Justia Contracts Opinion Summaries

Talisker Finance, LLC and its affiliates defaulted on a $150 million loan secured by real property in Utah. The lenders, Wells Fargo Bank, N.A. and Midtown Acquisitions L.P., foreclosed on the collateral and purchased it at two sheriff’s sales, but the sale proceeds did not satisfy the debt. Talisker later discovered that the lenders had entered into a Common Interest Agreement with the court-appointed receiver, allegedly colluded to depress the sale price, and deterred potential bidders. Talisker claimed that the lenders bundled properties in a way that made them less attractive and that the receiver stalled a third party’s interest in purchasing some of the collateral.The Third District Court, Summit County, reviewed Talisker’s complaint seeking equitable relief from the deficiency judgments, arguing that the lenders’ conduct violated Utah Rule of Civil Procedure 69B(d) and common law principles. The district court accepted Talisker’s factual allegations as true for the purpose of the motion to dismiss but found that Talisker had broadly waived its rights related to the foreclosure process in the loan documents. The court concluded that the lenders’ actions, while possibly unfair, were not unlawful under the terms of the agreements and dismissed the complaint.On direct appeal, the Supreme Court of the State of Utah affirmed the district court’s dismissal. The court held that Talisker’s waivers in the loan documents were broad and explicit enough to encompass all rights under Rule 69B(d), including the requirement that property be sold in parcels likely to bring the highest price. The court further held that Talisker had also waived any equitable or common law claims related to the foreclosure sales. The Supreme Court affirmed the district court’s ruling, finding no error in its conclusion that Talisker’s waivers precluded relief. View "TALISKER PARTNERSHIP v. MIDTOWN ACQUISITIONS" on Justia Law

Two individuals, Kellogg and Mathiesen, formed a limited liability company (LLC) to provide in-home personal care services. Over time, disputes arose regarding ownership interests, capital contributions, and management of the company. The parties executed several agreements, including a 2017 contract transferring Mathiesen’s ownership to Kellogg due to his ineligibility as a Medicaid provider, and a 2019 contract in which Kellogg sold Mathiesen a 50% interest in the LLC’s assets. Allegations of mismanagement, misuse of company funds, and inappropriate conduct by Mathiesen led to litigation between the parties, including derivative claims and counterclaims. Kellogg also sought judicial dissolution of the LLC, citing unlawful conduct and irreconcilable differences.The District Court for Douglas County held a bench trial and found both Kellogg and Mathiesen to be 50-percent co-owners or managers of the LLC. The court denied all derivative claims and counterclaims, citing unclean hands by both parties. However, the court granted Kellogg’s application for dissolution, finding Mathiesen’s conduct oppressive and fraudulent, and ordered the appointment of a receiver to oversee the dissolution and possible sale of the company. Mathiesen appealed both the judgment and the receiver’s appointment.The Nebraska Supreme Court reviewed the consolidated appeals, limiting its review to plain error due to deficiencies in Mathiesen’s appellate briefing. The court determined it had jurisdiction over both appeals and addressed Mathiesen’s argument that Kellogg lacked standing. The court held that Kellogg remained a member of the LLC at the time of filing her derivative action and thus had standing. Finding no plain error in the record, the Nebraska Supreme Court affirmed the district court’s judgment and the order appointing a receiver. View "Kellogg v. Mathiesen" on Justia Law

