Justia Contracts Opinion Summaries

Celeste Grynberg and her husband were co-owners of Grynberg Petroleum. Celeste filed a complaint for declaratory relief, breach of contract, unjust enrichment, and conversion against L&R Exploration Venture and numerous individuals and entities having an interest in the venture (collectively L&R), claiming that L&R owed her compensation for services Grynberg Petroleum provided to L&R and that she was entitled to payment of those amounts. The district court granted summary judgment for L&R and dismissed the complaint on the basis of res judicata, finding that Celeste was in privity with parties involved in prior litigation in Colorado and New York and her complaint involved the same subject matter and issues resolved in those proceedings. The Supreme Court affirmed, holding that Celeste was in privity with her husband, who was a party in the New York proceedings, as the assignee of his interest in L&R and with Grynberg Petroleum as the co-owner of the company and was bound by the prior rulings.

A limited liability company (MIC) was formed for the purpose of building and operating a hotel. The original members of MIC were a revocable trust (the Trust), trustee Michael Siska, and Thomas, Jane, and Jason Dowdy. Later, Thomas and Jane Dowdy transferred, without the Trust's involvement, MIC's assets to Milestone Development, the Dowdy's family company. The Trust filed an amended complaint derivatively on behalf of MIC against Defendants, Milestone and the Dowdys. In its amended complaint, the Trust claimed that the transfer of assets to Milestone was not in the best interests of MIC or its members and alleging, inter alia, breach of fiduciary duty, breach of contract, unlawful distribution, and conversion, and seeking to recover damages. The Trust, however, did not join MIC as a party to the derivative action. The circuit court dismissed the Trust's amended complaint, holding that the Trust lacked standing to maintain the derivative action on behalf of MIC because the Trust could not fairly represent the interests of the Defendant shareholders. The Supreme Court reversed, holding that it would not entertain the appeal on the merits because MIC was a necessary party to the proceeding and had not been joined. Remanded.

Plaintiff Fox Rest Associates (Fox Rest) was formed to purchase Fox Rest Apartments. Defendants in this case were George Little, Fox Rest's legal counsel through his law firm, George B. Little and Associates (GBL&A), George Little's wife, and GBL&A. This action took place after Mr. Little sold the Apartments without knowledge of Fox Rest and transferred a portion of the proceeds from the sale in an account he held with Mrs. Little. Unable to satisfy a previous judgment finding Mr. Little and GLB&A liable to Fox Rest for, inter alia, malpractice and double billing, Fox Rest filed this action against Defendants, seeking to void various transactions by Mr. Little as fraudulent conveyances and voluntary conveyances. The court granted Defendants' motion to strike, finding that Fox Rest did not present sufficient evidence in its case in chief to establish a prima facie case for its claims. The Supreme Court affirmed in part and reversed in part, holding that, except for a portion of the claims relating to the sale of certain equipment, the circuit court erred in striking Fox Rest's fraudulent conveyance and voluntary conveyance claims. Remanded.

Lawton Rogers, an attorney, and three associates (Plaintiffs) formed a partnership (the Firm) by signing a partnership agreement. Each Plaintiff signed a note securing his indebtedness with his interest in the Firm. Later, all four partners joined a new firm, and the Firm remained extant but inactive. Several years later, Rogers and his wife later filed an amended complaint against Plaintiffs, demanding repayment of the notes. Plaintiffs filed a separate complaint asserting that Rogers had overdrawn his capital account by $611,147 and that this amount was owed to the Firm under the partnership agreement. Plaintiffs sought a final accounting and judgment against Rogers in favor of the Firm, the distribution of the Firm's assets equally among the partners, and the judicial dissolution of the Firm. The circuit court consolidated the two cases and ultimately ordered the judicial dissolution of the Firm without performing an accounting and settlement of the partners' accounts. The Supreme Court affirmed in part and vacated in part, (1) remanding for an accounting and settlement of the Firm's assets and liabilities, and (2) affirming the portion of the circuit court judgment awarding Rogers unpaid interest on his $150,000 capital contribution to the Firm.

