Justia Contracts Opinion Summaries

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Dr. Shailendra Kumar sued Dr. Anand Dhanda, alleging breach of contract and breach of a covenant not to compete. The contract at issue provided for disputes to be initially addressed through mandatory, non-binding arbitration. Dhanda filed a motion to dismiss the action, asserting that the suit was barred by the applicable statute of limitations. Kumar opposed dismissal, arguing that the complaint was timely because his cause of action had either not accrued or that limitations was tolled until the completion of arbitration. The trial court dismissed the action as time-barred, and the court of special appeals affirmed. The Court of Appeals affirmed, holding that while non-binding arbitration may have been a condition precedent to litigation, it neither affected the accrual of the underlying breach of contract claims, nor otherwise tolled the statute of limitations applicable to maintaining an action in court.

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Plaintiffs appealed an order of the district court granting in part and denying in part the motion of defendant to dismiss the complaint for failure to state a claim. Plaintiffs contended that the IRS wrongfully withheld tax refunds to which plaintiffs were entitled as the result of the IRS's misinterpretation of contractual language in Offer-in-Compromise (OIC) agreements that plaintiffs entered into with the IRS. The principal issue on appeal was whether specialized tax terms in an OIC agreement derived their meaning from the Internal Revenue Code or from ordinary "plain English." The court held that, when used in IRS standard form documents, specialized tax terms such as "refund" and "overpayment" were interpreted in light of the Internal Revenue Code. Further, tax refunds made pursuant to the Economic Stimulus Act of 2008, I.R.C. 6428, related to the 2007 tax year, and so those refunds fell with the OIC agreements' temporal limitation. Finally, plaintiffs' agreement to forfeit their interest in "any" tax refund for the 2007 tax year encompassed anticipated as well as unanticipated tax refunds. Based on these holdings, the court concluded that the IRS correctly withheld the tax refunds at issue in this action from plaintiffs under the express terms of the OIC agreements.

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Petitioners, a pair of adult children, sued Griffith Energy Services, an energy company that spilled heating oil in Petitioners' parents' home, and its attorneys for fraud and negligent supervision. Petitioners' parents (Parents) had previously sued Griffith and won a judgment after a jury trial. The circuit court dismissed Petitioners' lawsuit, holding, inter alia, that Petitioners' claims were barred by res judicata. The court of special appeals affirmed, reaching only the res judicata issue. The Court of Appeals affirmed, holding (1) Petitioners were in privity with Parents, and (2) thus, the intermediate appellate court did not err in holding that Petitioners' claim was barred by res judicata.

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Plaintiffs sued Juno under the Interstate Land Sales Full Disclosure Act (ILSFDA), 15 U.S.C. 1701, seeking rescission of their purchase agreement in a lot at Creighton Farms, claiming that Juno misrepresented its involvement with the Ritz-Carlton in regards to the Creighton Farms development. The court held, among other things, that plaintiffs established that they merit equitable rescission and that the district court properly determined that the equitable remedy was to return the property title to Juno and return the purchase price, plus interest, to plaintiffs. The court held, however, that the district court abused its discretion when it denied plaintiffs pre-judgment interest on the debt portion of their purchase funds. Therefore, the court reversed the district court and awarded plaintiffs prejudgment interest on the funds at issue at 7 percent. Accordingly, the court affirmed in part and reversed in part.

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This case arose when a real estate developer hired HOD to act as general contractor for the construction of two multi-family residences. HOD entered into a subcontract with Well Built for the masonry work. At issue was whether a general contractor acted as a joint employer of masonry workers, who were employed by one of its subcontractors, thereby owing unpaid wages to the subcontractor's workforce. The court held that the Board erred as a matter of law in relying on the federal six-factor test in Zheng v. Liberty Apparel Co., Inc. in reaching its determination of joint employment. Because the Board's factual findings indicated nothing more than that the usual contractor/subcontractor relationship existed between HOD and Well Built during the three-month period that Well Built's principal, Martin Bruten, was on the job, the court need not resort to federal precedent to resolve the issue. In any event, even if the court were to apply the Zheng test, the court would hold that HOD was not a joint employer of Well Built's employees. Accordingly, the judgment of the Appellate Division should be reversed and the matter remitted with directions to remand to the Board for further proceedings.

