Justia Contracts Opinion Summaries

by
The questions before the Supreme Court in this case stemmed from damages sustained because of food contaminated by E. coli pathogens at two Sizzler Steak House restaurants. The plaintiffs in the underlying actions settled years ago, and the claims before the Court related to the apportionment of liability and costs among those who were defendants in the underlying actions. The defendants included Sizzler and Excel corporation, which processed and distributed the contaminated meat that was source of the E. coli pathogens. Among the plaintiffs was the estate of Brianna Kreifall, who died from the contaminated food. The court of appeals affirmed in part and reversed in part the circuit court. The Supreme Court affirmed on all issues, holding, inter alia, that (1) Sizzler was entitled to recover consequential damages for Excel's breach of implied warranties in the parties' meat supply contract; (2) Sizzler was entitled to indemnity from Excel for the entirety of Sizzler's advance partial payment to the Kriefall family; and (3) notwithstanding the jury's determination that Sizzler was zero percent responsible for the E. coli contaminated food, Sizzler may not recover attorney fees from Excel because the exception to the American Rule did not apply here.

by
Petitioner Jones & Trevor Marketing appealed the dismissal of its suit against the owners of Financial Development Services, Jonathan Lowry and Nathan Kinsella, alleging various contract and tort claims based on an alter ego theory of liability. The district court held that Petitioner had not demonstrated sufficient facts to support its alter ego theory and therefore granted summary judgment against Petitioner on its tort and contract claims that rested on its alter ego theory. The court of appeals affirmed. The Supreme Court affirmed, holding that Petitioner failed to provide affirmative evidence establishing a genuine material dispute on its alter ego theory.

by
This dispute centered around two roads owned by the Maceys, their company Family Link, and the remaining defendants (Defendants). Petitioner Nadine Gillmor previously brought suit against the Maceys seeking to interpret and enforce the terms of a settlement agreement purporting to give the Gillmors a limited private easement over one road and limited access over the other road. The court of appeals held that Gillmor had a limited private easement over the roads but that the easement would not pass on to her children from a prior marriage. Gillmor later brought two claims for access over the roads, asserting that the roads were subject to condemnation for a public access easement and that the roads had been continuously used as public thoroughfares for a period of ten years and were thus dedicated to public use as a "highway by use" under Utah Code 72-5-104. The district court dismissed the complaint based on res judicata and imposed sanctions on Gillmor's attorney for filing a claim without a basis in law. The Supreme Court (1) held that Gillmor's claims were not barred by res judiciata; and (2) vacated the imposition of sanctions. Remanded for adjudication of Gillmor's suit on the merits.

by
At issue in this appeal was whether to judicially invalidate an insurance contract requirement that the insured file her lawsuit for underinsured motorist coverage (UIM) within two years of her auto accident. Plaintiff argued the deadline was unenforceable because, although she was still experiencing pain two years after the accident, only later did she discover the full extent of her injuries and realize her claim exceeded the other driver's liability limits. Plaintiff filed this UIM action against her insurer (Defendant) nearly six years after the accident. The district court granted Defendant's motion for summary judgment enforcing the contractual deadline as reasonable. The court of appeals reversed, holding the two-year limitation period was unreasonable under the circumstances. The Supreme Court vacated the court of appeals and affirmed the district court, holding that the two-year UIM insurance policy deadline was enforceable as a matter of law because it matched the two-year statute of limitations in Iowa Code 614.1(2) for personal injury actions.

by
Plaintiff corporation filed an action against Defendant, a resident of Nebraska, for damages related to the termination of an apartment lease in Iowa where Defendant formerly resided. Plaintiff attempted to serve notice under Iowa's long-arm statute by certified mail at a forwarding address provided by Defendant upon the termination of his tenancy in the apartment. The notice, however, was returned by postal authorities. Plaintiff took no further action to achieve service, and the district court entered a default judgment against Defendant. Based on the default judgment, Plaintiff sought to garnish Defendant's wages at his Nebraska employer. Defendant sought to quash the garnishment on the ground that Plaintiff failed to comply with the requirements of Iowa Code 617.3 in connection with the underlying action. The district court denied Defendant relief. The Supreme Court reversed, holding that the underlying default judgment that gave rise to the garnishment in this case was void for lack of personal jurisdiction over Defendant as provided in section 617.3. Remanded with instructions to grant the motion to quash.

by
In this action, a real estate company that prepared due diligence reports for a developer in connection with the potential purchase of commercial properties alleged that a rival brokerage firm was unjustly enriched when it acquired the material from the developer and later obtained a commission on the ultimate sale of the properties. Supreme Court dismissed the unjust enrichment claim against the rival brokerage firm, and the appellate division affirmed. At issue before the Court of Appeals was whether a sufficient relationship existed between the two real estate firms to provide a basis for an unjust enrichment cause of action. Based on the allegations presented in the complaint, the Court of Appeals held that the relationship between the two parties was too attenuated and affirmed.

