Justia Contracts Opinion Summaries

When attorney Kent Rubens, now deceased, was a general partner in the law firm of Rieves, Rubens and Mayton (RRM) Rubens entered into an oral contingency-fee agreement for legal services rendered to Hotel Associates, Inc. (Hotel). Hotel later filed suit against RRM and other defendants, contending that the oral contingency-fee agreement was unenforceable as against public policy. RRM counterclaimed for breach of contract. The circuit court granted RRM’s motion for summary judgment on all of Hotel’s claims and on RRM’s counterclaim and awarded RRM prejudgment interest. The Supreme Court affirmed, holding that the circuit court did not err in (1) ruling that oral contingency-fee agreements are enforceable in Arkansas; (2) granting summary judgment for RRM because no material issues of genuine fact remained in dispute; and (3) granting RRM’s motion for prejudgment interest. View "Hotel Assocs. Inc. v. Rieves, Rubens & Mayton" on Justia Law

Appellees filed a class-action complaint against a Bank, asserting several claims arising from the Bank’s alleged practice of manipulating customers’ checking-account debit transactions to maximize the amount of overdraft fees charged to each customer. The Bank filed a motion to dismiss, or alternatively, a motion to compel arbitration based on an arbitration provision contained in the Deposit Agreement attached to Appellees’ complaint. In response, Appellees denied the existence of a valid arbitration agreement. The circuit court denied Bank’s motion, ruling that the arbitration provision was unconscionable and, thus, unenforceable. The Supreme Court reversed, holding that because the circuit court did not find that there was a valid arbitration agreement, the case must be remanded to the circuit court to determine whether there was a valid agreement to arbitrate between the parties. View "Bank of the Ozarks, Inc. v. Walker" on Justia Law

Truck Insurance Exchange (TIE) issued an apartment-owners insurance policy to appellant Jeanne Estates Apartments (JEA) that became effective in 1998. In 2006, Farmers Insurance Exchange (FIE) renewed the policy and continued to provide coverage. In 2008 and 2010, JEA became involved in three underlying lawsuits, which involved several appellants. JEA submitted claims for coverage to TIE/FIE in regard to those cases. TIE/FIE filed a complaint requesting that the circuit court declare that they owed no coverage to any person for any of the alleged misconduct which formed the basis of the claims in the underlying lawsuits and that they had no duty to provide a defense to any person or entity who was a defendant in the underlying lawsuits. The circuit court granted summary judgment in favor of TIE/FIE. The Supreme Court affirmed, holding that the apartment-liability contract issued by TIE/FIE did not provide an insured coverage for the type of harm alleged by the plaintiffs in the underlying suit. View "Kolbek v. Truck Ins. Exch." on Justia Law

Following the bankruptcy of BioBased Technologies, LLC, certain members of BioBased (Appellants) brought an action against other members, the members’ lawyers, and the managers of the corporation for fraud, breach of duty to disclose company information, conversion of membership interest, civil conspiracy, and breach of contract. The circuit court granted summary judgment on some claims, dismissed some claims, and found that the remainder of the claims were barred by collateral estoppel and res judicata. The Supreme Court reversed, holding (1) the circuit court erred in granting summary judgment on Appellants’ claims for fraud, breach of duty to disclose company information, and conversion of membership interest claims based on Appellants’ lack of standing, as Appellants had standing to assert their claims; (2) the circuit court erred in granting summary judgment on Appellants’ fraud claim against certain defendants on the basis that Appellants “failed to meet proof with proof” to show that the defendants made false representations of fact; (3) the circuit court erred in dismissing claims for lack of subject-matter jurisdiction; and (4) the circuit court erred in concluding that the bankruptcy proceeding had res judicata or collateral estoppel effect on Appellants’ state-law claims. Remanded. View "Muccio v. Hunt" on Justia Law

Arloe Designs, LLC proposed to build a building at an airport. Arkansas Capital Corporation (ACC) and National Bank of Arkansas (NBA) allegedly worked together to procure a loan for the building’s construction. After the NBA approved financing for the project, Arloe entered into a thirty-year lease for the new hangar. Later that month, Arloe learned that NBA would not close the loan without a bond as collateral, which Arloe did not give, and therefore, the loan was not closed. Arloe sued ACC and NBA, alleging breach of contract, violations of the Arkansas Deceptive Trades Practices Act, negligence, and promissory estoppel. The circuit court granted summary judgment to Defendants as to all but Arloe’s promissory estoppel claim, and limited damages for that claim to the money Arloe had spent in reliance on the claimed promise. At trial, a jury found Arloe had not proved that either defendant had made a promise to loan Arloe money. The Supreme Court affirmed, holding (1) Arloe’s claims that the circuit court erred in denying it recovery for lost profit damages and limiting its damages on its promissory-estoppel claim were moot; and (2) summary judgment was proper in regard to the remainder of Arloe’s claims. View "Arloe Designs LLC v. Ark. Capital Corp." on Justia Law

