Justia Contracts Opinion Summaries

Columbus Cheer Company ("CCC") entered into a rental contract for the use of school facilities. Subsequently, CCC was informed that Columbus Municipal School District ("CMSD") would not honor the contract with CCC. CCC filed a complaint against CMSD. The complaint read in part: "[p]laintiff Columbus Cheer Company is a profit corporation licensed to due [sic] business in the state of Mississippi . . . ." The prayer sought judgment for plaintiff (CCC). Defendants filed their motion to dismiss or for summary judgment, asserting that CCC was an administratively dissolved corporation; therefore, CCC could not have entered into a valid contract with CMSD, and CCC did not possess the requisite legal status to initiate suit. The trial court entered an order granting Defendants' motion for summary judgment. CCC appealed, and the issues on appeal were: (1) whether a dissolved corporation could pursue a legal action; and if not, (2) could the corporation's shareholders pursue the same action in their own name? The Supreme Court answered both questions "no."View "Columbus Cheer Company v. City of Columbus" on Justia Law

This case arose from Agrisource’s breach of contract claim against Robert Johnson (Johnson). Johnson argued that he was not liable on the contract because he was an agent for a disclosed principal named “Johnson Grain Inc.” which was owned by Neil Brown. Agrisource leased a grain elevator in Ririe from Johnson’s father, Wydell. For several years prior to 2006, Johnson was Agrisource’s employee and managed the elevator. Agrisource terminated its elevator lease in summer 2006, and Johnson was then unemployed. Brown purchased the grain elevator in August 2006 from Wydell. Brown was Johnson Grain Inc.’s majority shareholder from August 2006 through December 2007. Johnson and Brown opened a business checking account under Johnson Grain Inc.’s name with both men as signatories. Johnson entered into two contracts to sell durum wheat to Agrisource. Agrisource did not receive 15,527.87 bushels of wheat promised by Johnson Grain. Agrisource contacted both Johnson and Brown for two years about the undelivered wheat. Neither party delivered the wheat, so in 2009 Agrisource purchased wheat elsewhere. This resulted in $51,241.97 in damages. In 2010, Agrisource filed a claim alleging breach of the 2007 contract against Brown, Brown’s wife, and Neil Brown, Inc., Johnson, Johnson’s wife, and Johnson’s corporation as defendants. Agrisource alleged that Johnson was an individual doing business as Johnson Grain when he entered into the contract. Johnson appealed the district court’s grant of summary judgment in favor of Agrisource, Inc. The district court held that there was no genuine disputed issue of material fact as to Johnson’s lack of disclosure of his agency and alleged principal. Johnson argued on appeal that Agrisource had notice that Johnson was the principal’s agent because Agrisource should have known Johnson was an agent and disputed issues of fact existed. Upon review, the Supreme Court affirmed the district court’s grant of summary judgment to Agrisource and the denial of Johnson’s third motion to reconsider. However, the Court vacated the district court’s denial of Johnson’s request for I.R.C.P. 60(b) relief and remanded for the district court to analyze Johnson’s third affidavit in the context of Johnson’s request for I.R.C.P. 60(b) relief.View "Agrisource, Inc v. Johnson" on Justia Law