Benz Farm, LLP ("Benz") appealed a summary judgment dismissing its action against Cavendish Farms, Inc. ("Cavendish") for breach of contract and violation of the Unlawful Sales or Advertising Practices Act, and awarding Cavendish attorney fees. In 2006, Cavendish and Benz entered into written agreements for the sale and purchase of potatoes. One was a "Grower Storage Agreement," under which Benz agreed to grow and sell, and Cavendish agreed to buy, 150,000 hundredweight of potatoes, to be stored after harvest by Benz until Cavendish directed they be delivered to its processing plant. The second agreement was a "Company Storage Agreement," under which Benz agreed to grow and sell, and Cavendish agreed to buy, 113,000 hundredweight of potatoes, to be delivered to and stored by Cavendish. The parties also entered into a written credit agreement, whereby Cavendish agreed to provide financing for Benz's expenses in growing the potatoes. Benz claims that there were numerous oral agreements regarding the dates that Cavendish would accept deliveries, but that Cavendish accepted only limited deliveries on those dates, causing inefficiencies and additional expenses for Benz. Upon review, the Supreme Court concluded: (1) the district court did not err in granting summary judgment dismissing Benz's breach of contract claims; (2) the Unlawful Sales or Advertising Practices Act did not apply to, or create a cause of action against, a purchaser; (3) the district court did not abuse its discretion in denying Benz's motion to amend its complaint; and (4) the district court did not err in awarding Cavendish attorney fees.

Polysilicon producer MEMC entered in exclusive sales representation agreements with Semi-Materials. Under these agreements, Semi-Materials was to serve as the sales representative for MEMC in China and Korea. Semi-Materials brought suit against MEMC, claiming it was entitled to certain commissions. The court held that, considering the four corners of the agreements at issue, the court could not agree with the district court's conclusion that the agreements clearly and unambiguously limited Semi-Materials to receiving commissions only on those sales which included terms whereby the risk of loss remained with MEMC until the product entered China or South Korea. Because the meaning and intent of that language was uncertain and subject to more than one reasonable interpretation, it was necessary to reverse the grant of partial summary judgment and remand this matter to the district court for trial. The court also held that the evidence presented to the jury at trial supported its finding that MEMC clothed a sales manager with the authority to enter into the agreements with Semi-Materials. Accordingly, MEMC could not show there were no probative facts presented at trial supporting the jury's determination that Semi-Materials reasonably relied upon the sales manager's apparent authority to enter into the agreements. Moreover, the court rejected MEMC's argument that Semi-Materials failed to perform a material obligation to the contracts to provide regular reports to MEMC. Therefore, the court reversed the district court's grant of partial summary judgment for MEMC and affirmed its denial of MEMC's judgment as a matter of law.

Appellants appealed the district court's adverse grant of summary judgment in favor of appellee on their claim for breach of a 1988 contract between the parties. The district court held that the 1988 contract had been superseded by a subsequent agreement between the parties and appellants' claim for breach of the 1988 contract failed as a matter of law. The court held that because there was a genuine issue of fact as to whether appellants and appellee mutually assented to enter a new contract, the court reversed and remanded.

Chevron, the franchisor, brought suit for declaratory judgment against one of its franchised dealers, M&M Petroleum Services, Inc. M&M responded with a counterclaim of its own, a counterclaim that was not only found to be frivolous, but the product of perjury and other misconduct. The court held that had M&M merely defended Chevron's suit, it could not have been held liable for attorneys' fees. The court held, however, that in affirmatively bringing a counterclaim that was reasonably found to be frivilous, M&M opened itself up to liability for attorneys' fees under the Petroleum Marketing Practices Act, 15 U.S.C. 2805(d)(3). Therefore, the district court did not err in determining that Chevron was eligible to recover attorneys' fees, nor did the district court abuse its discretion in determining that M&M's counterclaim was frivolous and awarding attorneys' fees to Chevron under section 2805(d)(3).

Defendant AIA Services Corporation entered into a stock redemption agreement with Appellant Reed Taylor to purchase all of his shares in AIA Services for a $1.5 million down payment promissory note and a $6 million promissory note, plus other consideration. When AIA failed to pay the $1.5 million when it became due, Appellant and AIA agreed to modify the stock redemption agreement. AIA was a still unable to make payments under the new terms. Appellant then filed suit to recover the amounts owed on the two promissory notes. The district court granted partial summary judgment in favor of AIA and dismissed six of Appellant's causes of action after finding the revised stock redemption agreement was unenforceable. On appeal, Appellant argued the redemption agreement complied with state law and was still enforceable. Upon review, the Supreme Court affirmed the district court's holding that the agreement was illegal and unenforceable and affirmed the court's dismissal of Appellant's six causes of action.

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.