Justia Contracts Opinion Summaries

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Justin Beckstrand and James Beckstrand, through his surviving spouse, Cynthia, appealed a judgment awarding $164,202.40 in 2015 farm rental payments to Julie Beckstrand, the personal representative of John Beckstrand's estate. The Supreme Court found that because the district court's findings were inadequate to explain the basis for its equitable decision to award the farm rental payments to Julie Beckstrand, it reversed and remanded for the court to explain the rationale for its decision. View "Beckstrand v. Beckstrand" on Justia Law

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Kevin and Lynn Klein appealed a judgment dismissing their claims and quieting title to certain real property in Gregory Sletto. The Supreme Court affirmed, concluding the district court did not err in granting summary judgment because the Kleins failed to present any evidence supporting their claims about the existence of a valid contract. View "Klein v. Sletto" on Justia Law

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The property owners, participants in the “Section 8” federal rental assistance program (42 U.S.C. 1437f(a)), sued the Wisconsin Housing and Economic Development Authority for allegedly breaching the contracts that governed payments to the owners under the program, by failing to approve automatic rent increases for certain years, by requiring the owners to submit comparability studies in order to receive increases, and by arbitrarily reducing the increases for non-turnover units by one percent. Because Wisconsin Housing receives all of its Section 8 funding from the U.S. Department of Housing and Urban Development (HUD), the Authority filed a third-party breach of contract claim against HUD. The district court granted summary judgment in favor of Wisconsin Housing and dismissed the claims against HUD as moot. The Seventh Circuit affirmed, noting that the owners’ Section 8 contracts were renewed after the challenged requirements became part of the program. “The doctrine of disproportionate forfeiture simply does not apply,” and Wisconsin Housing did not breach any contracts by requiring rent comparability studies in certain circumstances or by applying a one percent reduction for non-turnover units. View "Evergreen Square of Cudahy v. Wisconsin Housing & Economic Development Authority" on Justia Law

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Plaintiff and his corporate entity, Marken, Inc., filed suit alleging that FedEx breached contractual duties, engaged in fraud, and violated North Dakota's Franchise Investment Law, N.D.C.C. 51-19-02(5)(a), and Racketeer Influenced and Corrupt Organizations (RICO) Act, N.D.C.C. 12.1-06.1-05. The district court dismissed the amended complaint. Determining that Pennsylvania law governs the construction of the Standard Operating Agreement (SOA) at issue, the court concluded that dismissal as to the first breach-of-contract claim was proper because the SOA had expired and the Independent Service Provider (ISP) Agreement governed the relationship between the parties. Furthermore, the plain text of the SOA foreclosed the claim. The court also concluded that plaintiff's second breach-of-contract claim was properly dismissed and rejected plaintiff's reading of the Background Statement of the SOA because plaintiff's reading ignores context and would lead to an absurd result. The court also concluded that plaintiff's fraud claims were properly dismissed because he failed to plead fraud with the specificity required by Rule 9(b); the district court properly dismissed the Franchise Investment Law claim because the amended complaint failed to plausibly allege that plaintiff was granted the right to offer or distribute services to customers; and plaintiff's state RICO claim was also properly dismissed because he failed to sufficiently plead facts for his fraud claims and Franchise Investment Law claim. Accordingly, the court affirmed the judgment. View "Neubauer v. FedEx" on Justia Law

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The Funny Guy, LLC sued Lecego, LLC, claiming that it was not paid for work it did for Lecego. Funny Guy alleged that Lecego had agreed to pay approximately ninety-seven percent of the fees claimed in an attempt to resolve the dispute but later refused to do so. The trial court sustained Lecego’s demurrer, finding that no such settlement ever existed. Thereafter, Funny Guy again sued Lecego asserting two alternative theories of recovery - breach of contract and quantum meruit. The trial court dismissed this second suit on the basis of res judicata, concluding that these two alternative theories of recovery could have been, and should have been, asserted in the first suit. The Supreme Court affirmed, holding that the trial court properly applied res judicata in this case. View "The Funny Guy, LLC v. Lecego, LLC" on Justia Law

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Thomas Saul and Jon Swartzfager initially reached a verbal agreement for Saul’s purchase of a piece of property located within a larger tract of land Swartzfager owned. But another person came along and offered Swartzfager a significant sum to buy the whole tract. Swartzfager approached Saul and asked if he would forego their original land deal and in exchange accept a separate parcel within a different tract of land. Saul agreed to Swartzfager’s new offer, and Swartzfager reduced their agreement to writing, stating that for “good and valuable consideration” already received, he would transfer the second parcel to Saul upon request. However, Swartzfager later backed out and never transferred any land to Saul. Saul filed suit against Swartzfager seeking damages and specific performance. The chancellor found a valid contract existed between Saul and Swartzfager, and awarded him damages, attorney’s fees, and prejudgment interest. After review, the Supreme Court found the chancellor correctly ruled that Saul and Swartzfager had a contract, and Swartzfager was equitably estopped from denying the land deal. Furthermore, the Court found the chancellor’s awards for intentional infliction of emotional distress and attorney’s fees are supported. But Court found the chancellor erred in awarding prejudgment interest, because Saul did not plead a request for prejudgment interest. View "Swartzfager v. Saul" on Justia Law

