Justia Contracts Opinion Summaries

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Respondent Michael Stewart and appellant Rolland Weddell entered into a business relationship concerning a number of different projects. After their business relationship collapsed, Weddell filed a complaint asserting numerous claims against Sewart. Stewart asserted numerous counterclaims. The district court found in Stewart's favor on all counts. The Supreme Court reversed in part, holding that pursuant to Nev. Rev. Stat. 86.401, a judgment creditor may obtain the rights of an assignee of the member's interest, receiving only a share of the economic interests in a limited-liability company, and thus, the judgment creditor and holder of a charging order against Weddell's membership interests was entitled to Weddell's economic interest in appellant Granite Investment Group, LLC but not Weddell's managerial rights. The Court affirmed in all other aspects, holding (1) parties should only file a notice of pendency when the action directly involves real property, and therefore, the notice of pendency filed by Weddell, which involved an option to purchase a membership interest in Respondent Empire Geothermal Power, LLC, was unenforceable; and (2) substantial evidence existed to support the district court's finding that Weddell had no ownership interest in respondent H2O, Inc.

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This was an appeal and cross-appeal from a district court judgment awarding appellant homebuyer treble damages against respondent seller, a limited liability company, but refusing to find that the individual respondent, a former manager of the limited liability company, was liable for the judgment as the company's alter ego. The Supreme Court (1) affirmed the district court's award of treble damages under Nev. Rev. Stat. 113.150(4), which awards treble damages for a seller's delayed disclosure or nondisclosure of property defects, despite the court's failure to make a finding that the seller acted willfully, as the legislature did not intend to imply a heightened level of mental culpability to the statute; and (2) vacated the portion of the court's judgment concerning the alter ego issue, as the court failed to explain its reasoning for denying alter ego status. Remanded.

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When Employee left his employment, Employee and Employer entered into a consulting agreement containing restrictive covenants prohibiting Employee from disclosing Employer's confidential information. After Employee purchased another competing company, Employer filed a motion alleging breach of the agreement and seeking a preliminary injunction to enforce the Agreement's covenants. The district court granted Employer's request, concluding that Employee had likely violated several provisions of the agreement and had misappropriated trade secrets in violation of Nevada's Uniform Trade Secrets Act. Employee then filed a motion to dissolve the preliminary injunction upon termination of the agreement, which the district court denied. The Supreme Court (1) affirmed the court's order granting preliminary injunctive relief; and (2) reversed the court's order denying Employee's motion to dissolve the injunctive provisions, finding that the court improperly relied on the terminated agreement in declining to dissolve the injunction and failed to make findings as to the continued existence of a trade secret and for what constitutes a "reasonable period of time" for maintaining an injunction under the Act.

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The company has been under contract with the U.S. Army’s Morale, Welfare, and Recreation Fund since 1993 to build and operate a hotel at a military base on Oahu. With 18 years remaining on the agreement, the Armed Services Board of Contract Appeals determined that the Fund breached the core of the contract and the parties entered the damages phase of the dispute. The company filed a separate complaint alleging that the Fund had done nothing to cure its ongoing breach. The ASBCA dismissed the second complaint as duplicative. The Federal Circuit affirmed, finding that the company voluntarily waived its right to appeal to the court under its negotiated contract with the Fund.

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Plaintiffs brought a putative class action under the Employee Retirement Income Security Act, 29 U.S.C. 1001, to recover benefits under long-term disability benefit plans maintained by their former employers. The plans provide for reduction of benefits if the disabled employee also receives benefits under the Social Security Act, as both plaintiffs do. They dispute calculation of the reduction, claiming that the plans do not authorize inclusion in the offset of benefits paid to dependent children. Both plans require offsets for "loss of time disability" benefits. The district court dismissed. The Seventh Circuit affirmed, holding that children's Social Security disability benefits paid based on a parent's disability are "loss of time disability" benefits under the language of the plans.

