth Circuit took us down memory lane when it decided a contracts case, which dealt with the fundamental issue of whether a contract was even formed.

Offer and acceptance, condition precedents and the parol evidence rule are just some of the fundamental contract principles that this case touches upon. As a contracts law nerd, this case was an exciting read, but if you don't share my enthusiasm (thank you Professor Brickman), then perhaps the summary below will suffice.

The Supreme Court recently granted a petition for writ of certiorari for a case originating in the Eighth Circuit. The case is a classic example of a circuit split.

Essentially, the question before the Court is: What is sufficient notice of a rescission request under the Truth in Lending Act? That is, whether a borrower who intends to rescind a loan under the Truth in Lending Act must file a suit in federal court, or whether a letter to the lender is sufficient.

Postnup Does Not Waive Spousal Rights to 401(k), 8th Cir. Says

When you sign a prenuptial or postnuptial agreement in which you agree not to be the beneficiary of a 401(k) retirement plan, does that extinguish your spousal rights to it?

To the surprise of divorced couples and family law attorneys alike, the Eighth Circuit has ruled that no, it does not extinguish your rights. You still may have a right to the 401(k).

In its decision, the appeals court ruled that a postnuptial agreement in which each party expressed "irrevocable consent" to a change of beneficiary of the other's retirement plan did not constitute a waiver of the spousal right to benefit from such plans.

Natasha Dallas made multiple mistakes when filling out the auto-draft payment form for an American General life insurance policy for her father. Alas, the insurance company never received her initial premium. Her father passed away a couple of weeks later. Dallas, who is also an insurance agent for American General, tried to retroactively make the premium payments. Her efforts were rebuffed and her claims denied.

Though we sympathize with her, Dallas' legal case is pretty clear-cut. Basic contract law requires consideration. Insurance policies are contracts. If consideration is never received, there is no contract. Case closed.

Of course, this is an appeals case. No appeals case can be that simple, right?

Pizza delivery is a fun gig, especially for those of us who love to drive while bumping hot jams. ("I [Drove] Myself Crazy" - don't judge). Unfortunately for drivers, many pizza places now tack on a "delivery charge" of a buck or two, which some customers mistake for an automatically-included gratuity. For those restaurants that do not split that fee with the drivers, that means the drivers get shafted.

Matt Luiken was one of those drivers. He worked for Domino's, which -- at the time -- charged a $1 per delivery fee. He sued on behalf of all similarly-situated pizza boys, claiming that the big D withheld these fees from the drivers illegally, as per Minnesota law, they are tips.

In 2002, Hallmark Cards, Inc. and Janet Murley parted ways. She had served as the vice-president of marketing and was responsible for product and business development, advertising, and research, and by extension, had access to confidential business plans, market research, and other internal information.

When she was let go, she was paid a severance of $735,000, 18 months of paid COBRA insurance, paid tax preparation for 2 years, and was given executive outplacement services. In exchange, she agreed to not work in the greeting card industry for 18 months, solicit Hallmark employees, disclose or use any propriety or confidential Hallmark information, or retain any Hallmark records or documents. She also waived any claims against Hallmark arising from her termination.

Res Judicata Can Be Raised in Motion to Dismiss

The Eighth Circuit Court of Appeals offered two important lessons for contract disputes this week.

First, choice of venue clauses are sometimes mere suggestions.

Second, res judicata can be raised in a motion to dismiss.

Insurer Must Cover Junk Fax Settlement

We get a fair number of junk faxes at our office. Our fax machine is next to the paper recycling bin, so it’s easy to toss them and forget about them. Because that’s what most people do.

Most people are tossing out a veritable gold mine; under the Junk Fax Act, they could be suing and collecting damages for those unwanted faxes.

Before you shudder at the thousands of dollars you’re losing by simply ignoring your in-house money press fax machine, just think about the money you’re saving insurance companies. Yes, insurers have to indemnify those overly-aggressive-faxers under advertising injury provisions.