ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Monday, June 30, 2008

Limerick of the Week: Majestic Realty

Wrecking_ball This may not be the best Limerick I've ever composed, but I think it among my most useful.  It pretty much sums up the case and states the relevant exception to the rule that parties are generally not liable for the torts of their independent contractors.  The Limerick leaves out the court's interesting discussion of another exception -- hiring an incompetent  -- but that's dictum.

For those of you unfamiliar with the case, it involved the demolition of a building in a built-up area in Paterson, New Jersey.  The crane operator apparently swung his wrecking ball in the wrong direction, knocking the building to be demolished onto an adjacent building and causing damage.  When asked for a  explanation of his wrecking technique, the crane operator said, "I goofed."  The liability of the City of Paterson, which hired Toti, turned on whether demolition in a built-up area constituted nuisance per se, that is an "inherently dangerous activity," a question that need to be determined on remand.

Majestic Realty Assoc. v. Toti Contracting Co.

"I goofed," said the crane operator
And unwitting tort perpetrator.
The city must pay
If it's nuisance per se
To wreck first and ask questions later.

[Jeremy Telman]

June 30, 2008 in Famous Cases, Limericks, Teaching | Permalink | Comments (0) | TrackBack (0)

It Depends What You Mean By “Occupying” The Vehicle

Insurance disputes often provide the most interesting interpretation issues. Take for example this recent appellate case out of New York’s Third Department.

Plaintiff truck driver was struck by a hit-and-run driver while standing on the street in the City of Albany after unloading construction equipment from the tractor-trailer owned by his employer and insured by defendant American Home Assurance Company. Plaintiff filed a supplementary uninsured/underinsured motorist claim with American Home Assurance Co. (American) and also with defendant Nationwide Mutual Insurance Co. (Nationwide), which was his insurer. American denied the claim asserting that plaintiff was not covered by its policy because he was not "occupying" the vehicle at the time of the accident. Nationwide contended that plaintiff was covered by American and that its coverage was thus secondary.

The pertinent endorsement in American's policy provided coverage for an individual "occupying" a covered vehicle. The term "occupying" was further defined in American's policy to include "in, upon, entering into, or exiting from a motor vehicle.” The interpretation of the term “occupying” has apparently resulted in differing tests in various jurisdictions.

On cross-motions for summary judgment, the trial court determined that plaintiff was "occupying" the vehicle and, accordingly, among other things, declared that plaintiff’s injury came with in the coverage of American’s policy. American appealed. The appellate court reversed, holding that plaintiff was not occupying the vehicle at the time of the accident. The court reasoned:

Here, plaintiff was off-loading a 44,000 pound, 50-to-55 foot-long boom lift from a 70-foot tractor-trailer. The procedure involved many steps, including setting out safety cones, unchaining the boom lift, folding out and inserting pins in the jib, inspecting the basket, lowering the trailer, backing the machine off the trailer, and securing and extending axle shifts. Plaintiff had completed these steps, which he testified at his deposition typically took 20 to 30 minutes. He further testified that, after removing and readying the boom lift, he next trains the person renting it on the proper operation of the equipment, a procedure he estimated to take 30 to 35 minutes. He recalled during his testimony that, in the current situation, he had been training the person who was going to operate the equipment for 10 to 15 minutes when the accident occurred. Although the tractor-trailer reportedly remained running during the entire time and plaintiff's affidavit sets forth a more condensed time frame than his deposition for his activities at the site, it is inescapable that he was no longer vehicle-oriented. His absence from the vehicle was not intended to be brief and, at the time of the accident, he was engaged in instructing the lessee about the operation of the delivered equipment. Under such circumstances, he was no longer "occupying" his employer's vehicle.

Because American did not cover plaintiff, this meant that Nationwide was on the hook.

Faragon v. American Home Assur. Co., --- N.Y.S.2d ----, 2008 WL 2278093 N.Y.A.D. 3 Dept. (June 5, 2008).