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This case came before the Supreme Court on interlocutory appeal from the Circuit Court of Warren County in which the circuit court affirmed in part and reversed in part the county court's grant of summary judgment for Plaintiff James Hobson, Jr. Defendants Chase Home Finance, LLC, and Priority Trustee Services of Mississippi, LLC (collectively, Chase) appealed the circuit court's affirmance of their liability. Plaintiff cross-appealed the circuit court's order that vacated the county court's award and ordered trial on damages. The dispute arose from Plaintiff's purchase of real property at a foreclosure sale. He tendered a cashier's check to Chase's agent, for which Chase gave Plaintiff a receipt. Approximately two weeks later, Chase returned Plaintiff's check and refused to tender a deed to the property, stating that the foreclosure sale had been cancelled due to the original borrower's reinstatement. Plaintiff sued for breach of contract, arguing that Defendants breach was grossly negligent, and requested actual and punitive damages along with attorney's fees. Upon review, the Supreme Court found that the borrower's alleged reinstatement prior to the foreclosure sale created a genuine issue of dispute regarding Chase's liability, and, therefore, the Court held that the circuit court erred in affirming the county court's grant of summary judgment as to liability. Accordingly, the Court reversed the circuit court's judgment and remand to the county court for further proceedings.

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The employer sought an early withdrawal from its obligation to make pension contributions to a multiemployer pension fund; it entered into a new collective bargaining agreement, six weeks before expiration of the existing agreement, that abrogated its obligation to make payments to the fund. The fund sued under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1145. The district court entered summary judgment in favor of the fund. The Seventh Circuit affirmed, rejecting an argument that the agreement was ambiguous in providing that the employer could not “prospectively” change its obligation.

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Plaintiff rented a car, drove 64 miles in one day, refilled the fuel tank, and returned the car to the same location from which he rented the car. In addition to rental and other fees that he does not dispute, he was charged a $13.99 fuel service fee that he challenged by filing a putative class action, claiming breach of contract, fraud, and unjust enrichment. Defendant claimed that, because plaintiff drove fewer than 75 miles during the rental period, to avoid the charge he was required to return the car with a full fuel tank and to submit a receipt. The district court dismissed, finding that the contract was not ambiguous. The Sixth Circuit affirmed, citing the voluntary payment doctrine.

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Miriam Salazar purchased an insurance policy from United Automobile Insurance Company and El Sol Insurance Agency (collectively, United), rejecting underinsured motorist (UIM) coverage by signing United's waiver. After Salazar was involved in an accident, Lopez sued United, arguing that United must provide her with UIM coverage because the waiver did not provide the required reasonable explanation of UIM coverage. The district court granted summary judgment in favor of United. The court of appeals reversed, holding that the waiver did not contain a reasonable explanation, and Lopez was therefore entitled to UIM coverage of $25,000 under the UIM statute. The court then remanded the case with instructions for the district court to enter judgment in favor of Lopez in the amount of $25,000. The Supreme Court held that the court of appeals (1) did not err in finding that United failed to provide a reasonable explanation of the purpose of UIM coverage and when it would be applicable; but (2) erred in instructing the district court to enter judgment for Lopez in the amount of $25,000. Remanded with instructions to determine the amount of damages Lopez actually sustained.

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Joshuah Farrington struck a moose while driving a vehicle loaned to him by Darling's Rent-a-Car, causing damages. Philadelphia Indemnity, Darling's insurer, compensated Darling's pursuant to the property damage provision of its commercial insurance policy. Philadelphia Indemnity, as Darling' subrogee, subsequently filed a complaint against Farrington, asserting that he breached the rental contract by damaging the vehicle. The Business and Consumer Docket entered judgment in Philadelphia Indemnity's favor. Farrington appealed, contending that he was insured by Darling's insurance policy with Philadelphia Indemnity and that Maine's anti-subrogation rule prohibited Philadelphia Indemnity to bring a claim against him. The Supreme Court affirmed, holding that the district court did not err in concluding that Farrington was not included as an insured within the meaning of the property damage portion of the contract Darling's made with Philadelphia Indemnity.