Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

CNH, which manufactures “New Holland” brand farming and construction machinery, hired the real estate services firm, JLL, to manage a corporate re-branding program that involved the replacement of signage more than 1,400 North American dealerships. The vinyl used in the new signs was defective, necessitating the re-manufacture and replacement of virtually all of the installed signs. After the vinyl manufacturer repudiated its commitment to replace, at its own cost, the defective signs, CNH sued, alleging that JLL had failed to perform adequate quality control in the manufacturing of the signs, failed to negotiate the best possible warranty on the vinyl and the signs, and failed to properly document and manage the warranties. The district court found that CNH had suffered damages of $5,482,735 but reduced JLL’s liability to $3,026.361.60—the sum CNH paid to JLL in project management fees—plus such other amounts JLL might recover from third parties (the vinyl manufacturer and the sign fabricators) in the future. The Seventh Circuit affirmed. The district court’s findings were supported by the evidence and make clear that JLL’s own failures with respect to quality control in the manufacturing process and with respect to the vinyl warranty made the defective-sign problem much worse for CNH than it otherwise would have been. View "CNH Industrial America LLC v. Jones Lang LaSalle Americas, Inc." on Justia Law

Atlas, an authorized interstate transporter of household goods, contracts with agents to perform its shipments. One of its agents, Ace, leases trucks and driving services from owner-operators. In 2009, owner-operator Mervyn entered into a lease agreement with Ace to haul shipments for Atlas. In 2013, Mervyn sued Atlas and Ace in a purported class action, alleging breach of contract and violations of the federal Truth-In-Leasing regulations under 49 C.F.R. 376.12(d). The Seventh Circuit affirmed summary judgment in favor of Atlas and Ace. Mervyn advanced claims that are necessarily inconsistent: that he was not paid according to the plain terms of the lease and that the lease violated the Truth-In-Leasing regulations because the terms were not “clearly stated.” Mervyn never disputed the financial entries he complained of until he filed this lawsuit, in violation of a contract provision allowing a 30-day window to dispute financial entries. Mervyn was compensated according to the plain and ordinary terms of the lease. View "Mervyn v. Atlas Van Lines, Inc." on Justia Law

A father and son left employment at Engineered Abrasives to start a competing business, American Machine, in 2011. Several lawsuits followed. In 2015, Engineered Abrasives won a default judgment against American Machine and its principals for $714,814.04 and injunctive relief for stealing trade secrets and infringing trademarks. Five months later, Engineered Abrasives sued again; the parties reached a settlement. American Machine’s insurer would pay $75,000 to Engineered Abrasives, and a permanent injunction would be entered against slander by American Machine or its principals with a $250,000 liquidated damages clause accompanying the injunction. American Machine returned to court in the earlier case under FRCP 60(b), reporting that the settlement covered the earlier trademark judgment as well as the new case; Engineered Abrasives contended that it had only settled the new case. The written settlement did not mention a global settlement. The district court and Seventh Circuit agreed that the settlement’s release clause is unambiguous and releases all claims and liabilities between the parties, including the earlier default judgment. Under Illinois law, a court deciding whether the parties intended to include other claims in a release cannot consider extrinsic evidence unless the contract is ambiguous. View "Engineered Abrasives, Inc. v. American Machine Products & Service, Inc." on Justia Law

Givens, a Missouri resident, suffered from renal failure, was on dialysis for about 10 years and had experienced multiple strokes. In 2009, she suffered an additional injury from gadolinium dye, a substance used in MRIs, joined a class action related to the dye, and received about $255,000 in settlement proceeds. Givens signed an agreement allowing the National Foundation for Special Needs Integrity to manage a trust for her benefit while she lived. Givens named herself as the only beneficiary. Givens died a month after funding the trust, leaving more than $234,000. Givens failed to specify a remainder beneficiary. The Foundation claimed that the agreement entitled it to retain any remaining trust assets. Givens’s Estate claimed that it is entitled to the money for the benefit of Givens’s children, arguing that the agreement is ambiguous and should be construed against the Foundation, or that the court should use its equitable power. The district court rejected the Estate’s arguments. The Seventh Circuit reversed, finding the agreement ambiguous on the key question. The overwhelming weight of evidence shows that Givens intended that any remaining assets pass to her children rather than to the Foundation. The court did not address equitable theories or a laches defense. View "National Foundation For Special Needs Integrity, Inc. v. Reese" on Justia Law