[Meredith R. Miller]

June 30, 2008 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Friday, June 27, 2008

Contracts Prof Snubbed in New Collection of Limericks

Limerick Limericks seem to be in the news a lot lately. 

As reported in the Washington Times, Ernest W. LeFever has just published Liberating the Limerick, which includes 230 representative examples of the undersigned's preferred poetic form, contributed by over fifty writers, not including the undersigned. Those of you interested in purchasing the book can find it available for purchase here.  You may note that the book has been criticized on the Amazon website for its principles of selection, although the exclusion from the collection of the works of the author of the (still unpublished) collection, Limericks for Lawyers, is not a part of the criticism. 

Thanks so very much to my colleague, Zachary Calo, who took time off from work on his seventh doctoral dissertation (which is really remarkable when you consider that he is only 23 years old) to send me cheering news of the revival of interest in the Limerick.

[Jeremy Telman]

June 27, 2008 in In the News, Limericks | Permalink | Comments (0) | TrackBack (0)

Thursday, June 26, 2008

The Newest Investment Vehicle: "Personal Seat Licenses"?

How are football franchises managing to raise money for their new stadiums? Well, if the local city and state legislators won't pony up tax dollars, one option is to sell "personal seat licenses" ("PSLs") to well-healed and die-hard fans. The Jets are apparently contemplating whether to issue such licenses when they move into their new billion dollar stadium in 2010. Unlike season tickets, the Jets would license the rights to the seats. The licenses seem to have a perpetual duration (or, at least, certainly last beyond one season) and may carry a $30,000 price tag. The NY Post explains:

The most expensive package is for lower level seats, where the Jets would charge $5,000 up front, then $5,000 a year for five years in PSL fees. The season ticket itself would cost $1,650 a year. The cheapest option is in the upper level corner, where seats cost $200 down, $200 a year for five years and $1,000 a year for the ticket itself.

Plus, the license is transferrable, which could turn out to be a wise investment:

PSLs have also proven to be a wise investment for deep-pocketed fans. For example, the Panthers - whose seat licenses were sold in 1996 for between $600 and $5,400 each - are currently selling PSLs for $3,000 to $20,000 on Internet auction site eBay.

I am not much of a sports fan, so please forgive any ignorance reflected in this post, but that is a pretty good ROI.

[Meredith R. Miller

June 26, 2008 in In the News | Permalink | Comments (0) | TrackBack (0)

Duke Football Wins!!!

Duke_football At left is the Wallace Wade Stadium, home to the Duke Blue Devil football team and site of the 1942 Rose Bowl.  These days, Duke isn't really thinking Rose Bowl.  Or any bowl really.  According to the Louisville Courrier-Journal, Duke football has achieved a record of 6-45 in its last five seaons, which may be why Duke opted out of a contract to play the University of Louisville football team in 2007, 2008, and 2009.

According to press reports, the two teams agreed to play four times, but after the 2002 game, in which Duke football came in a distant second, Duke opted out of the remaining games.  The contract called for damages of $150,000 unless Louisville could line up a game against an opponent "of similar stature."  Duke's lawyers persuaded the court that Duke's team is so bad that any college football team would qualify as "of similar stature" and the court threw out Louisville's $450,000 breach of contract claim.

HT: Stetson's James W. Fox, Jr.

[Jeremy Telman]

June 26, 2008 in In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 25, 2008

Judge Demeans Himself: Composes Legal Limerick

For some reason, my co-blogger Meredith Miller thinks I ought to be the one to blog about an opinion recently issued by Judge Berle M. Schiller of the U.S. District Court in Philadelphia.  The full report on the case is available for subscribers to the New York Lawyer here.  The rest of you will have to do with my synopsis of the report.

The case, Sullivan v. Limerick Golf Club Inc., involved a brawl at the Golf Club's bar, the Sand Trap.  Plaintiff Sullivan alleged that the club was liable because it served his alleged assailant drinks after the latter was already visibly intoxicated.  The club tardily moved to implead the allaged assailant in violation of F.R.C.P. 14, leading the Judge to quip:

"Unfortunately for Limerick, their sub-par performance occurred in the pleading stage of this case and not on the golf course."  Already drunk with his own wit, the judge then summarized his holding as follows:

With arguments hard to resist,
The movant correctly insists,
His joinder was tardy,
And so the third-party
Complaint is hereby dismissed.

