Justia Contracts Opinion Summaries

The underlying dispute in this case involved a commercial transaction between H2O Environmental, Inc. (H2O) and Farm Supply Distributors, Inc. (Farm Supply). Following a bench trial, H2O was awarded $7,354.64 for Farm Supply’s breach of an express oral contract. The magistrate court subsequently awarded attorney’s fees to H2O pursuant to Idaho Code section 12-120(3), but limited its award to the amount in controversy. H2O appealed to the district court, claiming that the magistrate court abused its discretion. The district court affirmed and awarded attorney’s fees to Farm Supply. H2O timely appealed. The Idaho Supreme Court determined the district court erred when it affirmed the magistrate court’s award of attorney fees: nothing in the record explained the relationship between the magistrate court’s evaluation of the Idaho Rule of Civil Procedure 54(e)(3) factors and its decision regarding the amount to award for attorney’s fees. “It is not enough for a trial court to acknowledge the existence of the Rule 54(e)(3) factors; rather, it must appear that there is a reasoned application of those factors in the trial court’s decision regarding the amount of attorney’s fees to be awarded.” The Supreme Court reversed and remanded for further proceedings. View "H20 Environmental v. Farm Supply" on Justia Law

The plaintiffs were two wholly owned subsidiaries of First American Financial Corporation: First American Title Insurance Company (FA Company) and First American Title Company, LLC (FA LLC) (collectively Plaintiffs). The defendants, who appealed a judgment against them (Defendants) were Michael Smith, Kristi Carrell, and Northwest Title Insurance Agency, LLC. Jeffrey Williams was also a defendant, but is not a party to the appeal. Defendants raised numerous grounds on appeal of a large jury award based on breaches of contractual and fiduciary duties, many of which the Tenth Circuit concluded were not adequately preserved or presented. Therefore, the Tenth Circuit affirmed the district court's judgment, "[w]e may not have awarded the same amount, but we see no abuse of discretion." View "First American Title Insurance v. Northwest Title Insurance" on Justia Law

Aqua Marine Enterprises, Inc. ("AME"), and AME's chief operating officer and vice president Brent Mitchell appealed a circuit court judgment in favor of K&B Fabricators, Inc. ("K&B"), following a bench trial in a dispute alleging the usurpation of corporate opportunities in the business of fabricating storm shelters. In 2006, Mitchell began discussions with Kendall Blaxton, who owned a welding-supply company used by AME, about starting a storm-shelter-fabrication business in Alabama because Mitchell believed it would be more efficient to deal with a local shelter fabricator. Those discussions led to the formation of K&B, a closely held corporation with three shareholders, Mitchell and two brothers, Kendall and Kenneth Blaxton. From 2006 to mid 2014, all of AME's steel storm-shelter orders were fabricated by K&B. AME entered into a non-compete/non-disclosure agreement with K&B. Kendall testified that in 2009 he and his brother had a dispute about how K&B was being managed, and Kendall ended up buying out Kenneth's ownership interest in K&B. Kendall then owned 90 percent of K&B's stock and Mitchell owned 10 percent. In early 2012, Kenneth formed Compliance Construction with two others; the company was to "take advantage of business opportunties that did not involve storm-shelter fabrication." By 2014, the relationship between AME and K&B had soured, and ended with AME accusing K&B of violating the noncompetition agreement between them. AME contended the trial court erred in concluding K&B did not violate the agreement. The Alabama Supreme Court found that AME failed to demonstrate Compliance's involvement in storm-shelter fabrication constituted a violation by K&B of the noncompetition agreement. The Court affirmed a finding of liability against Mitchell and its imposition of a constructive trust upon AME; the Court also affirmed the ruling in favor of K&B on AME's allegation of breach of the noncompetition agreement. The Court reversed, however, part of the trial court's judgment awarding damages, finding the award was not based upon the profits earned by AME in its fabrication. View "Aqua Marine Enterprises, Inc. v. K&B Fabricators, Inc." on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the trial court’s denial of settlement credits in this case, holding that the trial court erred in failing to apply the one-satisfaction rule and therefore erred in denying the nonsettling defendant the settlement credits they sought.Plaintiff sued Defendants alleging, inter alia, breach of loan note and guaranty agreements, fraud, and conspiracy. The jury awarded Plaintiff damages of $2,665,832 and attorney’s fees. In response to Plaintiff’s motion for judgment, Defendants asserted that under the one-satisfaction rule, they were entitled to offset the final judgment by the amounts the four settling defendants paid to Plaintiff. However, the trial court rendered judgment against Defendants for the full jury award. The Supreme Court reversed, holding that Defendants were entitled to reduce the judgment by the total amount of the four settlements Plaintiff received and any applicable interest. View "Sky View at Las Palmas, LLC v. Mendez" on Justia Law

