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

Relying on an advertiser’s claim that its fax advertising program complied with the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, Stevens & Ricci allowed the advertiser to fax thousands of advertisements to potential customers on its behalf. More than six years later, Hymed filed a class action TCPA lawsuit, which settled with a $2,000,000 judgment against Stevens & Ricci. While that suit was pending, Auto-Owners sought a declaratory judgment, claiming that the terms of the insurance policy it provided Stevens & Ricci did not obligate it to indemnify or defend Stevens & Ricci in the class action. The Third Circuit affirmed summary judgment, finding that the sending of unsolicited fax advertisements in violation of the TCPA did not fall within the terms of the insurance policy. The “Businessowners Insurance Policy” obligated Auto-Owners to “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’, ‘property damage’, ‘personal injury’ or ‘advertising injury’ to which this insurance applies.” The “advertising injury” deals only with the publication of private information, View "Auto-Owners Ins. Co. v. Stevens & Ricci Inc" on Justia Law

Between 2002-2006, Lucht purchased treated lumber for a deck on his vacation home in the Virgin Islands. The lumber allegedly decayed prematurely and he began replacing boards in 2010; he claims he did not discover the severity of the problem until the fall of 2011. Lucht sued the retailer, wholesaler, and treatment company of the lumber in February 2013, alleging a Uniform Commercial Code contract claim; a common law contract claim; a breach of warranty claim; a negligence claim; a strict liability claim; and a deceptive trade practices claim under the Virgin Islands Deceptive Trade Practices Act. The district court rejected the claims as time-barred. The Third Circuit affirmed, citing the “‘gist of the action doctrine,” which bars plaintiffs from bringing a tort claim that merely replicates a claim for breach of an underlying contract. View "MRL Dev. I, LLC v. Whitecap Inv. Corp" on Justia Law

Hamilton Park, a long-term care facility, belonged to a multi-employer bargaining group, Tuchman. Tuchman and the employees' union agreed to a CBA beginning in 2008 and extending through February 28, 2013, giving the union the option to reopen negotiations in November 2011 to bargain for new terms for the CBA’s last year and to submit any unresolved items to binding interest arbitration, and allowing the arbitrator to “determine his jurisdiction” and grant “all appropriate remedies.” In 2011, the union invoked its right to reopen negotiations. The parties agreed to arbitrate unresolved issues, including the cost to maintain the existing health benefits. The arbitrator, Scheinman, suggested a multi-year award to spread increased contributions over a longer period. Scheinman claims that “[b]oth sides [orally] agreed my jurisdiction permitted a multi-year Award, at my discretion.” In 2012, Scheinman issued an award that extended through June 2016, dealing with wages and health benefits contributions, and allowing the union to reopen negotiations for the contract’s last year. Scheinman did not address why he included a second generation interest arbitration provision, nor did he claim that the parties consented. Hamilton Park petitioned to vacate the award, arguing that Scheinman exceeded his authority. The Third Circuit reversed in part. Hamilton Park agreed to expand Scheinman’s jurisdiction to a multi-year award, but did not agree to inclusion of a second generation interest arbitration provision. View "Hamilton Park Health Care Ctr., Ltd.v. 1199 SEIU United Healthcare Workers E." on Justia Law

Hamilton Park, a long-term care facility, belonged to a multi-employer bargaining group, Tuchman. Tuchman and the employees' union agreed to a CBA beginning in 2008 and extending through February 28, 2013, giving the union the option to reopen negotiations in November 2011 to bargain for new terms for the CBA’s last year and to submit any unresolved items to binding interest arbitration, and allowing the arbitrator to “determine his jurisdiction” and grant “all appropriate remedies.” In 2011, the union invoked its right to reopen negotiations. The parties agreed to arbitrate unresolved issues, including the cost to maintain the existing health benefits. The arbitrator, Scheinman, suggested a multi-year award to spread increased contributions over a longer period. Scheinman claims that “[b]oth sides [orally] agreed my jurisdiction permitted a multi-year Award, at my discretion.” In 2012, Scheinman issued an award that extended through June 2016, dealing with wages and health benefits contributions, and allowing the union to reopen negotiations for the contract’s last year. Scheinman did not address why he included a second generation interest arbitration provision, nor did he claim that the parties consented. Hamilton Park petitioned to vacate the award, arguing that Scheinman exceeded his authority. The Third Circuit reversed in part. Hamilton Park agreed to expand Scheinman’s jurisdiction to a multi-year award, but did not agree to inclusion of a second generation interest arbitration provision. View "Hamilton Park Health Care Ctr., Ltd.v. 1199 SEIU United Healthcare Workers E." on Justia Law

