Justia Contracts Opinion Summaries

Belasco bought a new Manhattan Beach residence in 2004 from the builder (Wells). In 2006, Belasco filed a complaint with the Contractors State License Board, alleging construction defects. Belasco and Wells settled the dispute in 2006, with Wells paying $25,000 and Belasco executing a release and a Civil Code 15241 waiver of all known or unknown claims. In 2012, Belasco sued, based on an alleged roof defect discovered in 2011. The trial court entered summary judgment, finding the action barred by the settlement. The court of appeal affirmed, rejecting arguments that: the 2006 general release and waiver for patent construction defects is not a “reasonable release” of a subsequent claim for latent defects under section 929 and the Right to Repair Act (section 895); a reasonable release can only apply to a “particular violation” and not to a latent defect under section 945.5(f), and the 2006 settlement was too vague to be a valid; section 932 authorizes an action on “[s]ubsequently discovered claims of unmet standards;” public policy prohibits use of a general release and section 1542 waiver to bar a subsequent claim for latent residential construction defects; and a genuine issue of fact existed concerning fraud and negligence claims that would void the settlement under section 1668. View "Belasco v. Wells" on Justia Law

Plaintiffs, Germain and GM Enterprises, filed suit against defendants, HCH and Metropolitan, alleging breach of contract claims related to an option to purchase based on the assignment of a lease agreement. The district court dismissed the complaint because plaintiffs were precluded from bringing the action where a state court already had decided the issue underlying the claims alleged in their federal complaint. As a preliminary matter, the court held that the Rooker-Feldman doctrine does not bar plaintiffs' claims where their complaint alleged injuries caused by breach of contract and related to torts. Turning to section 13 of the Restatement (Second) of Judgments, the court believed that the Arkansas Supreme Court would hold that the state-court judgment in this case was sufficiently firm to be considered final for purposes of issue preclusion; based on the state court's conclusion and the terms of the subordination agreement, Germain was not entitled to specific performance of the option and dismissal of the federal declaratory-judgment action was appropriate; and the district court did not abuse its discretion in awarding attorneys' fees to defendants. The court affirmed the judgment of the district court. View "Germain Real Estate v. HCH Toyota" on Justia Law

BADD, L.L.C. purchased three warehouse units in Myrtle Beach. To finance the transaction, BADD executed two promissory notes. A personal guaranty was also executed by William McKown, who was a member of BADD. After BADD defaulted, the Bank brought this foreclosure action and included McKown as a party based on his status as a guarantor. In McKown's amended answer and counterclaim, he demanded a jury trial because the Bank sought a money judgment for the breach of a guaranty arrangement. McKown further sought an accounting and a determination that the guaranty agreement was unconscionable. McKown then asserted two counterclaims: (1) civil conspiracy and (2) breach of contract, both based on an alleged conspiracy between the Bank and William Rempher. Finally, McKown asserted third-party claims against Rempher. The Bank moved for an order of reference. The circuit granted the motion, referring the matter in its entirety to the master-in-equity. The Court of Appeals reversed, holding McKown was entitled to a jury trial because the Bank's claim on the guaranty agreement was a separate and distinct legal claim. The Bank appealed, challenging the Court of Appeals' finding that McKown was entitled to a jury trial. The Supreme Court reversed, finding that McKown was not entitled to a jury trial solely because the Bank exercised its statutory right to join him as a party in the event of a deficiency judgment. Furthermore, the Court held McKown was not entitled to a jury trial based on his counterclaims, which, while legal, were permissive. McKown waived his right to a jury trial by asserting permissive counterclaims in an equitable action. View "Carolina First Bank v. BADD, L.L.C." on Justia Law

A California resident owned an apartment building in Arkansas that was insured by a Michigan insurance company under a policy the owner obtained through an insurance agent in Arkansas. That policy included commercial property coverage for the Arkansas apartment building and commercial general liability coverage for the owner's property ownership business, which he operated from California. Other than writing this policy, the insurer did no business in California. Both the commercial property coverage and the commercial general liability coverage in the policy covered some risks, losses, or damages that could have arisen in California, but the dispute at issue here arose out of two fires that damaged the building in Arkansas. Initially, the insurer agreed to treat the two fires as separate losses but later reversed its position and took the position that both incidents were subject to only a single policy limit payment. As a result, the owner sued the insurer in a California state court for breach of contract and bad faith. The issue presented for the Court of Appeal's review was, under these circumstances, did the insurer have sufficient minimum contacts with California to allow the state court to exercise personal jurisdiction over the company in this action? The Court concluded the answer was "no." Accordingly, the Court affirmed the trial court's order granting the insurance company's motion to quash the service of summons. View "Greenwell v. Auto-Owners Ins. Co." on Justia Law