Nationwide Mutual Fire Insurance Company issued a policy to Danny Ludwick insuring his home and its contents. The policy named Citizens Bank & Trust Company as the first mortgagee. The dwelling was subsequently destroyed by fire. However, based on material misrepresentations in Ludwick's application, Nationwide voided the policy back to its inception. Citizens submitted a claim to Nationwide. Nationwide denied the claim on the basis that the policy was void ab initio, allegedly extinguishing not only Ludwick’s interest but also Citizen’s interest as mortgagee. Citizens filed a complaint for wrongful denial of its claim. The circuit court granted summary judgment to Citizens. The Supreme Court affirmed, holding (1) an insurance company is entitled to rescission of its insured’s policy based on the insured’s fraud or misrepresentation, but the rescission of the policy has no effect on an independent contract with the mortgagee; and (2) because the policy at issue contained a standard mortgage cause, which operated as an independent contract between the insurance company and the named mortgagee, the rescission of Nationwide’s policy had no effect on the independent contract with Citizens. View "Nationwide Mut. Ins. Co. v. Citizensbank & Trust Co." on Justia Law

Johnny Washington died after his 1994 Ford Explorer was struck by another vehicle driven by Karah Williams and rolled over twice. Johnny suffered a fatal head injury when his head exited the vehicle during the rollover and was crushed. Paulette Washington, Johnny's wife, filed a complaint against Ford Motor Company, asserting claims for, among other things, negligence, strict liability, failure to warn, and breach of warranties. A jury returned a verdict finding that both Ford and Williams, equally, had been the proximate cause of Johnny's death. Following a second remand, the circuit court entered an order awarding judgment against Ford in the amount of $7,152,125. The Supreme Court affirmed in part and reversed in part, holding that the circuit court (1) did not err in excluding evidence of Johnny's nonuse of a seat belt; (2) did not err in determining that the defective-glass claim was not preempted by Federal Motor Vehicle Safety Standard 205; (3) did not err in denying Ford's motion for judgment notwithstanding the verdict on the issue of punitive damages; (4) did not err in failing to reduce the jury's compensatory-damages award; and (5) erred in including a nunc pro tunc provision for postjudgment-interest purposes. View "Ford Motor Co. v. Washington" on Justia Law

Petitioners had a homeowners' insurance policy with Respondent that covered Petitioners' dwelling. The policy stated that any covered loss would be paid based on actual cash value, rather than replacement value, but the policy did not define the term "actual cash value." After Petitioners' dwelling was damaged by a tornado, Respondent valued Petitioners' loss at $48,647 after calculating the repair costs and the depreciation of the items requiring repair. Petitioners brought a class action in federal district court against Respondent, alleging that Respondent breached the insurance policy, and those policies of the putative class members, when it improperly applied a depreciation factor to the labor portion of repairs required at their respective dwellings. Specifically, Petitioners contend that their policy's failure to address depreciation of labor rendered the policy's term "actual cash value" ambiguous. The federal district court certified a question of law to the Supreme Court, which answered by holding that an insurer, in determining the "actual cash value" of a covered loss under an indemnity insurance policy, may not depreciate the costs of labor when the term "actual cash value" is not defined in the policy. View "Adams v. Cameron Mut. Ins. Co." on Justia Law

Decedent was a resident of Searcy Healthcare Center (SHC) from January 7 to January 29. On January 8, Decedent executed a written arbitration agreement with SHC that was binding on Decedent's children, personal representatives, and administrators of Decedent's estate. Decedent died on February 12. The next year, Appellee filed a nursing-home-malpractice action against SHC as administrator of Decedent's estate and on behalf of the statutory wrongful-death beneficiaries. The circuit court denied SHC's motion to compel arbitration against the wrongful-death beneficiaries, concluding that Decedent had not extinguished the substantive rights of the wrongful-death beneficiaries by signing the arbitration agreement. The Supreme Court reversed, holding that the circuit court erred as a matter of law in finding that the wrongful-death beneficiaries were not bound by the arbitration agreement executed by Decedent. Remanded. View "Searcy Healthcare Ctr., LLC v. Murphy" on Justia Law

Les Marlow filed a complaint against Glenn Petkovsek and United Systems of Arkansas, Inc. for breach of contract and breach of the duties of good faith and fair dealing. Additionally, Appellants, Les Marlow and other individuals, filed claims for wrongful termination in violation of public policy against Petkovsek and United Systems. Various counterclaims were filed against Appellants, including breach of contract and conversion. The jury (1) entered verdicts in favor of United Systems on its claims but awarded zero damages, and (2) entered defense verdicts for Petkovsek and United Systems, finding Plaintiffs failed to prove their claims. The circuit court subsequently found United Systems and Petkovsek were entitled to attorney's fees and costs but awarded them only to Petkovsek. Appellants appealed the award. The Supreme Court affirmed the circuit court's award, holding that the circuit court did not err in (1) finding that Petkovsek was a prevailing party; and (2) finding that attorney's fees and costs are available to a prevailing party in a wrongful-discharge against public-policy case. View "Marlow v. United Sys. of Ark., Inc." on Justia Law