In 2001, Furnival and its insurer agreed to a Pollution and Remediation Legal Liability Policy, detailing $10 million in liability protection; a 10-year coverage period; and insurance coverage for 12 Furnival locations, including the Elizabethtown Landfill Site, which Furnival was obligated to clean up under a consent decree with the federal government. Insurer knew about the consent decree when the Policy issued. The Policy Endorsements list five reasons for which insurer may “refuse to offer a renewal extension of coverage,” and states that insurer “shall not cancel nor non-renew this Policy except for the reasons stated above.” None of the listed reasons for non-renewal occurred. In 2006, the parties increased the Policy’s limit to $14 million. After the term expired, insurer sent Furnival’s insurance broker its version of a renewal offer, providing $5 million of coverage over a one-year term, omitting coverage for Elizabethtown, the only previously insured site for which Furnival had made a claim, refusing to renew the same terms. The Third Circuit vacated a ruling in favor of insurer, holding that, for a contract to be considered a renewal, it must contain the same, or nearly the same, terms as the original contract. View "Indian Harbor Ins. Co v. F&M Equip., Ltd" on Justia Law

Witasick was covered by a disability policy and a business overhead expense policy. His claims against both policies were honored. A dispute arose concerning coverage of some claimed business expenses. After years of negotiation, the parties settled: the insurer agreed to pay more than $4 million and Witasick agreed to release known, unknown, and future claims. The settlement contained a covenant not to sue, based on “any conduct prior to the date the Parties sign this document, or which is related to, or arises out of” the policies. During negotiations, the U.S. Government notified Witasick that he was the target of a grand jury investigation related to fraud and business expense claims on his income tax returns. Witasick was indicted in 2007. To support its charge of mail fraud, the government relied on information and documents Witasick had submitted to the insurer. An employee of the insurer testified before the Grand Jury and at Witasick’s trial. Witasick was convicted on most counts, but acquitted of mail fraud, and was sentenced to 15 months’ imprisonment. In 2011, Witasick sued the insurer based on the policies and cooperation with the prosecution. The Third Circuit affirmed dismissal, finding the claims prohibited by the settlement agreement. View "Witasick v. Minn. Mut. Life Ins, Co." on Justia Law

Brand developed Thermablaster, a vent-free heater, to be manufactured by a Chinese company, Reecon. Reecon suggested using Intertek testing to ensure the heaters met U.S. safety standards. Brand spoke with Intertek representatives and visited the company’s website to ensure that Intertek could test to American National Standards Institute (ANSI) standards. Satisfied that Intertek’s China facility had the necessary expertise, Brand allowed Reecon to use Intertek for testing against the most recent applicable ANSI standard. The $22,000 testing cost was part of the per-unit price. Ace Hardware agreed to pay Brand $467,000 for 3,980 Thermablasters. Brand visited China to monitor production. Reecon gave Brand an Intertek document signed by its engineers, showing that the heaters had passed all relevant tests. Brand bought 5,500 heaters and delivered them to Ace. Ace began selling the heaters in 2011 but halted sales permanently after learning from a competitor that they did not meet ANSI standards. Ace obtained a default judgment of $611,060 against Brand. Brand sued Intertek. Intertek countersued, alleging trademark infringement because Brand had placed Intertek’s testing certification mark on boxes before receiving permission. Intertek bought Ace’s judgment against Brand for $250,000 and aggressively tried to collect before trial. The Third Circuit affirmed a verdict finding Intertek liable to Brand for negligent misrepresentation and awarding Brand $1,045,000 in compensatory and $5 million in punitive damages. View "Brand Mktg. Grp. LLC v. Intertek Testing Servs. NA" on Justia Law

