Eric Bradley and Jacqueline Chuang filed a lawsuit in the Washtenaw Circuit Court against Linda Frye-Chaiken for breach of contract, specific performance, and promissory estoppel. The dispute arose from an agreement to sell a condominium in the Cayman Islands, which Frye-Chaiken later hesitated to complete following her mother's death. Frye-Chaiken claimed the contract was obtained through coercion or fraud and counterclaimed that her diminished capacity due to her mother's illness invalidated the agreement. The trial court granted summary disposition in favor of Bradley and Chuang, ordering specific performance of the contract and dismissing Frye-Chaiken's counterclaims.The Court of Appeals affirmed the trial court's decision, supporting the summary disposition and the order for specific performance. Bradley and Chuang then sought sanctions, arguing that Frye-Chaiken's defenses and counterclaims were frivolous. Frye-Chaiken hired Barry Powers to represent her in the sanctions proceedings. The trial court awarded $16,714.27 in attorney fees to Bradley and Chuang, holding Frye-Chaiken, Powers, and her previous attorneys jointly and severally liable for the sanctions.The Michigan Supreme Court reviewed the case and held that under MCR 1.109(E) and MCL 600.2591, sanctions for frivolous filings should only be imposed on the attorney who signed the frivolous documents and the represented party. The court found that Powers did not sign any of the frivolous documents and was only involved in litigating the amount of sanctions. Therefore, the trial court abused its discretion by holding Powers jointly and severally liable for the sanctions. The Michigan Supreme Court reversed the Court of Appeals' decision and remanded the case for further proceedings consistent with its opinion. View "Bradley v. Frye-Chaiken" on Justia Law

Fitness International, LLC ("Fitness") entered into a lease agreement with City Center Ventures, LLC ("City Center") for a property in Hopkins, Minnesota, where Fitness operated a health club. Due to executive orders during the COVID-19 pandemic, Fitness was mandated to close its business for approximately 3.5 months in 2020. Fitness sought to recover the rent paid during these closure periods, arguing that the doctrine of frustration of purpose excused its obligation to pay rent during the mandatory closure.The Hennepin County District Court granted summary judgment in favor of City Center, concluding that Fitness's obligation to pay rent was not excused. The Minnesota Court of Appeals affirmed, noting that Fitness cited no binding authority allowing the doctrine of frustration of purpose to establish a breach-of-contract claim. The court of appeals also determined that the mandatory COVID-19 closures did not prohibit all permitted uses of the property, thus not substantially frustrating the lease's purpose.The Minnesota Supreme Court reviewed the case to consider the doctrine of frustration of purpose. The court recognized that the Restatement (Second) of Contracts §§ 265 and 269 provide appropriate frameworks for analyzing claims of permanent and temporary frustration of purpose, respectively. However, the court did not decide whether the doctrine could be used affirmatively for a breach-of-contract claim. Instead, it concluded that even if Fitness could pursue such a claim, the obligation to pay rent was only suspended, not discharged, during the temporary frustration. Since Fitness did not establish that paying rent after the closure would be materially more burdensome, the court affirmed the lower courts' decisions, denying Fitness's claim for rent recovery.The Minnesota Supreme Court affirmed the decision of the court of appeals, holding that Fitness's obligation to pay rent was merely suspended during the temporary frustration and not discharged. View "Fitness International, LLC v. City Center Ventures, LLC" on Justia Law