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This case stemmed from a dispute between Ghana and Balkan Energy Company where Balkan contracted with Ghana to refurbish and recommission a 125 megawatt power barge. Ghana filed an application for discovery pursuant to 28 U.S.C. 1782, seeking documents exchanged in a separate lawsuit between the current defendants. The district court granted Ghana's application and ordered the Missouri companies (collectively ProEnergy) to produce documents. ProEnergy produced some documents and discovery materials from its lawsuit with Balkan, but it refused other documents related to the settlement of that lawsuit. Because ProEnergy had already produced most of the documents, depositions, and interrogatory answers from its lawsuit with Balkan, and because ProEnergy was not party to the foreign litigation, the court was not persuaded that any fundamental unfairness was caused by the district court declining to compel production of the settlement documents. Accordingly, the court affirmed the decision.

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Mortenson brought this action to compel arbitration with Saunders concerning a dispute arising out of a wind turbine project. The district court granted the motion and Saunders appealed. The court affirmed, concluding that section 21.2 of the subcontract between the parties was a separate provision containing a specific agreement to arbitrate and was not unconscionable.

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This appeal concerned the 2003 fire that occurred at the Station nightclub, wherein one hundred people died. The nightclub was co-owned by Plaintiffs, Michael and Jeffrey Derderian. A grand jury returned separate criminal indictments against Plaintiffs on charges of involuntary manslaughter. Prior to the fire, Essex Insurance Company had issued an insurance policy to Michael. Plaintiffs demanded, pursuant to R.I. Gen. Laws 12-28-5 and the policy, that Essex afford them a defense against the criminal prosecutions. When Essex refused, Plaintiffs filed a complaint against Essex, seeking a declaratory judgment that the grand jury indictments against them constituted a suit as defined in the Essex policy and that, accordingly, Essex had a duty to provide them with a defense in the related criminal proceedings. The superior court granted summary judgment in favor of Essex. The Supreme Court affirmed, holding that the language of the policy clearly showed that the parties' intention when entering into the contract was that Essex would provide Plaintiffs with a defense only in civil proceedings in which bodily injury or property damage were alleged, and therefore, Essex had no duty to defend Plaintiffs in their criminal prosecutions.

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In 1999, the Baltimore City Council enacted an urban renewal plan (Plan) to renew a portion of Baltimore City. A five-block area located in the renewal area was the subject of protracted litigation between 120 West Fayette, LLLP and the Mayor and City Council of Baltimore. The current iteration of the litigation focused on a memorandum of agreement (MOA) between the City and the Maryland Historical Trust relating to the treatment of historic properties in connection with the Plan. The MOA required the City to submit redevelopment plans to the Trust for approval. After the Trust's director provided conditional approval of a fifth set of plans 120 West Fayette (Appellant) filed a complaint seeking a declaration of rights interpreting the terms of the MOA. The circuit court dismissed the complaint, finding that Appellant was neither a party to, nor an intended beneficiary of, the MOA, and therefore, Appellant failed to state a claim upon which relief could be granted. The Court of Appeals affirmed, holding that Appellant, at best an incidental beneficiary to the MOA, could not file a suit requesting declaratory judgment that interprets and enforces an agreement to which it had no part.

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After allowing discovery on the issue of whether Kansas courts could exercise personal jurisdiction over some of the defendants in this case, the district court granted defendant Tel-Instrument Electronics Corp.'s (TIC) motion to dismiss for lack of personal jurisdiction. At issue on interlocutory appeal was the correct standard for judging a motion to dismiss for lack of personal jurisdiction when that motion is decided after discovery but without an evidentiary hearing. The Supreme Court reversed, holding (1) plaintiff Aeroflex Wichita, as the party with the ultimate burden of establishing jurisdiction and as the party responding to a motion to dismiss presented to the court without an evidentiary hearing, need only establish a prima facie basis for jurisdiction; (2) in determining if that prima facie burden has been met, a district court should view factual disputes in the light most favorable to the nonmoving party, and an appellate court applies the same standard de novo; and (3) in this case, the district court erred erred by weighing the evidence rather than granting all favorable inferences to Aeroflex, and Aeroflex presented a prima facie case of jurisdiction based on a conspiracy between TIC and its codefendants, over whom the court had jurisdiction.