In my view, this opinion sets a bad precedent.

[Jeremy Telman]

June 25, 2008 in In the News, Limericks, Recent Cases | Permalink | Comments (3) | TrackBack (0)

Tuesday, June 24, 2008

Would You Really Want Credit for this Idea?

Corey Feldman and Corey Haim are out of the spotlight, but that's nothing a little car-wreck-reality-tv can't temporarily fix (see, e.g., VH1's Surreal Life). The two former childhood stars have been sued for $1 million in L.A. Superior Court based on claims of breach of contract, unjust enrichment, unfair competition and fraud.

Feldman and Haim allegedly agreed to star in a reality show with writers David Pullano, Matthew Odgers and Jeff McCarthy. The show, entitled "The Two Coreys," would focus on their attempts to regain the spotlight. But, before the writers could pitch the show to TV networks, the Coreys allegedly sold the show to A&E without the writers.

As you might imagine, the show is apparently "hard to watch." While some may have only "vaguely heard of the show", the lawsuit does bring it some publicity. And, with a sleeper reality tv concept like this (apparently it just started its second season), it seems that any publicity is, well, good publicity.

[Meredith R. Miller]

June 24, 2008 in In the News | Permalink | TrackBack (0)

Change in Reporting Relationship Entitles Ex-President/CEO to Severance Payments

A trial judge in New York recently granted plaintiff C. Richard Stafford summary judgment, holding that his former employer breached his employment contract by failing to make severance payments.

Scientia Health Group, Inc., is a venture capital firm that invested in the medical and biotech fields. In the spring of 2002, Dr. Samuel Waksal (yes, of IMClone/Martha Stewart fame), then Scientia's executive chairman, recruited Stafford to become president of Scientia. In June 2002, Stafford and Scientia entered into an Executive Employment Agreement, which provided the terms of Stafford's employment as president and chief operating officer of Scientia. Under the Agreement, Stafford was to "report to the Chairman of the Company," and he had "primary authority for the day-to-day financial administration and operations of the Company."

Under the Agreement, Stafford was entitled to a healthy severance payment in the event that he terminated "his employment for Good Reason or the Company terminates [his] employment without Cause." This provision also entitled Stafford "to continue to participate in all health, life and disability insurance plans in which he participated immediately prior to the Date of Termination," during the period that he was entitled to receive severance. The Agreement defined "Good Reason" as any of the following, without Stafford's "express written consent":

(i) [Stafford] shall not have the title or reporting relationship as set forth in Section 1.2 hereof;

(ii) the assignment to [Stafford] of any duties that are materially inconsistent with, or a substantial alteration in the nature or status of, [Stafford's] position, authority or responsibilities or the conditions of his employment;

(iii) the failure of the Company to pay [Stafford] any compensation or provide other benefits as specified in Section 2 or 5 of this Agreement . . . .

In July 2002, Waksal resigned as chairman of Scientia. Scientia did not appoint a replacement for Waksal. In February 2003, Stafford tendered his resignation, purportedly for "Good Reason" under the Agreement. The trial granted Stafford summary judgment, holding that the change in reporting relationship constituted "good reason" for Stafford's resignation and entitled him to severance payments under the Agreement.

This is only a brief recap of a larger picture: here's a summary from the NYLJ.

Stafford v. Scienta Health Group, 600666/03 (Supreme Court, New York County, June 9, 2008).