David Hepfl and Jodine Meadowcroft had a complex romantic history, including two marriages and divorces. After their second divorce, they reconciled in 2016 and decided to build a cabin on Meadowcroft's property, which she had retained as nonmarital property. Hepfl paid for the construction and furnishing of the cabin, as well as additional structures like a dock and outhouse. Their relationship ended again in October 2020, and Meadowcroft obtained an Order for Protection (OFP) against Hepfl. Hepfl then filed a civil action alleging unjust enrichment to recover the cabin and its associated fixtures and furnishings or reasonable payment.The district court ruled in favor of Hepfl, concluding that Meadowcroft would be unjustly enriched if she retained the cabin and its associated items without compensating Hepfl. The court found that Hepfl had no intention of gifting the cabin to Meadowcroft and that his contributions were made with the expectation of shared use. Meadowcroft's motion for amended findings was denied, and she was ordered to pay Hepfl for the construction costs and return or compensate for the additional items.The Minnesota Court of Appeals affirmed the district court's decision, agreeing that Meadowcroft's retention of the cabin would result in unjust enrichment. The court noted that Hepfl's contributions were made with the expectation of shared use and that Meadowcroft's actions induced him to make these expenditures.The Minnesota Supreme Court reviewed the case and affirmed the lower courts' decisions. The court held that Hepfl did not need to show that Meadowcroft engaged in morally wrongful conduct to succeed in his unjust enrichment claim. Instead, it was sufficient that Meadowcroft's retention of the cabin and its associated items would be inequitable under the circumstances. The court emphasized that unjust enrichment claims between former partners in a cohabitating, marriage-like relationship should focus on the equities of the situation rather than the conduct of the parties. View "Hepfl v. Meadowcroft" on Justia Law

RCBA Nutraceuticals, LLC, a Florida-based nutritional supplements company, contracted with Western Packaging, Inc. for the manufacture of plastic zipper pouches to hold its protein powder. These pouches were produced by PolyFirst Packaging, Inc. in Wisconsin, which was later acquired by ProAmpac Holdings, Inc. The pouches were shipped to companies in New York and Texas for filling. RCBA discovered that the pouches were defective, with seams splitting and spilling the protein powder, leading to a lawsuit against ProAmpac in federal court in Wisconsin. RCBA's claims included breach of contract, breach of implied warranties, negligence, civil conspiracy, and fraudulent misrepresentation.The United States District Court for the Eastern District of Wisconsin dismissed RCBA’s complaint. The court found that the claims were "foreign" under Wisconsin’s borrowing statute, WIS. STAT. § 893.07, and applied the statutes of limitations from New York and Texas for the contract claims, and Florida for the negligence claim. The court concluded that the contract claims were time-barred under the four-year statutes of limitations of New York and Texas, and the negligence claim was time-barred under Florida’s statute of limitations. The remaining tort claims were precluded by the economic loss doctrine. RCBA’s motion to reconsider was denied, with the court ruling that RCBA had waived its equitable arguments by not raising them earlier.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s dismissal. The appellate court agreed that the final significant event for the contract claims occurred where the defective pouches were delivered, in New York and Texas, making the claims foreign and subject to those states' statutes of limitations. The court also upheld the district court’s decision to deny the motion to reconsider, noting that RCBA had waived its equitable arguments by not presenting them in response to the motion to dismiss. The court concluded that RCBA’s claims were either time-barred or precluded. View "RCBA Nutraceuticals, LLC v. ProAmpac Holdings, Inc." on Justia Law

Windward Bora LLC purchased a junior promissory note signed by Constance and Royston Browne, secured by a junior mortgage on real property. Windward's predecessor had already obtained a final judgment of foreclosure on the junior mortgage. Without seeking leave from the court that issued the foreclosure, Windward filed a diversity action to recover on the promissory note. Both parties moved for summary judgment.The United States District Court for the Southern District of New York granted the Brownes' motion for summary judgment and denied Windward's. The court found diversity jurisdiction by comparing the national citizenship of the Brownes with that of Windward’s sole member, a U.S. lawful permanent resident, and concluded that state domiciles were irrelevant. It also held that the suit was precluded by New York’s election-of-remedies statute because Windward did not seek leave before suing on the note after its predecessor had already sued on the mortgage. The court found no special circumstances to excuse Windward’s failure.The United States Court of Appeals for the Second Circuit reviewed the case. It agreed with the district court that diversity jurisdiction was present but clarified that the state domiciles of the parties were relevant. The court resolved a divide among district courts, stating that there is no diversity jurisdiction in a suit between U.S. citizens and unincorporated associations with lawful permanent resident members if such jurisdiction would not exist in a suit between the same U.S. citizens and those permanent resident members as individuals. The court also affirmed the district court’s decision to grant summary judgment for the Brownes under New York’s election-of-remedies statute, finding no special circumstances to excuse Windward’s failure to seek leave. The judgment of the district court was affirmed. View "Bora v. Browne" on Justia Law

