Justia Contracts Opinion Summaries

Sidney and Julian Helvik, who have lived on their family ranch since 1947, sold a portion of their ranch to Wesley and Karen Tuscano in 2018. In 2020, the Helviks agreed to sell the remainder of the ranch to the Tuscanos under an agreement that included a promissory note and provisions for the Tuscanos to assist the elderly Helviks with end-of-life issues. The Helviks signed a quitclaim deed, but the Tuscanos later had them sign a gift deed, which transferred the ranch without consideration. The Tuscanos never made any payments under the agreement and used the gift deed to obtain a mortgage on the ranch.The Helviks filed a complaint in the District Court of the Sixth Judicial District, Sweet Grass County, seeking to void the agreement and the gift deed, alleging undue influence and fraud. The Tuscanos counterclaimed and filed a third-party complaint against Jacqueline Conner, alleging tortious interference and abuse of process. The District Court granted summary judgment in favor of Conner on the tortious interference claim and excluded evidence of an Adult Protective Services investigation and an oral agreement to transfer land.The Supreme Court of the State of Montana reviewed the case. It affirmed the District Court's decision to rescind the agreement based on its equitable powers, noting the unique fiduciary duty in grantor-support agreements. The court found no abuse of discretion in excluding evidence of the APS investigation and the oral agreement. The court also held that the Tuscanos waived their argument regarding jury instructions on undue influence by not objecting at trial. The summary judgment in favor of Conner was upheld due to the lack of evidence of damages. The court declined to award attorney fees to Conner under M. R. App. P. 19(5). The District Court's orders and judgments were affirmed. View "Helvik v. Tuscano" on Justia Law

Brainchild Surgical Devices, LLC, a medical device developer, entered into a contract with CPA Global Limited for patent renewal services. Brainchild alleged that CPA overcharged it by marking up fees beyond the actual costs and sued for breach of contract and fraud. The district court excluded Brainchild’s expert witnesses, granted summary judgment for CPA on the breach of contract claim, dismissed the fraud claim, and denied leave to amend the fraud claim.The United States District Court for the Eastern District of Virginia dismissed Brainchild’s fraud claim for lack of particularity and denied leave to amend. The court granted summary judgment for CPA on the breach of contract claim, finding that Brainchild’s theories were inconsistent with the contract’s terms. The court excluded Brainchild’s expert witnesses, David Cass and John Keogh, for offering legal conclusions and lacking qualifications.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court affirmed the district court’s exclusion of Cass’ testimony due to lack of qualification and improper legal conclusions. The court also affirmed the exclusion of Keogh’s testimony for failing to disclose the bases of his opinions and offering legal conclusions but reversed the decision to disqualify him based on confidential information. The court agreed with the district court that Brainchild’s pass-through cost and implied covenant of good faith theories failed to overcome summary judgment. However, the court reversed the summary judgment for CPA on the theory that CPA applied Country Charges unrelated to the required personnel, infrastructure, and third parties for renewals in particular jurisdictions. The case was remanded for further proceedings on this theory. The court also affirmed the denial of leave to amend the fraud claim. View "Brainchild Surgical Devices, LLC v. CPA Global Limited" on Justia Law

Darian McKinney, a health and physical education teacher, was employed by the District of Columbia Public Schools (DCPS) for four years. During his tenure, he was investigated for sexual harassment, leading to a grievance he filed against DCPS. Both disputes were resolved through a Settlement Agreement, under which McKinney resigned but was allowed to reapply for teaching positions. However, when he reapplied, DCPS blocked his return, citing a failed background check.McKinney sued the District of Columbia, alleging that DCPS breached the Settlement Agreement by not fairly considering his employment applications and deprived him of property and liberty without due process. The United States District Court for the District of Columbia dismissed his complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court held that the Settlement Agreement did not obligate DCPS to fairly consider McKinney’s applications, only to allow him to apply. The court found no basis in the contract’s language or law for McKinney’s demand for fair consideration. Additionally, the court ruled that McKinney did not have a constitutionally protected property interest in his original job, the contingent job offers, or his eligibility for DCPS positions. The court also found that McKinney’s claim of deprivation of liberty without due process was forfeited as it was not raised in the lower court.The court affirmed the district court’s dismissal of McKinney’s complaint. View "Darian McKinney v. DC" on Justia Law