A same-sex married couple, one a U.S. citizen residing in California and the other a Saudi citizen, spent part of each year living together in Saudi Arabia, where homosexuality is punishable by death. In 2021, after U.S. travel restrictions eased, they booked tickets with a German airline to fly from Saudi Arabia to San Francisco. The airline, which operates extensively in California, required them to confirm their marital status for entry into the U.S. During check-in in Riyadh, a senior airline employee publicly disclosed and questioned their relationship, and copies of their marriage certificate and passports were sent electronically to airline headquarters despite their concerns about Saudi government surveillance. After the trip, the Saudi government updated one plaintiff’s official status to “married,” and he feared returning to Saudi Arabia due to potential severe penalties. The couple alleged that the airline’s actions led to significant personal, financial, and health consequences.The couple filed suit in California state court against the airline and its U.S. subsidiary, alleging breach of contract and several torts. The defendants removed the case to the United States District Court for the Northern District of California, asserting diversity and federal question jurisdiction. The district court dismissed the case for lack of personal jurisdiction. On appeal, the United States Court of Appeals for the Ninth Circuit initially remanded for clarification of the subsidiary’s citizenship, after which the district court allowed amendment of the removal notice to reflect the correct citizenship.Upon renewed review, the Ninth Circuit held that the district court had both specific personal jurisdiction over the defendants and subject matter jurisdiction based on diversity. The court found that the airline purposefully availed itself of California’s market, the claims arose from the airline’s California-related activities, and exercising jurisdiction was reasonable. The court reversed the district court’s dismissal and remanded for further proceedings. View "DOE V. DEUTSCHE LUFTHANSA AKTIENGESELLSCHAFT" on Justia Law

Casa Express Corp. obtained a $40 million judgment in the Southern District of New York against the Bolivarian Republic of Venezuela for unpaid bonds and a global note. After Venezuela failed to pay, Casa sought to enforce the judgment in Florida by targeting eight Miami properties owned by corporate entities allegedly controlled by Raul Gorrin Belisario. Casa claimed that Gorrin, through a bribery and currency-exchange scheme involving Venezuelan officials, used misappropriated Venezuelan funds to purchase these properties, and argued that the properties should be subject to a constructive trust in favor of Venezuela.Casa registered the New York judgment in the United States District Court for the Southern District of Florida and initiated supplementary proceedings under Florida law, seeking to execute the judgment against the properties. Casa impleaded Gorrin, several individuals, and six corporate entities as third-party defendants. The defendants moved for judgment on the pleadings, arguing, among other things, that the district court lacked ancillary jurisdiction over Casa’s claims. The magistrate judge recommended dismissal for lack of ancillary jurisdiction, and the district court adopted this recommendation, also finding a lack of personal jurisdiction over Gorrin. Casa appealed.The United States Court of Appeals for the Eleventh Circuit held that the district court lacked ancillary jurisdiction over Casa’s supplementary proceedings. The court reasoned that Casa’s action sought to impose liability on third parties not previously found liable for the New York judgment and was based on new facts and legal theories unrelated to the original breach of contract claims against Venezuela. The Eleventh Circuit affirmed the district court’s jurisdictional ruling, vacated its alternative merits rulings, and remanded with instructions to dismiss the case without prejudice for lack of subject matter jurisdiction. View "Casa Express Corp v. Bolivarian Republic of Venezuela" on Justia Law

The case centers on a long-standing dispute involving three churches over ownership and sale of real property in Los Angeles. Attorney Steven C. Kim represented one of the churches, Central Korean Evangelical Church, which granted him a deed of trust on the property to secure payment of attorney fees. Central Korean had contracted to sell the property to New Life Oasis Church but later reneged, leading to litigation. The trial court ordered Central Korean to honor the sale and expunged Kim’s deed of trust, which was obstructing the transaction. Kim’s client appealed, but the appeal was dismissed for lack of standing, and Kim did not pursue his own appeal. The judgment became final in 2018.Following the final judgment, Kim filed a new lawsuit against New Life Oasis Church and Bank of Hope, seeking a declaration that his deed of trust was still valid and challenging the prior expungement order. New Life and Bank of Hope moved for judgment on the pleadings, arguing that issue preclusion barred Kim from relitigating the validity of his lien. The Superior Court of Los Angeles County agreed and entered judgment against Kim. Additionally, New Life filed a cross-complaint alleging that Kim’s recording of a lis pendens constituted slander of title and abuse of process. After a bench trial, the court ruled in favor of New Life, awarding damages and not addressing Kim’s defense based on the litigation privilege.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. It affirmed the trial court’s application of issue preclusion, holding that Kim could not relitigate the validity of his deed of trust. However, it reversed the judgment on the cross-complaint, holding that the litigation privilege protected Kim’s recording of the lis pendens from claims of slander of title and abuse of process. The case was remanded for entry of judgment consistent with these holdings. View "Kim v. New Life Oasis Church" on Justia Law