Keiland Construction, L.L.C. entered into a construction subcontract with Weeks Marine, Inc. for a project in Louisiana. Weeks terminated the contract for convenience, leading to a dispute over compensation. Keiland submitted pay applications and demobilization costs, which Weeks partially paid. The disagreement centered on whether the contract required lump-sum payments for work completed before termination or if it converted to a cost-plus basis upon termination.The United States District Court for the Western District of Louisiana held a bench trial and found the contract ambiguous. It construed the ambiguity against Keiland, the drafter, and ruled in favor of Weeks. The court awarded Keiland damages based on Weeks’s interpretation of the contract but denied Keiland’s claims for direct employee and demobilization costs. The court also awarded Weeks attorneys’ fees and costs, though less than requested, and denied Weeks’s motion for post-offer-of-judgment fees and costs.The United States Court of Appeals for the Fifth Circuit reviewed the case. It affirmed the district court’s findings, agreeing that the contract was ambiguous and that the ambiguity should be construed against Keiland. The appellate court upheld the district court’s rulings on damages, attorneys’ fees, and costs, including the denial of post-offer-of-judgment fees and costs. The court also affirmed the award of prejudgment interest to Keiland, finding no abuse of discretion.In summary, the Fifth Circuit affirmed the district court’s judgment in all respects, including the interpretation of the contract, the award of damages, attorneys’ fees, costs, and prejudgment interest. View "Keiland Construction v. Weeks Marine" on Justia Law

The case involves a dispute between the law firm Abraham Watkins Nichols Agosto Aziz & Stogner and its former associate, Edward Festeryga. Abraham Watkins terminated Festeryga’s employment after discovering that he attempted to take clients and firm files to a new firm. Abraham Watkins sued Festeryga in Texas state court for conversion, breach of fiduciary duty, and tortious interference with contract. Festeryga moved to dismiss the suit under Texas’s anti-SLAPP statute, the Texas Citizens Participation Act (TCPA), which stayed the expedited discovery sought by Abraham Watkins. Despite agreeing to produce certain documents, Festeryga filed a notice of removal to federal court, claiming diversity jurisdiction as a Canadian citizen.The United States District Court for the Southern District of Texas remanded the case back to state court. The district court did not address whether Festeryga had shown diversity of citizenship but concluded that Festeryga waived his right to remove by participating in state court proceedings, specifically by filing a TCPA motion to dismiss. The district court found that this action demonstrated an intent to invoke the jurisdiction of the state court.The United States Court of Appeals for the Fifth Circuit reviewed the case to determine if it had appellate jurisdiction over the remand order. The court concluded that it did not have jurisdiction, citing its precedent in In re Weaver, which held that waiver-based remand orders are jurisdictional under 28 U.S.C. § 1447(c) and thus unappealable under § 1447(d). The court noted that although it disagreed with the reasoning in Weaver, it was bound by the rule of orderliness to follow the precedent. Consequently, the Fifth Circuit dismissed the appeal for lack of appellate jurisdiction. View "Abraham Watkins Nichols Agosto Aziz & Stogner v. Festeryga" on Justia Law

