Justia Contracts Opinion Summaries

Phoenix Pipeline filed a second amended complaint (SAC) alleging breach of contract claims related to SpaceX's failure to pay for its services from 2010 to October 2013. The trial court subsequently granted SpaceX's demurrer, which argued that the license issued to Phoenix Plumbing was not sufficient to satisfy the requirements of Business Code section 7031. The Court of Appeal held that Phoenix Pipeline's SAC failed to state a claim for construction related services because it did not allege that Phoenix Pipeline was a licensed contractor. The court explained that Phoenix Pipeline may not rely upon a license issued to another and that section 7031 was not limited to contracts with unsophisticated persons or homeowners. The court held, however, that Phoenix Pipeline adequately alleged that it provided some services for which no contractor license was necessary. Finally, the trial court acted within its discretion in declining to permit an amendment alleging that Phoenix Pipeline was an employee. Accordingly, the court reversed and remanded. View "Phoenix Mechanical Pipeline, Inc. v. Space Exploration Technologies Corp." on Justia Law

In 2000, doctors Strohmyer, Naegele, and Mantler formed Papillion Family Medicine, P.C. (PFM). In 2013, Strohmyer provided notice that he was leaving PFM to start his own medical practice. Strohmyer then sued PFM, Naegele, and Mantler (collectively, Defendants), alleging that Defendants failed to “buy out” Strohmyer and pay associated director fees following his departure and improperly calculated the value of PFM’s stock, assets, and goodwill. Defendants counterclaimed. The district court found (1) PFM was not a corporation under the laws of Nebraska; (2) the buyout clause was so ambiguous as to be unenforceable; (3) the value of Strohmyer’s stock was $104,200; (4) Strohmyer was due $9,389 in unpaid compensation; and (5) Strohmyer damaged PFM in the amount of $30,673. The Supreme Court affirmed in part and reversed and remanded in part, holding that the district court (1) did not err in its valuation of Strohmyer’s shares, finding that PFM had no goodwill for which Strohmyer was entitled to compensation, and failing to award compensation for director fees and salary; but (2) erred in finding that Strohmyer breached a fiduciary duty by continuing to accept Medicaid patients, in holding Strohmyer liable for a physical assistant’s continuing treatment of Medicaid patients, and in its calculation of damages based on those claims. View "Strohmyer v. Papillion Family Medicine" on Justia Law

This appeal arose out of a breach-of-contract action between Marc Daniels, Sandra Daniels, Crocker & Associates, Inc., and Maxx Investments, LLC (collectively, “the Danielses”) and Dennis Crocker, Gail Crocker and Crocker, Ltd. (collectively, “the Crockers”). The Danielses entered into an Asset Purchase Agreement (the “Agreement”) with the Crockers to acquire Crocker & Associates, Inc. (“C&A”). Within eighteen months of the sale, C&A lost a number of important contracts and its employees resigned. The Danielses sued the Crockers for failing to disclose all material information about C&A as required by the Agreement. The Crockers answered the suit and brought counterclaims. After extensive discovery, the trial court granted the Crockers’ motion for summary judgment on the Danielses’ claims against them. The Danielses now appeal the trial court’s grant of summary judgment. Because the record contained a genuine issue as to material fact concerning the Danielses’ contract claims and negligent and fraudulent misrepresentation claims, the Mississippi Supreme Court concluded the trial court erred in granting summary judgment on these claims. Further, because the Court remanded these claims for a jury to determine if the Danielses were entitled to compensation, the Court reversed the trial court’s grant of summary judgment on the punitive damages claim. The Court affirmed in all other respects, and remanded the case for further proceedings. View "Daniels v. Crocker" on Justia Law

An indemnification agreement need not be in writing, and an agent's authority to enter into an indemnification agreement need not be in writing. Jim Leach (“Leach”) and Elizabeth Leach appealed a district court judgment awarding money damages to SNAPS Holding Company after ruling they breached a stock purchase agreement with SNAPS. SNAPS cross-appealed the dismissal of its breach of contract claims against Leach. Leach was the chief operating officer and majority shareholder of IDA of Moorhead Inc. Leach negotiated with Sanjay Patel, president and CEO of SNAPS, to sell IDA to SNAPS. During negotiations the parties discussed the effect of an employee lawsuit on the potential sale. The parties agreed SNAPS would be responsible for the first $100,000 of expenses associated with the lawsuit, and Jim Leach and IDA would be responsible for that portion exceeding $100,000. At a shareholders and board of directors meeting, the IDA shareholders and board of directors authorized the sale of IDA's stock to SNAPS for $1,180,000. A district court ruled IDA wrongfully terminated the employee and Leach breached a fiduciary duty. Leach and the selling shareholders of IDA refused to pay the employee lawsuit judgment. The employee filed the judgment against Leach in Arizona, and subsequently assigned the judgment to SNAPS and IDA. Leach objected to the filing of the judgment against him in Arizona. An Arizona court ruled SNAPS and IDA could not enforce the judgment against Leach in Arizona. The court concluded SNAPS exercised total control over the management and activities of IDA and was the alter ego of IDA. The Arizona court concluded both Arizona and North Dakota law prohibited contribution between intentional joint tortfeasors; therefore, allowing IDA to obtain contribution from Leach, its co-intentional joint tortfeasor, was prohibited in Arizona. SNAPS sued Leach and the other former IDA shareholders after they failed to pay the employee judgment. The North Dakota Supreme Court concluded the proceeding in Arizona relating to the filing of the employee judgment and SNAPS' lawsuit in North Dakota relating to the stock purchase agreement were based on different factual circumstances, and as such, not barred by res judicata. The Court reversed and remanded that part of the district court's order granting summary judgment in favor of Jim Leach that found otherwise. The Court also reversed and remanded that part of the judgment dismissing SNAPS' claims against Jim Leach. The Court affirmed in all other respects. View "SNAPS Holding Company v. Leach" on Justia Law

