Justia Contracts Opinion Summaries

Triller Inc., a social media company was being sold to a group of owners, including Carnegie Technologies, Inc. Prior to the sale, Triller executed a promissory note in favor of Carnegie and then immediately assigned the note to a group of “legacy” owners—including Carnegie—as part of the deal’s closing. After the note was defaulted, Carnegie sued Triller to collect the amounts due. Triller claimed that it had no obligations under the note because it had been assigned, resulting in novation. The district court rejected Triller's novation defense and Triller appealed.The Fifth Circuit affirmed, finding that the plain meaning of the agreement was silent on the extinction of any obligation between Triller and Carnegie. The laws of both California and Texas require clear evidence illustrating the parties' intent to replace an earlier agreement, and the agreement's merger clause precludes evidence of a contemporaneous or earlier agreement. Thus, the court held that Triller failed to raise an issue of material fact regarding whether its obligations under the note were extinguished. View "Carnegie Technologies. v. Triller" on Justia Law

Plaintiff Bainbridge Fund Ltd. is the beneficial owner of bonds issued by the Republic of Argentina. Argentina defaulted on these bonds back in 2001, but Bainbridge didn’t sue to recover them until 2016. The district court dismissed Bainbridge’s claims as untimely under New York’s six-year statute of limitations for contract actions and the Second Circuit’s nonprecedential decisions. Bainbridge appealed, asking the Second Circuit to reconsider those decisions. Specifically, Bainbridge argues that (1) the twenty-year statute of limitations for recovery on certain bonds under N.Y. C.P.L.R. 34 Section 211(a) applies to its claims against Argentina; and (2) even if the six-year limitations period for contract actions applies, it was tolled under N.Y. Gen. Oblig Law Section 17-101 because Argentina “acknowledged” this debt when it publicly listed the bonds in its quarterly financial statements (the “Quarterly Reports”).   The Second Circuit rejected Plaintiff’s arguments. First, the twenty-year statute of limitations does not apply to claims on Argentine bonds because a foreign sovereign is not a “person” under N.Y. C.P.L.R. Section 211(a). Second, tolling under N.Y. Gen. Oblig. Law Section 17-101 is inapplicable because the Quarterly Reports did not “acknowledge” the debt at issue in a way that reflected an intention to pay or seek to influence the bondholders’ behavior. To the contrary, Argentina repeatedly stated that the bonds “may remain in default indefinitely.” Bainbridge’s claims are thus time-barred. View "Bainbridge Fund Ltd. v. The Republic of Argentina" on Justia Law

Plaintiff took out a home equity loan on a house in Texas (“Property”). Deutsche Bank National Trust Company (“Deutsche Bank”) is the trustee of the loan. Deutsche Bank sought a non-judicial foreclosure order on the Property.   Plaintiff sued Deutsche Bank in Texas state court, alleging violations of the Texas Debt Collection Act (“TDCA”), breach of the common-law duty of cooperation, fraud, and negligent misrepresentation. Despite the stipulation, Deutsche Bank removed the case to federal district court. Plaintiff then moved to remand the case back to Texas state court because, in his view, the amount in controversy could not exceed the stipulated maximum of $74,500. The district court denied Plaintiff’s motion to remand.   The Fifth Circuit reversed and concluded that the district court erred in denying Plaintiff’s motion to remand, and it lacked subject-matter jurisdiction when it entered final judgment. The court reasoned that Deutsche Bank failed to establish that the amount in controversy exceeds the jurisdictional floor of $75,000.   The court first noted that the bank points out that Plaintiff’s suit requested relief which might be read to suggest Plaintiff also sought injunctive relief. But the bank makes that argument only to establish that Plaintiff’s initial pleading seeks nonmonetary relief not to establish that the requested nonmonetary relief put the house in controversy. Whatever the merit of that latter contention might otherwise be, the court held that Deutsche Bank forfeited it. Moreover, the mere fact that Plaintiff pleaded a demand for specific damages cannot support bad faith. View "Durbois v. Deutsche Bank Ntl Trust" on Justia Law

Plaintiff experienced financial difficulties and applied for a loan modification. In response, CitiMortgage mailed Plaintiff an offer to participate in a Trial Period Plan (“TPP”). The TPP provided that “the terms of your  TPP are effective on the day you make your first trial period payment, provided you have paid it on or before the last day of [January 2019].” Plaintiff effectively accepted the terms of the TPP when he made the first trial period payment of $1,293.66. CitiMortgage sent him a letter informing him that he was “ineligible” for the loan modification and then posted Plaintiff’s property for foreclosure.   Plaintiff filed suit against CitiMortgage in state court, asserting claims for breach of contract. The district court granted summary judgment to CitiMortgage concluding that Plaintiff failed to comply with the TPP’s payment deadlines.   The Fifth Circuit reversed finding that Plaintiff met his obligations under the TPP by making timely payments. CitiMortgage, by contrast, violated its obligations by refusing to grant the permanent loan modification and proceeding with foreclosure. The court explained that the TPP establishes a grace period. It accepts payment so long as it is made “in the month in which it is due.” Neither the TPP nor the parties use the term “grace period” to describe this language. But that is plainly what the text contemplates. And no one disputes that Plaintiff’s payments comply with the governing grace periods. CitiMortgage has offered no reason why favoring the monthly deadlines and ignoring the grace period would “do the least damage” to the text of the TPP. View "Burbridge v. CitiMortgage" on Justia Law

