Recent Contract Law Decisions

In plaintiff's suit against defendants claiming breach of contract, tortious interference, and violation of the Fair Credit Reporting Act, arising from a six-figure mortgage he obtained at an interest rate of 10.65% where he was to make monthly payments as well as taxes, insurance premiums and other charges and fees, summary judgment in defendants' favor and dismissal of plaintiff's claims for defamation and intentional infliction of emotional distress is affirmed because plaintiff did not comply with the terms of his agreement that required him to submit proof of payment.   

Hukic v. Aurora Loan Serv., No. 07-3826

Appellate Information

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division

Decided November 20, 2009

Judges

Before:  Bauer, Evans, and Williams, Circuit Judges

Opinion by Williams, Circuit Judge

In parties' dispute over the terms of a stock purchase agreement entered into in 1989 and several modification of the agreement over the next decade involving a small number of shares in two automobile dealerships and whether the contract also gave plaintiff option to purchase remaining shares, summary judgment in plaintiff's favor is reversed as extrinsic evidence is required to clarify what the parties meant because the contract as modified is reasonably susceptible to both parties' interpretation and is therefore ambiguous regarding the survival of the options.     

Curia v. Nelson, No. 07-2766

Appellate Information

Appeal from the United States District Court for the Northern District of Illinois, Western Division

Decided November 20, 2009

Judges

Before:  Williams, and Kanne and Sykes, Circuit Judges

Opinion by Circuit Judge Sykes

In plaintiff-James River Insurance's case seeking a declaration that it had no duty to defend or indemnify two lawyers who were sued for malpractice, district court's grant of summary judgment in favor of defendant-Kemper Insurance is reversed with instructions to enter the declaratory judgment requested by the plaintiff as James River's policy does not apply since it excludes coverage of conduct covered by a prior insurer, and all the wrongful acts alleged in the malpractice suit arose from events that took place in Kemper's policy period.   

Read James River Ins. Co. v. Kemper Cas. Ins. Co., No. 08-3570

Appellate Information

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division

Decided October 28, 2009

Judges

Before:  Posner, Manion, and Tinder, Circuit Judges

Opinion by Posner, Circuit Judge

In plaintiffs' class action lawsuit against defendant-automobile insurance providers, defendant's petition for permission to appeal is granted and the judgment of the district court granting plaintiff's motion to remand the action to the state court is affirmed where the new claims added by the class certification order relate back to the relevant transaction or occurrence.   

Read In Re: Safeco Ins. Co. of America, No. 09-8027

On Petition for Leave to Appeal

Decided October 22, 2009

Judges

Before:  Ripple, Kanne, and Manion, Circuit Judges

Opinion by Ripple, Circuit Judge

In a dispute arising from a transaction between a co-op, insurer and a surety involving a leveraged lease of a power station over a 63-year period, district court's grant of temporary injunction is affirmed as it did not err in concluding that co-op's claim was sufficient for the limited purpose of the temporary injunction.    

Read Hoosier Energy Rural Elec. Coop., Inc. v. John Hancock Life Ins. Co., No. 08-4030

Appellate Information

Appeals from the United States District Court for the Southern District of Indiana, Indianapolis Division.

Argued January 5, 2009
Decided September 17, 2009

Judges

Before Easetbrook, Chief Judge, and Kanne and Wood, Circuit Judges

Opinion by Easterbrook, Chief Judge

In plaintiff's suit against his insurance company for breach of a policy, district court's judgment in favor of plaintiff is affirmed in most part where:  1) district court's ruling on the issue of liability is affirmed as it properly found that plaintiff's wood inventory was not "in the open" when it was damaged because it was securely covered by a tarp and not left exposed to the elements; 2) district court did not err in awarding damages as defendant failed to produce evidence that contradicted plaintiff's affidavit regarding the value of the wood inventory; and 3) district court abused its discretion in awarding plaintiff prejudgment interest at the rate of 6.98% as nothing in the record support a rate of interest in excess of the statutory rate of 5%, and thus such award is vacated.     

Read Twenhafel v. State Auto Prop. & Cas. Ins. Co., No. 08-4275

Appellate Information

Appeal from the United States District Court for the Southern District of Illinois 
Argued May 14, 2009
Decided September 14, 2009

Judges

Before Rovner and Evans, Circuit Judges, and Van Bokkelen, District Judge 

Opinion by Van Bokkelen, District Judge

Dismissal of plaintiff's action against the Indiana University School of Optometry arising from his expulsion from the school is affirmed as the court correctly concluded that plaintiff failed to point to any specific promise that the university made which established that plaintiff might have had an entitlement to a continuing education or any other entitlement. As such, plaintiff's complaint failed to contain enough information to state a legally cognizable claim. 

Read Bissessur v. Indiana Univ. Bd. of Trustees, No. 08-3504

Appellate Information

Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division
Argued February 25, 2009
Decided September 11, 2009

Judges

Before Flaum, Williams, and Tinder, Circuit Judges 

Opinion by Williams, Circuit Judge

In a case involving a subpoena to turn over certain documents exchanged in an arbitration, judgment directing third party to produce the documents and issuing a stay pending defendant's appeal is affirmed where: 1) paragraph 6 of the agreement between defendant and third party provides that materials from the arbitration may be disclosed in response to a subpoena; and 2) even if the agreement had purported to block disclosure, such a provision would be ineffectual as contracts bind only parties and no one can agree with someone else that a stranger's resort to discovery under the Federal Rules of Civil Procedure will be cut off. 

Read Gotham Holdings, LP v. Health Grades, Inc., No. 09-2377

Appellate Information

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division.
Argued August 28, 2009
Decided September 3, 2009

Judges

Before Easterbrook, Chief Judge, and Williams and Sykes, Circuit Judges

In an insurance-coverage dispute involving the interpretation of an "advertising injury" clause in a commercial general liability policy, district court's judgment is reversed where Iowa law, and not Illinois law, applies in this case as the court was not required to apply the substantive law of the forum state in a diversity case, and the parties had stipulated that Iowa law should control their dispute.  Under Iowa law the insurance policy does not require plaintiff to defend defendant in the underlying suit.     

Read Auto-Owners Ins. Co. v. Websolv Computing, Inc. , No. 07-3286

Appellate Information

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. 

Argued September 3, 2008
Decided September 1, 2009

Judges

Before Easterbrook, Chief Judge, and Cudahy and Sykes, Circuit Judges. 

Opinion by Sykes, Circuit Judge.

In a contract case involving two separate agreements involving the applicability of an arbitration clause in the latter of the two agreements, dismissal of the case is affirmed where: 1) res judicata bars consideration of the arbitrability issue as a state court already reached that issue and resolved it with sufficient finality; and 2) a finding of improper venue was proper as only the district court in the particular forum of the forum selection clause can issue an order compelling arbitration. 

Read Haber v. Biomet, Inc., No. 08-1670

Appellate Information

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division.
Argued February 17, 2009
Decided August 20, 2009

Judges

Before Posner, Kanne, and Wood Circuit Judges 
Opinion by Wood, Circuit Judge.