Justia Contracts Opinion Summaries

Two software development companies became involved in a dispute after a UK bank, Metro Bank PLC, hired one company, Arkeyo LLC, to create software for its coin-counting machines. Years later, as Arkeyo’s product became outdated, Metro Bank engaged Saggezza UK (a subsidiary of Saggezza, Inc.) to build replacement software. During development, Metro Bank provided Saggezza with an Arkeyo-operated touchscreen computer for reference. Arkeyo later alleged that Saggezza, Inc. infringed its copyrights and trade secrets, interfered with its contract and business relationship with Metro Bank, and converted Arkeyo’s property.The United States District Court for the Northern District of Illinois granted summary judgment for Saggezza, Inc. on all claims, ruling that Arkeyo did not show Saggezza, Inc. was responsible for the alleged infringement or tortious acts—these, if they occurred, were committed by Saggezza UK, which was not a defendant. The district court also denied Arkeyo’s motions for sanctions and for reconsideration based on purportedly new evidence, and it awarded attorney’s fees to Saggezza, Inc. under federal statutes.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court’s decisions. The appellate court held that Arkeyo’s copyright claims failed because there was no evidence of copying. The trade secret claims failed due to Arkeyo’s public disclosure of its software and the generic nature of the alleged secrets. The tortious interference claims were rejected because Saggezza’s competitive conduct was not “wrongful” under Illinois law, and the conversion claim failed since Arkeyo did not own or demand the property. The appellate court also affirmed the denial of sanctions, the denial of reconsideration, and the award of attorney’s fees. View "Arkeyo LLC v Saggezza, Inc." on Justia Law

The dispute centers on mineral rights to a property in McKenzie County, North Dakota. In 1938, the county acquired the property from Ellen Stole through foreclosure. In 1948, the county leased mineral rights—the “County Lease”—to Thomas Dorough, granting extraction rights in exchange for royalties. Hans Stole, Ellen’s son, redeemed the property in 1951, terminating the county’s ownership, and in 1954 ratified the County Lease as it pertained to his interest. There has been continuous mineral production since 1957. The Rolfsruds acquired the property in 2002 and entered new leases in 2007 and 2019—the latter (“Rolfsrud Lease”) granting higher royalties and naming Davis Exploration as lessee. Continental Resources operated under both leases, ultimately paying royalties at the lower County Lease rate. The Rolfsruds, joined by Davis Exploration, sued Continental and Petro-Hunt, asserting the Rolfsrud Lease controlled the property and raising several claims, including breach, quiet title, and declaratory relief.The United States District Court for the District of North Dakota granted summary judgment to the defendants. The court relied on Ulrich v. Amerada Petroleum Corporation and Holbeck v. Hull from the North Dakota Supreme Court, finding the County Lease had priority. The court determined the Rolfsrud Lease was a “top lease” and quieted title in favor of Petro-Hunt’s interest under the County Lease.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the grant of summary judgment de novo. It held the County Lease became voidable—not void—upon redemption, and Hans’s ratification was valid as to the property he owned. The court further held continuous production under the County Lease sustained its force, despite no Pugh clause or lack of production on the specific property. The Eighth Circuit affirmed the district court’s judgment, holding the County Lease controls the subject property and the Rolfsrud Lease is a top lease. View "Rolfsrud v. Continental Resources, Inc." on Justia Law

