Justia U.S. 4th Circuit Court of Appeals Opinion Summaries

Articles Posted in Contracts
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In this appeal, the court considered the enforceability of an arbitration clause included in a franchise agreement between plaintiff and Shuttle Express. The court concluded that the Supreme Court's recent decision in AT&T Mobility LLC v. Concepcion required reversal of the district court's holding that the class action waiver in the franchise agreement was an unconscionable contract provision; the district court erred in holding that the other two challenged provisions of the franchise agreement also rendered the arbitration clause unconscionable; and therefore, the court vacated the district court's judgment and remanded for entry of an order compelling arbitration. View "Muriithi v. Shuttle Express, Inc." on Justia Law

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This appeal arose from the district court's dismissal of plaintiff's complaint against Home Loan and Deutsche Bank, alleging state law claims based on a mortgage contract. The district court determined that plaintiff's claims were preempted by the Home Owner's Loan Act (HOLA), 12 U.S.C. 1461 et seq., and its implementing regulation, 12 C.F.R. 560.2. The court concluded that plaintiff's allegations supporting her first count - that the mortgage contract was unconscionable - fell under section 560.2(b) and therefore, the court concluded that her claim was preempted and affirmed the dismissal of that claim. However, because plaintiff's state tort claim for fraud only incidentally affected lending, it was not preempted by HOLA or its implementing regulation. Therefore, dismissal of that claim on preemption grounds was unwarranted. Further, the court found no basis for dismissal of plaintiff's fraud count on Rule 12(b)(6) grounds and plaintiff's complaint met the requirements of Rule 9(b). Accordingly, the court affirmed in part and reversed in part, remanding for further proceedings. View "McCauley v. Home Loan Investment Bank, F.S" on Justia Law

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Plaintiffs brought this action in Maryland state court seeking a declaration as to Allstate's duty under a renters insurance policy to defend and indemnify plaintiffs in a tort suit brought against them, and others. On appeal, defendant challenged the district court's grant of summary judgment to Allstate, concluding that Allstate did not have a duty to defend. The court held that Maryland law applied to the issue of whether Allstate had a duty to defend plaintiffs if Maryland law would apply without the choice-of-law provision in the policy; according to Maryland's lex loci contractus rule for choice-of-law decisions, California law governed the analysis of whether Allstate had a duty to defend plaintiffs in the underlying action; and the court rejected plaintiffs' argument that Allstate nonetheless owed them a duty to defend under the policy. Accordingly, the court affirmed the judgment. View "Francis v. Allstate Ins. Co." on Justia Law

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Plaintiffs, prospective luxury home buyers, alleged that Toll Brothers, a real estate development company, unlawfully refused to return deposits when plaintiffs could not obtain mortgage financing. The district court denied Toll Brothers' motion to dismiss or stay the suit pending arbitration, finding that the Agreement of Sale's arbitration provision lacked mutuality of consideration under Maryland law because it required only the buyer - but not the seller - to submit disputes to arbitration. The court held that the appeal was properly before it under 9 U.S.C. 16(a), and that the Agreement of Sale's arbitration provision was unenforceable for lack of mutual consideration under Maryland law. Accordingly, the court affirmed the judgment. View "Noohi v. Toll Bros., Inc." on Justia Law

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Carilion initiated an arbitration proceeding against UBS and Citi under the Financial Industry Regulatory Authority, Inc. (FINRA) Rule 12200, which required FINRA members to arbitrate disputes with a customer at the customer's request. UBS and Citi commenced this action to enjoin the arbitration proceedings, contending that Carilion was not a "customer" as that term was used in FINRA Rule 12200 and that, in any event, Carilion waived any right to arbitrate by agreeing to the forum selection clause contained in written agreements with UBS and Citi. The court concluded that Carilion, by purchasing UBS and Citi's services, was indeed a "customer" entitled to arbitration under FINRA Rule 12200 and that the forum selection clause did not have the effect of superseding or waiving Carilion's right to arbitrate. Accordingly, the court affirmed the district court's denial of UBS and Citi's motion for injunctive relief. View "UBS Financial Services, Inc. v. Carilion Clinic" on Justia Law