A jury awarded Plaintiff future lost profits based on Defendants’ failure to comply with their covenants not to compete and covenants not to solicit. The jury also awarded Plaintiff exemplary damages and attorney fees. The trial court awarded Plaintiff the full amount of damages. The court of appeals reversed and rendered a take-nothing judgment in part and remanded in part, concluding, inter alia, that the evidence was legally insufficient to support the jury’s award of future lost profits and that the exemplary damages award was unconstitutionally excessive. The Supreme Court affirmed in part and reversed in part, holding (1) the court of appeals did not err in concluding that the evidence of future lost profits was legally insufficient; (2) the court of appeals’ remitted exemplary damages award was unconstitutionally excessive; and (3) the court of appeals properly found that remand of the issue of attorney’s fees was proper. The court remanded the case to the court of appeals so that it may reconsider its suggested remittitur of exemplary damages. View "Horizon Health Corp. v. Acadia Healthcare Co." on Justia Law

Certain minority shareholders filed suit in a Texas court alleging dilution of equity interests. Defendants responded by invoking a forum-selection clause designating Delaware as the proper forum for disputes arising out of a shareholders agreement. The court of appeals reversed the trial court’s grant of Defendants’ motion to dismiss, concluding that the forum-selection clause did not control because the shareholders’ extracontractual claims did not allege noncompliance or interference with any rights or obligations derived from the shareholders agreement. The Supreme Court reversed and dismissed the shareholders’ claims in part, holding (1) the shareholders’ statutory and common-law tort claims evidence a “dispute arising out of” the shareholders agreement; and (2) the shareholders’ noncontractual claims fell within the forum-selection clause’s scope. View "Pinto Technology Ventures, LP v. Sheldon" on Justia Law

Janice M. Hinrichsen, Inc. (JMH) had a judgment against Risk Assessment and Management, Inc. (RAM) in a previous action. In the instant action brought under the Uniform Fraudulent Transfer Act (UFTA), JMH alleged that RAM had fraudulently transferred certain assets to Messersmith Ventures, LLC. The district court entered judgment in favor of JMH in the amount of $250. The Supreme Court affirmed in part and reversed in part, holding (1) the district court did not err when it implicitly found that, under the UFTA, a fraudulent transfer of assets had occurred; and (2) the monetary judgment awarded by the district court was not appropriate relief under the UFTA in this case, as the court instead should have ordered that MJH may levy execution on the assets that were transferred to Messersmith Ventures or the proceeds of such assets. View "Janice M. Hinrichsen Inc. v. Messersmith Ventures, LLC" on Justia Law

The circuit court determined that appropriations made by ordinances or resolutions of the cities of Little Rock and North Little Rock (Appellants) to the cities’ chambers of commerce and related economic development entities were in violation of article 12, section 5 of the Arkansas Constitution. The court concluded that Appellants had appropriated city funds to private corporations using “service contracts” that violated article 12, section 5 and were invalid due to lack of consideration and absence of benefits to the taxpayers. The court permanently enjoined Appellants from passing such ordinances or resolutions. The Supreme Court remanded the case to the circuit court with instructions to lift the injunction and dismiss Appellees’ complaint, holding that an amendment to article 12, section 5 rendered the basis for the circuit court’s injunction moot. View "Stodola v. Lynch" on Justia Law

Plaintiff Shashi Airi filed suit against defendant Gurdeep “Sunny” Nagra in 2011. The trial court held a bench trial in 2016. Initially, defendant hired plaintiff to manage two hotels in Brattleboro. In this capacity, plaintiff was employed by a variety of business entities that owned the hotels. Defendant was either a member, partner, or shareholder in these entities until October 2007, when federal agents raided defendant’s various business entities and the physical hotels. As a result of the raids and defendant’s subsequent prosecution, the business entities that employed plaintiff went into receivership. At this point, in 2007, defendant contracted in an individual capacity with plaintiff to assist with the receivership proceedings and to perform the duties defendant could not accomplish because of the pending criminal charges. The parties agreed to a rate of pay. Plaintiff performed the required tasks until December 14, 2007, when the properties were out of receivership. From November 5, 2007 to December 14, 2007, was the first period under dispute; the trial court awarded plaintiff $7215 for services rendered during this period. Defendant appealed that award. The Vermont Supreme Court concluded that because defendant did not submit the transcripts of that record, he waived his right to contest the issue on appeal under Vermont Rule of Appellate Procedure 10(b)(1). Thus, the Supreme Court affirmed. View "Airi v. Nagra" on Justia Law

The Warrens owned and operated a Harley-Davidson motorcycle dealership in Salinas for approximately 38 years. Intending to retire, the Warrens contacted a potential buyer, Dabney, who owned a Harley-Davidson dealership in Riverside. The Warrens’ corporation and Dabney executed various agreements, including a master “Asset Purchase Agreement” that incorporated a Guaranty signed by Dabney, under which he “agree[d] . . . to guarantee . . . the collection and receipt of all amounts” required under section 2 of the Agreement, under the promissory note(s), and under the lease. The Agreement allowed Dabney to assign his rights and obligations as buyer to a corporation that he controlled, with the assignment to relieve Dabney of all obligations under the Agreement. Dabney assigned his rights under the Agreement to Monterey Motorcycles, Inc., which defaulted on its obligations under the Agreement. The dealership was sold to a third party. The Warrens sued and won a judgment of $2,746,318 against Dabney. The court of appeal reversed, agreeing that the Guaranty did not apply to a covenant not to compete agreement and two consulting agreements. View "G & W Warren's, Inc. v. Dabney" on Justia Law