by
After a school district (District) approved the conversion of an existing public school into a charter school, a union (UTLA) claimed that the District failed to comply with collective bargaining agreement provisions (CBPs) concerning charter school conversion. UTLA petitioned to compel arbitration pursuant to the collective bargaining agreement. The trial court denied the petition, finding that the collective bargaining provisions (CBPs) regulating charter school conversion were unlawful because they conflicted with the Education Code, and therefore, arbitration of those unlawful provisions should not be compelled. The court of appeals reversed, holding that the court's function in adjudicating a petition to compel arbitration was limited to determining whether there was a valid arbitration agreement that had not been waived. The Supreme Court reversed, holding (1) a court faced with a petition to compel arbitration to enforce CBPs between a union and a school district should deny the petition if the CBPs at issue directly conflict with provisions of the Education Code; and (2) because UTLA had not identified with sufficient specificity which CBPs the District allegedly violated, the case was remanded for identification of those specific provisions and to address whether the provisions conflicted with the Education Code.

by
After the company began to fail, plaintiffs, co-founders and shareholders of Environamics, which designed, manufactured, and sold pumps and sealing devices, sought investors to satisfy its debt. SKF learned that Environamics had developed and patented a "universal power frame" that SKF had been trying to develop for some time, and repeatedly expressed interest in acquiring Environamics. Environamics began to share confidential business information with SKF, stopped seeking out new distribution channels and ceased looking for other opportunities to pay its debt. They gave SKF an irrevocable option to purchase all outstanding Environamics stock and made SKF exclusive marketer and reseller of Environamics products. SKF paid Environamics $2 million. The relationship deteriorated as Environamics required additional financing. Because of SKF’s rights and requirements, plaintiffs made personal guarantees to obtain financing from Wells Fargo. Eventually Environamics filed for bankruptcy. Plaintiffs, responsible for roughly $5 million in personal guarantees on the Wells Fargo loan, sued under an estoppel theory. The district court granted SKF summary judgment. The First Circuit affirmed, finding no specific, competent evidence of any promise made by SKF to buy Environamics on terms other than those of the Option on which plaintiffs could reasonably have relied

by
Appellant Stephen Lipscomb, manager of SEL Properties, appealed a jury verdict against him for tortious interference with a contract entered into by SEL with Respondents Dutch Fork Development Group, II, LLC and Dutch Fork Realty, LLC. Appellant contended that he, as the manager of the limited liability company, could not be held individually liable in tort for a contract that was breached by SEL. Alternatively, Appellant challenged the jury's award of $3,000,000 in actual damages to Respondents on the grounds: (1) the trial judge erred in charging the jury that lost customers and lost goodwill were elements of damages as there was no evidence of such damages; and (2) the award was improper and should have been reduced as the actual damages for the tort claim were "coextensive" with or subsumed in the jury's award of actual damages to Respondents for the breach of contract claim against SEL. Upon review, the Supreme Court found that Appellant was entitled to a directed verdict as to the claim of tortious interference with a contract. Accordingly, the Court reversed the jury's award of damages.

by
Appellant Richard Freemantle challenged the legality of a severance agreement between Anderson County and Respondent Joey Preston, a former Anderson County administrator. Respondent was hired as County Administrator in 1998. His contract with the County provided for an initial employment term of three years, with an annual renewal in the absence of written notice not to renew the contract. The November 2008 election changed the "balance of power" on the Anderson County Council. One of the final acts of the outgoing Council was to execute a severance agreement for Respondent that provided him over one million dollars in benefits which was "well in excess of that provided in his employment contract." The severance agreement also included a release provision stating that the County would never seek legal redress against Respondent for any claims relating to his employment with the County. Appellant filed a complaint against Respondents on behalf of himself and all others similarly situated seeking monetary relief and various declaratory judgments. Specifically, Appellant alleged that Council's vote approving the severance agreement was invalid. In addition, Appellant contended the successor Anderson County Council was not bound by the severance agreement. Relief was sought pursuant to various causes of action, including covin and collusion, breach of fiduciary duties, illegal gift of county funds, misfeasance, malfeasance, conspiracy, violations of public policy, and violations of FOIA, The trial court dismissed the action finding that Appellant's status as a taxpayer did not confer standing to challenge the severance agreement. The Supreme Court agreed with the circuit court in most respects concerning Appellant's lack of standing. However, the Court disagreed with the trial court "only insofar as the FOIA claim is concerned, for traditional standing principles do not apply under FOIA because the legislature has conferred standing on any citizen to enforce the Act's provisions." Accordingly, the Court affirmed in part, reversed in part, and remanded the case for further proceedings.