Saint Alphonsus Diversified Care, Inc.formed a general partnership named MRI Associates. The parties executed a written partnership agreement for the purpose acquiring and operating diagnostic and therapeutic devices, equipment, and accessories, beginning with a magnetic resonance imaging (MRI) scanner. MRI Associates formed two limited partnerships: MRI Limited Partnership (which owned and operated an MRI scanner located on Saint Alphonsus' campus) (“MRI Center”); and MRI Mobile Limited Partnership (which owned and operated mobile MRI scanners) (“MRI Mobile”). For decades, a group of radiologists known as Gem State Radiologists had interpreted medical images pursuant to a contract that gave them the exclusive right to serve the radiological needs of patients of Saint Alphonsus. After the formation of MRI Associates, they interpreted MRI scans performed at MRI Center. In 1998, the Radiologists began planning to construct and operate an outpatient facility in Boise that was located away from the hospital. The proposed facility would provide a full range of medical imaging services, including MRI imaging. There were negotiations among the Radiologists, Saint Alphonsus, and MRI Associates to have one medical imaging entity, but those negotiations were unsuccessful. There was evidence that Saint Alphonsus was negotiating against MRI Associates with the Radiologists. In 1999, the Radiologists formed Intermountain Medical Imaging, LLC, (“IMI”), and on September 1, 1999, they opened their facility. Saint Alphonsus began negotiating with the Radiologists to partner with them in the imaging center. In 2001, Saint Alphonsus became a member of IMI. IMI opened another facility in Meridian. In 2004, Saint Alphonsus gave notice to MRI Associates that it would dissociate from the partnership. Under the partnership agreement, upon dissociation Saint Alphonsus could not compete with MRI Associates for a period of one year. Saint Alphonsus then filed this action seeking to recover the value of its partnership interest from MRI Associates, and MRI Associates responded by filing a multi-count counterclaim and claims against third parties. The third-party claims were ultimately dismissed. The jury found Saint Alphonsus liable on all causes of action, and MRI Associates was awarded a judgment in the sum of $36.3 million. That judgment was vacated on appeal, and the case was remanded for further proceedings. The case was again tried to a jury. The jury found in favor of the MRI Entities on each of the claims. Under the judgment entered by the district court, the awards under each claim for relief were in the alternative. The highest award to each of the MRI Entities was: $3,906,338 to MRI Associates; $25,828,208 to MRI Center; and $22,349,967 to MRI Mobile, which totaled $52,084,513. On its complaint, Saint Alphonsus was awarded $4.6 million against MRI Associates. Saint Alphonsus appealed, and the MRI Entities cross-appealed. Finding no reversible error in the district court's decision, the Supreme Court affirmed the district court.View "St. Alphonsus Diversified Care v. MRI Associates, LLP" on Justia Law

This case arose out of a contract dispute when Robert Coleman, Profits Plus Capital Management, LLC (“Profits Plus”), and Dollars and Sense Growth Fund Limited Partnership (“Dollars and Sense”) filed a claim for declaratory judgment against Jeffrey Podesta and Street Search, LLC. Coleman, Profits Plus, and Dollars and Sense sought a judgment declaring that they did not have a contract with either Podesta or Street Search. Podesta and Street Search then counterclaimed seeking damages for breach of contract, fraud, constructive fraud, and breach of fiduciary duties. Ultimately, only Podesta and Street Search’s breach of contract and breach of fiduciary duty claims went to the jury, which decided those claims in favor of Coleman, Profits Plus, and Dollars and Sense. Podesta and Street Search now appeal a number of the district court’s decisions made before, during, and after trial. We affirm the district court’s decisions.View "Profits Plus Capital Mgmt. v. Podesta" on Justia Law

Lynn Becker contracted with the Ute Indian Tribe of the Uintah and Ouray Reservation (Tribe) to provide services related to the Tribe's development of its energy and mineral resources. Following a dispute concerning Becker's compensation under the contract, Becker brought breach of contract, breach of covenant of good faith and fair dealing, and accounting claims against the Tribe in the United States District Court for the District of Utah. All of Becker's claims were state law claims. Nevertheless, Becker's complaint asserted that the district court had federal question jurisdiction because the case raised substantial issues of federal law. Becker appealed the district court's dismissal of his complaint for lack of subject matter jurisdiction. Finding no reversible error, the Tenth Circuit affirmed.View "Becker v. Ute Indian Tribe of the Uintah" on Justia Law