In 2008, the former Attorney General of Mississippi entered into a retention agreement with the Kilborn Firm to sue Entergy Corporation over electricity rates. The Kilborn Firm then agreed to split any compensation with Roedel Parsons, a Louisiana law firm. After years of litigation, the trial judge granted Entergy’s motion for summary judgment, dismissing the case with prejudice. The State did not appeal. Roedel Parsons then sued the State, claiming it was entitled to $34,625,000 as a third-party beneficiary under the retention agreement or, alternatively, for unjust enrichment and quantum meruit recovery.The Hinds County Circuit Court granted the State’s motion to dismiss under Mississippi Rule of Civil Procedure 12(b)(6) for failure to state a claim. The court found that Roedel Parsons was not a third-party beneficiary under the retention agreement, as the agreement specified that any associated attorneys would be at the Kilborn Firm’s expense and at no cost to the State. The court also found that Roedel Parsons failed to state a claim for unjust enrichment and quantum meruit recovery, as the State had no obligation to compensate Roedel Parsons under the terms of the agreement.The Supreme Court of Mississippi reviewed the case and affirmed the lower court’s decision. The court held that Roedel Parsons was not a third-party beneficiary under the retention agreement and had no standing to sue the State for breach of contract. The court also held that Roedel Parsons failed to state a claim for unjust enrichment and quantum meruit recovery, as the State had no reasonable expectation to compensate Roedel Parsons. The court further found that the common-fund doctrine did not apply, as Roedel Parsons failed to identify a specific fund or class of beneficiaries. View "Roedel Parsons Blache Fontana Piontek & Pisano v. State of Mississippi" on Justia Law

Plaintiffs purchased Ford vehicles from various dealerships, signing sales contracts that included arbitration provisions. They later sued Ford Motor Company, alleging defects in the vehicles and claiming Ford violated express and implied warranties and engaged in fraudulent concealment. Ford, not a party to the sales contracts, sought to compel arbitration based on the arbitration clauses in the sales contracts between plaintiffs and the dealerships.The trial court denied Ford's motion to compel arbitration. Ford appealed, and the Court of Appeal affirmed the trial court's decision. The appellate court concluded that the arbitration clauses in the sales contracts did not apply to Ford, as Ford was not a party to those contracts and the plaintiffs' claims were not intimately founded in or intertwined with the sales contracts.The Supreme Court of California reviewed the case and affirmed the Court of Appeal's judgment. The court held that the estoppel approach, which allows a nonsignatory to compel arbitration if the plaintiff's claims are intimately founded in and intertwined with the contract containing the arbitration clause, did not apply here. The court found that plaintiffs' claims against Ford were based on statutory obligations and fraud, not on the sales contracts themselves. Therefore, plaintiffs were not estopped from pursuing their claims in court, and Ford could not compel arbitration based on the sales contracts between plaintiffs and the dealerships. View "Ford Motor Warranty Cases" on Justia Law

Bighorn Construction, LLC (Bighorn) and JED Spectrum, Inc. (JED) filed mechanic’s liens against property owned by Keith Stoakes, seeking to foreclose on the liens. Stoakes denied the validity of the liens and counterclaimed for slander of title against both companies, and for breach of contract, promissory estoppel, and fraud against JED. After a bench trial, the circuit court denied Bighorn’s and JED’s claims for lien foreclosure and ruled in favor of Stoakes on his slander of title claims, awarding him $252,225.27 in damages and $33,394.20 in attorney fees. The court denied relief on the remaining claims.The circuit court found that Bighorn had no reasonable grounds to file the lien after receiving a check for full payment, and that JED’s lien was untimely and insufficiently itemized. The court also found that Stoakes reasonably relied on JED’s promise of a shared well system, awarding him damages for promissory estoppel. However, the court later reversed its decision on the promissory estoppel claim and reduced the attorney fee award accordingly.The Supreme Court of South Dakota reviewed the case. It reversed the circuit court’s ruling on the slander of title claims, finding insufficient evidence to prove that Jerry, acting on behalf of Bighorn and JED, knew or recklessly disregarded the falsity of the liens. The court affirmed the denial of Stoakes’s promissory estoppel claim, concluding that Stoakes did not suffer substantial economic detriment. The court also affirmed the attorney fee award of $33,394.20 to Stoakes, as it was within the court’s discretion under SDCL 44-9-42. View "Jed Spectrum, Inc. v. Stoakes" on Justia Law

In March 2020, the COVID-19 pandemic led to a surge in demand for personal protective equipment (PPE). Bay Promo, LLC, a merchandise supplier, sought to profit by supplying PPE to various entities. Arely Nicolle Moncada Alaniz, a college student, was brought in to assist. Disputes arose over who was responsible for securing lucrative contracts, leading to litigation.The case was first heard in the Massachusetts Federal District Court. After a two-day bench trial, the court found that Bay Promo breached a contract, entitling Moncada to a commission on one PPE order. However, the court denied Moncada's claims for commissions on nine other orders, determining there was no agreement for those commissions.The United States Court of Appeals for the First Circuit reviewed the case. Bay Promo argued that the district court erred in its breach of contract finding and in admitting certain evidence. Moncada contended she was entitled to commissions on all orders and sought equitable relief. The appellate court found no abuse of discretion in the district court's evidentiary rulings and upheld the factual findings that Bay Promo breached the contract by failing to deliver FDA-approved masks on time. The court also agreed that Moncada did not establish new contracts for additional commissions and was not entitled to equitable relief.The First Circuit affirmed the district court's judgment, concluding that Moncada was only entitled to a commission on the initial PPE order and not on subsequent orders. View "Moncada Alaniz v. Bay Promo, LLC" on Justia Law