Devon acquired the rights to distribute robotic medical devices, CytoCare and i.v. Station, from Robotics. DeViedma, Robotics's general counsel, negotiated the contracts. Each contained an arbitration clause. Robotics later agreed to provide management consulting services through DeViedma. DeViedma allegedly obstructed a possible sub-licensing contract with McKesson; Devon failed to make franchise payments, leading Robotics to draw down a $5 million line of credit from Itochu, guaranteed by Devon. Itochu eventually sued Devon. The parties terminated the management consulting services. Robotics terminated Devon's CytoCare contract and entered into an agreement with McKesson. Robotics also alleged breaches of the i.v. Station agreement. DeViedma e-mailed hospital customers telling them that Devon faced financial difficulties and lacked staff qualified to manage i.v. Station installations. Devon sued DeViedma and McKesson, claiming breach of fiduciary duty, tortious interference with current and prospective contractual relations, defamation, and conspiracy. The court rejected a motion to dismiss in favor of arbitration. DeViedma did not appeal that order. Extensive litigation followed. DeViedma later moved for summary judgment on the remaining claims for breach of fiduciary duty and tortious interference with contractual relations. The court rejected his arguments in favor of arbitration. The Third Circuit dismissed DeViedma’s interlocutory appeal, rejecting an argument that the denial of summary judgment was an appealable order under the Federal Arbitration Act, 9 U.S.C. 16(a)(1)(C). View "Devon Robotics LLC v. DeViedma" on Justia Law

Realtor Willis planned Southgate, involving the purchase of 68 acres on St. Croix, re-zoning, subdivision, building infrastructure, and selling individual lots. Willis worked with defendants Cheng and Dubois and their entities (OMEI, Ocean View) for financing, but the defendants did not actually intend to develop the property. Pollara, a 47-year veteran of the construction industry, was hired to create the subdivision’s entrance. Ultimately Cheng and Dubois stopped paying Pollara and locked him out of his site office. Pollara was never paid for repair work to the roadway after flooding. Defendants, standing on both sides of the financing, refused any extension of the financing terms; they withheld their consent to selling the land at a profit to a buyer whom Willis had found. They caused Ocean View to foreclose, acquiring the property free of Willis’s and Pollara’s interests. The jury found that Ocean View and Cheng had made intentional misrepresentations and that OMEI had made negligent misrepresentations and that Dubois had made negligent misrepresentations with respect to the building permit and proposals for the development plan, and intentional misrepresentations as to the other three subjects. The jury awarded Pollara compensatory damages of $391,626 from all of the defendants and punitive damages of $90,000 against Cheng. The Third Circuit affirmed. View "Frank C Pollara Grp. LLC v. Ocean View Inv. Holding, LLC" on Justia Law

The Torres own land and a house in Mantoloking, New Jersey, that was covered by a National Flood Insurance Program Dwelling Form Standard Flood Insurance Policy (SFIP) issued by Liberty under the National Flood Insurance Act. The National Flood Insurance Program “is underwritten by the United States Treasury in order to provide flood insurance below actuarial rates.” The Torres’ property sustained substantial damage during Hurricane Sandy, and they submitted claims under the SFIP for that damage to Liberty. Liberty administered a total payment1 to the Torres of $235,751.68, which included the cost of removing debris from their house. The Torres sought an additional payment of $15,520 for the cost of removing sand and other debris deposited on their land in front of and behind their house. Liberty denied that claim on the ground that the SFIP does not cover it. The Third Circuit affirmed judgment in Liberty’s favor. The SFIP provides coverage for structures and other items of property but not for an entire parcel of land; the provision requiring Liberty to pay for removal of non-owned debris that is “on or in insured property” does not apply to expenses incurred in removing non-owned debris from land outside the home. View "Torre v. Liberty Mut. Fire Ins. Co." on Justia Law