In 1999, Cooper and Robert L. Flowers formed C&F Enterprises, LLC. C&F owned a parcel of property in Huntsville, upon which it built a shopping center known as College Plaza. Pursuant to an "Amended and Restated Operating Agreement," MTA, Inc. became a member of C&F. The operating agreement provided that MTA, Flowers, and Cooper each owned a one-third interest in C&F. C&F borrowed $650,000 from the Southern Development Council, Inc. ("SDC"), a community-development program; that debt was memorialized by a promissory note. On the same day, SDC assigned the note to the Small Business Administration ("the SBA"). Cooper and Flowers personally guaranteed the indebtedness owed under the note. A few years later, C&F received a foreclosure letter with respect to the note. Counsel for MTA sent Cooper a letter informing him of MTA's intent to exercise its right of first refusal pursuant to section 16 of the operating agreement. In 2012, MTA filed a complaint against Cooper and Flowers, alleging multiple issues, but of pertinence for this appeal, the complaint alleged a count of contribution and "demand[ed] judgment in [MTA's] favor and against Cooper in the amount of $270,902.00, and Flowers in the amount of $270,902.00." In the alternative, "[MTA] demand[ed] judgment in its favor and against Cooper and Flowers for their individual pro rata contribution shares as determined at trial." Cooper filed a motion to dismiss; the trial court denied the motion. Cooper then answered the complaint. Thereafter, MTA filed a motion for a summary judgment against Cooper and Flowers. After a hearing, the trial court entered an order granting MTA's summary-judgment motion. Because genuine issues of material fact still remained at the time the trial court granted summary judgment, the Supreme Court concluded the trial court erred in this respect. The trial court's order was reversed, and the case remanded for further proceedings.View "Cooper v. MTA, Inc." on Justia Law

Jeffrey Wright and Myron Allenstein filed separate complaints against A-1 Exterminating Company, Inc.; Terry Buchanan; Edward Wrenn; and David Wrenn (collectively, "A-1"). In the complaints, plaintiffs alleged that, on the date of the initial termite bonds they were issued, A-1 Exterminating promised to identify and recommend the appropriate services to protect the plaintiffs' houses or property from termites. Plaintiffs stated that in their contract with A-1, plaintiffs had paid for the initial service, the issuance of the termite bond, and annual renewal premiums. During subsequent periodic visits to the subject properties, A-1 sprayed liquids and either represented to plaintiffs or led plaintiffs to believe that those applications were treatments for termites. But in the last two years, A-1 had admitted that the periodic sprays were not to prevent or control termites; and that Buchanan, a State-licensed pest-control operator who worked for A-1 Exterminating, had admitted that the spray was a regular, watered-down pesticide that might only be strong enough to kill ants and possibly spiders. The two complaints included counts alleging fraud, including promissory fraud; breach of warranty; negligence, including negligence per se, and wantonness; breach of contract; and negligent training, supervision, and retention. It also included a request for "equitable relief, including unjust enrichment." The trial court entered an amended protective order in both cases. Plaintiffs then filed petitions for the writ of mandamus with the Supreme Court seeking a rescission. The Supreme Court found the protective orders overbroad: "the trial court should balance its interest in protecting A-1's right to a fair trial against the First Amendment rights of the plaintiffs and their attorneys. Further, any protective order in this regard must be narrowly tailored so that it uses the least restrictive means necessary to protect A-1's right to a fair trial." The Court granted plaintiffs' petitions for mandamus relief, and remanded the cases for further proceedings.View "Wright v. A-1 Exterminating Company, Inc., et al." on Justia Law