This debt collection action arose from a credit agreement between U.S. Bank and Charles Migliore. Livingston Financial, LLC, as assignee for U.S. Bank, brought suit against Migliore for breach of the credit agreement. The Supreme Court granted summary judgment for Livingston. Approximately two years after the district court denied Migliore’s motion to reconsider summary judgment pursuant to Utah R. Civ. P. 60(b), Migliore filed a renewed Rule 60(b) motion to set aside the judgment. The district court denied the renewed motion and granted Livingston’s motion for attorney fees. Migliore appealed the original grant of summary judgment, the denial of the renewed Rule 60(b) motion, and the order granting attorney fees. The court of appeals (1) dismissed the appeal of the original summary judgment order and the order denying the renewed rule 60(b) motion on the basis that it lacked jurisdiction; and (2) affirmed Livingston’s award of fees. The Supreme Court affirmed, holding that the court of apepals (1) erred when it concluded that it lacked jurisdiction to review the district court’s denial of Migliore’s renewed Rule 60(b) motion, but the renewed motion was improper and without merit; and (2) correctly affirmed the award of attorney fees. View "Migliore v. Livingston Fin. LLC" on Justia Law

The Milky Whey, Inc., a dairy broker based in Montana, bought products from Dairy Partners, LLC, a dairy supply company located in Minnesota. This appeal concerned Milky Whey’s purchase of a product from Dairy Partners that Dairy Partners shipped to Utah. When Milky Whey picked up the product, it had become moldy and unusable. Milky Whey filed suit, alleging breach of contract, breach of warranty, unjust enrichment, and breach of an obligation to pay. Dairy Partners moved to dismiss the complaint for lack of personal jurisdiction. The district court dismissed the action, concluding that Dairy Partners did not come within Montana’s long-arm jurisdiction statute. The Supreme Court affirmed, holding that the district court did not err in determining that it could not exercise personal jurisdiction over Dairy Partners. View "Milky Whey, Inc. v. Dairy Partners, LLC" on Justia Law

Plaintiff offered to sell 3 million pounds of scrap copper to the defendant. The defendant negotiated the core terms of the sale but did not object to a fee-shifting provision: “In the event purchaser shall default in his obligations hereunder, purchaser shall be liable for [the plaintiff]’s costs of collection, including attorney’s fees.” The contract was negotiated between two experienced and sophisticated commercial entities. There was no duress. In a suit between the two, the otherwise victorious plaintiff appealed the district court’s ruling that the unilateral fee-shifting clause for attorney’s fees was unenforceable under Ohio law as a matter of public policy. The district court relied on Sixth Circuit precedent, holding that the Ohio Supreme Court would not enforce similar fee-shifting clauses. The Sixth Circuit reversed, noting that the Ohio Supreme Court has since clarified that it would enforce such unilateral or one-sided fee-shifting contract provisions. View "Allied Indus. Scrap, Inc. v. OmniSource Corp." on Justia Law

The parties in this case, two corporations, were parties to a Development Agreement. Defendant claimed Plaintiff owed it approximately $60 million under the Development Agreement. Plaintiff sought a declaration that it did not owe Defendant any money, and Defendant sought reformation of the Development Agreement. After two years of discovery, and as the trial approached, the parties filed a Joint Pretrial Stipulation and Proposed Order (the Proposed Order) identifying fifteen facts as admitted and not requiring proof at trial (the Admitted Facts). Plaintiff moved to have the Court of Chancery declare that certain facts were Admitted Facts and to require Defendant to meet and confer in good faith about additional Admitted Facts. The Court granted the motion, holding (1) facts Defendant admitted in its answer, in its responses to requests for admissions, and drawn from its sworn interrogatory responses constituted Admitted Facts, and Defendant should not have objected to their inclusion in the Proposed Order; and (2) Defendant did not confer in good faith regarding Admitted Facts as required by Ch. Ct. R. 16. View "Itron, Inc. v. Consert, Inc." on Justia Law

Sarun, uninsured when he received emergency services from a hospital owned by Dignity Health, signed an agreement to pay the "full charges, unless other discounts apply.” The agreement explained uninsured patients might qualify for government aid or financial assistance from Dignity. After receiving an invoice for $23,487.90, which reflected a $7,871 “uninsured discount,” and without applying for any other discount or financial assistance, Sarun filed a putative class action, asserting unfair or deceptive business practices (Business and Professions Code 17200) and violation of the Consumers Legal Remedies Act (Civ. Code, 1750). The complaint alleged that: Dignity failed to disclose uninsured patients would be required to pay several times more than others receiving the same services, the charges on the invoice were not readily discernable from the agreement, and the charges exceeded the reasonable value of the services. The trial court dismissed, finding that Sarun had not adequately alleged “actual injury.” The court of appeal reversed. Dignity’s argument Sarun was required to apply for financial assistance to allege injury in fact would be akin to requiring Sarun to mitigate damages as a precondition to suit. Mitigation might diminish recovery, butt does not diminish the party’s interest in proving entitlement to recovery. View "Sarun v. Dignity Health" on Justia Law

Plaintiff Kathryn Kipling sued State Farm Automobile Insurance Company in Colorado federal district court for breach of contract because it did not pay her benefits under four insurance policies issued in Minnesota. The court determined that she would be entitled to benefits under Colorado law but not under Minnesota law. It then applied tort conflict-of-laws principles to rule that Colorado law governed. After its review, the Tenth Circuit held that the court erred by not applying contract conflict-of-laws principles. The district court was reversed and the matter remanded for further consideration. View "Kipling v. State Farm Mutual Automobile" on Justia Law