Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Burton founded and ran companies that manufactured and distributed medical device parts. By 2006, the companies employed approximately 140 people and generated annual revenue of $14 million. In 2007, Burton sold to Teleflex and entered into a two-year employment agreement with Teleflex, providing that she could terminate her employment by providing 30 days’ written notice. Teleflex could fire Burton without cause by providing 30 days’ written notice or could fire Burton for cause, upon written notice and an opportunity to cure. Burton, then age 67, became Vice President of New Business Development, supervised by Boarini. The two had a strained relationship. During an argument, Burton asked Boarini whether he wanted her to resign. There is evidence that she stated that she was resigning, stayed out of the office for two days, then left on a previously-scheduled vacation, after which SMD “accepted” her resignation in writing. The district court granted Telefex summary judgment on claims under the Age Discrimination in Employment Act, 29 U.S.C. 621; Title VII of the Civil Rights Act, 42 U.S.C. 2000e; and state law. The Third Circuit reversed, finding genuine issues of fact on whether Burton resigned. View "Burton v. Teleflex Inc." on Justia Law

The Condominium Association’s declaration required Bayside to provide fresh water and wastewater treatment to the Association and made all of the water facilities common property of the Association. Bayside contracted with TSG to construct and operate a system to fulfill its obligations. TSG charged Bayside $0.02 per gallon. By 2005, Bayside owed millions of dollars to creditors including TSG and the Association. Bayside assigned its rights to TSG, permitting TSG to charge $0.05 per gallon. To secure the Association’s consent Bayside and TSG threatened to cease providing services even though it was not feasible to obtain those services elsewhere. The Association’s Board consented and signed a Water Supply Agreement, which provided that Bayside owned the water facilities and contained an arbitration clause. After not receiving payments under the WSA, TSG temporarily stopped producing potable water for the Association, which then filed suit, asserting criminal extortion under the Racketeer Influenced Corrupt Organizations Act; breach of obligations under the Declaration; and ownership of the water treatment systems. The district court ordered arbitration. The Third Circuit affirmed in part but vacated in part. The Association raised a bona fide question as to whether its Board had authority to enter into the WSA, a question that requires judicial determination. View "SBRMCOA, LLC v. Bayside Resort Inc." on Justia Law

Sweeney owned a transmission shop and referred customers to Tradewell, who owned a nearby car rental business. Sweeney would sometimes simply refer customers to Tradewell or drive them to Tradewell’s business. If employees were available, Tradewell would have them take a car to Sweeney’s shop. Sweeney would sometimes pick up a car from Tradewell and deliver it to the customer and would occasionally use the car for personal errands. This was encouraged by Tradewell, who asked Sweeney to make sure the cars were running properly. In 2004 Sweeney, returning from a personal errand, was injured in an accident while driving a car owned by Tradewell that was intended for delivery to a customer the following morning. Sweeney sought underinsured motorist benefits pursuant to his policy with Liberty. Liberty sought a declaration that Sweeney was not entitled to coverage. On remand, the district court granted Liberty summary judgment, finding that “intended use” and “regular use” provisions did not bar coverage, but Liberty could deny coverage based on the “auto business” provision. The Third Circuit reversed, in favor of Sweeney, noting that Sweeney was on a personal errand, not engaged in “auto business” and did not have unfettered use of the cars. View "Liberty Mut. Ins. Co. v. Sweeney" on Justia Law

Attorneys Post and Reid were retained to defend a medical malpractice action. At trial, plaintiffs introduced evidence suggesting that Post and Reid had engaged in discovery misconduct. Fearing that the jury believed that there had been a “cover-up” involving its lawyers, and concerned with the “substantial potential of uninsured punitive exposure,” the hospital, represented by new counsel, settled the case for $11 million, which represented the full extent of its medical malpractice policy limits. The settlement did not release Post, Reid, the law firm where they began representation of the hospital, or their new firm from liability. The hospital threatened Post with a malpractice suit and sought sanctions. Post eventually brought claims of bad faith and breach of contract against his legal malpractice insurer. The district court awarded $921,862.38 for breach of contract. The Third Circuit affirmed summary judgment in favor of the insurer on the bad faith claim and remanded for recalculation of the award, holding that, under the policy, the insurer is responsible for all costs incurred by Post in connection with the hospital’s malpractice claim from October 12, 2005 forward and for all costs incurred by Post to defend the sanctions proceedings from February 8, 2006 forward. View "Post v. St. Paul Travelers Ins. Co." on Justia Law

CS manufactures and sells X-ray and metal detection devices for use in public facilities around the world. Tecapro is a private, state-owned company that was formed by the Vietnamese government to advanced technologies into the Vietnamese market. In 2010, Tecapro purchased 28 customized AutoClear X-ray machines from CS for $1,021,156. The contract provides that disputes shall be settled at International Arbitration Center of European countries for claim in the suing party’s country under the rule of the Center. Tecapro initiated arbitration proceedings in Belgium in November 2010. In December 2010, CS notified Tecapro of its intention to commence arbitration proceedings in New Jersey. In January 2011, CS filed its petition to compel arbitration in New Jersey and enjoin Tecapro from proceeding with arbitration in Belgium. The district court concluded that it had subject matter jurisdiction under the U.N.Convention on the Recognition and Enforcement of Foreign Arbitral Awards, that it had personal jurisdiction over Tecapro, and that Tecapro could have sought to arbitrate in Vietnam and CS in New Jersey. The latter is what happened, so “the arbitration shall proceed in New Jersey.” After determining that it had jurisdiction under the Federal Arbitration Act, 9 U.S.C. 1, the Third Circuit affirmed. View "Control Screening LLC v. Technological Application & Prod. Co." on Justia Law