In this action challenging an insurance company’s doubling of Plaintiff’s insurance premium, the Seventh Circuit reversed the district court’s dismissal of Plaintiff’s complaint for failure to state a claim, holding that Plaintiff was entitled to relief on her contract claim and that the allegations Plaintiff raised were enough to permit her to go forward on her other theories.When Plaintiff was sixty-seven years old, she discovered that Metropolitan Life Insurance Company (MetLife) more than doubled her insurance premium. Plaintiff brought this lawsuit against MetLife on behalf of herself and a proposed class, alleging breach of contract, deceptive and unfair business practices, and common-law fraud. The district court granted MetLife’s motion to dismiss for failure to state a claim, concluding that the insurance policy unambiguously permitted MetLife to raise Plaintiff’s premium. The First Circuit disagreed, holding that the allegations raised in the complaint were enough to entitle Plaintiff to prevail on the liability phase of her contract claim and to go forward on her remaining claims. View "Newman v. Metropolitan Life Insurance Co." on Justia Law

Meyer, a disbarred lawyer, owns JHM, which installed and maintained laundry machines in apartment buildings; Dolphin, which sold commercial laundry equipment to JHM and others; and JH Meyer, which operated a laundry facility. In 2012-2013, Firestone financed JHM’s business with loans totaling about $250,000. Because JHM obtained its equipment from Dolphin, the loans actually financed Dolphin’s purchases from the manufacturer. Firestone retained a security interest in JHM’s assets. Dolphin, JH Meyer, and Meyer guaranteed JHM’s loan obligations. In 2013 Firestone sued JHM for default and sued Meyer, Dolphin, and JH Meyer under the guarantees. The defendants raised the affirmative defense and counterclaim of promissory estoppel, asserting that after Firestone issued JHM two loans, Firestone’s Vice President McAllister told Meyer that Firestone would set up a $500,000 line of credit for JHM and that, until the line of credit was established, Firestone would finance “any” equipment that JHM needed on “identical terms” to the first two loans. Firestone subsequently issued the third loan. After McAllister left Firestone, Firestone’s CEO approved the final loan. The defendants assert that Firestone’s refusal to issue further loans harmed them. The Seventh Circuit affirmed summary judgment in favor of Firestone. Meyer’s allegations were implausible because no financial firm would commit orally to loaning substantial sums to a startup. Meyer conceded that he “made no payments” to Firestone. A reasonable jury could not conclude that Meyer has satisfied any of the elements of promissory estoppel. View "Firestone Financial Corp. v. Meyer" on Justia Law

Apple Leisure specializes in packaged travel sales and resort management. In 2011 Scott and Natasha Mueller purchased an Apple all-inclusive honeymoon trip to Secrets Resort in Punta Cana, Dominican Republic, through a Fond du Lac, Wisconsin travel agent. The contract attached to their travel vouchers explains in boldface type that “[t]he exclusive forum for the litigation of any claim or dispute arising out of … [this] trip shall be the Court of Common Pleas of Delaware County, Pennsylvania.” While on her honeymoon, Natasha became ill after Secrets Resort served her contaminated fish. She was diagnosed with Ciguatera poisoning, a foodborne illness caused by eating certain reef fish infected with Ciguatera neurotoxins. The Muellers sued in the Eastern District of Wisconsin. The district judge applied the doctrine of forum non conveniens and dismissed the case based on the forum-selection clause. The Seventh Circuit affirmed. The judge’s decision was procedurally and substantively sound. A forum-selection clause channeling litigation to a nonfederal forum is enforced through the doctrine of forum non conveniens; only an exceptional public-interest justification can displace a contractual choice of forum. The Muellers have not identified any public interest to justify overriding the forum-selection clause in their travel contract. View "Mueller v. Apple Leisure Corp." on Justia Law