Premier contracted Pinnacle to provide labor and materials for flooring in three homes, with each subcontract containing a clause allowing Premier to recover attorney fees in the event of Pinnacle’s default. Pinnacle sued Premier, alleging breach of contract for unpaid work, attaching the relevant subcontracts as exhibits. Premier counterclaimed, asserting that Pinnacle breached the subcontracts due to defective work, and requested attorney fees. Premier’s counterclaim referenced paragraphs from Pinnacle’s complaint, which incorporated the contracts, but did not explicitly state the basis for its attorney fees request. Pre-trial, Premier’s counsel informed Pinnacle’s counsel by email that the attorney fees request was based on Section 8(b) of the subcontracts, and the parties agreed to bifurcate the fees issue.The Circuit Court of Virginia found for Premier on its counterclaim regarding the breach, but denied Premier’s request for attorney fees, holding that Premier had not sufficiently identified the basis for its fee request in the counterclaim as required by Rule 3:25(b) of the Rules of the Supreme Court of Virginia. Premier appealed, and the Court of Appeals of Virginia reversed, concluding that the incorporation of the subcontracts and the attached exhibits were sufficient to put Pinnacle on notice of the contractual basis for the attorney fees claim.The Supreme Court of Virginia reviewed the case de novo and held that Rule 3:25(b) is a pleading requirement, not merely a notice requirement. The court determined that Premier failed to affirmatively identify the basis for its attorney fees request in its counterclaim, and that mere incorporation by reference of the contracts was insufficient. The Supreme Court of Virginia reversed the judgment of the Court of Appeals and reinstated the trial court’s denial of attorney fees to Premier, entering final judgment for Pinnacle on the attorney fees issue. View "Pinnacle Flooring Solutions v. Premier Homes Group" on Justia Law

A company that operated as a fixed-base operator at a municipal airport sued the city that owns and operates the airport. The company alleged that the city provided more favorable lease terms and selectively excused certain regulatory requirements for a competing operator, thereby disadvantaging the plaintiff. The city’s leases with the plaintiff and with its competitor differed in several respects, including rent abatement periods, required capital investments, and compliance with fuel storage and insurance requirements. The plaintiff argued that these differences, along with the city’s alleged failure to strictly enforce its own policies and federal grant assurances, constituted both an equal protection violation under a “class-of-one” theory and a breach of contract.The lawsuit was originally filed in Illinois state court, but the city removed it to the United States District Court for the Northern District of Illinois. The plaintiff amended its complaint to drop claims against the competitor and proceeded against the city for breach of contract and equal protection violations. After discovery, both sides moved for summary judgment. The district court granted summary judgment for the city on both claims, finding that the class-of-one theory did not apply in the context of government contracting and that the contractual documents did not incorporate the policies or grant assurances as enforceable obligations.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The appellate court held that a class-of-one claim under the Equal Protection Clause is not available where a company challenges the terms of its lease or its competitor’s treatment under a different lease, absent any class-based discrimination. The court also held that the city’s policy and grant assurances were not incorporated into the plaintiff’s lease as enforceable contract terms, nor did the law provide a private right to enforce them in this context. The court affirmed the district court’s summary judgment in favor of the city. View "Joliet Avionics, Inc. v City of Aurora" on Justia Law

A Kentucky-based manufacturer entered into a sales representative agreement with a Minnesota-based company to facilitate sales of industrial parts in several Midwestern states. The contract included a choice of law clause specifying Kentucky law would govern disputes and permitted the manufacturer to terminate the relationship at its discretion. However, a pre-contract email from Minnesota’s representatives revealed their intent to disregard the Kentucky choice of law, planning instead to invoke the Minnesota Termination of Sales Representatives Act (MTSRA), which restricts termination and invalidates conflicting contract terms.After several years, the manufacturer issued a termination notice in line with the contract. The Minnesota company, shortly before the contract’s automatic renewal, claimed protection under the MTSRA and demanded $165,000, threatening litigation. The manufacturer responded by filing suit in the United States District Court for the Eastern District of Kentucky, seeking declaratory judgment that Kentucky law governed and asserting fraudulent inducement based on the Minnesota company’s misrepresentation of its intent to abide by the choice of law provision.The district court held that Kentucky law applied, rendering the MTSRA inapplicable, and granted declaratory judgment for the manufacturer. It permitted the fraudulent inducement claim to proceed to a jury, which found the Minnesota company liable, awarding nominal actual damages and $280,000 in punitive damages. The court denied post-trial motions challenging the verdict, jury instructions, evidentiary rulings, and the punitive damages award.On appeal, the United States Court of Appeals for the Sixth Circuit affirmed. The Sixth Circuit held that Kentucky’s choice of law rules applied and that Kentucky had the most significant relationship to the contract, making the MTSRA inapplicable. The court upheld the jury’s finding of fraudulent inducement and found no abuse of discretion in the district court’s management of trial issues. The punitive damages award was found not to violate due process. View "Bonfiglioli USA, Inc. v. Midwest Engineered Components, Inc." on Justia Law

