Justia Contracts Opinion Summaries

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Appellant, Whitney Holding Corporation, challenged a decision of the district court quieting title in a certain mineral estate in favor of Appellees, Clarence and Peggy Terry. The Supreme Court affirmed, holding (1) the district court did not err in concluding that the parties intended, and the limited warranty deed conveying the property from Whitney to the Terrys reflected, that Whitney did not reserve a mineral interest in the property; (2) the district court properly determined that the deed was ambiguous and did not err in considering extrinsic evidence to interpret the deed; and (3) the Terrys' quiet title action was not barred by the statute of limitations.

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Two houseguests suffered serious injuries after their host left her car running overnight in an attached garage and the house filled with carbon monoxide. Plaintiff, the insurer with whom the homeowner had a homeowner's insurance policy, brought a declaratory judgment action against Defendants, the homeowner, the houseguests, and the homeowner's automobile insurer, seeking a declaration that the homeowner's policy did not cover the injuries suffered by the houseguests. The trial court granted summary judgment in favor of Plaintiff, finding that the policy did not cover the injuries because they fell within the policy exclusion for injuries arising out of the use of a motor vehicle. The Supreme Court affirmed, holding that the injuries suffered by the houseguests fell under the policy's motor vehicle exclusion.

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BP appealed a district court order granting summary judgment in favor of Charles V. Stanley, Jr., and his business (defendants), in BP's action seeking to enforce a restrictive covenant in a deed. BP also appealed the district court's award of attorneys' fees and costs. The court held that the district court erred in finding the Petroleum Restriction (PR), in the Special Warranty Deed that was attached to the Purchase and Sale Agreement (PSA) at issue, was overbroad and unenforceable where the PR did not prohibit Stanley from operating a non-BP-branded vehicle repair business on his property so long as the business did not also sell non-BP-branded gasoline. The court also concluded that the PR's prohibition of the sale of certain enumerated items was too inconsequential to invalidate the entire PR. Therefore, the PR on the whole "afford[s] a fair protection" to BP's interest without being "so large as to interfere with the interests of the public." Therefore, the court reversed the district court's grant of summary judgment to defendants, vacated the fee and cost award, remanding for further proceedings.

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Plaintiff-Appellee HSBC Bank USA, NA, claimed to be the holder of a note and mortgage on Defendants-Appellants Wesley and Pamela Lyon's house, and initiated foreclosure proceedings against them. HSBC filed a first amended petition late 2008, adding additional defendants, but continued to assert its status as the "present holder of said note and mortgage." The Lyons, noting the facial deficiencies of the unindorsed note filed in the original action, asserted HSBC's lack of standing. The trial court denied HSBC's Motion for Summary Judgment. The trial court allowed the bank time to file an amended petition. HSBC filed its second amended petition again asserting its status as the holder of the note by reason of an indorsement and the assignment of the mortgage. A review of the note attached to the second amended petition demonstrated a blank indorsement from the original lender "without recourse to the bearer" and signed by a vice president of the assigning bank. HSBC then filed a renewed Motion for Summary Judgment in early 2011, which was granted two months later by the trial court. Defendants argued on appeal that the bank still lacked standing to bring suit, and that the summary judgment ruling was in error. Upon review, the Supreme Court found that the trial court properly granted the bank's motion for summary judgment because it had established in its amended petition that it was the current holder of the note, and that the Lyons had not made any payments on the house since 2008.

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Petitioner Amanda Vinton, Esq. sought relief from orders of the probate court that permitted Respondent Sharon Virzi to amend her challenge to a trust administration by adding a claim of fraud against Vinton, the attorney for the trustee. Over Petitioner's objection, the probate court summarily granted Respondent's motion to amend, forcing Petitioner to withdraw as counsel for the trustee. The probate court subsequently summarily denied two motions by Petitioner to dismiss the claim against her and ordered her to pay Respondent's attorney fees for having to defend against a substantially frivolous and groundless motion. The Supreme Court issued a rule to show cause. Because Respondent's fraud claim was not plead with sufficient particularity to withstand a motion to dismiss, it was futile, and the probate court abused its discretion in permitting the joinder of her opponent's attorney. The Supreme Court found that whether or not Petitioner's motion to dismiss for lack of subject matter jurisdiction over the separate fraud claim was meritorious, the record was inadequate to support an award of attorney fees. The rule was therefore made absolute, and the matter was remanded to the probate court with directions to dismiss Respondent's claim of fraud against Petitioner and to vacate its award of attorney fees.

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Plaintiff insured defendants. Defendant Schilli is a freight broker that arranges freight and provides risk management services for claims against other defendants, trucking companies, but does not own tractor-trailers or employ drivers. Plaintiff advanced funds to defend or settle claims against defendants for accidents that occurred during the duration of the policy. The policy had a coverage limit of $1,000,000 for each accident and a $100,000 basket deductible per occurrence and provides that "[y]ou agree to repay us up to this deductible amount for all damages caused by any one accident, as soon as we notify you of the judgment or settlement." Schilli's name and address are included in the definition of "you;" the other companies are named as insureds. Plaintiff sought reimbursement for amounts, up to the $100,000 deductible, that it advanced in defending and settling each case. Schilli refused to pay. In granting summary judgment in favor of plaintiff, the district court stated that the policy unambiguously defines "you" as all of the corporations. The Seventh Circuit reversed, finding the policy ambiguous as to the nature of defendants' liability for the deductible.

