Justia Contracts Opinion Summaries

Robert Nederlander, Sr. (“Robert”) controlled Nederlander of San Francisco Associates (“Nederlander”), a California general partnership. Carole Shorenstein Hays (“Carole”) and her family controlled CSH Theatres L.L.C. (“CSH”), a Delaware LLC. Nederlander and CSH each owned a fifty-percent membership interest in Shorenstein Hays-Nederlander Theatres LLC (“SHN”), a Delaware LLC that operated theaters in San Francisco under SHN’s Plan of Conversion and Operating Agreement of the Company (the “LLC Agreement”). In 2010, CSH Curran LLC, an entity that Carole co-managed, purchased the Curran Theatre in San Francisco (the “Curran”). SHN had been operating under a lease from the Curran’s then-owners, the Lurie Company, since the beginning of the partnership. Carole and her husband, Dr. Jeffrey Hays (“Jeff”) (collectively, the “Hayses”), did not extend that lease with SHN when it expired in 2014. Thereafter, the Hayses began staging productions at the Curran. In February 2014, CSH sued Nederlander in the Delaware Court of Chancery for a declaratory judgment that it had no legal obligation to renew the Curran lease. In September 2018, Nederlander sought a preliminary injunction against CSH and the Hayes to prevent them from staging two theatrical productions at the Curran (the “PI Action”). In the PI Action, Nederlander asserted four counts, but focused its injunction efforts on Count I, which asserted breach of contract claims (based upon the “provisions of Section 7.02 of the LLC Agreement or the contractual fiduciary duties owed to SHN and its members under the LLC Agreement) against all defendants in that action. The trial court denied that motion and shortly thereafter entered a partial final judgment as to Count I of Nederlander’s Complaint, pursuant to Court of Chancery Rule 54(b), to allow for an immediate appeal of the PI Decision. Nederlander argued on appeal that the trial court erred in the Declaratory Judgment Action by refusing to enforce Section 7.02(a) of the LLC Agreement against the Hayses. The Delaware Supreme Court agreed with Nederlander that the Court of Chancery misinterpreted Section 7.02(a) and that the Hayses could not stage competitive productions (not falling within Section 7.02(b)’s exceptions) at the Curran that violated its contractual duty to maximize SHN’s economic success. Accordingly, the Court reversed that aspect of the trial court’s decision. Because Nederlander did not challenge the court’s rulings in the Declaratory Judgment Action as to damages and other forms of relief, the Supreme Court declined to remand that action. Further, in view of the reversal of the trial court’s interpretation of Section 7.02(a) in the Declaratory Judgment Action, the Supreme Court ordered remand of the PI Action for further proceedings. The Court found no error with any other aspect of the trial court’s decisions. View "In Re: Shorenstein Hays-Nederlander Theatres LLC Appeals" on Justia Law

In 2013, Blooming Terrace No. 1 (“Blooming Terrace”) obtained an $11 million loan from KH Blake Street, LLC (“KH Blake Street”), a special purpose entity organized by Kresher Holdings, LLC. The loan was secured by a deed of trust and memorialized by promissory note. Blooming Terrace paid a $220,000 origination fee upon execution of that note. The note specified that interest would accrue on the outstanding principal at a rate of 11% per annum. In the event of default, the note provided for a higher default interest rate of 21% per annum. The note required monthly interest payments in the amount of 8% per annum throughout the term of the loan, though these periodic payments did not apply to reduce the principal balance of the loan. In the event of any late monthly payment, a 5% late fee was applicable to the overdue amount. The note was to mature in 2014. However, KH Blake Street reserved the right to accelerate Blooming Terrace’s full loan repayment obligation upon an event of default. Prior to paying down any portion of the principal, Blooming Terrace defaulted on its monthly payment obligation. The parties entered into a forbearance agreement; at that time, the parties stipulated that the accrued charges due and owing to KH Blake Street under the original loan agreement were $778,583.33. In exchange for KH Blake Street’s agreement not to pursue collection of that sum, or any other remedies, Blooming Terrace agreed to pay a $110,000 fee. Payment of this new fee did not substitute for any other charges that continued to accrue during the forbearance period, including, but not necessarily limited to, default interest and late fees. Instead, a condition of the forbearance was Blooming Terrace’s compliance with all of the original loan terms. The Colorado Supreme Court granted certiorari to clarify the proper method for determining the effective rate of interest charged on a nonconsumer loan to ascertain whether that rate was usurious under Colorado law: the effective interest rate should be calculated by determining the total per annum rate of interest that a borrower is subjected to during a given extension of credit. Here, where a forbearance agreement was entered into after an event of default, all charges that accrued during the period of forbearance must be totaled and then annualized using only that timeframe as the annualization period. Such includable interest must then be combined with any interest that continued to accrue pursuant to the original loan terms to determine the effective rate of interest subject to the 45% ceiling set by Colorado’s usury statute, section 5-12-103, C.R.S. (2018). View "Blooming Terrace No. 1, LLC v. KH Blake Street, LLC" on Justia Law

