Justia Contracts Opinion Summaries

Norfolk Redevelopment and Housing Authority (NRHA) filed a complaint against the St. Joe Company and Advantis Real Estate Services Company alleging unjust enrichment and seeking imposition of a constructive trust and recovery of funds supplied by NRHA to its agent, Advantis, for the payment of contractors who had performed services for NRHA. St. Joe held a perfected secured interest in Advantis's operating account and exercised its rights as a secured creditor over that account to have funds from Advantis's account, including those entrusted to Advantis as NRHA's agent, transferred to a St. Joe account. The circuit court entered summary judgment in favor of NRHA. The Supreme Court affirmed, holding that the imposition of a constructive was was proper and necessary to prevent a failure of justice and unjust enrichment.

This case concerned a commercial lease between Defendants-Appellants-Cross-Appellants Michael Storms and Kathy Burggraf and the Plaitniff-Respondent-Cross-Appellant Watkins Company, LLC’s predecessor in interest, Watkins and Watkins for a restaurant and microbrewery in Idaho Falls, Idaho. Watkins filed a lawsuit seeking to enforce the lease after Storms and Burggraf failed to timely pay the rent. The issues were tried to the district court, which found that Storms and Burggraf had materially breached the lease and that Watkins could regain possession of the property. The district court also found that Storms and Burggraf had been unjustly enriched by failing to pay rent for additional storage space. Further, the district court found that the lease's provision for accelerated rent was a liquidated damages clause and found it be unconscionable. Storms and Burggraf appealed the district court’s decision, arguing that an accord and satisfaction had been reached between the parties and that the court erred in its finding of the rent for the upstairs storage area above the restaurant. Watkins argued on cross-appeal that the district court based its finding regarding the accelerated rent on insufficient evidence. Because of an error in the district court's finding regarding the upstairs storage area, the Supreme Court vacated that part of the court's order but upheld the remaining issues.

Auto Owners Insurance, Inc. (Auto Owners) appealed a circuit court's denial of its motion to dismiss or, in the alternative, to compel arbitration in an action against it filed by Blackmon Insurance Agency, Inc. Blackmon and Auto Owners entered into an "agency agreement" authorizing Blackmon to act as an agent for the sale of Auto Owners' insurance in Alabama (the 1995 agreement). A 2005 document entitled "Letter of Instructions" was alleged to be an independent document from the 1995 agreement. Auto Owners contended that the 2005 document was contemplated by and incorporated into the 1995 agreement. The 2005 document contained instructions governing the issuance of a variety of bonds by an agency of Auto Owners. In late 2010, Blackmon filed a complaint in the circuit court seeking a declaratory judgment as to the arbitrability of a dispute between Blackmon and Auto Owners as to which Auto Owners had already initiated arbitration proceedings in its home state of Michigan. Blackmon also alleged that in the Michigan arbitration proceeding Auto Owners based its claims on the 2005 document and a 2009 agreement. Upon review of the matter, the Alabama Supreme Court concluded that the circuit court erred in denying Auto Owners' motion to compel arbitration. The Court therefore reversed that order and remanded the case for the circuit court to grant the motion to compel arbitration and either issue a stay of these proceedings pending arbitration or dismiss the case.

Respondent Michael Stewart and appellant Rolland Weddell entered into a business relationship concerning a number of different projects. After their business relationship collapsed, Weddell filed a complaint asserting numerous claims against Sewart. Stewart asserted numerous counterclaims. The district court found in Stewart's favor on all counts. The Supreme Court reversed in part, holding that pursuant to Nev. Rev. Stat. 86.401, a judgment creditor may obtain the rights of an assignee of the member's interest, receiving only a share of the economic interests in a limited-liability company, and thus, the judgment creditor and holder of a charging order against Weddell's membership interests was entitled to Weddell's economic interest in appellant Granite Investment Group, LLC but not Weddell's managerial rights. The Court affirmed in all other aspects, holding (1) parties should only file a notice of pendency when the action directly involves real property, and therefore, the notice of pendency filed by Weddell, which involved an option to purchase a membership interest in Respondent Empire Geothermal Power, LLC, was unenforceable; and (2) substantial evidence existed to support the district court's finding that Weddell had no ownership interest in respondent H2O, Inc.

This was an appeal and cross-appeal from a district court judgment awarding appellant homebuyer treble damages against respondent seller, a limited liability company, but refusing to find that the individual respondent, a former manager of the limited liability company, was liable for the judgment as the company's alter ego. The Supreme Court (1) affirmed the district court's award of treble damages under Nev. Rev. Stat. 113.150(4), which awards treble damages for a seller's delayed disclosure or nondisclosure of property defects, despite the court's failure to make a finding that the seller acted willfully, as the legislature did not intend to imply a heightened level of mental culpability to the statute; and (2) vacated the portion of the court's judgment concerning the alter ego issue, as the court failed to explain its reasoning for denying alter ego status. Remanded.