The issue this case presented to the Supreme Court centered on the lower courts’ interpretation of portions of a written mineral agreement. The agreement was prepared by a mineral leaseholder and ostensibly conveyed to an exploration company an “exclusive option to sublease” at least 15 percent of the leaseholder’s mineral rights. The lower courts interpreted the agreement as imposing an obligation on the exploration company to execute the sublease rather than simply allowing the exploration company the right to execute the sublease. Because the exploration company did not execute such a sublease, the lower courts awarded damages to the leaseholder for breach of contract. When the Court granted certiorari review, the lower courts had awarded to the leaseholder other damages, related to the exploration company’s obligation to execute a mineral sublease. The Supreme Court determined that the lower courts erred in ruling that the exploration company was obligated by the agreement to sublease mineral rights. Instead, the Court found the agreement afforded the exploration company a non-binding option to sublease (for which the exploration company paid $1.4 million), but that if the exploration company exercised the non-binding option, it was then obligated to sublease at least 15 percent of the leaseholder’s rights described in the agreement. Accordingly, the damage award on the breach of contract claim for failing to sublease at least 15 percent of the leaseholder’s mineral rights was reversed. However, the Court also found the exploration company breached its obligation to complete a seismic survey, and the Court affirmed the corresponding award of damage. Because the record did not support a finding that the exploration company acted in bad faith, we examine the effects of a contractual prohibition against consequential damages that the lower courts refused to apply based on those courts’ findings of bad faith. Because of the court of appeal's error, any meaningful review of the merits of the exploration company’s argument that its reconventional demand for improper use and sharing of its seismic data was improperly dismissed. The case was therefore remanded to the court of appeal the question of the propriety of that dismissal and, as that court then deems necessary, the question of whether the record supports the exploration company’s request for relief, or whether remanding to the district court for the taking of additional evidence is required.View "Olympia Minerals, LLC v. HS Resources, Inc." on Justia Law

This case was one of a number of cases which have, in the aftermath of the "Great Recession" that hit Riverside and San Bernadino counties particarly hard. This appeal stemmed from the construction of a Kohl’s department store in Beaumont. The developer of the store was Inland-LCG Beaumont, LLC, and the general contractor was 361 Group Construction Services, Inc. Somewhere in the process of construction, the money dried up and 361 refused to pay its subcontractors for work they had done. Those subcontractors included Cass Construction, TNT Grading Inc., Palomar Grading & Paving and R3 Contractors. These four subcontractors recorded mechanic’s liens and sued to foreclose those liens. With one exception they obtained judgments of foreclosure. The one exception was TNT, who, by the time of the trial to foreclose its mechanic’s lien, was a suspended corporation and thus unable to prosecute an action. The two owners of the property, Kohl’s and Wells Fargo, appealed the judgments obtained by the three successful subcontractors, Cass, R3 and Palomar Grading. The Court of Appeal took a "soup-to-nuts" approach in reviewing the multiple issues presented on appeal, and affirmed in all respects except to the degree that liens of Palomar Grading and Cass should include prejudgment interest. To that degree the Court reversed the judgment and remanded it with instructions to the trial court to recalculate the prejudgment interest at 7 percent. On balance, Cass and R3 were still the prevailing parties in this appeal: Of 10 issues raised, they prevailed, either singly or together, in 9. They recovered their costs on appeal from Kohl’s and Wells Fargo. For Palomar Grading, the only issue on which it has appeared in this appeal was the issue of the proper rate of prejudgment interest, and on that issue it lost. "However, it would be unfair to allow Kohl’s and Wells Fargo to recover all their appellate costs from Palomar Grading because they won on the lone prejudgment interest rate issue. Most of this appeal has concerned their unsuccessful challenges to the foreclosure judgments obtained by Cass and R3."View "Palomar Grading v. Wells Fargo" on Justia Law

Plaintiff CB Richard Ellis, Inc. (CBRE), pursuant to a 2004 listing agreement, sought a commission after the 2005 sale of 38 acres of land in Murrieta. Arbitration proceedings between CBRE and the seller, Jefferson 38, LLC resulted in a confirmed arbitral award in CBRE’s favor, but no monetary satisfaction for CBRE because Jefferson had no assets by the time of the arbitral award and judgment. The issue this case presented to the Court of Appeal centered on CBRE’s attempt to recover damages from Jefferson’s individual members. A jury trial resulted in a $354,000 judgment in favor of CBRE. Both defendants and CBRE appealed the judgment, citing alleged errors pertaining to jury instructions, the admissibility of evidence, juror misconduct, attorney fees, and prejudgment interest. Upon review, the Court of Appeal rejected the parties’ contentions, except with regard to CBRE’s entitlement to attorney fees.View "CB Richard Ellis v. Terra Nostra Consultants" on Justia Law