Louisiana Hospice Corporation, otherwise known as LHC, sought to acquire Gulf Coast Hospice LLC in D’Iberville, Mississippi. LHC and Gulf Coast Hospice executed a letter of intent outlining the basic terms of the proposed acquisition. Ultimately, the parties failed to consummate the transaction. Gulf Coast Hospice LLC and its members, Jyoti Desai, Krupa Desai, and Iqbal Savani sued LHC Group Inc., LHCG XXVI LLC, and Mississippi Health Care Group LLC, raising several theories of liability stemming from the failed acquisition. The trial court granted LHC’s motion for summary judgment and dismissed Gulf Coast Hospice’s claims. Gulf Coast Hospice appealed, arguing that genuine issues of material fact should have prevented summary judgment. Gulf Coast Hospice’s chief argument was that LHC entered into an enforceable contract to acquire its hospice operations. Alternatively, Gulf Coast Hospice argued that if no enforceable contract to purchase existed, its claims for breach of contract and duty of good faith with respect to the letter of intent and tortious interference should have survived summary judgment. The Mississippi Supreme Court held there was no enforceable contract, that the doctrine of estoppel was inapplicable, and that no genuine issue of material fact existed regarding Gulf Coast Hospice’s misrepresentation claims. The Court also held no genuine issue of material fact existed regarding Gulf Coast Hospice’s alternative claims. As such, the Court affirmed View "Gulf Coast Hospice LLC v. LHC Group Inc." on Justia Law

At issue in this case before the Mississippi Supreme Court was a dispute between an automobile manufacturer and one of its dealerships. Specifically, the issue reduced to whether the dealer filed a timely complaint under Mississippi Code section 63-17-73(1)(d)(iii) after the dealer received the manufacturer’s notice it would terminate the applicable dealership agreement. The Court determined the statute was unambiguous, and its plain meaning provided a dealer may file its verified complaint within the sixty day notice period, i.e., the sixty days preceding the effective date of termination. Because the statute was unambiguous and conveyed a clear and definite meaning, the Court did not resort to the rules of statutory construction. The Court found the dealer’s complaint was timely filed within the sixty days immediately preceding the effective date of termination. View "Nissan North America, Inc. v. Great River Nissan, LLC d/b/a Great River Nissan" on Justia Law

The federal United States District Court for the Middle District of Georgia certified questions of Georgia law to the Georgia Supreme Court regarding the scope of the “acceptance doctrine” in negligent construction tort cases. At issue was whether and how the acceptance doctrine applied as a defense against a claim brought by a subsequent purchaser of allegedly negligently constructed buildings. Thomaston Crossing, LLC (the “original owner”) entered into a construction contract with appellee Piedmont Construction Group, Inc. to build an apartment complex in Macon. Piedmont then retained two subcontractors – appellees Alan Frank Roofing Company and Triad Mechanical Company, Inc. – to construct the roof and the HVAC system, respectively. In 2014, the complex was completed, turned over to, and accepted by the original owner. In 2016, the original owner sold the apartment complex to appellant Thomaston Acquisition, LLC (“Thomaston”) pursuant to an “as is” agreement. Shortly after the sale, Thomaston allegedly discovered evidence that the roof and HVAC system had been negligently constructed. Thomaston filed suit against Piedmont, asserting a claim for negligent construction of the roof and HVAC system and a claim for breach of contract/implied warranty. Piedmont then filed a third-party complaint against Alan Frank Roofing and Triad Mechanical because both companies had allegedly agreed to indemnify Piedmont for loses arising out of their work. Each of the appellees later moved for summary judgment based in part on the defense that Thomaston’s negligent construction claim is barred by the acceptance doctrine. The Georgia Supreme Court concluded the acceptance doctrine applied to Thomaston’s claim, and that “readily observable upon reasonable inspection” referred to the original owner’s inspection. “Without any real claim of privity, Thomaston nevertheless contends that it should be treated like the original owner because it is the current owner-occupier of the property. But doing so would undermine the acceptance doctrine’s foundational purpose of shielding contractors from liability for injuries occurring after the owner has accepted the completed work, thereby assuming responsibility for future injuries. There is no ‘current owner-occupier’ or ‘subsequent purchaser’ exception to the acceptance doctrine, and the facts of this case do not compel us to recognize one here.” View "Thomaston Acquisition, LLC v. Piedmont Construction Group, Inc." on Justia Law