A physician specializing in physical medicine and rehabilitation was employed by a medical practice under a three-year contract that anticipated partnership if not terminated. After patient and staff complaints about her conduct, the practice proposed a new one-year contract without a partnership track, which she refused to sign. She was then terminated with 90 days’ notice. The physician alleged that her termination was due to age and sex discrimination, as well as retaliation for stating her intent to file an EEOC complaint, and also brought a breach of contract claim.After discovery, the defendants moved for summary judgment in the United States District Court for the Eastern District of New York. A Magistrate Judge recommended granting summary judgment to the defendants on all claims. The District Judge reviewed the report and recommendation (R&R) only for clear error, concluding that the physician’s objections were improper because they repeated arguments made before the Magistrate Judge, and adopted the R&R in full. The physician appealed, arguing that her objections were timely and specific, and that the District Judge should have conducted de novo review.The United States Court of Appeals for the Second Circuit held that the District Court erred in applying only clear error review, as the physician’s objections were proper and required de novo review. However, the appellate court found this error harmless because it reviews summary judgment decisions de novo. On its own review, the Second Circuit concluded that the physician failed to establish a genuine dispute of material fact on her preserved claims of sex discrimination, aiding and abetting discrimination, and retaliation. The court also found that her age discrimination and breach of contract claims were not preserved for appellate review. The Second Circuit affirmed the District Court’s judgment granting summary judgment to the defendants. View "Nambiar v. The Central Orthopedic Group, LLP" on Justia Law

A group of plaintiffs leased a 2,400-acre parcel of undeveloped land in San Luis Obispo County, California, from the predecessor of the defendant, Eureka Energy Company. The lease, originally executed in 1968 and later novated, provided for a 99-year term with an option to renew for another 99 years. The property, known as Wild Cherry Canyon, was historically used for cattle grazing, but the lease itself stated that the premises could be used for “any lawful purpose.” The parties understood that cattle grazing would continue, primarily to reduce wildfire risk rather than for commercial livestock production. In 2018, the plaintiffs exercised their option to renew the lease, but Eureka asserted that the lease was limited to 51 years under California Civil Code section 717, which restricts leases for agricultural purposes.The Superior Court of San Luis Obispo County held a court trial and issued a detailed statement of decision. It found that the lease was for agricultural purposes, specifically cattle grazing, and concluded that section 717 applied, limiting the lease to 51 years. The court entered judgment for Eureka, declaring that the lease expired in 2019 and that the plaintiffs had no further interest in the property. The plaintiffs appealed, arguing that the lease was not for agricultural purposes within the meaning of section 717, given the fire prevention intent.The California Court of Appeal, Second Appellate District, Division Six, reviewed the case. It held that, although cattle grazing generally constitutes an agricultural purpose under section 717, the particular circumstances here—where grazing was intended for fire prevention and not for commercial agriculture—meant the lease was not for agricultural purposes as defined by the statute. The court reversed the trial court’s judgment, finding that the lease was valid beyond the 51-year limit and that the plaintiffs’ leasehold interest should not be forfeited. View "Pacho Limited Partnership v. Eureka Energy Co." on Justia Law

Edward T. Saadi, a licensed attorney proceeding pro se, obtained a $90,000 judgment against Pierre Maroun and Maroun’s International, LLC (MILLC) following a jury verdict in a federal defamation suit. Despite the judgment, Saadi was unable to collect payment for nine years. In 2018, Saadi discovered information suggesting Maroun had transferred $250,000 from his personal account to MILLC, allegedly to evade the judgment. Saadi claimed these funds were used to purchase a condominium titled to MILLC but used as Maroun’s residence, and to pay Maroun’s personal expenses. Saadi initiated proceedings supplementary under Florida law, seeking to void the transfer and recover assets.The United States District Court for the Middle District of Florida allowed Saadi to file an impleader complaint against Maroun and MILLC, asserting claims for fraudulent transfer and actual and constructive fraud under Florida statutes. Saadi also sought sanctions when MILLC failed to produce a representative for deposition, but the district court denied the motion, finding the individual was not a managing agent of MILLC. Ultimately, the district court granted summary judgment for Maroun and MILLC, ruling that Saadi’s claims were time-barred under Florida’s statutes of repose and limitations, and that tolling provisions did not apply. The court also found that the remedies Saadi sought were unavailable under the relevant statutes.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed the district court’s rulings. Finding that several dispositive questions of Florida law lacked controlling precedent and were subject to conflicting interpretations by Florida’s intermediate appellate courts, the Eleventh Circuit certified five questions to the Florida Supreme Court. The court deferred its decision pending the Florida Supreme Court’s response to the certified questions. View "Saadi v. Maroun" on Justia Law

