Justia Contracts Opinion Summaries

The plaintiff entered into an oral lease agreement with the defendant for the rental of a dump trailer for seven days at a flat rate. During the lease period, the plaintiff was arrested while using the trailer, and the trailer was impounded by law enforcement. The defendant retrieved the trailer from the impound lot before the lease term ended. The plaintiff was released from custody before the lease expired and alleged that the defendant breached the contract by repossessing the trailer early and converted his property contained in the trailer, which he claimed to be valuable.The District Court of Cass County, East Central Judicial District, granted summary judgment in favor of the defendant, Muddy Boyz Drywall LLC, dismissing the plaintiff’s claims. The court concluded there were no genuine issues of material fact regarding the alleged breach of contract and conversion. After procedural steps involving the dismissal of counterclaims and certification under Rule 54(b), the plaintiff appealed the certified judgment.The Supreme Court of North Dakota reviewed the case de novo. The Court held that genuine issues of material fact existed regarding the terms of the oral contract, whether its conditions were breached, whether the defendant’s performance was rendered impossible, and whether the plaintiff suffered damages. The Court also found that the plaintiff’s complaint sufficiently alleged a conversion claim and that factual disputes existed regarding ownership, value, and the defendant’s disposal of the plaintiff’s property. The Supreme Court of North Dakota reversed the judgment dismissing the plaintiff’s claims and remanded the case to the district court for further proceedings. View "Gum v. Muddy Boyz Drywall" on Justia Law

The dispute centers on a commercial contract between two companies, one providing live-chat and visitor-monitoring software services and the other purchasing licenses for these services. The contract, first executed in 2008 and amended multiple times, included automatic annual renewal, a termination-for-convenience clause, and a late-payment-charge clause. In 2022, the parties agreed to a two-year term without modifying the termination or late-payment provisions. About seven months into the new term, the buyer exercised its right to terminate for convenience. The seller then invoiced the buyer for the entire remaining balance of the two-year term, asserting that full payment was due despite the early termination. The buyer disputed this, arguing it owed only for services rendered up to the termination date.The case was tried without a jury in the Madison Circuit Court. The trial court found the termination-for-convenience clause ambiguous regarding payment obligations upon early termination. Relying on witness testimony and email correspondence to resolve this ambiguity, the court concluded the buyer owed the full remaining contract balance and imposed a late-payment charge, also awarding the seller its costs and attorneys’ fees.On appeal, the Supreme Court of Alabama reviewed whether the contract’s termination and late-payment provisions were ambiguous. The court held that the termination-for-convenience clause was unambiguous: the buyer was obligated to pay only for services received up to the termination date, not the full contract term. The court further found the late-payment-charge clause inapplicable because the invoice in question was disputed and not for a quarterly period as required by the contract. As a result, the Supreme Court of Alabama reversed the trial court’s judgment, including the award of attorneys’ fees and expenses, and remanded for further proceedings consistent with its opinion. View "LG Electronics Alabama, Inc. v. Velaro, Inc." on Justia Law

Derek and Keisha Hall hired Jose Silva to construct their new home and financed the project through Priority One Bank, where Harvey Lott served as the loan officer. The Halls later discovered construction defects and alleged that Silva, Lott, and the bank engaged in a secret arrangement for personal profit, including unauthorized loan disbursements and a failure to conduct proper inspections. The Halls also claimed Silva lacked a contractor’s license and that the relationship between Silva and Lott involved improper payments. Both Lott and the bank denied these allegations, asserting that bank inspections were for their own benefit and that loan advances sometimes occurred before work was completed, in line with their agreement.The Halls brought several claims against the bank, Lott, and Silva in the Jefferson Davis County Circuit Court, including breach of contract, fraud, and conspiracy. In response, the bank and Lott sought summary judgment, but the circuit court denied their motion, finding that genuine issues of material fact remained. Subsequently, the Halls moved to strike a provision in the loan agreement, arguing it was unconscionable and deprived them of legal remedies. The circuit court granted this motion, holding the provision was void, invalid, and unconscionable.The Supreme Court of Mississippi reviewed the case on interlocutory appeal. It held that the Halls’ “Motion to Strike Contract Provision” was not an appropriate procedural vehicle to challenge the enforceability of a contract provision, as motions to strike under Mississippi Rule of Civil Procedure 12(f) are limited to pleadings, not contract clauses. The court reversed the circuit court’s order striking the provision and remanded the case for further proceedings, directing that any challenge to the provision’s enforceability must follow the proper procedures for dispositive motions. View "Priority One Bank v. Hall" on Justia Law

