Justia Contracts Opinion Summaries

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Plaintiff brought suit against her insurer, asserting claims of breach of contract and bad faith. After a jury awarded plaintiff the full amount of her underinsured motorist (UIM) coverage, but denied her bad faith claim, the district court found that the insurer's refusal to pay was "vexatious or without reasonable cause" and awarded plaintiff attorney's fees pursuant to S.D. Codified Laws 58-12-3. The insurer appealed arguing that the jury's rejection of plaintiff's bad faith claim should preclude an award of fees under the statute. The court affirmed the judgment and held that the district court did not err when it determined the statutory fee award did not hinge on the outcome of the bad faith claim and the district court did not err in finding the insurer's refusal to pay was vexatious or without reasonable cause.

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In a national emergency, the Department of Defense can augment its own capabilities with aircraft drawn from the "Civil Reserve Air Fleet," composed of aircraft owned by commercial carriers but committed voluntarily for use during emergencies. The Fleet is divided into teams of airlines. The Department awards mobilization value points; the more points a member has, the more non-emergency Department air transportation the member can bid on. Points are transferrable within teams. Members of defendant's team have a contract with a one-year term and a separate three-year agreement concerning distribution of business among members. Plaintiff's suit is based on a 2006 three-year agreement in the form of a letter. A change from what members of the team had been doing ultimately led to plaintiff's withdrawal from the team. Plaintiff subsequently went into bankruptcy. Plaintiff won a jury verdict of almost $66 million. The Seventh Circuit reversed, holding that the "agreement" did not include crucial terms and was so indefinite as to be unenforceable. The court also criticized the regression analysis on which the award was calculated. A promissory estoppel claim, while not preempted, failed on the facts.

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In 1995, defendant signed a 10-year lease with plaintiff's predecessor and occupied about 20% of the building. In 1999, defendant's corporate parent decided to consolidate operations and needed up to an additional 60,000 square feet. During negotiations, defendant's CEO allegedly asserted that defendants should not rent to anybody else. Negotiations failed. Defendant ultimately vacated the building but paid rent and looked for a sublessor until December 2000, when it sent notice that it was cancelling the lease. Plaintiffs sued in state court for breach of lease, breach of guaranty, consequential damages and fraud. Defendants prevailed. In 2004, while the corporate suit was pending, plaintiffs filed the individual suit, alleging fraud against defendants; CEO and general counsel. The suit was dismissed. In 2010, plaintiffs filed a diversity suit in federal court, bringing claims for breach of lease, breach of guaranty, and fraud. The district court dismissed, based on res judicata. The Seventh Circuit affirmed, holding that the the individual suit barred the federal suit.

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Aequitas Enterprises and Interstate Investment Group entered into a real estate contract for the sale of 388 properties, all located outside the state. Aequitas subsequently sued Interstate Investment for breach of contract. To protect its interest in the properties, Aequitas also filed a motion requesting an extraterritorial prejudgment writ of attachment on all the properties. The district court granted Aequitas's motion for prejudgment writ of attachment and entered an order vesting title to all the properties in Aequitas. The Supreme Court reversed the district court and vacated its order, holding that the state's rules of civil procedure did not authorize a district court to enter an order directly affecting interests in real property located in other states.

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Plaintiffs sought a preliminary injunction against the acquisition of Compellant by Dell. The parties settled after significant discovery but before merits briefing or a hearing. The settlement consideration consisted of modifications to the deal protections in the merger agreement, including the rescission of a stockholder rights plan adopted in connection with the transaction, and six supplemental disclosures. Plaintiffs applied for a fee of $6 million and defendants argued for not more than $1.25 million. In addressing the fee application, and thus to estimate the value of the resulting benefits conferred by the settlement, the court relied primarily on four studies that measured market-wide rates of topping bid activity and the incremental value generated by multiple bidders. The court also evaluated the benefits conferred by the supplemental disclosures. In total, the court awarded $2.4 million.

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This action involved a challenge to a decision by the board of directors of a company to call certain of its outstanding shares. The purchasers of those shares claimed that the company called the shares at a below market price in violation of the express terms of the contracts governing the shares as well as the implied covenant of good faith and fair dealing. The company moved to dismiss the purchaser's complaint for failure to state a claim. The court found that the purchaser had alleged facts that conceivably would support a conclusion that the call price was set below fair market value and that the company acted in bad faith by setting the call price at that value. Therefore, the court denied the company's motion to dismiss.

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Edwin Mitchell, a lobster fisherman, was sued by Victor Ames, who alleged that a group of lobster fishermen had conspired to prevent him from fishing for lobster in the area. The Ames complaint alleged that Mitchell had, among other things, converted Ames's personal property. Mitchell held a homeowners policy with Allstate Insurance Company. By the policy's terms, Allstate agreed to provide a defense if the policyholder was sued for such damages. Allstate, however, declined to provide coverage to Mitchell on the Ames litigation, after which Mitchell sued Allstate for breach of contract. The superior court granted summary judgment in favor of Allstate, concluding that Allstate had no contractual duty to defend Mitchell because a policy exclusion for certain intentional acts applied. The Supreme Court vacated the superior court's judgment, holding that Allstate did have a duty to defend because the liability alleged in the Ames complaint had the potential to result in covered liability.

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This case involved a dispute between the Mattesons and the Batchelders over fee ownership of less than one acre of land on a stream and the location of a deeded right-of-way on property owned by the Mattesons. The superior court (1) concluded that the Mattesons owned the disputed parcel of land; and (2) reformed the deed to locate the easement along a field road that crossed that Mattesons' property, concluding that the deed description of the right-of-way was ambiguous. The Supreme Court affirmed in part and vacated in part, holding (1) the superior court did not err in finding that the Mattesons obtained the property in dispute, which was included in the deed's property description; and (2) the court erred in reforming the deed to reflect a new location of the easement along the field road where there was no mutual mistake of fact that anything other than the shoreline was the boundary, as described in the deed. Remanded.

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Arrow Financial Services filed a complaint against Sarah Guiliani alleging breach of contract and unjust enrichment. Arrow then filed a motion for summary judgment seeking to establish that Arrow owned a credit card account registered to Guiliani and that Guiliani owed an unpaid balance of $5044 on the account. In support of its motion, Arrow asserted in an affidavit that it was the assignee of Guiliani's credit card account with Washington Mutural. The district court granted Arrow's motion and awarded Arrow $3493, plus interest and court costs. The Supreme Court vacated the district court's judgment, holding that the district court incorrectly granted summary judgment in favor of Arrow because disputes remained as to material facts regarding the balance due on the account and its assignment to Arrow.

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In November 1998, Respondent David Moeller’s 1996 Honda Civic CRX was damaged in a collision. Respondent had an insurance policy through Farmers Insurance Company of Washington (Farmers). Farmers chose to repair Respondent's damaged car, and he authorized the repairs. In May 1999, Respondent brought suit on behalf of himself and other similarly situated Farmers policy holders in Washington State asserting a breach of contract claim on the grounds that Farmers failed to restore his vehicle to its "preloss condition through payment of the difference in the value between the vehicle's pre-loss value and its value after it was damaged, properly repaired and returned." The issue on appeal before the Supreme Court was whether the contract between Farmers and Respondent provided for the diminished value of the post-accident, repaired car. Upon review, the Court affirmed the appellate court which held that the policy language at issue here allowed for recovery for the diminution in value.