Justia Contracts Opinion Summaries

The Ministry of Defence of the State of Kuwait entered into three contracts with Joseph M. Naffa and his fictitious law firm, Naffa & Associates, LLP, for legal advice and representation in real estate transactions. The Ministry later discovered that Naffa was not authorized to practice law in the United States and that he had kept a credit meant for the Ministry from one of the real estate transactions. The Ministry sued Naffa and his firm for breach of contract and conversion of funds.The United States District Court for the Eastern District of Virginia dismissed the Ministry's claims under Rule 12(b)(1), ruling that the Ministry had not pleaded damages sufficient to meet the amount in controversy requirement for federal court jurisdiction. The court also held that the agreements did not require Naffa to be a licensed attorney and that the Ministry could not show that it did not receive legal advice or that its outcome would have been different if it was represented by a licensed attorney.The United States Court of Appeals for the Fourth Circuit reversed the district court's decision. The appellate court held that the district court erred in dismissing the Ministry's claims for lack of subject matter jurisdiction because the complaint contained sufficient allegations to invoke the court's diversity jurisdiction. The court concluded that the Ministry had pleaded damages of at least $635,000, an amount that substantially exceeds the statutory minimum for federal court jurisdiction. The court vacated all other determinations made by the district court and remanded the case for further proceedings. View "Ministry of Defence of the State of Kuwait v. Naffa" on Justia Law

A general contractor, Graycor Construction Company Inc., was involved in a dispute with a subcontractor, Business Interiors Floor Covering Business Trust, over unpaid invoices for flooring work performed on a movie theater project. Business Interiors submitted three separate applications for periodic payments, which Graycor neither approved nor rejected within the time limit set by the Prompt Pay Act. As a result, the applications were deemed approved under the Act. Business Interiors sued Graycor for breach of contract and other claims in the Superior Court. The Superior Court granted Business Interiors's motion for summary judgment on its breach of contract claim and entered separate and final judgment. Graycor appealed.Graycor argued that the original contract was not a "contract for construction" within the meaning of the Act, and that it had a valid impossibility defense due to its failure to pay. The Supreme Judicial Court held that the Act defines its scope broadly, and the subcontract at issue was a "contract for construction" under the Act. The Court also held that common-law defenses are not precluded by the Act, but a contractor that does not approve or reject an application for payment in compliance with the Act must pay the amount due prior to, or contemporaneous with, the invocation of any common-law defenses in any subsequent proceeding regarding enforcement of the invoices. As Graycor sought to exercise its defenses without ever paying the invoices, it could not pursue the defenses. The Court also vacated and remanded the rule 54 (b) certification to the motion judge for reconsideration. View "Business Interiors Floor Covering Business Trust v. Graycor Construction Company Inc." on Justia Law

The case involves Brian Frye, a homeowner who claimed that his property had suffered damage due to underground mine subsidence. He submitted a claim to his home insurer, Erie Insurance Company, and notified the Board of Risk Insurance and Management (BRIM) of the damages. Both Erie and BRIM investigated the claim, but both denied it, stating that the damage was not due to mine subsidence. Frye then sued Erie for breach of contract and other claims. The Circuit Court of Ohio County granted summary judgment to Erie, concluding that Erie functioned as BRIM’s agent in the adjustment of Frye’s claim. Frye moved the court to alter or amend that judgment, arguing that it threatened the constitutionality of certain West Virginia statutes.The Supreme Court of Appeals of West Virginia vacated the lower court's decision and remanded the case for further proceedings. The court found that the lower court erred by failing to notify the Attorney General of the constitutional questions raised in Frye’s motion to alter or amend the summary judgment order. The court concluded that the appropriate remedy was to vacate the lower court’s order denying Frye’s motion and to remand the matter to permit the lower court to notify the Attorney General of these proceedings in accordance with Rule 24(c) of the West Virginia Rules of Civil Procedure. View "Frye v. Erie Insurance Company" on Justia Law