A law firm sought to recover over $1.7 million in fees and costs for representing the Los Angeles County Sheriff, Alex Villanueva, and the Sheriff’s Department in litigation initiated by the County of Los Angeles. Due to a conflict of interest, the County’s Board of Supervisors offered Villanueva independent counsel, allowing him to select his attorney but reserving discretion over compensation. Villanueva chose the law firm, which entered into an engagement agreement with him. The County, however, sent its own retainer agreement to the firm, which the firm refused to sign. The firm continued its representation but was never paid. After the firm demanded arbitration under its engagement agreement, the County and related plaintiffs filed suit seeking a declaration that no valid agreement to arbitrate existed and an injunction against the arbitration.The Superior Court of Los Angeles County granted a preliminary injunction, then summary judgment for the County plaintiffs, finding the Sheriff lacked authority to enter into the engagement agreement. The court denied the law firm’s post-judgment motion for leave to file a cross-complaint, citing both untimeliness and bad faith. The firm then filed a separate lawsuit against the County and related defendants, asserting breach of contract and related claims. The trial court sustained the County’s demurrer, dismissing the complaint with prejudice on grounds that the claims were compulsory cross-claims in the earlier action and for failure to allege compliance with the Government Claims Act.The California Court of Appeal, Second Appellate District, Division Eight, affirmed both the judgment in the County’s action and the dismissal of the law firm’s separate lawsuit. The court held that the Sheriff did not have authority to retain counsel on his own; only the Board of Supervisors could contract for legal services. The law firm’s claims were barred as compulsory cross-claims and for failure to comply with the Government Claims Act. View "County of Los Angeles v. Quinn Emanuel Urquhart & Sullivan, LLP" on Justia Law

A company based in the Commonwealth of the Northern Mariana Islands (CNMI), which provides computer and networking services, entered into a contract with a California-based distributor of Microsoft products. The CNMI company sought to purchase Microsoft software to fulfill a government contract. After a series of communications and assurances that the software would meet the CNMI government’s specifications, the CNMI company paid over $800,000 to the distributor, which then delivered the software directly to the CNMI government. The software did not conform to the required specifications, leading the government to cancel its contract with the CNMI company and request a refund. The CNMI company, in turn, sought a refund from the distributor, which offered a partial refund minus a cancellation fee. The CNMI company objected and filed suit alleging fraud, breach of contract, promissory estoppel, and unjust enrichment.The United States District Court for the Northern Mariana Islands dismissed the case for lack of personal jurisdiction over the California distributor. The district court relied on a then-binding Ninth Circuit panel decision, which was later vacated and replaced by an en banc decision. The district court did not address whether the claims arose out of the distributor’s contacts with the CNMI or whether exercising jurisdiction would be reasonable.On appeal, the United States Court of Appeals for the Ninth Circuit reversed the district court’s dismissal. The Ninth Circuit held that the CNMI company alleged sufficient facts to establish specific personal jurisdiction over the California distributor. The court found that the distributor purposefully availed itself of the privilege of doing business in the CNMI and purposefully directed its actions toward the CNMI. The court also concluded that the claims arose out of the distributor’s contacts with the CNMI and that exercising jurisdiction would not be unfair or unjust. View "SUPERTECH, INC. V. MY CHOICE SOFTWARE, LLC" on Justia Law