An investor, Snowden Investment LLC, was denied its contractual right to purchase a membership interest in two companies, Boomerang Franchise LLC and Ashburn Indoor Play LLC, which were formed by Maryland Indoor Play, LLC (MIP) and its members. Snowden had a right to invest in these ventures under a Loan and Security Agreement but was not given the required notice.The Circuit Court for Howard County granted summary judgment to Snowden on liability for breach of contract and awarded specific performance for Boomerang and compensatory damages for Ashburn. Snowden's expert valued the damages for Ashburn at $453,333 using a "fair value" approach, which the court accepted. The court also ordered specific performance for Boomerang, requiring the defendants to offer Snowden the opportunity to invest on the same terms as the original members.The Appellate Court of Maryland upheld the Circuit Court's decisions, rejecting the defendants' arguments that specific performance was inappropriate without evidence that Snowden was ready, willing, and able to invest, and that damages should have been measured at the time of breach using "fair market value" rather than "fair value."The Supreme Court of Maryland reviewed the case and held that the proper measure of damages for the breach of an investor’s right is general damages, calculated using the fair market value at the time of the breach minus the price the investor would have paid. The court found that the Circuit Court erred in awarding specific performance for Boomerang without sufficient evidence that Snowden was ready, willing, and able to meet the terms of membership. The Supreme Court reversed the specific performance order and remanded the case for the Circuit Court to enter nominal damages for the Ashburn breach and reconsider attorneys' fees. View "Maryland Indoor Play v. Snowden Investment" on Justia Law

The plaintiff, Dino J. Guilmette, owned a property in North Providence, Rhode Island, and executed a mortgage in favor of Option One Mortgage Corporation in 2006. The mortgage was later assigned to Wells Fargo, with PHH Mortgage Services as the servicing company. Guilmette requested a modification of his mortgage in 2014, resulting in a Shared Appreciation Modification Agreement. This agreement increased the principal balance and included a provision for a shared appreciation amount if the property value increased and was sold.Guilmette sold the property in 2022 and disputed the calculation of the shared appreciation amount provided by PHH. He argued that PHH's calculation was incorrect and that they overcharged him by $40,708.33. Guilmette filed a breach of contract action, claiming that PHH did not properly calculate the shared appreciation amount according to the modification agreement.The Superior Court granted summary judgment in favor of the defendants, PHH and Wells Fargo, concluding that the modification agreement was clear and unambiguous. The court found that the defendants correctly calculated the shared appreciation amount based on the terms of the agreement and the attached disclosure statement, which provided specific examples of the calculation method.The Rhode Island Supreme Court reviewed the case de novo and affirmed the Superior Court's judgment. The Supreme Court held that the modification agreement was unambiguous and that the defendants' calculation of the shared appreciation amount was correct. The court emphasized that the disclosure statement, which was part of the agreement and signed by Guilmette, clearly illustrated the calculation method, and there was no ambiguity in the contract terms. View "Guilmette v. PHH Mortgage Services FKA Ocwen Loan Servicing LLC" on Justia Law

Kratzer Construction entered into a subcontract with Hardy Construction Co. to perform work on a building addition for Ekalaka Public Schools. Kratzer completed the work and submitted pay applications, including one for $92,856.45, which Hardy partially disputed due to unapproved change orders. Hardy offered to pay $81,153 upon Kratzer signing a release, but Kratzer refused, demanding the full amount plus interest. Hardy later offered the same amount without requiring a release, but Kratzer still declined, insisting on interest.The Sixteenth Judicial District Court granted summary judgment to Kratzer, ruling that Hardy owed $81,153 plus 18% interest from January 6, 2022, and attorney fees, as Kratzer was deemed the prevailing party. Hardy appealed, arguing that Kratzer failed to meet a condition precedent in the subcontract requiring submission of releases from his subcontractors before final payment.The Supreme Court of Montana reviewed the case and concluded that the subcontract's provisions were clear and unambiguous. The court determined that Kratzer's failure to submit the required releases constituted a breach of the subcontract, and Hardy was entitled to withhold payment. The court found that Hardy's offers to settle did not constitute a waiver of the condition precedent or a novation of the contract.The Supreme Court reversed the District Court's summary judgment in favor of Kratzer, including the awards for interest and attorney fees. The court remanded the case for entry of judgment in favor of Hardy, requiring Hardy to pay Kratzer $81,153 for services rendered under the subcontract, less reasonable attorney fees and costs incurred by Hardy. View "Kratzer Construction v. Hardy Construction" on Justia Law