In 2020, Albert Omstead contracted BPG Inspection, LLC to inspect a property he and his wife, Jessique Omstead, intended to purchase. The contract included a one-year limitation clause preventing Mr. Omstead from suing BPG Inspection or its employees more than one year after the inspection. After the inspection, the Omsteads purchased the property. Over a year later, Mr. Omstead died when a retaining wall on the property collapsed. Mrs. Omstead filed a wrongful death suit against BPG Inspection and one of its inspectors.The trial court found the one-year limitation unenforceable, but the Court of Appeals reversed this decision. The Supreme Court of Georgia granted review to consider whether the Court of Appeals erred in approving the one-year limitation and whether the limitation is void as against public policy.The Supreme Court of Georgia affirmed the Court of Appeals' decision. The court found that the one-year limitation was enforceable and not void as against public policy. The court rejected Mrs. Omstead's arguments that the limitation only applied to contract claims and not claims involving bodily injury or wrongful death, that the limitation functioned as a “contractually-effectuated statute of repose,” and that the limitation impermissibly voided “professional standards of conduct.” The court concluded that the one-year limitation did not violate OCGA § 13-8-2 (b) and was not void as against public policy. View "OMSTEAD v. BPG INSPECTION, LLC" on Justia Law

The case involves Ferrellgas Partners L.P. and its subsidiaries (collectively "Ferrellgas") and Zurich American Insurance Company ("Zurich"). Ferrellgas had an insurance policy with Zurich, which included a provision for the advancement of defense costs for litigation. Ferrellgas was involved in a separate lawsuit with Eddystone Rail Company, LLC ("Eddystone") over a breach of contract. Ferrellgas sought to have Zurich cover the defense costs for the Eddystone litigation under their insurance policy.In the lower court, the Superior Court of the State of Delaware, Ferrellgas filed a motion for summary judgment seeking a declaratory relief obligating Zurich to advance defense costs for the Eddystone litigation. Zurich also filed a motion for summary judgment seeking a declaration that it had no obligation to advance defense costs. The Superior Court denied Ferrellgas' motion and granted Zurich's motion, finding that the Eddystone litigation was excluded from coverage under the Zurich policy.On appeal, the Supreme Court of the State of Delaware affirmed the decision of the Superior Court. The Supreme Court found that the Eddystone litigation was a claim seeking relief for a breach of contract that occurred after the commencement of the Run-Off Coverage Period in the Zurich policy. As such, Zurich had no duty to advance defense costs for this matter due to the Run-Off Exclusion in the policy. The court also found that Ferrellgas' appeal was timely filed. View "Ferrellgas Partners, L.P. v. Zurich American Insurance Company" on Justia Law

The Supreme Court of Texas reviewed a case involving Samson Exploration, LLC and several families, including the Bordages, from whom Samson held oil-and-gas leases. The families sued Samson for unpaid royalties under those leases. The Bordages claimed that they were entitled to late charges on the late charges, arguing that the leases' Late Charge Provision imposed late charges on late charges, compounding them each month. Samson disagreed, asserting that the late charges were not compounded.Previously, the trial court found Samson liable for breach of contract and awarded the Bordages $12,955,919 in contract damages, based on the interpretation of the Late Charge Provision. The Bordages argued that collateral estoppel prevented the Supreme Court from deciding whether the Late Charge Provision calls for simple or compound interest because that issue was previously resolved in another case involving Samson and a different lessor, the Hooks case.The Supreme Court of Texas held that Texas law disfavors compound interest, and an agreement for interest on unpaid amounts is an agreement for simple interest absent an express, clear, and specific provision for compound interest. The court also held that Samson’s prior litigation of the issue does not collaterally estop it from asserting its claims here. The court reversed the judgment of the court of appeals and remanded the case to the trial court for further proceedings. View "SAMSON EXPLORATION, LLC v. BORDAGES" on Justia Law

