Justia Contracts Opinion Summaries

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Mutual of Omaha Bank filed a petition seeking declaratory judgment against Patrick and April Kassebaum, who owed the Bank payments due under several promissory notes. In particular, the Bank sought to have the district court declare the rights of the parties with respect to an assignment of unliquidated proceeds or personal injury litigation executed by the Kassebaums. The Kassebaums filed a motion to dismiss or, in the alternative, a motion for summary judgment, alleging that the assignment was ineffective. The district court denied the motion, and the matter proceeded to trial. A jury entered a verdict in favor of the Bank in the amount of $126,376. The Supreme Court affirmed, holding that the Kassebaums' assignment was valid and enforceable under Nebraska law.

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An owner and contractor entered into an agreement for the construction of a new home. During construction, the owner refused to pay the contractor after discovering markups on the cost of materials. In response, the contractor halted construction and filed an action to enforce a mechanic's lien. The contractor subsequently filed a petition to foreclose the mechanic's lien. Although the contractor did not complete construction, the district court found the contractor rendered substantial performance under the contract and entered a judgment against the owner. The court of appeals affirmed. The Supreme Court affirmed in part and vacated in part the court of appeals and reversed the district court, holding that the trial court erred in concluding that the contractor had substantially completed work for the owner. Remanded.

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This case presented the question of whether an individual who made voluntary expenditures based on a mother's fraudulent representation that the individual had fathered her child has a cause of action against the mother for recovery of those payments. The district court granted the mother's motion to dismiss the action. The Supreme Court reversed the district court, holding that such a cause of action may be pursued because it is consistent with traditional concepts of common law fraud, there is no prevailing public policy reason against recognizing such a cause of action, and Iowa's statutes do not speak to the issue. Remanded.

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Northstar Battery Company, LLC ("Northstar"), petitions this Court for a writ of mandamus directing the Cullman Circuit Court to vacate its order denying Northstar's motion to dismiss the action filed against it by Apel Steel Corporation ("Apel") and to enter an order dismissing the action for lack of in personam jurisdiction. The case stemmed from a contract in which Apel Steel was working as a subcontractor for a battery manufacturing plant in Springfield, Missouri. Northstar Battery, owner of the plant, contracted with Walton Construction to serve as general contractor. Apel had further subcontracted a portion of its work to JS Nationwide, who erected structural steel at the plant. Sparks from welding started a fire which resulted in the destruction of property/equipment, and caused heat and smoke damage in the affected area of the plant. The contract between Apel and Walton contained a provision by which Apel allegedly waived all rights against JS Nationwide. Counts against Northstar alleged negligence, unjust enrichment, breach of contract, misrepresentation and conspiracy. Northstar moved to dismiss citing lack of personal jurisdiction. Finding that Apel failed to carry its jurisdictional burden, the Supreme Court held that the trial court "clearly" erred in denying Northstar's motion to dismiss. Accordingly, the Court granted Northstar's petition and issued the writ.

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This action stemmed from an appeal to the Eleventh Circuit wherein plaintiff appealed the dismissal of claims under section 627.701(4)(a), Florida Statutes, and the denial of a motion to enforce execution of the judgment, and defendant appealed the denial of motions for a new trial and for judgment as a matter of law. Plaintiff had filed a claim with defendant, its property insurer, pursuant to an insurance policy but was dissatisfied with defendant's investigation and processing of its claim. Based on the facts and analysis, the court answered the first, third, fourth, and fifth questions certified by the Eleventh Circuit in the negative. In doing so, the court did not reach the second certified question. The court concluded that under Florida law: (1) first-party claims were actually statutory bad-faith claims that must be brought under section 624.155; (2) an insured could not bring a claim against an insurer for failure to comply with the language and type-size requirements established by section 627.701(4)(a); (3) an insurer's failure to comply with the language and type-size requirements established in section 627.701(4)(a) did not render a noncompliant hurricane deductible provision in an insurance policy void and unenforceable as the Legislature had not provided for this penalty; and (4) a contractual provision mandating payment of benefits upon "entry of a final judgment" did not waive the insurer's procedural right to post a bond and stay the execution of a money judgment pending resolution of appeal.