Apple Leisure specializes in packaged travel sales and resort management. In 2011 Scott and Natasha Mueller purchased an Apple all-inclusive honeymoon trip to Secrets Resort in Punta Cana, Dominican Republic, through a Fond du Lac, Wisconsin travel agent. The contract attached to their travel vouchers explains in boldface type that “[t]he exclusive forum for the litigation of any claim or dispute arising out of … [this] trip shall be the Court of Common Pleas of Delaware County, Pennsylvania.” While on her honeymoon, Natasha became ill after Secrets Resort served her contaminated fish. She was diagnosed with Ciguatera poisoning, a foodborne illness caused by eating certain reef fish infected with Ciguatera neurotoxins. The Muellers sued in the Eastern District of Wisconsin. The district judge applied the doctrine of forum non conveniens and dismissed the case based on the forum-selection clause. The Seventh Circuit affirmed. The judge’s decision was procedurally and substantively sound. A forum-selection clause channeling litigation to a nonfederal forum is enforced through the doctrine of forum non conveniens; only an exceptional public-interest justification can displace a contractual choice of forum. The Muellers have not identified any public interest to justify overriding the forum-selection clause in their travel contract. View "Mueller v. Apple Leisure Corp." on Justia Law

In 2006, Warciak’s mother signed an agreement with T-Mobile to begin cell phone service. In 2012, she signed another agreement when she purchased a new phone. Each agreement contained an arbitration clause. Although Warciak uses a phone on his mother’s plan and is an authorized user who can make changes to the account, he never signed either agreement nor is he otherwise a party to them. In 2016, Warciak received a spam text message promoting a Subway sandwich. He sued Subway under federal and state consumer protection statutes. Subway moved to compel arbitration based on the agreements between T-Mobile and Warciak’s mother. In the district court, Subway argued that federal estoppel law required Warciak to arbitrate under his mother’s contracts. Warciak countered that under Illinois law he is not bound by his mother’s contracts. The district court applied federal law. The Seventh Circuit reversed, holding that state law applies and that Subway cannot claim estoppel because it cannot show detrimental reliance. View "Warciak v. Subway Restaurants, Inc." on Justia Law

A “pickle line” processes hot rolled steel coil through acid tanks to remove impurities. In 2006, Toll purchased a used pickle line, in need of repair. Kastalon had previously serviced the machine. In 2008, Kastalon agreed to move and store the machine, at no cost, until Toll could order reconditioning. Both parties believed that Toll would move the equipment within months; they did not discuss a specific timeframe. For two years, Kastalon stored the equipment indoors. Toll negotiated with various companies, to run or sell the equipment, but was not in communication with Kastalon. Kastalon eventually greased and wrapped the equipment before moving it to outside storage under tarps. Toll employees with whom Kastalon had communicated were laid off. Kastalon thought that Toll had gone out of business and that the equipment had been abandoned. Kastalon had the equipment scrapped, without inspecting it, and received $6,380.80. In June 2011, Toll requested a price for reconditioning and learned that they had been scrapped. Toll obtained quotes for replacement: the lowest was about $416,655. Toll sued. The Seventh Circuit reversed, in part, summary judgment entered in favor of Kastalon. A reasonable jury could conclude that Toll’s prolonged silence, alone, did not constitute unambiguous evidence of intent to abandon. The court did not consider whether Kastalon had an extra-contractual duty not to dispose of the equipment or Kastalon’s evidence that the loss was not due to Kastalon’s failure to exercise reasonable care. Affirming rejection of a contract claim, the court stated the parties’ oral agreement was not sufficiently definite as to duration. View "Toll Processing Services, LLC v. Kastalon, Inc." on Justia Law