Two investment entities entered into an agreement to sell a significant number of shares of a company to a purchaser. The seller was represented by a law firm as administrative agent and a broker as placement agent. Before the purchaser paid for the shares, it placed the transaction on hold. Despite this, the shares were mistakenly transferred to the purchaser. Multiple parties, including the administrative agent and broker, communicated about the error, and assurances were made that the transfer would be reversed. However, the reversal did not occur, and years later, the purchaser executed documents asserting ownership of the shares, which had notably increased in value. After demands for the return of the shares went unmet, the sellers filed suit. The shares were eventually returned, but their value had dropped.The United States District Court for the Northern District of California addressed claims brought by the sellers against the purchaser for conversion, among other causes of action. The purchaser, in turn, filed a third-party complaint seeking equitable indemnity and statutory contribution from the administrative agent and broker, alleging negligence in their handling of the transaction. The district court granted summary judgment in favor of the third-party defendants on the equitable indemnity claim, reasoning that conversion is an intentional tort for which equitable indemnity is unavailable. The sellers and purchaser settled their claims, but the purchaser appealed the indemnity ruling.The United States Court of Appeals for the Ninth Circuit reviewed the district court’s decision. It held that, under California law, conversion is a strict liability tort, not an intentional tort requiring wrongful intent. Accordingly, a party liable for conversion may seek partial equitable indemnity from negligent joint tortfeasors. The panel reversed the district court’s summary judgment for the third-party defendants and remanded for further proceedings. View "SERENITY INVESTMENTS, LLC, ET AL. V. SUN HUNG KAI STRATEGIC CAPITAL, LTD." on Justia Law

Between 2007 and 2011, Michael Jensen sexually abused multiple children in Martinsburg, West Virginia. Jensen’s parents and grandfather held significant positions within the Church of Jesus Christ of Latter-Day Saints. Several of Jensen’s victims later sued the Church in West Virginia state court, alleging that the Church failed to take reasonable precautions to prevent Jensen’s abuse, including failing to report suspected abuse and failing to supervise or warn families about Jensen’s prior conduct. Before a verdict was reached, the Church settled with the remaining minor plaintiffs and their families.Following settlement, the Church sought coverage from two of its insurers, National Union Fire Insurance Company of Pittsburgh, PA, and ACE Property and Casualty Insurance Company, for defense and settlement costs. Both insurers refused to pay, prompting the Church to file suit in the United States District Court for the District of Utah, claiming breach of contract and breach of the implied covenant of good faith. The central issue became whether the underlying events constituted a single “occurrence” or multiple “occurrences” under the insurance policies, which would determine if the Church’s settlements met the policies’ retained limits required for coverage. The district court granted summary judgment to the insurers, holding that each instance of abuse was a separate occurrence and, therefore, the retained limits were not met for any single occurrence.The United States Court of Appeals for the Tenth Circuit reviewed the case and reversed the district court’s grant of summary judgment. The Tenth Circuit held that the insurance policies’ definitions of “occurrence” were ambiguous and that the Church’s interpretation—that its alleged negligence constituted a single occurrence—was reasonable. Under Utah law, ambiguities in insurance contracts must be construed in favor of coverage. The case was remanded for further proceedings consistent with this interpretation. View "Church of Jesus Christ of Latter-Day Saints v. National Union Fire Insurance Company of Pittsburg" on Justia Law