Three siblings contracted with a funeral home for the cremation of their mother’s remains. The transaction involved two documents: a Purchase Agreement, signed only by one sibling, and an Authorization for Cremation, signed by all three. The Purchase Agreement contained an arbitration clause. The siblings later claimed that the funeral home failed to provide notice and an opportunity to cancel the cremation, as they had allegedly been promised. After the cremation was performed without further notice, the siblings and the decedent’s estate sued the funeral home for breach of contract and various torts.The case was first heard by the Eighth Judicial District Court in Clark County. The funeral home moved to compel arbitration under the agreement. The district court denied the motion, reasoning that factual issues remained as to the enforceability of the agreement and the arbitration provision. Specifically, the court found uncertainty regarding the right to cancel and determined that only the signing sibling could potentially be bound by the arbitration clause, pending resolution of factual disputes. The court also concluded that the nonsignatory siblings and the estate were not bound by the arbitration clause, rejecting the funeral home’s equitable estoppel arguments.On appeal, the Supreme Court of the State of Nevada reviewed whether the enforceability of the contract containing an arbitration clause must be decided by the arbitrator under NRS 38.219(3), regardless of whether a delegation provision was invoked below, and whether nonsignatories could be bound to arbitrate under equitable estoppel. The Supreme Court held that under NRS 38.219(3), the arbitrator must resolve the contract’s enforceability, and the district court erred in denying arbitration on that basis. The court further held that the two nonsignatory siblings are equitably estopped from avoiding arbitration because they seek a direct benefit from the agreement, but the estate is not bound. The order was affirmed in part, reversed in part, and remanded for further proceedings. View "LEGACY FUNERAL HOLDINGS OF NEV., LLC VS. OUZENIAN" on Justia Law

A dispute arose between two parties who had entered into a contractual agreement to jointly develop and market a therapeutic tabletop role-playing game. The plaintiffs, including the individual who originally developed the game and his company, had created intellectual property related to the game and later formed a business entity to market and distribute it. The defendants, including a psychologist and his companies, operate a business that integrates therapeutic practices with “geek” culture, and they sought to develop and sell the game using their resources. The parties executed a second licensing agreement (SLA) that allowed the defendants to use, market, and sell the game content, while the plaintiffs retained ownership of the intellectual property until a future sale was negotiated. Disagreements arose after a potential change to a third-party game license led the plaintiffs to propose significant changes to the game, which the defendants opposed due to business concerns. Communication broke down, and the plaintiffs eventually demanded that the defendants cease use of the game and related intellectual property.The United States District Court for the Northern District of Texas found in favor of the defendants, granting summary judgment and dismissing all claims. The district court determined that the SLA was a valid, binding contract authorizing the defendants to use the content, and that the plaintiffs’ failure to bill for certain services did not constitute a breach allowing them to terminate the agreement. The court also rejected claims related to derivative works, trademark use, and the use of the individual plaintiff’s name and likeness, finding the actions authorized by the contract.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s judgment. The Fifth Circuit held that the SLA was valid and enforceable, that it authorized the defendants’ use of the game content and associated intellectual property, and that the plaintiffs’ claims for intellectual property infringement, name-and-image misappropriation, and unjust enrichment were properly dismissed. View "Thomas v. Leyline Publishing" on Justia Law

