Justia Contracts Opinion Summaries

All Masonry & Landscape Supply (All Masonry) appealed a postjudgment order awarding attorney fees to Oldcastle, the prevailing party in a breach of contract action. Oldcastle manufactured masonry and concrete products, including its Belgard-branded concrete pavers and segmented retaining walls. All Masonry distributed landscape supplies and concrete products to customers. All Masonry claimed that in 2001, it entered into an agreement with Oldcastle to be Oldcastle's exclusive dealer of Belgard products in San Diego County. The 2001 dealer agreement was part written and part oral. In 2013, All Masonry sued Oldcastle for breaching the 2001 dealer agreement by distributing Belgard products through other dealers in San Diego County. Oldcastle prevailed on the breach of contract cause of action in 2015 when the court granted its motion for summary adjudication on that claim, rejecting All Masonry's contention that it had the exclusive right to sell Belgard at preferential pricing in San Diego County. Oldcastle filed a postjudgment motion to recover attorney fees in connection with All Masonry's breach of contract claim. The court awarded Oldcastle $180,120 in attorney fees for defending the breach of contract cause of action through summary adjudication and for litigating the postjudgment fees motion. The Court of Appeal reversed the award of attorney fees to Oldcastle, finding no clear and unequivocal evidence that the parties intended to incorporate the terms of a 2010 credit application into their 2001 dealer agreement, which was the basis of the fee award. Civil Code section 1642 does not allow the recovery of attorney fees in this case. View "R.W.L. Enterprises v. Oldcastle, Inc." on Justia Law

This was an insurance bad faith case arising out of a claim for underinsured motorist coverage. In May 2008, Peggy Cedillo was injured in a collision while riding as a passenger on the back of a motorcycle. About a year after the collision, she settled her claim against the motorcycle driver for $105,000, the total amount available under his insurance policy. Cedillo married the motorcycle driver about eight months after the collision, and he was her lawyer in this lawsuit and designated as one of her experts. Cedillo claimed the district court erred when it: (1) granted summary judgment in favor of Farmers on her bad faith claim; (2) denied discovery of the entirety of Farmers’ claims file and certain electronic information; and (3) denied a motion to amend her complaint to include a claim for punitive damages. The Idaho Supreme Court, after review of the terms of the insurance contract and the district court record, affirmed the grant of summary judgment on Farmers’ motion relating to the bad faith claim: “General conclusions about Farmer’s conduct do not provide the facts needed to overcome summary judgment on the ‘fairly debatable’ element. Thus, the district court did not err in granting Farmers’ motion for summary judgment.” View "Cedillo v. Farmers Ins. Co. of Idaho" on Justia Law

This case turned on whether an attorney-in-fact made a “health care decision” by admitting her principal to a residential care facility for the elderly and, in the process, agreeing to an arbitration clause. The trial court found she acted outside the scope of her authority under the power of attorney, and the arbitration clause this appeal seeks to enforce was void. The issue this case presented for the Court of Appeal’s review centered on the scope of two statutes, the Power of Attorney Law (Prob. Code, sec. 4000 et seq. (PAL)), and the Health Care Decisions Law (Prob. Code, sec. 4600 et seq. (HCDL)), in light of the care a residential care facility for the elderly agreed to provide, and actually provided, in this instance (Health & Saf. Code, sec. 1569 et seq.). For resolution, the Court had to parse the authority of two of the principal’s relatives, one holding a power of attorney under the PAL and one holding a power of attorney under the HCDL. The Court concluded admission of decedent to the residential care facility for the elderly in this instance was a health care decision, and the attorney-in-fact who admitted her, acting under the PAL, was not authorized to make health care decisions on behalf of the principal. As a result of this conclusion, the Court affirmed the trial court’s denial of a motion by the residential care facility to compel arbitration. Because the attorney-in-fact acting under the PAL did not have authority to make health care decisions for her principal, her execution of the admission agreement and its arbitration clause are void. View "Hutcheson v. Eskaton Fountainwood Lodge" on Justia Law

