Justia Contracts Opinion Summaries

Barry and Jacklynn Graham hired Bradshaw Renovations, LLC to renovate their home. They agreed on a contract with an initial estimate of $136,168.16, which was later revised to $139,168.16. The contract included provisions for revising estimates and required written approval for changes. Throughout the project, Bradshaw sent invoices that varied from the initial estimate, leading to the Grahams' concerns about billing practices. After paying $140,098.79, the Grahams disputed a final invoice of $18,779.15, leading to a legal dispute.The Iowa District Court for Polk County held a jury trial, which found in favor of the Grahams on their breach of contract and consumer fraud claims, awarding them $16,000 and $40,000 respectively. The court denied Bradshaw's claims for unjust enrichment and quantum meruit. Bradshaw's motions for directed verdict and judgment notwithstanding the verdict were also denied. The court awarded attorney fees to the Grahams for their consumer fraud claim.The Iowa Court of Appeals affirmed the jury verdict, the district court's denial of Bradshaw's posttrial motions, and the dismissal of Bradshaw's equitable claims. It also affirmed the attorney fee award but remanded for determination of appellate attorney fees.The Iowa Supreme Court reviewed the case and found that the Grahams did not present substantial evidence of consumer fraud as defined by Iowa Code section 714H.3(1). The court reversed the district court's ruling on the consumer fraud claim and remanded for entry of judgment consistent with this opinion. The court affirmed the district court's dismissal of Bradshaw's unjust enrichment and quantum meruit claims, as these were covered by the written contract. The court also upheld the $16,000 jury award for the breach of contract claim. View "Bradshaw Renovations, LLC v. Graham" on Justia Law

A Delaware limited partnership, acting as the Members’ Representative for former members of a company, engaged in a merger agreement with a Delaware limited liability company. The merger agreement included specific notice requirements for indemnification claims, which required the acquiring company to provide written notice with reasonable detail and all available material written evidence of the claim. The agreement also stated that failure to comply with these requirements would result in forfeiture of the right to recover from the indemnity escrow fund.The Court of Chancery dismissed the Members’ Representative’s complaint, which sought a declaration that the acquiring company’s claim notice was invalid for failing to meet the contractual requirements. The court held that the notice was valid under the escrow agreement and dismissed the complaint, reasoning that the notice provided sufficient detail and was timely.On appeal, the Delaware Supreme Court reversed the Court of Chancery’s decision. The Supreme Court held that the merger agreement and escrow agreement should be read together as an integrated contractual scheme. The court found that the final sentence of the notice provision in the merger agreement created a condition precedent, requiring compliance with the notice requirements to avoid forfeiture of the right to recover from the indemnity escrow fund. The court determined that it was reasonably conceivable that the acquiring company failed to comply with the notice requirements, particularly the requirement to include all available material written evidence.The Supreme Court remanded the case to the Court of Chancery for further proceedings to determine whether the acquiring company’s noncompliance with the notice requirements could be excused. The court instructed the lower court to consider whether the notice requirements were a material part of the agreed exchange and whether excusing the noncompliance would result in a disproportionate forfeiture. View "Thompson Street Capital Partners IV, L.P. v. Sonova United States Hearing Instruments, LLC" on Justia Law

Larry Lawson, former CEO of Spirit AeroSystems, Inc., retired and entered into a Retirement Agreement with Spirit, which allowed him to continue vesting in long-term incentive stock awards as if he were an active employee. This agreement was conditioned on his compliance with a non-competition covenant from his original Employment Agreement. Lawson later engaged with a hedge fund, Elliott Management, which was involved in a proxy contest with Arconic, a competitor of Spirit. Spirit deemed this a violation of the non-competition covenant and ceased payments and stock vesting under the Retirement Agreement.The United States District Court for the District of Kansas held a bench trial and found that Lawson had not violated the non-competition covenant, ruling in his favor. Spirit appealed, and the Tenth Circuit reversed, holding that Lawson had breached the covenant and remanded the case to determine the enforceability of the covenant under Kansas law.On remand, the district court found the non-competition covenant enforceable without applying the reasonableness test from Weber v. Tillman, concluding that the covenant was a condition precedent to the receipt of future benefits, not a traditional non-compete. The court severed the injunctive enforcement mechanism from the covenant, leaving only the condition precedent.The United States Court of Appeals for the Tenth Circuit affirmed the district court's judgment, predicting that the Kansas Supreme Court would not apply the Weber reasonableness test to a non-competition condition precedent to the receipt of future benefits. The court also denied Lawson's motion to certify the question to the Kansas Supreme Court, finding it unnecessary to resolve the issue. View "Lawson v. Spirit Aerosystems" on Justia Law