Southbridge RE, LLC (Southbridge) executed promissory notes and secured mortgages for two properties in Massachusetts with LendingHome, which later assigned the mortgages to Christiana Trust. However, LendingHome had previously issued blank assignments of the same mortgages to Toorak Capital Partners as security for a private funding agreement. Toorak filled in its name and recorded the assignments after Southbridge defaulted on the mortgages. Christiana Trust conducted foreclosure sales on both properties, which Southbridge contested, arguing that the blank assignments to Toorak broke the chain of title, rendering the foreclosures invalid.The United States District Court for the District of Massachusetts found that the blank assignments to Toorak were void under Massachusetts law and granted summary judgment in favor of Christiana Trust, declaring it had the authority to conduct the foreclosure sales. The court denied Southbridge's motion for summary judgment and defendants' cross-claims for slander of title, unjust enrichment, and promissory estoppel. Southbridge appealed the decision.The United States Court of Appeals for the First Circuit affirmed the district court's judgment. The appellate court held that under Massachusetts law, assignments in blank are void and convey no interest. The court found that Toorak's filling in its name on the blank assignments did not validate them, as Toorak lacked authorization from LendingHome. The court also determined that post-foreclosure affidavits confirming the invalidity of the Toorak assignments were proper and did not contravene state law. Additionally, the court ruled that the foreclosure sale notices did not need to reference the void Toorak assignments, as they were not part of the chain of title. Thus, the foreclosure sales conducted by Christiana Trust were valid. View "Southbridge RE, LLC v. Kiavi Funding, Inc." on Justia Law

The case involves a qui tam action under the False Claims Act (FCA) brought by Relators against Great American Insurance Company (GAIC) and Native American Services Corporation (NASCO). The Relators allege that GAIC and NASCO fraudulently took control of DWG & Associates, Inc. (DWG), a company that had graduated from the Small Business Administration's (SBA) 8(a) program but was still performing on 8(a) contracts. The 8(a) program is designed to help small, disadvantaged businesses compete for federal contracts. DWG, initially owned and controlled by a disadvantaged individual, Gose, lost its eligibility when GAIC and NASCO allegedly took over its ownership and control without notifying the SBA or seeking a waiver, as required by the program's regulations.The United States District Court for the Middle District of Florida dismissed the Relators' claims with prejudice. The court found that DWG, having graduated from the 8(a) program, was no longer a "participant" and thus not subject to the program's ownership and control requirements. Consequently, the court ruled that Relators failed to allege any false claims. Additionally, the court held that fraudulent inducement related to bidding on government contracts was not actionable under the FCA and that Relators failed to meet the particularity requirements of Rule 9(b) for pleading fraud.The United States Court of Appeals for the Eleventh Circuit reversed the District Court's decision. The appellate court held that a business that has graduated from the 8(a) program but is still performing on 8(a) contracts remains a "participant" and is subject to the program's ownership and control requirements. The court further held that submitting bids and claims for payment under these circumstances without notifying the SBA or obtaining a waiver could constitute an actionable claim under the FCA. The court also found that Relators' complaint met the particularity requirements of Rule 9(b) by providing sufficient details about the alleged fraudulent conduct, including the specific contracts, task orders, and the date DWG became ineligible to bid. The case was remanded for further proceedings consistent with the appellate court's opinion. View "Berry v. Native American Services Corporation" on Justia Law

The case involves a dispute between two parties who entered into a partnership agreement that specified the financial conditions under which the appellant would receive a distribution upon the sale of the partnership’s principal asset. The agreement set a net-sale-price threshold above which the appellant would receive a distribution, and it directed the general partner to calculate that net sale price by deducting certain categories of costs from the gross sales price. The general partner determined that the deductions reduced the net sale price below the minimum threshold for a distribution. The appellant challenged several of these deductions, particularly the costs incurred to defease the interest payments on the mortgage.The Court of Chancery of the State of Delaware reviewed the case and held that the deduction for the costs to defease the interest payments on the mortgage was proper under the partnership agreement. The court concluded that this deduction was outcome determinative and entered judgment in favor of the partnership. The court also noted that the general partner acted in good faith in calculating the net sale price, which eliminated any breach of contract claim.The Supreme Court of the State of Delaware reviewed the case and affirmed the Court of Chancery’s judgment. The Supreme Court held that the plain language of the partnership agreement and the formula used permitted the challenged deduction for defeasance costs. The court did not reach the effect or correctness of the Court of Chancery’s alternative holding regarding the general partner’s good faith. The Supreme Court concluded that the defeasance costs were properly deducted, which reduced the net resale price below the threshold required for the appellant to receive a distribution. View "Exit Strategy, LLC v. Festival Retail Fund BH, L.P." on Justia Law