The Maintenance Group, Inc. petitioned the Alabama Supreme Court for a writ of mandamus to direct the Madison Circuit Court to enter an order dismissing the claims against it based on lack of personal jurisdiction. This case arises from the sale of an aircraft. The purchaser alleged tortious conduct related to the sale of the aircraft negotiated and consummated outside Alabama by nonresident parties, including Maintenance. The only contact with Alabama being post-purchase travel into and out of Alabama. The Supreme Court concluded that, based on the evidence before the trial court, the purchaser did not establish a sufficient nexus between Maintenance's purposeful activity within Alabama and the claims made in its action sufficient to subject Maintenance to personal jurisdiction in an Alabama court. Accordingly, Maintenance has shown a clear legal right to the dismissal of the complaint on the ground that the trial court lacked personal jurisdiction over it. View "Ex parte The Maintenance Group, Inc." on Justia Law

Kansas distinguishes between legal malpractice claims: some sound in contract, others sound in tort. Plaintiff Cory Sylvia sued his former attorneys, James Wisler and David Trevino, for legal malpractice allegedly sounding in tort and breach of contract arising from their representation of Sylvia in a suit for wrongful termination against Goodyear Tire & Rubber Co. (“Goodyear”), his former employer. Later, Sylvia amended his complaint to add as a defendant Xpressions, L.C. (“Xpressions”), a limited liability company formerly known as the Wisler Law Office, L.C. Sylvia’s initial complaint characterized his claims as sounding both in tort and in contract. Specifically, he faulted: (1) both individual defendants for failing to include in, or to later amend, his complaint to aver a workers’ compensation retaliation claim; and (2) solely Wisler for voluntarily dismissing Sylvia’s case on the erroneous belief that all claims could be refiled, causing one of his claims to become barred by the statute of limitations. For each of these claims, Sylvia advanced both tort and contract theories of liability. This case presented a difficult question of Kansas law for the Tenth Circuit's review: when do legal malpractice claims involving a failure to act sound in tort rather than contract? After review, the Tenth Circuit reversed in part and vacated in part the district court’s judgment dismissing Sylvia’s tort-based legal malpractice claims. However, regarding the district court’s grant of summary judgment for the defendants on the breach of contract claims, the Court affirmed. View "Sylvia v. Wisler" on Justia Law

The Pennsylvania Supreme Court granted allowance of appeal in this case to determine when the statute of limitations begins to run on an uninsured motorist (UM) claim under an insurance policy. Specifically, the issue reduced to whether the statute of limitations begins to run on an insured’s ability to initiate a court action to enforce a UM claim in a policy containing an arbitration agreement. The Superior Court held that, for the purpose of UM and underinsured motorist (UIM) claims, the statute of limitations begins to run when a claimant injured in an automobile accident first learns that the other driver is uninsured or underinsured. However, the Supreme Court determined this conclusion was not adequately grounded in the pertinent statutory text, prevailing statute of limitations doctrine, or significant public policy concerns. Accordingly, the Court held that statute of limitations principles attending contract claims apply, and that the running of the statute was commenced upon an alleged breach of a contractual duty, which in this case would be occasioned by the insurer’s denial of coverage or refusal to arbitrate. The Court therefore reversed the Superior Court’s order to the contrary. View "Erie Insurance Exchange v. Bristol" on Justia Law

Laboratory Specialists International, Inc. (LSI) filed a complaint in Orange County Superior Court alleging causes of action against Shimadzu Scientific Instruments, Inc. (Shimadzu) for breach of contract, conversion, breach of the implied covenant of good faith and fair dealing, intentional interference with contractual relations, and intentional and negligent interference with prospective economic relations. LSI appealed when the trial court dismissed its lawsuit against Shimadzu under the forum selection clause in the parties’ contract. LSI contended Shimadzu erred by requesting a dismissal in its demurrer dismissal based on the forum selection clause, rather than by a separate motion, and that the trial court erred by granting Shimadzu leave to recast its request for dismissal in a separate motion. In the alternative, LSI argued the court erred by: (1) dismissing LSI’s tort claims, which LSI argued did not arise out of or “pertain[]” to the parties’ contract; (2) finding the forum selection clause mandated Maryland as the proper fourm, rather than conducting an analysis under discretionary forum non conveniens factors; and (3) dismissing rather than staying LSI’s lawsuit. As we explain, these contentions are without merit, and we therefore affirm the court’s dismissal order. View "Laboratory Specialists International v. Shimadzu Scientific etc." on Justia Law