Two companies that compete in the financial technology sector became involved in a dispute after one, SS&C (which had acquired Advent), alleged that its competitor, Arcesium, misappropriated trade secrets from its Geneva portfolio accounting software. Previously, Advent and Arcesium had entered into a Hosted Reseller Agreement (HRA) that allowed Arcesium to sublicense Geneva to its own customers and provide related services, subject to confidentiality and non-disclosure provisions. The HRA specifically prohibited Arcesium from using Geneva to develop competing products. After the HRA expired, SS&C alleged that Arcesium used its access to Geneva to develop competing software, Trinity and Nautilus, by copying proprietary features and methods, in violation of their agreements.The United States District Court for the Southern District of New York dismissed SS&C’s trade secret misappropriation claims, holding that while SS&C sufficiently alleged the existence of trade secrets, it did not adequately allege that Arcesium misappropriated those secrets. The district court also denied SS&C’s motion to vacate the dismissal and to amend its complaint, after considering documents referenced in the complaint and crediting Arcesium’s interpretations of those documents.The United States Court of Appeals for the Second Circuit reviewed the district court’s order de novo. The appellate court held that SS&C’s complaint contained sufficient factual allegations to plausibly state a claim for trade secret misappropriation under the Defend Trade Secrets Act, including direct and circumstantial allegations of use and improper acquisition. The Second Circuit found that the district court improperly engaged in fact-finding and inappropriately credited Arcesium’s version of contested facts at the pleading stage. The court reversed the district court’s dismissal of the trade secret misappropriation claims and remanded the case for further proceedings. View "SS&C Technologies Holdings, Inc. v. Arcesium LLC" on Justia Law

Two Oklahoma cattle ranchers entered into an agreement with an Idaho-based cattle breeder concerning the ownership and profits from a Hereford bull named Guardian. The arrangement involved the Plaintiffs bidding on Guardian at an Oklahoma auction, acquiring a partial ownership interest, and receiving a share of profits from the sale of Guardian’s semen. The agreement also contemplated that Guardian would spend part of each year in Oklahoma. After the auction, Guardian remained in the Defendant’s custody out of state. Plaintiffs alleged that the Defendant’s negligent care led to Guardian’s death and sought compensation and an accounting of profits.The District Court of Oklahoma County dismissed the Plaintiffs’ action for lack of both general and specific personal jurisdiction, finding that the Defendant’s contacts with Oklahoma were insufficient. After the judgment, a dispute arose over the timeliness of the Plaintiffs’ appeal, because proof of service of the judgment was not immediately filed. The Defendant moved to dismiss the appeal as untimely, arguing the appellate deadline had passed.The Supreme Court of the State of Oklahoma held that the Plaintiffs’ appeal was timely, as the thirty-day period to appeal began when proof of service was filed, not when the judgment was originally served. The Supreme Court further found that, although Oklahoma lacked general jurisdiction over the Defendant, specific personal jurisdiction existed because the Defendant purposefully directed activities toward Oklahoma by facilitating the auction transaction and ongoing custodial arrangement. Plaintiffs’ claims “arose out of or related to” these contacts. The Supreme Court denied the motion to dismiss the appeal, reversed the district court’s order dismissing for lack of personal jurisdiction, and remanded for further proceedings. View "SCHRAMMEL & WARD v. COLYER HEREFORDS AND ANGUS, INC." on Justia Law