The Supreme Court affirmed in part and vacated in part the decision of the court of appeals affirming the judgment of the district court modifying a judgment for civil conspiracy following a jury trial, holding that the district court did not abuse its discretion in granting the motion to amend the judgment.Jeffrey Anderson commenced an action against Dean and Carol Anderson and Anderson Tooling, Inc. (ATI) alleging, among other claims, tortious discharge. Dean, Carol, and ATI filed several counterclaims. ATI sued Lori and brought a claim against Lori and Fabrication & Construction Services Inc. (FabCon) for, among other claims, conspiracy. Damages against Jeff totaled $772,297.72. The district court subsequently granted ATI's motion to modify the judgment to make Lori and FabCon jointly and severally liable for the $772,297.72 judgment. As relevant to this appeal, the court of appeals reversed the district court's order imposing joint and several liability on Lori and FabCon, determining that a conspiracy did not exist for Lori and FabCon to join. The Supreme Court vacated the court of appeals's judgment in part, holding that the district court did not abuse its discretion in granting the motion to amend the judgment. View "Anderson v. Anderson Tooling, Inc." on Justia Law

The Supreme Court affirmed the district court's decision to exclude all evidence of Keystone Insurance Agency's alleged damage under Utah R. Civ. P. 26(d)(4) in Keystone's suit against Inside Insurance, the court's dismissal of all of Keystone's claims with the exception of Keystone's request for declaratory relief, and the court's dismissal of Inside's counterclaims, holding that the district court did not abuse its discretion.In its complaint, Keystone requested that the district court declare Keystone a member of Inside and sought to inspect certain records. Inside asserted several counterclaims. After the district court entered its judgment the Supreme Court affirmed, holding (1) Keystone failed to provide Inside with a viable computation of its claimed damages in compliance with Utah R. Civ. P. 26(a)(1)(C), and therefore, the district court properly excluded Keystone's damages evidence under rule 26(d)(4); (2) the district court properly denied Keystone's motion for reconsideration; and (3) the district court did not abuse its discretion by dismissing with prejudice Inside's expulsion counterclaim seeking expulsion of Keystone as a member of Inside pursuant to Utah R. Civ. P. 41(a)(2) and (c). View "Keystone Insurance Agency, LLC v. Inside Insurance, LLC" on Justia Law

Rex Distributing Company was a wholesaler of Anheuser-Busch’s beer. When Rex sought to sell its business, Anheuser-Busch asserted a contractual right to “redirect” the sale to its preferred buyer, Mitchell Distributing Company. Rex alleged the redirect provision was void under Mississippi’s Beer Industry Fair Dealing Act (BIFDA) and that Anheuser-Busch’s interference with the sale caused it damages actionable under the same statute. The trial court dismissed Rex’s claims against Anheuser-Busch and Mitchell for failure to state a claim upon which relief can be granted. The Mississippi Supreme Court reversed, however, concluding Rex alleged a valid cause of action. The dismissal of Rex’s BIFDA claim against Anheuser-Busch and the derivative claims against Mitchell were reversed and the matter remanded for further proceedings. The Supreme Court affirmed the trial court’s judgment dismissing Rex’s other claims. View "Rex Distributing Company, Inc. v. Anheuser-Busch, LLC" on Justia Law

In this appeal brought by Alex Mantle and Marjorie Mantle the Supreme Court affirmed in part and reversed and remanded in part the district court's decision as to various post-trial issues in ongoing litigation arising from a soured business deal.The Court held (1) the district court lacked subject matter jurisdiction to offset the judgments when that issue was pending in the Supreme Court in Mantle I; (2) with respect to Killmer Settlement Funds, (a) there was no reviewable order in the record regarding whether the Garlands had standing to assert a direct claim against Karl Killmer, and (b) the Mantles did not have a superior security interest in the Killmer Settlement Funds by operation of the “general intangibles” clause of the FNB security agreement; (3) the district court did nor when it awarded North Star Energy & Construction, LLC's attorneys, The Kuker Group, their attorney fees from a portion of the Killmer Settlement Funds; and (4) the district court did not err when it issued a nunc pro tunc order that removed Marjorie Mantle’s name from the order that disbursed the Killmer Settlement Funds. View "Mantle v. North Star Energy & Construction LLC" on Justia Law

Rotondo was the sole owner of Apex, which wholly owned four limited liability companies (Directional Entities). Apex and the Directional Entities provided services, such as human resources, to different clients. Rotondo sold the Directional Entities’ key asset, customer lists, to AES, which agreed to pay Rotondo a share of its gross profits in the form of “Consulting Fees.” Two entities sought to collect Rotondo’s Consulting Fees: Akouri loaned money to one of Rotondo’s other companies and had a security interest in Apex’s assets and a judgment against Rotondo and Apex for $1.4 million. Rotondo also owes the IRS $3.4 million. The IRS filed several notices of tax liens against Rotondo, Apex, and the Directional Entities. AES filed an interpleader action. The Sixth Circuit affirmed summary judgment in favor of the IRS. The timing of a federal tax lien is measured by when the IRS gave notice of its lien, 26 U.S.C. 6323(a), (f); the timing of state security interests, like Akouri’s, is measured by when they become “choate”—i.e., complete or perfected. Akouri’s interest would be choate as of 2019, but the IRS’s tax liens date to before 2019. The court rejected Akouri’s attempt to recategorize the customer list assets as originally belonging to Apex rather than the Directional Entities. View "AES-Apex Employer Services, Inc. v. Rotondo" on Justia Law