Justia Contracts Opinion Summaries

In 2006, Kevin and his wife Marjorie moved to Indiana, to manage car dealerships owned by Savoree. In 2007 Savoree proposed selling the dealerships to the couple through a series of stock purchases to be financed by a $3.5 million loan from CSB. After negotiating the loan with CSB, Kevin took out a life insurance policy with Cincinnati Life that named Marjorie as the beneficiary. Two months later, Kevin assigned that policy to CSB. The couple eventually declared bankruptcy and litigation between all of the parties ensued. Kevin died of cancer in 2010. Cincinnati Life deposited the proceeds, $3 million, with the clerk of court and sought judicial determination of ownership. The district court dismissed Marjorie’s claims with prejudice for failing to meet pleading standards and entered summary judgment for CSB. The Seventh Circuit affirmed, finding that Marjorie did not present any evidence to create a genuine disputed issue of material fact. She identified lack of consideration for the assignment as a potential disputed fact, but the assertion was made and repeated without any support or citation to evidence. View "Cincinnati Life Ins. Co. v. Beyrer" on Justia Law

This case presented the issue of revocability of a gift of stock in one company and the validity of stock transfers in two other companies. George Sipko and his two sons Robert and Rastislav managed Koger, Inc. George made an undocumented gift of 1.5 percent in Koger stock to each of his sons. George then formed Koger Distributed Solutions, Inc. (KDS) and Koger Professional Services, Inc. (KPS) The sons each owned fifty percent of KDS and KPS. According to Robert, George became angry after learning about a romantic relationship in which Robert was involved and threatened to physically harm Robert unless he signed certain documents. Robert signed a document transferring his stock in KDS "For Value Received." A second document, transferred Robert's KPS stock using the same language. Robert testified that he signed the KPS document on February 3, 2006, and it was backdated. At a 2006 board meeting, George conducted a purported recall of Robert's 1.5 percent share of Koger stock. George and Rastilav contended that any document signed by Robert was executed voluntarily. Robert then sued his father, Rastislav and the three companies seeking damages and equitable relief. Upon review, the Supreme Court held that George's gift of Koger stock to Robert was unconditional and therefore irrevocable. Robert's transfers of KDS and KPS stock were void for lack of consideration. View "Sipko v. Koger, Inc." on Justia Law

An Oklahoma City car dealer, Automax Hyundai South, sued its insurance company for refusing to defend it when the dealership was sued by customers. Two aggrieved customers brought claims against Automax relating to car purchases they made. The customers won their cases at the state court. The district court ruled that the insurance company had no duty to defend or indemnify Automax in the underlying lawsuits. Upon review of the district court record and the policy at issue, the Tenth Circuit agreed with Automax and concluded the insurance company had a duty to defend. View "Automax v. Zurich, et al" on Justia Law

Plaintiffs, stockholders in Chevron and FedEx, sued the boards of Chevron and FedEx for adopting forum selection bylaws providing that the forum of litigation relating to the companies' internal affairs should be conducted in Delaware. The cases were consolidated. Defendants filed a motion for judgment on the pleadings on Plaintiffs' claims that (1) the bylaws were statutorily invalid because they were beyond the boards' authority under the Delaware General Corporation Law, and (2) the bylaws were contractually invalid and therefore could not be enforced like other contractual forum selection clauses. The Court of Chancery granted Defendants' motion, holding (1) the bylaws were facially valid as a matter of statutory law; and (2) the bylaws were valid and enforceable contractual forum selection clauses. View "Boilermakers Local 154 Ret. Fund v. Chevron Corp." on Justia Law

Plaintiff Advanced Medical Diagnostics entered into a contract for services with Defendant Imaging Center of Idaho, LLC. Defendant stopped making payments and Plaintiff sued for damages for breach of contract. The matter was tried to a jury and the jury returned a special verdict finding that Plaintiff had proved its claim but was not entitled to damages because Defendant proved its affirmative defense. The trial court determined that Defendant was the prevailing party, and was awarded costs and attorney fees. Plaintiff appealed that award to the Supreme Court. After its review, the Supreme Court found no error in the trial court's decision and affirmed. View "Adv Medical Diagnostics v. Imaging Center of Idaho" on Justia Law