A restaurant group based in Orange County provided catering services to a client and his family during the Masters golf tournament in Georgia. The parties discussed a menu for seven days but did not sign a written contract or discuss the cost beforehand. The restaurant group ended up providing meals and services for five days, serving around 25 guests per meal. After the event, the group sent an invoice for nearly $75,000, which the client disputed and refused to pay, leading to an increase in the invoice amount. The client maintained that he had been overcharged and would have made other arrangements had he known the cost.The Superior Court of Orange County heard the breach of contract case. During discovery, the client denied a request for admission that he had contracted with the restaurant group for seven days of service. At trial, the jury found in favor of the restaurant group but awarded a lesser amount than invoiced. After the verdict, the restaurant group sought cost-of-proof attorney’s fees under California Code of Civil Procedure section 2033.420 for the client’s denial of the request for admission, as well as court reporter costs. The trial court awarded only a small portion of the requested attorney’s fees, explaining that the restaurant group had not properly identified which fees related specifically to proving contract formation. The court also struck the entire amount claimed for court reporter costs, finding the group had not provided sufficient proof that the costs were recoverable.On appeal, the California Court of Appeal, Fourth Appellate District, Division Three, affirmed both the fee and costs orders. The court held that the restaurant group was entitled to some cost-of-proof fees because the client denied a request for admission that was later proved true, but the trial court did not abuse its discretion in awarding only a limited amount due to the group’s failure to segregate relevant fees. The court also upheld the denial of court reporter costs for lack of supporting documentation. View "Hanna Carroll Restaurant Group LLC v. Hagestad" on Justia Law

The plaintiff worked for a telecommunications company, first as a contractor and later as an employee. His primary responsibilities involved designing, developing, and documenting the company's interactive voice response (IVR) system, an automated system that routes customer calls. He led projects integrating and updating this system and served as the main point of contact for related IT services. Over time, his workload increased significantly, leading him to work long hours. After unsuccessful attempts to resolve concerns about his workload, he resigned.After his employment ended, the plaintiff sued the company in the United States District Court for the Southern District of Ohio, claiming violations of the Fair Labor Standards Act (FLSA) for unpaid overtime and breach of contract for not being paid $75 per hour for all hours worked. The company argued he was exempt from FLSA overtime requirements as a computer employee and that no valid contract for hourly pay existed. The district court granted summary judgment to the company, finding him exempt under the FLSA's computer employee exemption and concluding no contract existed.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed the district court’s decision de novo. The appellate court found that the plaintiff’s primary duties involved the design, development, and documentation of the IVR system, meeting the statutory criteria for the computer employee exemption under the FLSA, regardless of his lack of formal computer science education. The court also agreed with the lower court that the offer letter did not constitute a contract and that the subsequent at-will employment relationship did not create enforceable terms for hourly pay beyond forty hours. The Sixth Circuit affirmed the district court’s judgment. View "Bennink v. Cincinnati Bell Tel. Co. LLC" on Justia Law

The appellants entered into a contract with the appellee for the construction of a house in Franklin County, Pennsylvania, and paid a $10,000 deposit. After terminating the contract in October 2015, the appellants expected the return of their deposit, but the appellee retained it. On April 10, 2017, the appellants filed a complaint in magisterial district court (MDJ court) seeking the return of the deposit. The MDJ court entered judgment in their favor, awarding the deposit amount plus costs.The appellee then timely appealed to the Franklin County Court of Common Pleas, which required the appellants to file a new complaint within twenty days. The appellants failed to do so, and the case became dormant until July 2020, when, in response to a notice of intent to terminate, the appellants filed a common pleas court complaint including a conversion claim. The appellee asserted that this claim was barred by the statute of limitations. At trial, the jury found in favor of the appellants on conversion and determined the claim accrued on October 15, 2015. However, the trial court granted a directed verdict for the appellee, holding the complaint was not timely filed within the two-year statute of limitations. The Superior Court of Pennsylvania affirmed, holding that the filing of an MDJ complaint tolls the statute of limitations only during the pendency of the MDJ case and that the statute begins to run again after the expiration of the twenty-day period to file a complaint in the Court of Common Pleas.The Supreme Court of Pennsylvania reversed the Superior Court’s holding. It held that the filing of an MDJ complaint tolls the statute of limitations for any cause of action based on the factual averments in that complaint, including during any appeal, and that the subsequent filing of a common pleas court complaint is a continuation of the original action, not the commencement of a new one. The appellants’ claim was thus not time barred. View "Whittington v. Daniels" on Justia Law