[Meredith R. Miller]

June 24, 2008 in Recent Cases | Permalink | TrackBack (0)

Further, on Consideration

Mwessman When it comes to the doctrine of consideration, Tulane University School of Law's Mark Wessman (pictured) is a one-man wrecking crew.  His latest assault on the doctrine, Recent Defenses of Consideration:  Commodification and Collaboration, can be found in the Indiana Law Review -- specifically at 41 Ind. L. Rev. 9 (2008).  Here's the abstract from SSRN:

In this article, Professor Wessman supplements his previous criticism of the traditional requirement of consideration in contract law. Specifically, he addresses innovative arguments by Professors Eisenberg and Markovits, respectively, that aspects of that traditional requirement are supported by notions of commodification and collaboration. Ultimately, he concludes that neither of those theoretical concepts provides an adequate basis for a defense of the classical rules pertaining to consideration.

[Jeremy Telman]

June 24, 2008 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Monday, June 23, 2008

Now in Print: When Tomorrow Has Arrived

Lately, SSRN is all the rage. The popularity of SSRN makes sense given that, as it promises, it brings us "tomorrow's research today." And, given that it can sometimes take over a year from manuscript submission to law review publication, it often seems like tomorrow may never come.

Don't get me wrong, I love the quick and early access of SSRN. But, I am also nostalgic for final, print versions of papers. Plus, for various reasons, SSRN does not capture all available papers. So, I thought we could add a weekly feature called "Now in Print." With the help of my SmartCILP feed, these post will list the contact-related scholarship that has just been made available in print. So, here, we'll bring you today's research, well, within the week.

- Sarah Baumgartel, Nonprosecution Agreements as Contracts: Stolt-Nielsen and the Question of Remedy for a Prosecutor's Breach, 2008 Wis. L. Rev. 25-68.
- John J. Chung, Promissory Estoppel and the Protection of Interpersonal Trust, 56 Clev. St. L. Rev. 37-82 (2008).
- Rachel S. Conklin, Student article, Be Careful What You Click For: An Analysis of Online Contracting, 20 Loy. Consumer L. Rev. 325-347 (2008).
- Benjamin Klein and Joshua D. Wright, The Economics of Slotting Contracts, 50 J.L. & Econ. 421-454 (2007).
- David T. Robinson and Toby E. Stuart, Financial Contracting in Biotech Strategic Alliances, 50 J.L. & Econ. 559-595 (2007).
- Symposium: Governing Contracts--Public and Private Perspectives. Osgoode Hall Law School, Toronto, November 9-10, 2006. Introduction by Peer Zumbansen; articles by Peer Zumbansen, Marc Amstutz, Andreas Abegg, Vaios Karavas, Peter Vincent-Jones, Alfred C. Aman, Jr., Karl-Heinz Ladeur, Andreas Maurer, Luke Nottage, David V. Snyder, Ralf Michaels and Graf-Peter Calliess; reply by David Campbell, 14 Ind. J. Global Legal Stud. 181-483 (2007).

Happy reading!

[Meredith R. Miller]

June 23, 2008 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Limerick of the Week: Manning v. Grimsley

Fenway_2 Above is a picture of Fenway Park (actual size!), site of Ross Grimsley's immortality as an icon of scope of employment doctrine.  On September 16, 1975, some Red Sox fans were doing their best to encourage Grimsley, who was warming up to pitch for the Baltimore Orioles.  Grimsley was so grateful to the Boston faithful that he decided to provide them with a souvenir.  He hurled a baseball into the crowd.  It penetrated the protective netting and struck plaintiff, who then sued Grimsley and his team (but not, for mysterious reasons, the obviously negligent Red Sox who failed to maintain the protective netting). 

The liabiility of the Baltimore Orioles turned on whether Grimsley was acting within the scope of his employment at the time of his mis-directed pitch.  In Massachussetts, a servant acts in the scope of employment if, among other things, her use of force is in response to conduct from the planitiff that "presently interferes" with the servant's duties.  The court found that the heckling during Grimsley's warm-ups was indeed a present interference with Grimsley's work and thus held that the Orioles could be vicariously liable for Grimsley's tort.

Manning v. Grimsley

A reliever awaiting deployment
May act in the scope of employment
If he throws some high heat
At a fan in his seat
Unless for his own sheer enjoyment.