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Lauron had two Chase credit cards, one ending in 5285 and one ending in 5274. The Cardmember Agreement for 5274 stated that: “THE TERMS AND ENFORCEMENT OF THIS AGREEMENT AND YOUR ACCOUNT SHALL BE GOVERNED AND INTERPRETED IN ACCORDANCE WITH FEDERAL LAW AND, TO THE EXTENT STATE LAW APPLIES, THE LAW OF DELAWARE, WITHOUT REGARD TO CONFLICT-OF-LAW PRINCIPLES. THE LAW OF DELAWARE, WHERE WE AND YOUR ACCOUNT ARE LOCATED, WILL APPLY NO MATTER WHERE YOU LIVE OR USE THE ACCOUNT.” Chase sold both accounts to PCC for collection. PCC filed suit. Lauron cross-complained, alleging violation of the Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. 1692) and California’s Rosenthal Act by attempting to collect a time-barred debt. The court granted Lauron summary judgment, determining that Delaware’s three-year state of limitations applied and that the limitations period had expired before PCC filed suit, so that PCC was attempting to collect a time-barred debt in violation of the FDCPA and the Rosenthal Act. The court of appeal reversed because, with respect to 5285 Lauron had not established when PCC’s claims accrued nor that the Cardmember Agreement applied. With respect to 5274, the court correctly applied Delaware law, but did not establish when the claims accrued. View "Professional Collection Consultants v. Lauron" on Justia Law

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Plaintiff had an Oregon auto insurance policy issued by defendant. In 2008, plaintiff was injured in a motor vehicle accident. Among other expenses, plaintiff incurred $430.67 in transportation costs to attend medical appointments and to obtain medication. She then applied for PIP medical benefits under her insurance policy. Defendant paid for plaintiff’s medical care, but it declined to pay for her transportation expenses to obtain her medical care. Plaintiff then filed a complaint for breach of contract, both for herself and on behalf of others similarly situated. She alleged that her claim for medical expenses under ORS 742.524(1)(a) included her transportation costs. Defendant moved for summary judgment, arguing ORS 742.524(1)(a) did not require it to pay for transportation costs. After a hearing, the trial court granted defendant’s motion and entered a judgment in defendant’s favor. The question on review was whether the PIP medical benefit in ORS 742.524(1)(a) included the insured plaintiff’s transportation costs to receive medical care. The Supreme Court held that PIP benefits for the “expenses of medical * * * services” do not include an insured’s transportation costs for traveling to receive medical care. Therefore, the Court affirmed the grant of summary judgment in favor of defendant. View "Dowell v. Oregon Mutual Ins. Co." on Justia Law

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In 2005, B&W entered into a contract to design and construct a Selective Catalyst Reduction (SCR) system to control emissions at KCP&L’s coal-burning Kansas power station. B&W purchased catalyst modules for the SCR from Cormetech, which guaranteed that the catalyst would perform under specified conditions for 24,000 operating hours before needing replacement. KCP&L began operating the SCR in April 2007. A June 2007 performance test revealed that the rate of “ammonia slip” was higher than expected, but within guaranteed limits. B&W advised Cormetech of the issue. Cormetech began testing. A September 2008 letter from KCP&L advised that it was B&W’s obligation to “generate a corrective action plan.” After KCP&L determined in 2008 that the catalyst was at the end of its useful life, it contracted directly with Cormetech for a replacement, which also failed before the end of its expected life. KCP&L’s claim against B&W resulted in a $3.5 million meditation settlement. B&W sued Cormetech; the case was dismissed without prejudice pursuant to the parties’ tolling agreement while B&W pursued mediation with KCP&L. After those efforts resulted in the settlement, B&W reinstituted the action within the agreed period. Following discovery the district court granted Cormetech summary judgment, finding a breach-of-warranty claim time-barred and that an indemnification claim failed for lack of evidence that B&W’s losses resulted from a defect in goods or services purchased from Cormetech. The Sixth Circuit vacated, finding that the court erred by failing to view the record in the light most favorable to the nonmovant. View "Babcock & Wilcox Co. v. Cormetech, Inc." on Justia Law

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Plaintiff Holloway Automotive Group (Holloway) appealed a circuit court order ruling that the liquidated damages clause contained in the parties’ contract was unenforceable. Holloway was an authorized franchisee of Mercedes-Benz North America. Defendant Steven Giacalone purchased a new vehicle from Holloway. At the time of the purchase, the defendant signed an “AGREEMENT NOT TO EXPORT:” “MBUSA prohibits its authorized dealers from exporting new Mercedes-Benz vehicles outside of the exclusive sales territory of North America and will assess charges against [Holloway] for each new Mercedes-Benz vehicle it sells . . . which is exported from North America within one (1) year.” By signing the agreement, defendant promised “not [to] export the Vehicle outside North America . . . for a period of one (1) year” from the date of the Agreement and, if he did so, to pay Holloway $15,000 as liquidated damages. The vehicle was subsequently exported within the one-year period. Holloway sued claiming breach of contract and misrepresentation and seeking liquidated damages in the amount of $15,000, plus interest, costs, and attorney’s fees. The trial court found that the Agreement was entered into “between the parties to protect [Holloway] from a claim by [MBUSA],” but that MBUSA did not, in fact, charge Holloway any fees despite the vehicle having been exported. The trial court declined to enforce the liquidated damages clause in the agreement. After review, the Supreme Court concluded that the $15,000 liquidated damages provision was enforceable because Holloway’s damages resulting from the breach were not “easily ascertainable.” Accordingly, the Court held the trial court’s determination that the liquidated damages provision in the parties’ Agreement was unenforceable was not supported by the record and was erroneous as a matter of law. View "Holloway Automotive Group v. Giacalone" on Justia Law