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In 1995, Alaska Interstate Construction's assets were sold to a joint venture but it continued to be operated by its founder, John Ellsworth, through a company he owned called Pacific Diversified Investments, Inc. In 1998, Alaska Interstate conveyed a 20% ownership interest to Ellsworth and entered into an operating agreement that provided for Ellsworth's continued management of its operations through Pacific Diversified Investments. Alaska Interstate filed suit against Pacific and Ellsworth in 2005, principally alleging fraud, breach of the covenant of good faith and fair dealing, violation of the Unfair Trade Practices Act, breach of the parties' operating agreement, and conversion. The jury returned a verdict of $7.3 million in favor of Alaska Interstate on its Unfair Trade Practices Act claims and $7.3 million on its claims for common law fraud and breach of fiduciary duty. The parties filed many post-trial motions. Though the jury decided that Pacific Diversified Investments and Ellsworth engaged in conduct that was fraudulent, it decided that they did not materially breach the parties' operating agreement. Alaska Interstate filed a post-verdict motion for judgment notwithstanding the verdict arguing the jury's finding of fraud required the finding that the operating agreement was materially breached. That motion was denied. But the superior court did enter judgment notwithstanding the verdict nullifying the $7.3 million award for violations of the Unfair Trade Practices Act. Alaska Interstate Construction appealed; Pacific cross-appealed. Upon review, the Supreme Court affirmed the superior court's denial of the motion for judgment notwithstanding the verdict which found that the Unfair Trade Practices Act did not apply to intra-corporate disputes. The Court reversed the superior court's judgment notwithstanding the verdict on Pacific's argument that Alaska Interstate's claims were exempt from the Unfair Trade Practices Act. The Court reversed the superior court's ruling on material breach and held that the jury's findings of fraud and wilful misconduct, under the circumstances of this case, required the finding that Pacific materially breached the operating agreement as a matter of law. The Court reversed the superior court's order denying the motion for judgment notwithstanding the verdict on Pacific's fraud in the inducement claim, and we vacated the superior court's determination of prevailing party, award of attorney's fees, and award of prejudgment interest.

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Defendant-Appellant Nodak Mutual Insurance Company appealed from a judgment awarding Plaintiff-Appellee Barry Myaer $34,933.24 plus interest in his breach of contract action against Nodak. Upon review, the Supreme Court concluded the district court did not err in ruling Plaintiff was entitled to deferred commissions payable to him in December 2009, but did err in ruling those commissions could exceed 10 percent under the terms of the parties' contract.

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Plaintiff Josephine Lamprey appealed a superior court order that dismissed her against Defendants, Britton Construction, Inc. (Britton), DeStefano Architects, PLLC f/k/a Lisa B. DeStefano (DeStefano) and Dave Sherwood, pursuant to the statutes of limitations and repose. Plaintiff hired the defendants to design and build her home. DeStefano was the architect; Britton was the general contractor; and Sherwood was the mason who installed the home’s extensive stonework, including a stone veneer, terrace and stone chimneys. Plaintiff began living in the house in November 2001, but never obtained a certificate of occupancy. Within one year, water damage appeared on the wood floors. In 2006, Plaintiff hired Sherwood to repair loose stones on her terrace. In 2010, when Plaintiff replaced her stone terrace with granite, the mason in charge of the replacement noticed problems with the home’s stonework requiring significant repairs. As a result, Plaintiff sued the defendants, alleging negligence and breaches of warranty in her home’s construction. Britton requested dismissal pursuant to the statute of limitations for personal actions. Sherwood moved to dismiss, arguing that the construction statute of repose also barred Plaintiff’s claims. Plaintiff responded by arguing, among other things, that the statutes should be tolled because Sherwood had fraudulently concealed her home’s masonry problems. Upon review, the Supreme Court affirmed in part, and reversed in part. The trial court properly dismissed all claims against Destefano. Although the trial court properly dismissed the claims against Britton and Sherwood initially, "it unsustainably exercised its discretion by not permitting Plaintiff to amend her writ to add fraudulent concealment allegations related to the bent masonry ties that concealed defects in her home’s stone veneer. Plaintiff’s amended claims against Britton and Sherwood related to the stone veneer were allowed. The Court remanded the case for further proceedings.

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This case arose when defendant agreed in three separate contracts to sell three properties to plaintiffs. At issue was whether a buyer in a damages suit like this one must show that it was ready, willing, and able to close the transaction i.e., that but for the seller's repudiation, the transaction could and would have closed. The court held that in a case alleging that a seller has repudiated a contract to sell real property, the buyers must prove that they were ready, willing, and able to close the transaction. Here, the buyers did submit evidence of their financial condition, but that evidence was not conclusive of the issue. Therefore, whether the buyers were ready, willing, and able to close presented an issue of fact and the buyers' motion for summary judgment should have been denied. The court also held that the courts below erred in deciding as a matter of law that the seller repudiated the contracts by transferring the properties in question. The court held, however, that the courts below were correct in denying the seller's cross-motion for summary judgment.