[Jeremy Telman]

June 23, 2008 in Famous Cases, Limericks, Teaching | Permalink | Comments (0) | TrackBack (0)

When Worlds Collide

SupernovaLately, I've been feeling a bit guilty about posting my business associations Limericks on a contracts blog.  But now Emory Law School's Professor Frederick Tung (pictured below the supernova) has solved my problems with an article posted on SSRN and entitled: The New Death of Contract: Creeping Corporate Fiduciary Duties for Creditors.  I am indebted to Professor Tung for showing how business associations law often relates to fundamental contracts issues and for showing the consequences of the collision involving these two realms of legal doctrine.
The abstract from SSRN is posted below:

TungThe article identifies a worrisome trend in corporate law and scholarship. Across seemingly unrelated issue areas, courts and scholars have lost faith in private corporate bargains. They invite judicial intervention into private contract, proposing to expand fiduciary duties beyond their traditional shareholder centered focus to protect non-shareholder claimants from managerial opportunism. When conflict between claimant classes becomes acute, managers pursuing shareholder value may make inefficient investments that benefit shareholders but harm other claimants and the firm generally. I argue that claimants' private contracts with the firm are superior to expanded duty for constraining this opportunism.

 I focus on one specific conflict - the conflict between shareholders and creditors. Existing doctrine already works a shift in fiduciary duties to creditors when this conflict becomes acute - when a firm becomes insolvent. Scholars propose to expand on current doctrine to include more creditors more of the time. I argue that both existing doctrine and its proposed expansions suffer fatal theoretical infirmities. The chief failing is that the accepted hypothetical bargain analysis from which corporate fiduciary duty derives cannot justify current doctrine or expansion proposals. Expanded duty to creditors is also costly compared to private contract.
I propose an approach I call contract primacy. Shareholder primacy should remain the default rule. Private contracting should be effective to curb manager opportunism. Additional legal constraints are costly and unnecessary. Sophisticated creditors typically negotiate elaborate covenant protections by the time a firm is in distress, often to the benefit of other creditors, who implicitly delegate monitoring responsibilities to the low cost monitor. A creditor may even negotiate for control of the firm, displacing shareholder primacy. Against the current doctrine and conventional wisdom, courts should vindicate these contracts for creditor primacy without insisting on the firm's insolvency. The doctrine should be abandoned, and proposals for further expansion of fiduciary duty for creditors should be rejected.

[Jeremy Telman]

June 23, 2008 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Friday, June 20, 2008

A Mind-Bending Ruling on the Status of eBay Sales

Uri_geller1Uri Geller (pictured) was once famous for bending spoons and other objects with his mind.  Does the fact that I have to tell you what he was famous for mean that he is no longer famous?  In any case, Geller has grabbed the spotlight again, this time with a breach of contract claim that has resulted in an interesting legal opinion about the status of e-Bay auctions.  I have not yet been able to locate the opinion, so I am relying on the AP report

According to that report, Geller and his partners bid just over $900,000 in a 2006 eBay auction for a Memphis home where Elvis Presley once resided .  The owners of the home ended up selling it for over $1 million to a Nashville record producer.  According to the BBC, always an authority on Elvis-related matters, Geller described himself as "mind-blown angry" over the sale.  The BBC might have added that since learning the news, the mind-blown Geller has been unable to bend a single spoon!  But I digress.

Chief Judge Jon McCalla of the Western District of Tennessee ruled that there was no actionable breach of contract by the sellers because Geller and his partners had already breached by altering the closing terms.  In addition, and this is what I find interesting, if the AP report is accurate, Judge McCalla ruled that the eBay auction in which Geller participated was more a means of advertising the home than a vehicle of binding sale.

If anyone can contribute a link to the actual opinion, I would appreciate it.

HT:Hazel Glenn Beh

[Jeremy Telman]

June 20, 2008 in Celebrity Contracts, In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

A Fault-Line Drawn in Contracts Theory

CohenThe University of Virginia Law School of Law's George M. Cohen has a new article out challenging conventional wisdom regarding contract law as a system of strict liability.  The piece, The Fault that Lies within Our Contract Law, was written for a University of Michigan Law School symposium on contract and fault and is forthcoming in the Michigan Law Review.  But those who can't wait can download the article here.