Plaintiff rented a car, drove 64 miles in one day, refilled the fuel tank, and returned the car to the same location from which he rented the car. In addition to rental and other fees that he does not dispute, he was charged a $13.99 fuel service fee that he challenged by filing a putative class action, claiming breach of contract, fraud, and unjust enrichment. Defendant claimed that, because plaintiff drove fewer than 75 miles during the rental period, to avoid the charge he was required to return the car with a full fuel tank and to submit a receipt. The district court dismissed, finding that the contract was not ambiguous. The Sixth Circuit affirmed, citing the voluntary payment doctrine.

Plaintiffs are personal investment holding corporations owned by two related Panamanian shareholders. Defendants, of who there are two distinct groups, are (1) a related group of banking corporations operating under the umbrella of Banco Santander, which provide banking, investment, and other financial management services; and (2) certain individual officers/employees of Santander. This dispute arose from plaintiff's investment of an undisclosed sum of money with defendants. At issue was whether a district court, having found a valid contract containing an arbitration clause existed, was also required to consider a further challenge to that contract's place within a broader, unexecuted agreement. Having considered those circumstances in light of Granite Rock Co. v. International Brotherhood of Teamsters and other relevant precedent, the court found that the district court properly construed the law regarding arbitrability in dismissing plaintiff's suit. Accordingly, the court affirmed the judgment.

MoBev appealed the district court's order denying its motion for partial summary judgment and granting Shelton's motion for summary judgment on MoBev's claims for violation of Missouri franchise law. Because the plain language of the Missouri franchise statue at issue unambiguously required that the general definition of "franchise" applied to liquor supplier-wholesaler relationships and the relationship between MoBev and Shelton did not satisfy this definition, the court affirmed the judgment.

Dorn Sprinkler, formed in 1977 and operated by its owner, David, failed to contribute to benefit funds required by its collective bargaining agreement for three months in 2006-2007. Employees organized a work stoppage. Sprinkler went out of business with its required contributions still unpaid. David’s son, Christopher, lead salesman at Sprinkler, had formed a company called Dorn Fire Protection during the 1990s but had not started doing business. Shortly before financial troubles at his father's business, Christopher began operations. The Union submitted a request to arbitrate to Fire Protection under the theory that it is an alter ego of Sprinkler. Fire Protection refused. The district court, finding that Fire Protection is not an alter ego of Sprinkler, granted summary judgment to defendants. The Sixth Circuit affirmed. The management structures at the companies were not substantially identical; there was no substantial continuity in employees, customers or equipment. There was no proof of intent to avoid the bargaining agreement.

Appellant Richard Dregseth appealed a district court's judgment that dismissed his equitable claims against Appellee Randy Brown. Appellant argued that the district court erred in failing to make findings of fact, failed to reject testimony and dismissed his promissory estoppel, equitable estoppel and unjust enrichment claims. In 1999, Appellant left his job at Bremer Bank to work for Appellee Brown at Capital Harvest, Inc., a captive finance company for AGSCO, Inc., a corporation owned Brown. Appellant worked for Brown until 2003, first at Capital Harvest then at AGSCO. In 2005, Appellee and two former Capital Harvest employees, John D. Erickson and Jon A. Ramsey, sued Brown and Capital Harvest for breach of contract, fraud, deceit, promissory estoppel, equitable estoppel, unjust enrichment and breach of fiduciary duty. Appellee claimed he was entitled to be paid the value of an ownership interest in Capital Harvest that Brown promised to provide as part of his compensation. Prior to trial, the district court dismissed all of Appellant's claims except for breach of contract and fraud. The Supreme Court affirmed in part, and reversed in part of the first appeal. The case was remanded for further proceedings on Appellant's deceit and equitable claims. On rehearing, the district court then dismissed the remaining claims, and the Supreme Court affirmed. In this case before the Supreme Court, the Court found that the district court's findings and conclusions were based on evidence from all of the witnesses, including Appellant, Brown and the economists who testified on behalf of both parties. Therefore the Court concluded the district court did not err relying on that evidence, nor did it err concluding under the facts of this case that Brown was not unjustly enriched by not paying Appellant for the value of the ownership interest in Capital Harvest that was not transferred by Brown. The Court affirmed the district court's judgment, finding no error to make findings of fact, to reject testimony or in dismissing Appellant's claims.