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Plaintiff filed this action, asserting claims for, inter alia, breach of contract and violation of the Maryland Credit Grantor Closed End Provisions (CLEC), Md. Code Ann., Com. Law 12-1001 et seq. The district court was persuaded that the National Bank Act (NBA), 12 U.S.C. 24, 484(A), and federal regulations preempted the CLEC, and that plaintiff failed to state a claim for breach of contract. The court held that the district court erred in deeming plaintiff's CLEC claim against Capital One preempted by federal law and regulations where Capital One was subject to the terms of the CLEC in loans it acquired through assignment. The court also held that a breach of contract claim had been adequately pleaded and therefore, the district court erred in dismissing the claim. Accordingly, the court vacated and remanded for further proceedings. View "Decohen v. Capital One N.A." on Justia Law

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Plaintiffs sued Juno under the Interstate Land Sales Full Disclosure Act (ILSFDA), 15 U.S.C. 1701, seeking rescission of their purchase agreement in a lot at Creighton Farms, claiming that Juno misrepresented its involvement with the Ritz-Carlton in regards to the Creighton Farms development. The court held, among other things, that plaintiffs established that they merit equitable rescission and that the district court properly determined that the equitable remedy was to return the property title to Juno and return the purchase price, plus interest, to plaintiffs. The court held, however, that the district court abused its discretion when it denied plaintiffs pre-judgment interest on the debt portion of their purchase funds. Therefore, the court reversed the district court and awarded plaintiffs prejudgment interest on the funds at issue at 7 percent. Accordingly, the court affirmed in part and reversed in part. View "Nahigian v. Juno-Loudoun, LLC" on Justia Law

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Plaintiff appealed the district court's judgment granting Chase's motion to dismiss her putative class action claim brought pursuant to the Maryland Credit Grantor Closed End Credit Provisions (CLEC), Md. Code Ann., Com. Law 12-1001 et seq. The district court concluded that federal regulations preempted relevant portions of the CLEC and that the retail sales installment contract signed by plaintiff and Chase's predecessor in interest did not mandate that Chase comply with the CLEC. The court held that the district court erred in concluding that the CLEC was preempted by the National Bank Act (NBA), 12 U.S.C. 1 et seq., or the Office of the Comptroller of the Currency (OCC) regulations. The court also held that the district court erred in dismissing plaintiff's breach of contract claim and remanded for further proceedings. View "Epps v. JP Morgan Chase Bank, N.A." on Justia Law

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Plaintiff, Jeremy Mayfield, a professional race car driver, appealed the district court's dismissal of his complaint against NASCAR for conduct arising out of a positive drug test. Plaintiff filed suit against defendants, asserting claims for defamation, violation of North Carolina's disability statute, unfair and deceptive trade practices, breach of contract, and negligence, when one of the defendants, Brian France, held a press conference where he indicated that plaintiff had been suspended because he took a "performance enhancing" or "recreational" drug. The court found that the district court properly dismissed the case and there was no abuse of discretion in denying plaintiff's motions to reconsider and to amend. Accordingly, the court affirmed the judgment. View "Mayfield v. NASCAR, et al." on Justia Law

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This appeal arose from a dispute between incumbent local exchange carriers that provide service in rural areas of North Carolina (RLECs) and commercial mobile radio service providers (CMRS Providers) in North Carolina. The CMRS Providers filed a complaint in the district court against the RLECs and the Commissioners of the NCUC in their official capacities, seeking review of several determinations made by the NCUC and, ultimately, the approval of portions of the interconnection agreements (ICA). The district court subsequently denied the CMRS Providers' motion for summary judgment and granted the RLECs' and the NCUC's motions for summary judgment. The district court also affirmed the NCUC's Filing of Composite Agreements (FAO) and approval order. Because the court ultimately agreed with the arguments advanced by the RLECs and the NCUC, the court affirmed the judgment of the district court. View "New Cingular Wireless PCS, LLC, et al. v. Finley, Jr., et al." on Justia Law