I have been toying with the idea of doing some legal scholarship on a pet theory of mine that damages in promissory estoppel cases are sometimes a form of punitive damages because courts award full expectation damages when the theory of harm is based on reliance but reliance damages would be paltry.  Professor Cohen's scholarship suggests that my theory (which may not be original, or in any other sense "mine" for all I know) might be just one small piece of a broader picture, so I am happy to learn of it.  The abstract of the article is presented below:

Scholars and courts typically describe and defend American contract law as a system of strict liability, or liability without fault. Strict liability generally means that the reason for nonperformance does not matter in determining whether a contracting party breached. Strict liability also permeates the doctrines of contract damages, under which the reason for the breach does not matter in determining the measure of damages, and the doctrines of contract formation, under which the reason for failing to contract does not matter.

In this essay, prepared for a symposium on Fault and Contract Law sponsored by the University of Michigan School of Law and to be published in the University of Michigan Law Review, I take issue with the strict liability paradigm, as I have in my prior work on contract law. In my view, the theoretical justifications for strict liability as a general paradigm for contract law oversimplify contractual intent, the relationship between intent and fault, and the nature of contractual fault. Moreover, the strict liability label is descriptively misleading, once one dips even slightly below the surface of contract doctrine. Fault shows up throughout contract law. Efforts to make contract law conform more to the strict liability paradigm and exorcise fault are wrongheaded. In any case, such efforts are doomed to fail. Fault may not be the dominant feature of contract law, but it plays an inherent, invaluable, and ineluctable supporting part. The strict liability impulse occurs when contract intent, contract terms, and contract doctrine coincide with a persuasive story of promisor fault, and when the consequences of strict liability are blunted because the promisor can easily mitigate them. But strict liability, like other contract rules, is merely a fault-based presumption. Determining the limits of that presumption means considering why parties make contract and why they do not perform them, in other words, fault. Courts and scholars should would do better to acknowledge the role of fault and think about how to use fault more effectively within the framework of contract doctrine.

[Jeremy Telman]

June 20, 2008 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 18, 2008

And Speaking of FOX Television . . .

Paula_abdul_1Fox's megahit American Idol has a problem, and for once, it's not Paula's fault.  No, this time the Associated Press is reporting that the problem is with management.  The American Federation of Musicians, a musicians' union, is suing the producers of the program, claiming that they were underpaid because the shows music was re-recorded for reruns.

Here is the AP's summary of the nature of the suit:

That contract says the show's musicians should be paid royalties for rebroadcasts of the show, the lawsuit said.

The producers are required to pay 75 percent of scale to musicians who appear in the original show and rehearsals, plus 10 percent of that pay to a union pension fund, with decreasing percentages for each rebroadcast, according to court papers.

In 2007, the producers started cutting out the show's soundtrack and using different musicians to re-record new music for the past-season highlights show "American Idol Rewind," the lawsuit said.

I am genuinely curious about the backstory here.  Why would the producers go to the trouble of hiring new musicians and re-recording the music?  After all, the musicians' salaries and benefits must be de minimis in the grand scheme of things.

[Jeremy Telman]


June 18, 2008 in In the News | Permalink | Comments (0) | TrackBack (0)

Writers Walk at Fox

FoxBack when The Simpsons was fresh and funny, they had an episode in which Bart and Lisa write an episode of Itchy and Scratchy for the Krusty the Clown show.  Realizing that nobody at the networks will take them seriously as a couple of kids, they decide to use Grandpa Simpson's name.  Unfortunately they don't know his name.  They ask him, and he can't remember, but whenever he can't remember his name, he just checks his underwear.  Then comes the following priceless dialogue:

Grandpa; Call me (pulling his underwear out of his pants). . . Abraham Simpson.
Lisa: Grandpa, how did you take off your underwear without taking off your pants?
Grandpa: I don't know.

