Justia Contracts Opinion Summaries

Gene Shields, an agent for State Farm Insurance Companies, opened an account with Bankcorp Bank. The owner of the account was State Farm. Shields's office manager subsequently diverted funds that were due to be deposited into the account, and Shields allegedly suffered at least $77,925 in losses as a result of over 100 overdrafts on the account. Shields sued Bancorp Bank for negligence in failing to notify him of overdrafts. Bancorp moved to compel arbitration based on the account's arbitration clause. The circuit court denied the motion to compel, and Bancorp appealed. At issue on appeal was whether the parties' 2005 agreement to modify the contract entered into by the parties in 1982 controlled when Shields signed the agreement but State Farm was not a party to the contract. The Supreme Court affirmed, holding that the 2005 agreement, which contained the arbitration provision, was not binding because the agreement was entered into in contravention of the rights of the account owner, State Farm.

When Rita Fix's son and daughter-in-law, Jeff and Marie, secured a loan from the First State Bank of Roscoe by obtaining a warranty deed for the property, the Bank assured Fix she could retain possession of the house. After Jeff and Marie conveyed the house and property to the Bank, the Bank sold the property and sought to remove Fix from the house. Fix sued the Bank for, inter alia, intentional infliction of emotional distress (IIED). Meanwhile, Fix, Jeff, and Marie were indicted on multiple criminal counts. The State attorney who brought the charges and who represented the Bank civilly offered to dismiss the criminal charges against Fix if she would deed the house back to the Bank. Fix then amended her complaint to include a claim of abuse of process against the Bank. The trial court granted summary judgment against Fix on her IIED claim. A jury then returned a verdict finding the Bank liable for abuse of process but awarded no damages to Fix. The Supreme Court reversed on the abuse of process claim, holding that the trial court provided the jury with the incorrect legal standard for the recovery of emotional damages. Remanded for a new trial.

A group of investors (Borrowers) bought a golf course by contributing part of the purchase amount in cash and financing the remaining balance through a nonrecourse loan with Community Bank of Nevada (CBN). To facilitate the sale, William Walters entered into a separate guaranty with CBN where he personally guaranteed the loan. Prior to the Borrowers' default and the eventual foreclosure of the golf course, Walters filed a complaint against CBN, asserting causes of action for declaratory relief and breach of the implied covenant of good faith and fair dealing. CBN counterclaimed, asserting breach of guaranty against Walters. The district court granted summary judgment in part to CBN, concluding that no genuine issues of material fact existed as to Walters' guaranty liability to CBN. Walters filed a petition for a writ compelling the district court to vacate its partial summary judgment in favor of CBN and to preclude CBN from recovering any amount from Walters under his guaranty. The Supreme Court denied the writ, holding (1) CBN complied with the deficiency application requirements of Nev. Rev. Stat. 40, and (2) CBN was not attempting double recovery because double recovery was not an issue in this case.

Plaintiff brought a class action against the Bank, alleging that the Bank breached its contract by charging interest in excess of the rate specified in the promissory note. The court affirmed the district court's grant of the Bank's motion to dismiss where the district court correctly concluded that the relevant provisions were clear, did not conflict with one another, and adequately disclosed the interest to be charged.

Capmark Bank appealed a preliminary injunction entered in favor of RGR, LLC; MB Park, LLC; TTM MB Park, LLC; Robert G. Randall; and T. Todd Martin III (referred to collectively as "RGR") which enjoined Capmark from foreclosing on certain real property that served as the primary collateral for a loan from Capmark to RGR, LCC, MB Park, LLC, and TTM MB Park, LLC. Upon review, the Supreme Court concluded RGR failed to establish the requisite elements entitling it to a preliminary injunction. The Court therefore reversed the trial court's judgment issuing the injunction.