The First Circuit affirmed the judgment and order of the district court granting summary judgment for Lender and denying Borrowers' motion for reconsideration in this lawsuit brought by Lender seeking repayment and foreclosure of a loan, holding that the district court did not err.Borrowers defaulted on a loan extended by Lender. The loan was subject to the Farm Credit Act, 12 U.S.C. 2001 et seq., which sometimes requires the lender to restructure the loan rather than foreclose. Borrowers applied to restructure the distressed loan, but Lender rejected the application. Lender eventually brought this action, and the district court ultimately granted summary judgment for Lender. The First Circuit affirmed, holding (1) a lender need not accept a plan of restructuring that the borrower cannot perform; and (2) the district court did not err in finding that Lender properly considered and rejected the requested restructuring. View "Puerto Rico Farm Credit, ACA v. Eco-Parque del Tanama Corp." on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the decision of the trial court granting summary judgment in favor of Roy Elizondo and dismissing this action brought by Cadence Bank, N.A. for breach of a deposit agreement, breach of warranty under the Uniform Commercial Code (UCC), and common-law torts, holding that the lower courts erred.In response to a stranger's email for legal assistance, Elizondo, an attorney, deposited a cashier's check in his bank account then wired most of the funds to an overseas account. The check was dishonored, and the bank charged the transfer back to Elizondo, as allowed by the UCC and the parties' deposit agreement. When Elizondo refused to pay the overdrawn funds Cadence brought this action. The trial court granted summary judgment for Elizondo, and the court of appeals affirmed. The Supreme Court reversed, holding that the wire-transfer form failed to create the contractual duty urged by Elizondo. View "Cadence Bank, N.A. v. Elizondo" on Justia Law

The Supreme Court affirmed the judgment of the superior court denying Defendants' motion for summary judgment and granting summary judgment in favor of Plaintiff, Webster Bank, National Association, holding that there was no error in the proceedings below.Plaintiff brought this action for breach of a loan agreement. In the superior court Defendants claimed that the Connecticut statute of limitations should apply because the parties agreed that Connecticut law would govern the loan agreement. The court entered judgment in favor of Plaintiff. On appeal, Defendants argued that the trial justice erred in applying Rhode Island's ten-year statute of limitations to Plaintiff's claim instead of Connecticut's six-year statute of limitations. The Supreme Court affirmed, holding that Rhode Island law controlled in this case. View "Webster Bank, National Ass'n v. Rosenbaum" on Justia Law

The Supreme Court reversed the order of the district court that overruled Community First Bank's motion for summary judgment, sustaining First Central Bank McCook's motion for summary judgments and dismissing Community First's breach of contract claims, holding that genuine issues of fact existed precluding summary judgment.On appeal, Community First argued that the district court erred in determining that the contract between Community First and First Central was a participation agreement that did not create a debtor-creditor relationship between the two banks. The Supreme Court reversed and remanded the case for further proceedings, holding (1) the contract between the parties was ambiguous; and (2) a genuine issue of material fact existed regarding the provisions of the contract between the parties. View "Community First Bank v. First Central Bank McCook" on Justia Law

The Supreme Court held that a defendant seeking an award of attorney fees and costs in a lawsuit filed by a married plaintiff does not need to join the plaintiff's spouse to later execute a judgment for fees and costs against the plaintiff's community assets.The trial court entered judgment judgment for Shamrock Materials, LLC and an LLC member and her husband (collectively, Shamrock) in this action brought by Kristi Lattin, "a married woman dealing with her own separate property." The court further awarded Shamrock attorney fees and costs as the prevailing party. Shamrock sought to garnish a bank account jointly owned by Lattin and her husband, Robert DeRuiter, a non-party. The trial court quashed Shamrock's garnishment on Wells Fargo Bank to pay funds held in the joint bank account because the judgment was not entered against DeRuiter. The Supreme Court affirmed, holding that Ariz. Rev. Stat. 25-215(D) did not require Shamrock to join DeRuiter in the case to execute its judgment for attorney fees and costs against community assets. View "Lattin v. Shamrock Materials LLC" on Justia Law

The dispute underlying this appeal began with the failure of Camille Village, LLC, the owner of an apartment complex, to deposit additional money in escrow for repairs after it was demanded by Lenders Federal National Mortgage Association and Barings Multifamily Capital, LLC. The Lenders held Camille Village to be in default, lengthy settlement negotiations failed, and the amount demanded for repairs increased dramatically after additional inspections. After a trial, the chancery court concluded that Camille Village was in default and had failed to prove the Lenders had acted in bad faith. Finding no reversible error, the Mississippi Supreme Court affirmed the trial court. View "Camille Village, LLC v. Federal National Mortgage Ass'n, et al." on Justia Law