I love that exchange, but it's not really relevant.  What is relevant is that when Lisa proposes that she and Bart write a script for a cartoon, he responds, "Cartoons have writers?!?"  "Sort of," she replies.  Now you might remember that joke (or a variation of it) from any number of subsequent Simpsons episodes, but that's just because they've been recycling old material for at least ten years.  Believe me, it was genuinely funny in 1993.  Today, not so much.

But oddly enough, it turns out that cartoons really do have writers and now some of those writers are on strike.  The New York Times reports that writers for a new Fox animated series about a high school, Sit Down, Shut Up walked off the job last Wednesday.  They had been working without a contract, and Sony Pictures Television, which is producing the series, just notified them that the show is not covered under the agreement recently negotiated by the Writers Guild of America. 

Now just what has become of writers?  If they're so talented, why don't they just write themselves a contract.  These guys don't even seem to have the creativity of the fictional cartoon writer characters on The Simpsons.  Those guys would have dropped an anvil on the heads of the Sony Pictures executives.  Or perhaps they would draw what looks like a tunnel on a brick wall so that the Sony executives would repeatedly walk into it.  And then when the Sony boys finally realize that it's still a brick wall, a train would come through the tunnel and run them down.  Now that's good writing!!

[Jeremy Telman]

June 18, 2008 in In the News, Labor Contracts | Permalink | Comments (0) | TrackBack (0)

Tuesday, June 17, 2008

Held: No Contractual Right to Single-Sex Education

Logo Back in April, my able co-blogger noted the AP's reporting on the oral argument in Dodge v. Trustees of Randolph-Macon Woman's College.  In Dodge, a group of female students sued the college for breach of contract after its trustees decided to "transition from a predmoninantly female educational insitution to a coeducational college."  The Supreme Court of Virginia recently held that the plaintiffs failed to state a claim for breach of contract based on male enrollment in the college

The plaintiffs alleged that

when they “accepted [the College's] offers of admission, paid tuition and other fees, and registered for classes, a contract was formed between them and the [College], which ... included the promise, both express and implied, that if [the plaintiffs] paid the tuition and fees and enrolled at [the College], they would receive a four-year liberal arts education at a woman's college.” The plaintiffs allege that they reasonably expected that the College would continue to offer “the curriculum plan as advertised in the college catalog and other promotional materials upon which Plaintiffs relied when choosing” to attend the College. Continuing, the plaintiffs state that “[a]dditional terms of the contracts are within the various official [College] publications, including promotional materials, the [H]onor [C]ode, the student handbook, the academic catalog, correspondence between [the College] and the students, and the [C]ollege's policies and regulations.”

They further alleged that, when the Trustees voted to allow male students to enroll in the college, that contract was breached.  The college filed a demurrer, asserting that the plaintiffs failed to identify or plead the existence of a contract between plaintiffs and the college.  The Virginia court agreed with the defendant College, holding that "plaintiffs failed to plead the existence of a clear, definite, and explicit contract between the plaintiffs and the College that required the College to provide a four-year education for the plaintiffs in an academic environment predominantly for women."  The court reasoned:

A contract must be sufficiently definite to enable a court to give the contract an exact meaning, and the contract must obligate the contracting parties to matters that are definitely ascertained or ascertainable. * * * A contract is not valid and it is unenforceable if the terms of the contract are not established with reasonable certainty. * * *

Applying the aforementioned principles, we hold that the plaintiffs failed to plead facts, which if established at trial, would demonstrate the existence of a contract that required the College to operate an academic institution predominantly for women during the four years that the plaintiffs expected to attend the College. Even though the plaintiffs referenced numerous documents, this Court, just as the circuit court, has reviewed the documents and can find no such promise. There is no language in any of these documents in which the College made a clear, definite, and specific promise to operate a college predominantly for women during the duration of the plaintiffs' academic studies at the College. Thus, we hold that the plaintiffs failed to plead the existence of a contract between the parties.