Newman Park, LLC was formed for the sole purpose of developing a piece of property. In 2004, it took out a loan to purchase the property at issue in this suit. In 2008, without knowledge of the other owners in Newman Park, one member went to Columbia Community Bank and requested a loan for his 95%-owned company, Trinity. Trinity had nothing to do with Newman Park, but the Bank's loan to Trinity was secured by a second deed of trust on the Newman Park property. The issue before the Supreme Court in this case was whether the Bank, who was tricked into refinancing the property that the borrower lacked authority to pledge as security, could benefit from equitable subrogation when that Bank had no preexisting interest in the property. The property-owner/debtor argued that the Bank's lack of the preexisting interest barred it from equitable subrogation because of the "volunteer rule" which would characterize it as an intermeddler. The Court rejected the volunteer rule as a bar to equitable subrogation. The Court affirmed the appellate court which held that the defrauded Bank was entitled to be equitably subrogated as first priority lienholder. View "Columbia Cmty. Bank v. Newman Park, LLC" on Justia Law

Plaintiff appealed from the district court's dismissal of his amended complaint, which alleged that FXDD engaged in dishonest and deceptive practices in managing its online foreign exchange trading platform in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(c), and New York General Business Law 349(h), and 350. Plaintiff also alleged breach of contract and of the implied covenant of good faith and fair dealing. The court concluded that, at this stage, some part of the underlying transaction occurred in New York State, giving plaintiff statutory standing to sue for deceptive practices and false advertising under sections 349 and 350; because the complaint alleged that FXDD failed to act in good faith and intentionally delayed trades or caused them to fail in order to enrich itself at the expense of its customers, these practices were incompatible with a promise to execute orders on a best-efforts basis and, therefore, the court vacated the dismissal of the breach of contract claim; and the court affirmed the judgment of the district court as to the RICO claim and the claim for breach of the implied covenant of good faith and fair dealing. View "Cruz v. FXDirectDealer, LLC" on Justia Law

Braunger Foods sold food product supplies to Hungry's North, a business owned by Michael Sears. Braunger Foods filed this action against Sears and Hungry's (collectively Hungry's), seeking to recover amounts Braunger Foods claimed were due for sales it had made on credit to Hungry's. The district court (1) entered judgment against Hungry's for amounts it concluded were owing to Braunger Foods; and (2) entered no judgment against Sears, concluding that a guaranty, by which Braunger Foods sought to hold Sears personally liable for the debt, was ineffective. Braunger Foods appealed the trial court's conclusion that the guaranty was unenforceable against Sears. The court of appeals affirmed. The Supreme Court reversed, holding that the guaranty was enforceable against Sears. Remanded with directions to enter judgment against Sears. View "Braunger Foods, LLC v. Sears" on Justia Law

The issue before the Supreme Court centered on the grant of summary judgment in favor of Respondent Action Concrete Contractors, Inc. in a mechanic's lien foreclosure action. Owners Elvira Chappelear, Craig Chappelear, Premier Southern Homes, LLC, Henry G. Beal, Jr. and First Citizens Bank and Trust Co., Inc. argued on appeal there were material issues of fact and that the grant of summary judgment was inappropriate. The Supreme Court disagreed after its review of the trial court record and affirmed. View "Action Concrete v. Chappelear" on Justia Law

Tenant-Defendant Bhole, Inc. terminated its commercial lease before the lease expired. Before the end of the lease, Plaintiff-landlord Shore Investments, Inc. filed suit to recover the entire unpaid rent for the balance of the term. The lease agreement did not contain an acceleration clause. Upon review of the matter, the Supreme Court found that though defendants breached the lease, the trial court erred by not considering the lease did not have an acceleration clause. The trial court's award of damages and attorney's fees was inappropriate, and its decision regarding the landlord's claim for tortious interference with the lease (with a punitive damages award) was also made in error. The Supreme Court reversed the trial court and remanded the case for further proceedings. View "Bhole, Inc., at al. v. Shore Investments, Inc." on Justia Law