New England Country Foods, LLC (NECF) alleged that VanLaw Food Products, Inc. (VanLaw) intentionally undercut its business by promising to replicate NECF’s popular barbeque sauce and sell it directly to Trader Joe’s. NECF sued VanLaw in federal court, claiming tortious interference and other claims. The district court dismissed the case based on a clause in their manufacturing contract that limited damages. The United States Court of Appeals for the Ninth Circuit asked the California Supreme Court whether a contract clause that substantially limits damages for intentional wrongdoing is invalid under Civil Code section 1668.The district court dismissed NECF’s complaint, reasoning that the contract allowed only for direct damages and injunctive relief, while NECF sought lost profits, attorneys’ fees, and punitive damages. The court rejected NECF’s argument that section 1668 prevents limiting damages for future intentional conduct, stating it only prevents contracts that completely exempt parties from liability. NECF amended its complaint, but the district court dismissed it with prejudice, citing that parties may limit liability for breach of contract and that the contract did not bar all money damages but limited them to specific types NECF did not suffer. NECF appealed, and the Ninth Circuit sought guidance from the California Supreme Court.The California Supreme Court held that limitations on damages for willful injury to the person or property of another are invalid under section 1668. The court reasoned that the statute’s language and purpose, along with the policy against willful tortious conduct, support this interpretation. The court clarified that section 1668 does not preclude parties from limiting liability for pure breaches of contract absent a violation of an independent duty. The court’s decision ensures that parties cannot contractually limit their liability for intentional torts. View "New England Country Foods v. Vanlaw Food Products" on Justia Law

Overhead Door Company of Indianapolis contracted with Blue Giant Equipment Corporation, a Canadian company, for the purchase of multiple dock levelers. After installation, Overhead experienced issues with the levelers and sued Blue Giant in federal court under diversity jurisdiction for breach of contract and warranty. Blue Giant moved to dismiss, citing a provision in its standard terms requiring arbitration in Ontario, Canada. The district court denied the motion, concluding that the standard terms were not incorporated into the parties' contract.The United States District Court for the Southern District of Indiana reviewed the case and denied Blue Giant's motion to dismiss. The court found that the mere reference to standard terms on a website was insufficient to incorporate those terms into the contract between Overhead and Blue Giant. Blue Giant appealed the decision.The United States Court of Appeals for the Seventh Circuit reviewed the case and reversed the district court's decision. The appellate court held that Blue Giant's reference to its Terms and Conditions on its website was sufficient to incorporate those terms into the contract. The court noted that the reference was conspicuous and provided Overhead with reasonable opportunity to take notice of the terms. The court concluded that the parties were obligated to resolve their dispute through arbitration in Ontario, Canada, as specified in the incorporated terms. The case was reversed and remanded for further proceedings consistent with this opinion. View "Garage Door Systems, LLC v Blue Giant Equipment Corp." on Justia Law

Kenneth Tilley sought financing from Malvern National Bank (MNB) for a real estate development project in 2009 and 2010, totaling $350,000. Tilley claimed MNB engaged in unfair dealings and sued for breach of contract, promissory estoppel, violations of the Arkansas Deceptive Trade Practices Act (ADTPA), tortious interference, negligence, and fraud. The case has been appealed multiple times, with the Arkansas Supreme Court previously reversing decisions related to Tilley's right to a jury trial.Initially, the Garland County Circuit Court struck Tilley's jury demand, which was reversed by the Arkansas Supreme Court. After remand, the circuit court reinstated a bench trial verdict, citing Act 13 of 2018, which was again reversed by the Supreme Court. On the third remand, MNB moved for summary judgment on all claims. The circuit court granted summary judgment, citing Tilley's reduction of collateral as a material alteration of the agreement, a rationale not argued by MNB. Tilley appealed this decision.The Arkansas Supreme Court reviewed the case and held that the circuit court did not violate the mandate by considering summary judgment. However, it was reversible error for the circuit court to grant summary judgment based on an unargued rationale. The Supreme Court affirmed summary judgment on Tilley's ADTPA, tortious interference, and negligence claims, finding no genuine issues of material fact. However, it reversed and remanded the summary judgment on Tilley's breach of contract, promissory estoppel, and fraud claims, determining that there were disputed material facts that required a jury trial. The case was remanded for further proceedings consistent with this opinion. View "Tilley v. Malvern National Bank" on Justia Law

Badlia Brothers, LLC, a check-cashing business, cashed 15 checks issued by the State of Maryland. These checks had already been paid by the State before Badlia presented them for payment. Some checks were deposited using a mobile app, creating "substitute checks," and were then fraudulently or negligently presented to Badlia. Others were reported lost or stolen, leading the State to issue stop payment orders and replacement checks, which were also cashed by Badlia. Badlia accepted the checks without knowledge of prior payments and sought payment from the State, which refused.Badlia filed complaints in the District Court of Maryland, claiming the right to enforce the checks as a holder in due course. The court consolidated the cases, ruled that the State enjoyed qualified immunity, and dismissed the cases. The Circuit Court for Baltimore City reversed, holding that a check is a contract, and thus, the State had waived sovereign immunity. On remand, the District Court found that Badlia was a holder in due course entitled to enforce the checks. The Circuit Court affirmed, and the State petitioned for certiorari.The Supreme Court of Maryland reviewed the case and held that a check is a contract for purposes of the State’s waiver of sovereign immunity under § 12-201(a) of the State Government Article. The court affirmed the Circuit Court's decision, concluding that the State has waived sovereign immunity for claims by a holder in due course seeking payment on an authorized State-issued check. View "Comptroller v. Badlia Brothers, LLC" on Justia Law