Keith Candee appealed the grant of summary judgment to his parents, Lyla and Douglas Candee, awarding them an $884,508.83 deficiency judgment following foreclosure of properties in California and North Dakota. Keith and his parents executed a settlement agreement and mutual release of claims in 2013 relating to earlier disputes between the parties about the management of their family assets. Under the settlement agreement, Keith agreed to pay $2.2 million to Lyla and Douglas. The $2.2 million settlement amount was secured by real property in California and North Dakota. A deed of trust in favor of Lyla and Douglas secured the California property, and a mortgage secured the property in North Dakota. The deed of trust securing the California property included a power of sale provision allowing Lyla and Douglas to foreclose the property in a nonjudicial manner via a trustee's sale. After Keith failed to make payments under the settlement agreement, Lyla and Douglas foreclosed the California property. They proceeded with a nonjudicial foreclosure and in January 2014 purchased the property at a trustee's sale for a credit bid of $200,000. Lyla and Douglas foreclosed the North Dakota property and purchased the property for $975,000 at a July 2015 sheriff's sale. In September 2015, Lyla and Douglas sued Keith in North Dakota for a deficiency judgment for the difference between the amount Keith owed under the settlement agreement and the amount Lyla and Douglas obtained through foreclosure of the properties. Keith argued a deficiency judgment was not available under the agreement because California law applied and a deficiency judgment was prohibited under California law. The district court concluded California law applied only to the California property and granted summary judgment to Lyla and Douglas. The court entered an $884,508.83 deficiency judgment against Keith. On appeal, Keith maintained the California anti-deficiency statutes applied to the settlement agreement, and those statutes barred a deficiency judgment in this case. The North Dakota Supreme Court reversed and remanded, concluding California law barred a deficiency judgment in this case as a matter of law. View "Candee v. Candee" on Justia Law

McMillin Management Services, L.P. and Imperial Valley Residential Valley Residential Builders, L.P. (collectively "McMillin") filed suit against numerous insurance companies, including respondents Lexington Insurance Company (Lexington) and Financial Pacific Insurance Company (Financial Pacific). McMillin alleged that it had acted as a developer and general contractor of a residential development project in Brawley and hired various subcontractors to help construct the Project. As relevant here, McMillin alleged that Lexington and Financial Pacific breached their respective duties to defend McMillin in a construction defect action (underlying action) brought by homeowners within the Project. McMillin alleged that Lexington and Financial Pacific each owed a duty to defend McMillin in the underlying action pursuant to various comprehensive general liability (CGL) insurance policies issued to the subcontractors that named McMillin as an additional insured. The trial court granted Lexington's motion for summary judgment, reasoning, that there was no possibility for coverage for McMillin as an additional insured under the policies "[b]ecause there were no homeowners in existence until after the subcontractors' work was complete[ ] . . . ." On appeal, McMillin contended that the fact that the homeowners did not own homes in the Project at the time the subcontractors completed their work did not establish that its liability did not arise out of the subcontractors' ongoing operations. The trial court granted Financial Pacific's motion for summary judgment, finding McMillin did not establish homeowners in the underlying action had sought potentially covered damages arising out of the subcontractors' drywall installation. The Court of Appeal reversed as to Lexington, and affirmed as to Financial Pacific. View "McMillin Management Services v. Financial Pacific Ins. Co." on Justia Law

The Supreme Court reversed the judgment of the district court granted summary judgment for New West Health Services (New West) in this action brought by Plaintiff and the class she represented alleging breach of contract, violation of made-whole rights, and unfair claims settlement practices. At issue in this appeal was the district court’s grant to New West leave to amend its answer to include the affirmative defense of ERISA preemption. The district court subsequently allowed Plaintiff to amended her complaint to include ERISA claims. Ultimately, the district court concluded that ERISA preemption required dismissal of Plaintiff’s state law and ERISA claims and entered summary judgment for New West. The Supreme Court reversed, holding that, under the extraordinary circumstances of this case, the district court abused its discretion by granting New West leave to amend its answer to assert ERISA preemption. View "Rolan v. New West Health Services" on Justia Law