Liberty entered into a Master Declaration and Easements, Covenants, Conditions and Restrictions for a shopping mall. PMI purchased the property and entered into a Declaration that gave Liberty the right to prior approval of future purchasers and an option to purchase. PMI borrowed $3.5 million from Nationwide, using the property as collateral. Nationwide purchased title insurance from Commonwealth, containing the ALTA 9 endorsement. PMI defaulted and conveyed the property to Nationwide, which attempted to sell to Ironwood. Liberty’s successor, Franklin, refused to approve Ironwood under its rights conferred by the Declaration, based on Ironwood’s planned use as a school. Nationwide claimed that the restrictions upon which Franklin justified refusal rendered the property unusable and unsalable. Commonwealth denied the claim. The district court dismissed. The Third Circuit remanded, holding that Commonwealth is obligated to cover the claim if the restriction causing Nationwide’s harm was covered by the ALTA 9 Endorsement and not expressly excepted on Schedule B. The district court then ruled in favor of Nationwide. The Third Circuit affirmed and remanded for determination of damages owed Nationwide, relying on the plain language of the ALTA 9 rather than deferring to industry custom and usage. View "Nationwide Life Ins. v. Commonwealth Land Title Ins. Co." on Justia Law

Andrews was designated as contractor for improvements to the sewage system, in a no-bid process involving kickbacks and bribery, having made numerous false statements in the bond application package. After the contract was terminated, he submitted a claim of $748,304, based on false statements and duplicate charges. Evidence indicated that Andrews was not capable of the project work and that the entire scheme was fraudulent. He was convicted of one count of conspiracy, 18 U.S.C. 371, four counts of wire fraud, 18 U.S.C. 1343, 1346, and 2, one count of program fraud, 18 U.S.C. 666(a)(1)(B) and 2, one count of making a false claim upon the Government of the Virgin Islands, 14 V.I.C. 843(4), and one count of inducing a conflict of interest, 3 V.I.C. 1102, 1103, and 1107. The Third Circuit affirmed the conviction, but remanded for resentencing. Errors in the indictment and jury instructions concerning honest services fraud did not affect substantial rights. Although the 151-month term of imprisonment was within the statutory maximum for Counts Two through Five, it exceeded the statutory maximum for Counts One and Six; it was not possible to determine whether the sentence was legal as to each count View "United States v. Andrew" on Justia Law

Ford provides a warranty, entitling buyers of new vehicles to have Ford repair or replace defective components at any Ford dealer, regardless of where they purchased the vehicle. Ford reimburses dealers, providing a mark-up of 40% over cost for most parts. However, under the New Jersey Franchise Protection Act, Ford must reimburse dealers for parts at the "prevailing retail rate," charged customers for non-warranty work. Ford implemented a Dealer Parity Surcharge to recoup the increased cost. Ford calculated, for each New Jersey dealer, the cost of increased warranty reimbursements and divided by the number of vehicles purchased by that same dealer. That amount constituted the surcharge added to the wholesale price of every vehicle. The Third Circuit affirmed summary judgment that DPS violated the NJFPA. Ford devised a new system, NJCS, under which Ford calculated its total cost of complying with the NJFPA and divided by the number of wholesale vehicles sold in the state. A dealer’s total NJCS increased in proportion to the number of vehicles it purchased, regardless of how many warranty repairs it submitted. The district court found that NJCS violated NJFPA. The Third Circuit reversed in part, holding that the scheme does not violate the statute. View "Liberty Lincoln-Mercury Inc. v. Ford Motor Co." on Justia Law

By their 1998 Primary Care Physician Agreement, the parties agreed that Dr. Sutter would provide primary care health services to members of Oxford's managed care network in exchange for predetermined reimbursement. They agreed to arbitrate any disputes. A dispute arose when Sutter accused Oxford of improperly denying, underpaying, and delaying reimbursement of physicians' claims. Sutter filed a complaint on behalf of himself and a class of health care providers, alleging breach of contract and other violations of New Jersey law. The state court granted Oxford’s motion to compel arbitration. The arbitrator determined that the agreement allowed for class arbitration. The arbitrator entered a Partial Final Class Determination Award. Oxford sought to vacate, arguing that the arbitrator disregarded the law by ordering class arbitration. The district court denied Oxford's motion and the Sixth Circuit affirmed. Arbitration proceeded on a classwide basis. Oxford later moved to vacated, based on the 2010 Supreme Court decision, Stolt-Nielsen S.A. v. AnimalFeeds International Corp. The district court denied the motion. The Third Circuit affirmed. The arbitrator endeavored to interpret the parties' agreement within the bounds of the law and his interpretation was not irrational. Nothing more is required under the Federal Arbitration Act. View "Sutter v. Oxford Health Plans, L.L.C." on Justia Law

The insured was driving his pickup truck when he was injured after swerving to avoid a cardboard box lying in the middle of his lane. Allstate stipulated that an unidentified vehicle dropped the box, but rejected a claim for uninsured motorist benefits and sought a declaratory judgment. The insured responded with counterclaims for breach of contract and insurance bad faith under 42 Pa. Cons. Stat.8371. The district court entered judgment for Allstate, finding that the injuries did not "arise out of ownership, maintenance or use of an uninsured auto." The Third Circuit reversed, rejecting an argument that the harm was caused by a box, not a vehicle. Physical contact with an uninsured vehicle is not required for an accident to "arise out of" the use of an uninsured vehicle. Accepting for purposes of appeal that an unidentified vehicle that dropped the box was an uninsured vehicle, there is a sufficient causal connection. The court noted that the insurance law is to be liberally construed in order to afford the greatest possible coverage to injured claimants. View "Allstate Prop. & Cas. v. Squire" on Justia Law