The dispute centers on a coal mining lease in Wyoming originally executed in 1986 between Rock Springs Royalty Company and Bridger Coal Company. Under this lease, Bridger gained exclusive rights to mine coal from a specified area (the “Nine Mile Lease”) and was required to mine at least forty-five percent of the total coal from both the leased lands and “Adjoining Lands” every five years. Bridger was obligated to pay production royalties based on actual coal mined or, if it failed to meet the threshold, advance royalties based on projected production. For nearly thirty years, payments proceeded without issue. In 2020, Bridger, anticipating it would not meet the production threshold, paid an advance royalty, but Wildcat Coal LLC, which had succeeded as lessor, objected to the calculation, particularly the definition of “Adjoining Lands.” Bridger then withheld future royalties to recover what it claimed was an overpayment, prompting Wildcat to sue for breach of contract.The United States District Court for the District of Wyoming granted summary judgment for Wildcat, finding Bridger’s definition of “Adjoining Lands” was incorrect and that the term included both public and private lands as well as surface and underground mining. In a footnote, the district court sua sponte required Bridger to recalculate all royalties paid since 1986, although neither party had requested this. Bridger subsequently moved to correct the order, arguing that a thirty-six-month protest provision in the lease barred recalculation for earlier years, but the district court denied the motion.The United States Court of Appeals for the Tenth Circuit reviewed the case de novo. The Tenth Circuit held that the lease’s protest provision precluded recalculation of royalties for payments made before 2016, reversed the district court’s order requiring recalculation from 1986, affirmed the district court’s interpretation of “Adjoining Lands,” and remanded for proceedings consistent with its opinion. View "Wildcat Coal v. Pacific Minerals" on Justia Law

A condominium resident entered into an agreement with the developer, the unit owners’ association, and other unit owners after concerns were raised about infrastructure and proposed changes to the condominium plan. The agreement required the developer to complete infrastructure work, pay a sum to the association, and convey a vacant lot to the association in exchange for the unit owners withdrawing their opposition to a planning board application. The agreement included a provision requiring planning board approval of the developer’s application by March 1, 2023, as a condition for the parties’ obligations. The planning board, however, did not approve the application until March 28, 2023. After learning that the lot was to be sold to a third party, the resident sued for specific performance of the agreement.The Superior Court (York County) granted the developer’s motion to dismiss, ruling that the failure to obtain planning board approval by the specified date was an unmet condition precedent, discharging all parties from their obligations under the agreement. The court also dismissed the resident’s claims for quantum meruit, unjust enrichment, and declaratory relief on independent grounds.On appeal, the Maine Supreme Judicial Court reviewed whether the timing requirement for planning board approval was necessarily a material condition precedent as a matter of law. The Court held that, in actions seeking equitable relief such as specific performance, whether time is of the essence is a factual question dependent on the intent of the parties and the circumstances. The Court concluded that the materiality of the March 1 deadline could not be determined solely from the pleadings, and that the complaint alleged facts which, if proven, could entitle the resident to relief. The Court vacated the dismissal of the breach of contract claim and remanded for further proceedings. View "Constance L. Beane v. Village on Great Brook, LLC" on Justia Law

Neils Point, LLC owns a farm property in Harpswell, Maine, which it leased to Joseph and Laura Grady for agricultural use. The Gradys resided on the property and operated the farm under successive lease agreements, culminating in a 2017 extension titled “Commercial Agricultural Lease Agreement.” This lease specified that it was not a residential rental, set rent as a percentage of the farm’s net proceeds, and required arbitration for disputes. Neils Point alleged that the Gradys breached the lease by miscalculating rent, failing to pay on time, and not using the land as productive cropland.After Neils Point initiated arbitration in 2024, the Gradys responded by admitting the dispute was subject to arbitration and made their own arbitration demand under the lease. The arbitration hearing was held in July 2025, with both parties participating fully and without objection to either the process or the arbitrability of the dispute. The arbitrator found in favor of Neils Point, concluding that the Gradys breached the lease by improperly deducting expenses, failing to pay rent, and not maintaining the farm’s productivity. Damages were awarded, and the Gradys were ordered to vacate the property.The Cumberland County Superior Court confirmed the arbitration award and denied the Gradys’ subsequent motion to vacate, in which they argued for the first time that the arbitration provision was void because the lease was residential and the arbitrator exceeded his authority. The Maine Supreme Judicial Court affirmed the judgment, holding that the Gradys’ participation in arbitration without objection waived their right to challenge the validity of the arbitration clause or the arbitrator’s authority. The Court further held that the arbitrator’s construction of the lease was rational, and thus confirmation of the award was proper. View "Neils Point, LLC v. Grady" on Justia Law