Plaintiff Vanguard Pai Lung, LLC, a manufacturer and distributor of high-speed circular knitting machines, sued its former president and CEO, William Moody, and his associated entities, Nova Trading USA, Inc., and Nova Wingate Holdings, LLC. The lawsuit stemmed from an investigation by Pai Lung Machinery Mill Co. Ltd., which owns a majority interest in Vanguard Pai Lung, revealing alleged fraud and embezzlement by Moody. Plaintiffs brought sixteen claims, including fraud, conversion, embezzlement, unfair and deceptive trade practices, and unjust enrichment. Defendants counterclaimed with twelve claims primarily based on alleged breaches of contract.The Superior Court of Mecklenburg County, designated as a mandatory complex business case, heard the case. After a jury found in favor of the plaintiffs on several claims, including fraud and conversion, defendants filed post-trial motions, including a motion for judgment notwithstanding the verdict (JNOV). The business court ruled that several issues raised in the JNOV motion were not preserved because they were not included in the directed verdict motion. The court also denied defendants' other post-trial motions on the merits.The Supreme Court of North Carolina reviewed the case. The court affirmed the business court's decision, endorsing the rule that to preserve an issue for a JNOV motion under Rule 50(b), the movant must have timely moved for a directed verdict on that same issue. The court agreed that the business court correctly determined that several of defendants' arguments were not preserved and properly rejected the remaining post-trial arguments on the merits. The Supreme Court affirmed the judgment and post-trial orders of the business court. View "Vanguard Pai Lung, LLC v. Moody" on Justia Law

Island Girl Outfitters, LLC (IGO) operated a store called Hippie Gurlz at Eastern Shore Centre, an outdoor shopping mall owned by Allied Development of Alabama, LLC. IGO signed a five-year lease in late 2020 but closed the store after the first year due to slow sales. Allied Development filed a complaint in Baldwin Circuit Court seeking rent and other damages under the lease. The trial court entered a $94,350 judgment in favor of Allied Development against IGO and its owner, Anthony S. Carver, who had personally guaranteed the lease.The Baldwin Circuit Court granted partial summary judgment in favor of Allied Development, finding no genuine issues of material fact regarding IGO's liability for breaching the lease. The court then held a hearing to determine damages, ultimately awarding Allied Development $94,350. IGO and Carver appealed, arguing that Allied Development failed to market and maintain the mall adequately and that they should not be liable for future rent since the storefront was relet shortly after they vacated.The Supreme Court of Alabama reviewed the case de novo regarding the liability determination and under the ore tenus rule for the damages award. The court found that IGO and Carver failed to show that Allied Development had a contractual duty to market and maintain the mall in a specific manner. Therefore, the trial court's summary judgment on liability was affirmed. Regarding damages, the absence of a transcript from the damages hearing meant the court had to presume the trial court's findings were correct. Consequently, the $94,350 judgment was affirmed. View "Island Girl Outfitters, LLC v. Allied Development of Alabama, LLC" on Justia Law

Stewart Dubose took over Radco Fishing and Rental Tools, Inc. from his father, John Dubose Sr., and sought to increase the company's cash flow by engaging Commercial Resources, Inc. for an accounts receivable line of credit. Stewart personally guaranteed the debt. Commercial Resources advanced over two million dollars to Radco, but payments ceased in 2015. John Dubose later took control of Radco and began liquidating its assets. Stewart and John settled a separate dispute, agreeing to sell Radco to Dynasty Energy Services, LLC, which assumed Radco's liabilities.Commercial Resources filed a lawsuit against Radco, Stewart, and Dynasty for the outstanding debt. Radco and Dynasty counterclaimed, alleging various defenses and claims against Commercial Resources. The case proceeded to trial, where the court granted a directed verdict against Radco and Stewart, finding them liable for the debt. The jury found Dynasty liable for $448,528.60 but awarded zero damages against Radco and Stewart. The trial court later amended the judgment to hold Radco, Stewart, and Dynasty jointly liable for the debt.The Supreme Court of Mississippi reviewed the case and affirmed the trial court's decisions. The court found no error in the trial court's grant of partial summary judgment dismissing Radco and Dynasty's affirmative defenses due to their delay in pursuing them. The court also upheld the trial court's decision to admit parol evidence, finding the Purchase Agreement ambiguous. The court affirmed the directed verdict against Radco and Stewart, agreeing that Stewart had authority to enter the agreement and that Radco ratified it. The court found no error in the jury instructions or the trial court's denial of post-trial motions. The court also upheld the trial court's award of attorneys' fees to Commercial Resources, finding it appropriate under the contractual provisions. View "Radco Fishing and Rental Tools, Inc. v. Commercial Resources, Inc." on Justia Law