Contrary to the plaintiffs' contentions, the College's articles of incorporation do not form the basis of a contract between the students and the College. By its very nature, the articles of incorporation do not contain a clear, definite, and explicit agreement among the parties to the alleged contract.

The two-judge dissent did not dipsute the legal principles stated by the majority, but disagreed with the majority's application of the those principles to the facts.  In light of evidence of numerous communications espousing a single-sex educational environment (such as promotional materials and acceptance letters), the dissent would have held that the plaintiffs presented sufficient evidence to survive demurrer.

Dodge v. Trustees of Randolph-Macon Woman's College, ___ S.E.2d ___, 2008 WL 2312509 (Va. Jun. 6, 2008).

[Meredith R. Miller]

June 17, 2008 in Recent Cases | Permalink | TrackBack (0)

Oregon Politician Liable For Breach of Contract, Inter Alia

Oregon According to The Oregonian, Craig Berkman "cut quite a figure" for years in Oregon politics.  Jeff Mapes reports that Berkman was a big donor in national Republican circles, the chair of the Oregon Republican party, and the great hope for the future among moderate Oregon Republicans until a string of electoral defeats in the 1990s. 

Alas, even in Oregon (an underrated state, in my view), politics can have its seedy side.  Last month, Berkman took the stand and tearfully admitted that he lied to investors about the assets of his venture capital fund in order to attract new funds.  He told investors that he personally had $25 million in assets when he was in fact in debt to the tune of $5 million.  Today, he claims to be nearly $12 million in the red, according to The Oregonian, but that claim might be to Berkman's benefit now, since he faces a $28 million judgment, including punitive damages, for theft, negligence and breach of contract.

Plaintiffs were trying to recover $75 million invested in Berkman's ventures.  They probably won't be recovering much from Berkman himself.  Fortunately, there was also a judgment against the non-defunct accounting firm, Arthur Andersen, that may be a source of some recovery.

[Jeremy Telman]

June 17, 2008 in In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Secret Contracts for 50 U.S. Military Bases in Iraq?

Bush_goofyAs reported in the Asian Times Online, various representatives of the Bush administration have been saying for some time that the United States has no interest in "permanent" military bases in Iraq.  Whew.  That's a relief.  However, according to an editorial in Saturday's New York Times, Still President Bush is "insisting on keeping more than 50 long-term [military] bases in Iraq." 

But the Bush administration has reached an impasse with the Iraqi government, according to a report in The Telegraph.  Iraqi Prime Minister Nouri al-Maliki said that negotiations over future U.S. operations in Iraq were at a stalemate because the United States was making demands that he regarded as an intrusion on Iraqi sovereignty.  The matter needs to be settled before a U.N. resolution authorizing the presence of the U.S. military in Iraq expires at the end of the year.  The administration has not shared details of the negotiations with Congress because, as innumerable news organizations have reported, it's a secret.  Shhhhhh!

[Jeremy Telman]

June 17, 2008 in Government Contracting, In the News | Permalink | Comments (0) | TrackBack (0)

Monday, June 16, 2008

Relationship Negotiation: Why Wait for the Pre-Nup?

WSJ Law Blog reports that Valleywag (self-described as "Silicon Valley's Tech Gossip Rag") reports on a supposed agreement between Facebook founder Mark Zuckerberg and his girlfriend. Apparently, when Zuckerberg's girlfriend moved to Silicon Valley, the couple penned a contract to govern their dating. The "final contract" purportedly contained the following clause:

One date per week, a minimum of a hundred minutes of alone time, not in his apartment and definitely not at Facebook.

Specifically enforceable? What are the damages for breach? Perhaps early negotiations are meant to take the sting out of the billionaire's eventual request for a pre-nuptial agreement if and when the relationship approaches marriage (i.e., it is never too early to negotiate). At the same time, if you need a written, formalized agreement concerning entitlement to a minimum number of "alone time" minutes, what does that say about your relationship? Perhaps, again, this is simply contract as metaphor or perhaps as a tool to initiate communication.

[Meredith R. Miller]

June 16, 2008 in In the News | Permalink | TrackBack (0)