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Leete & Lemieux, P.A. (L&L) provided legal services to James Horowitz and Oxford Aviation, Inc. (collectively, Horowitz) for several years. When L&L stopped receiving payments for its services, it filed a four-count complaint against Horowitz for failure to pay $10,917 for legal services rendered, plus interest. The district court stayed the action until resolution by the fee arbitration commission. A fee arbitration panel determined that Horowitz owed L&L the full amount of the unpaid fees charges plus interest. The district court affirmed the award of the panel. Horowitz appealed, arguing that the court (1) was required to vacate the arbitration award because the panel allegedly determined that it did not have the power to decide whether L&L's claim was time-barred, and (2) erred in confirming the award because it remained within the trial court's authority to decide a statute-of-limitations defense that was not subject to arbitration and was not decided during arbitration. The Supreme Court affirmed because Horowitz did not preserve a statute-of-limitations defense at the proper procedural stage of the proceedings, and therefore, the statute-of-limitations defense was waived.

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Sixty-six plaintiffs filed the underlying lawsuit in Tennessee against Morrow Valley Land Company and Ben Cain (Appellees) and others, alleging that Defendants owned and operated a concentrated animal-feeding operation that constituted a nuisance and a continuing trespass. After Appellees' insurer, Scottsdale Insurance Company, refused to provide defense or indemnification coverage under its insurance policy with Appellees, Appellees filed a petition for declaratory judgment in an Arkansas circuit court against Scottsdale and seeking damages for breach-of-contract claims. The circuit court granted partial summary judgment in favor of Appellees, concluding that Scottsdale had a duty to defend Appellees as its insured in the action. The Supreme Court affirmed, holding that the circuit court did not err in finding that the pollution exclusion provision in the insurance policy was ambiguous and that Appellees were entitled to summary judgment on the duty to defend because there was a possibility that the injury or damage may fall within the policy coverage.

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At issue in this appeal was a decision made by Appellee, Office of State Procurement (OSP), rejecting the protest submitted by Appellant, Fatpipe, Inc., of a contract award for the State's purchase of bandwidth equipment. Fatpipe sought judicial review of that decision. The circuit court granted OSP's motion to dismiss. The Supreme Court dismissed Fatpipe's appeal, holding that the circuit court lacked subject-matter jurisdiction to review the decision, as (1) Fatpipe was not among the class of entities entitled to lodge a protest against the contract award, and (2) OSP's decision, which merely determined that Fatpipe's protest could not be heard, was not subject to review under the APA.

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In the underlying federal court action, an auto insurer (Insurer) sought a declaratory judgment that it had validly denied Insured's underinsured motorist (UIM) claim. Insured was injured while a passenger on a motorcycle driven by her husband, who had a motorcycle insurance policy with Insurer. Insured counterclaimed for breach of contract and bad faith. The U.S. district court certified several questions to the state Supreme Court. The Court held (1) Ariz. Rev. Stat. 20-259.01(G) required Insurer to provide UIM coverage for Insured under the auto policy, where Insured's total damages exceeded the amount of her tort recovery from her husband under the husband's motorcycle policy; and (2) Ariz. Rev. Stat. 20-259.01(H) did not permit Insurer to refuse to provide Insured with UIM coverage under her auto policy because she was partially indemnified as a claimant under the liability coverage of the separate motorcycle policy issued by Insurer to Insured's husband, whose negligence contributed to Insured's injuries.

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In February, 2002, the Navy awarded GM&W a contract for floor coating at a military base. GM&W subcontracted with FloorPro, which completed the work on February 27, 2002 and billed GM&W. On March 8, the Navy informed GM&W that the work was completed satisfactorily. On April 17, FloorPro informed the Navy’s contracting officer that it had not been paid. GM&W had claims pending and was not sure whether funds that the Navy directly deposited would be available to FloorPro. In April 2002, the Navy and GM&W entered into contract modification providing for mailing to FloorPro of a check payable to GM&W and Floor-Pro. The Navy paid GM&W directly by electronic transfer and informed FloorPro that its recourse was to sue GM&W. In December 2002, FloorPro submitted a claim to the Navy’s contracting officer. On March 27, 2003, FloorPro filed at the Armed Services Board of Contract Appeals, which awarded $37,500. The Federal Circuit reversed, holding that under the Contract Disputes Act, 41 U.S.C. 7101, ASBCA has no jurisdiction over a claim by a subcontractor. In 2009, FloorPro filed in the Court of Claims, which ruled in favor of FloorPro. The Federal Circuit vacated, ordering dismissal under the six-year limitations period of 28 U.S.C. 2501.