The Supreme Court affirmed the decision of the circuit court dismissing Plaintiff’s suit alleging breach of contract claims against Wells Fargo Bank, N.A. pursuant to the applicable statute of limitations, holding that because Plaintiff did not file his suit within five years of the date of accrual, the statute of limitations barred his claims.After a foreclosure sale of the property at issue, Plaintiff filed this complaint alleging that Wells Fargo breached a mortgage loan agreement by failing to give him a contractually required opportunity to cure his default and by improperly accelerating the balance due after his default. The circuit court concluded that the debt acceleration had triggered the accrual of the breach of contract claims and that this breach had occurred more than five years before Plaintiff filed suit. The Supreme Court affirmed, holding that Plaintiff’s breach of contract claims were barred by the statute of limitations. View "Kerns v. Wells Fargo Bank, N.A." on Justia Law

Henderson, a patient with Alzheimer’s disease at Watermark’s nursing home, wandered from her room unattended and died after drinking detergent that she found in a kitchen cabinet. Henderson’s estate filed a wrongful death suit against Watermark. Morrison provided kitchen services at the facility and its employees had been in the kitchen shortly before Henderson discovered the detergent, but Watermark did not implead Morrison and argued that Morrison’s employees had properly locked the cabinet before leaving. A jury awarded $5.08 million. Watermark did not appeal but settled with Henderson’s estate for $3.65 million. On a joint motion, the court dismissed the action with prejudice. Months later, Watermark sued Morrison for contractual indemnification and breach of contract. The district court dismissed, finding that issue preclusion barred both claims. The Sixth Circuit affirmed in part. While a judgment that is set aside upon settlement can be used for collateral-estoppel purposes in future litigation, only the contractual indemnification issue is barred. Under the parties’ contract, Watermark can prevail on its indemnification claim only by showing that the damages it seeks were not the result of its own negligence. It cannot do so; the jury determined that the damages were the result of Watermark’s negligence. The jury’s finding of negligence does not, however, preclude Watermark from going forward with its breach-of-contract claim, which does not rely on the indemnity provision of the parties’ contract. View "Watermark Senior Living Communities, Inc. v. Morrison Management Specialists, Inc." on Justia Law

This case concerned the interpretation of Alaska’s usury statute and whether it provided for a maximum interest rate on contract or loan commitments in which the principal amount exceeds $25,000. William Cox argued the statute provided for a maximum interest rate of 10.5% on all loans in which the principal exceeds $25,000. The Estate of Steve Cooper and Dorothy Cooper (collectively “the Coopers”) argued that parties could contract for any interest rate if the principal of the contract or loan commitment exceeded $25,000. The superior court initially agreed with Cox that loans over $25,000 had a maximum legal interest rate of 10.5%, but the Coopers moved for reconsideration and provided the court with statutory history. This statutory history convinced the court that the Coopers were correct and that AS 45.45.010 did not limit the interest rate for contract or loan commitments over $25,000. Cox appealed, challenging the superior court’s decision to consider statutory history when ruling on the Coopers’ motion for reconsideration and the superior court’s decision to grant the Coopers reasonable attorney’s fees under Alaska Civil Rule 82. The Alaska Supreme Court affirmed the superior court's ruling in all respects. View "Cox v. Estate of Steve Cooper" on Justia Law