Robert S. Grant Construction, Inc. (the corporation), Robert S. Grant (RSG), and Pam E. Grant (PEG) (collectively referred to as "the Grants") appealed an order striking their jury demands in an action commenced by Frontier Bank (the bank) against the Grants and others alleging breach of contract, fraud, and the fraudulent conveyance of real estate. This case arose out of a loan from the bank to the corporation. The loan ultimately involved a number of related agreements, including a construction-loan agreement between the corporation and the bank and a series of "continuing guaranties," whereby RSG personally guaranteed repayment of the loan. The Supreme Court was unable to reach the merits of the Grants' contentions, and dismissed the appeal because, despite the invocation of Rule 54(b), the trial court's order was not final and appealable.

Defendant appealed the district court's order denying its motion to compel plaintiff to submit her claims to arbitration pursuant to an arbitration agreement governed by the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. The district court held that defendant had, by participating in the litigation for nine months prior to requesting that the case be submitted to arbitration, waived its contractual right to compel arbitration. The court found that defendant's right to compel arbitration, even if waived with respect to the claims in the Original Complaint, was revived by plaintiff's filing of the Amended Complaint. Therefore, the court vacated the district court's order denying defendant's motion to compel arbitration and stay the proceedings, remanding for further proceedings.

This case involved a fallout of a $3.65 billion Ponzi scheme perpetrated by Minnesota businessman Thomas J. Petters. Appellants, investment funds (collectively, Ritchie), incurred substantial losses as a result of participating in Petters' investment scheme. Ritchie subsequently sued two officers of Petters' companies, alleging that they assisted Petters in getting Ritchie to loan over $100 million to Petters' company. Ritchie's five-count complaint alleged violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(a), (c)-(d), common law fraud, and tortious inference with the contract. The court held that the district court erred in concluding that Ritchie's action was barred by a Receivership Order. The court also rejected arguments challenging the sufficiency of Ritchie's pleadings in the common law fraud count and did not to address other arguments related to abstention, lack of causation, and absolute privilege. Accordingly, the court reversed the judgment of the district court and remanded for further proceedings.

Synoran and e-Pin (appellants) appealed from the district court's confirmation of an arbitration award in favor of Wells Fargo, which had prevailed on its claims for breach of contract and for misappropriation of trade secrets. Appellants maintained that the district court lacked jurisdiction to confirm the award, erred in confirming the award, and abused its discretion in denying their motion to amend or terminate a permanent injunction issued as part of the award. The court rejected appellants' claim that Wells Fargo was a citizen of both South Dakota and California and concluded that the district court did not err in determining that it had subject-matter jurisdiction over the action. The court also held that the district court did not err in determining that appellants had waived their right to challenge the award of injunctive relief; in declining to vacate the award on the grounds that the arbitration panel exceeded the scope of its arbitral mandate; and in confirming the award of attorneys' fees against e-Pin. The court further held that the district court did not abuse its discretion in denying the motion to terminate or amend the permanent injunction. Accordingly, the judgment was affirmed.

This case originated with a misunderstanding regarding a $645 charge on the credit card bill of appellant. Chase Bank misidentified the basis for the charge but failed to respond to appellant's requests for information about it. After unsuccessfully attempting to get response from Chase Bank, appellant and his wife filed this action, alleging, inter alia, claims under the Fair Credit Billing Act (FCBA), 15 U.S.C. 1666-1666j and Oregon's Unlawful Debt Collection Practices Act (UDCPA), Or. Rev. Stat. 646.639-643. The court held that the trial court erred in holding that appellant failed to state a claim under the UDCPA. The court declined to certify appellant's proposed question to the Oregon Supreme Court regarding this claim because existing state precedent guided the court's decision. As to the FCBA claims, the trial court erred in requiring evidence of detrimental reliance to support actual damages and in limiting statutory damages for Chase Bank's multiple violations of the FCBA to a single recovery. Finally, the court held that the trial court abused its discretion in denying any award of attorneys' fees related to appellant's successful claim under the FCBA. Accordingly, the court reversed and remanded for further proceedings.