Belsen Getty, LLC, a registered investment adviser owned by Terry Deru, obtained a claims-made financial-services-liability policy (the Policy) from XL Specialty Insurance Company covering Belsen Getty and its advisers for the period for one year. Under the policy, XL had no duty to defend. During the policy period James, Jenalyn, and Wade Morden brought claims against Belsen Getty and Deru alleging improper and misleading investment advice. XL denied coverage, asserting the Mordens’ claims and claims brought by the Securities and Exchange Commission (SEC) before the policy period concerned “Interrelated Wrongful Acts,” as defined by the Policy, and that the Policy therefore required treating the two claims as one claim made before the policy period. Belsen Getty and Deru then settled with the Mordens, assigning their rights against XL; and the Mordens sued XL in federal district court, raising the assigned claims that XL breached its covenant of good faith and fair dealing and its fiduciary duties to Belsen Getty and Deru in denying coverage under the Policy. XL counterclaimed that the Policy’s Interrelated Wrongful Acts provision precluded coverage. The Mordens moved for partial summary judgment on the counterclaim and on several of XL's affirmative defenses. XL moved for summary judgment based on the policy and for failure to prove bad faith or breach of fiduciary duty. The district court denied XL's counterclaim, but granted summary judgment on the bad-faith and fiduciary-duty claims. The Mordens appealed summary judgment against them on their bad-faith and fiduciary-duty claims and on the denial of their motion to amend their complaint to add a breach-of-contract claim. XL cross-appealed the summary judgment against it on its counterclaim that the Policy’s Interrelated Wrongful Acts provision barred all the Mordens’ claims. The Tenth Circuit reversed the denial of XL’s motion for summary judgment on its counterclaim: this reversal undermined the Mordens’ challenges to the summary judgment against them and the denial of their motion to amend. The Court therefore affirmed summary judgment against the Mordens on their claims and the denial of their motion to amend. View "Morden v. XL Specialty Insurance" on Justia Law

The Supreme Judicial Court held that the trial judge did not abuse his discretion by allowing Defendant’s motion to dismiss on the ground of forum non conveniens because a Massachusetts choice of law provision in a confidentiality, nonsolicitation, and noncompetition agreement between the parties in this case was unenforceable.Defendant was employed in California by Plaintiff, a company headquartered in Massachusetts. Plaintiff signed an agreement as a condition of employment that declared that the agreement would be governed by Massachusetts law and that all lawsuits arising from the agreement would be brought in a Massachusetts court. When Defendant left to work for a California competitor, Plaintiff filed suit in the Massachusetts Superior Court. Defendant filed a motion to dismiss on the ground of forum non conveniens, and the trial judge allowed the motion. The Supreme Judicial Court affirmed, holding (1) where California substantive law would apply under choice of law principles and where the application of Massachusetts substantive law would violate California public policy favoring open competition and employee mobility, the Massachusetts choice of law provision was not enforceable; and (2) the trial judge did not abuse his discretion in deciding that this action should be dismissed on the ground of forum non conveniens. View "Oxford Global Resources, LLC v. Hernandez" on Justia Law

Vanguard offers retail securities brokerage accounts. Its website stated that Vanguard offered a price of “$2 commissions for stock . . . trades” for customers who maintained a balance in Vanguard accounts of $500,000-$1,000,000. The Taksirs, whose holdings met that threshold, used Vanguard to purchase Nokia stock. Vanguard charged them a $7 commission for each of their respective purchases, stating that the Taksirs’ accounts “are not eligible for discounts for trading stocks and other brokerage securities because of IRS nondiscrimination rules” and that “[u]nfortunately, this information is not listed on the Vanguard Brokerage Commission and Fee Schedule.” Weeks later, Orit Taksir acquired additional Nokia stock in the same Vanguard account and was charged a $2 commission. The Taksirs filed a putative class action for fraud or deception under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law and breach of contract. The district court dismissed the UTPCPL claim but denied Vanguard’s motion to dismiss the contract claim. On interlocutory appeal, the Third Circuit affirmed. The Securities Litigation Uniform Standards Act of 1998, 15 U.S.C. 78bb, does not bars investors’ claims that their broker overcharged them for the execution of securities transactions. The issue is whether the overcharges constitute “misrepresentation . . . in connection with the purchase or sale of a covered security.” The overcharges do not have a “connection that matters” to the securities transactions. View "Taksir v. Vanguard Group" on Justia Law