Joe Tubwell had been living in a house in DeSoto County, Mississippi, since 2005. In 2016, the mortgage loan on the house went into default, and foreclosure proceedings were initiated. Tubwell filed a complaint against the mortgage companies in an attempt to stop the foreclosure. The case was moved to a federal court where the mortgage companies were granted summary judgment. Tubwell, Morgan Stanley, and Specialized Loan Servicing LLC (SLS) entered settlement negotiations and reached an agreement. Tubwell agreed to vacate the property by April 30, 2020, in exchange for a confidential sum of money. The property was sold to FV-1, Inc., in trust for Morgan Stanley Mortgage Capital Holdings LLC. However, Tubwell refused to vacate the property by the agreed deadline and did not return the settlement funds.The mortgage companies filed a complaint against Tubwell in the DeSoto County Circuit Court to enforce the terms of the settlement agreement. The circuit court granted summary judgment ordering Tubwell to relinquish possession to the plaintiffs and dismissed Tubwell’s counterclaims for lack of jurisdiction. Tubwell appealed the decision to the Court of Appeals, which affirmed the circuit court's decision.The Supreme Court of Mississippi granted Tubwell’s petition for certiorari to address the issue of whether it was error to dismiss his counterclaims for lack of jurisdiction. The Supreme Court found that the circuit court had jurisdiction to entertain Tubwell’s counterclaims and erred when it declined to do so based on a lack of jurisdiction. The Supreme Court reversed the judgments of the circuit court and the Court of Appeals with regard to the dismissal of Tubwell’s counterclaims for lack of jurisdiction and remanded the case to the circuit court for further proceedings. The Supreme Court affirmed the judgments of the circuit court and the Court of Appeals on the remainder of the issues raised. View "Tubwell v. FV-1, Inc." on Justia Law

The case involves a dispute between Mary Roth and Gary Meyer, who were in a long-term relationship but never married. They cohabitated and ran a cattle operation together on a property that had a complex ownership history involving various members of Meyer's family. The couple's relationship ended, and Roth sued Meyer, alleging that he had converted some of her cattle and failed to repay loans she had given him.The District Court of Grant County, South Central Judicial District, found in favor of Roth. It ruled that Meyer had gained title to the disputed property through adverse possession and had transferred it to Roth in 2010. The court also found that Meyer had converted 13 of Roth's cattle and breached oral loan agreements with her, ordering him to pay her $52,500.On appeal, the Supreme Court of North Dakota reversed the lower court's decision. It found that the lower court had erred in its findings on adverse possession, the admissibility of certain evidence, the timing of the alleged conversion of cattle, the valuation of the converted cattle, and the enforceability of the loan contracts. The Supreme Court remanded the case to the lower court for further proceedings, instructing it to make new findings based on the existing record. View "Roth v. Meyer" on Justia Law

The Portland Mint delivered truckloads of coins to a foundry designated by the United States Mint for redemption under a regulation that provided for the redemption of mutilated coins. The coins were melted down and used to make new coins. However, the U.S. Mint refused to pay for the shipment, claiming that a high percentage of the coins were counterfeit. Portland Mint, asserting that the coins were genuine, brought five claims against the United States in the Court of Federal Claims. The Claims Court dismissed all five claims, concluding that it lacked jurisdiction for the first two claims and that all five claims failed to state a claim upon which relief could be granted.The United States Court of Appeals for the Federal Circuit found that the Claims Court erred in dismissing the second claim for lack of jurisdiction and failure to state a claim. The court held that the regulation under which the coins were submitted created an implied-in-fact contract between Portland Mint and the U.S. Mint, and that the Claims Court had jurisdiction over this claim. The court also held that Portland Mint had sufficiently stated a claim for breach of this implied contract. The court affirmed the dismissal of the remaining three merits claims and did not reach the fifth claim concerning attorneys’ fees. The case was affirmed in part and reversed and remanded in part for further proceedings. View "The Portland Mint v. United States" on Justia Law

The case involves NGL Energy Partners LP and NGL Energy Holdings LLC (collectively, "NGL") and LCT Capital, LLC ("LCT"). NGL, entities in the energy sector, engaged LCT, a financial advisory services provider, for services related to NGL's 2014 acquisition of TransMontaigne Inc. However, the parties failed to agree on payment terms, leading LCT to file a lawsuit in 2015. The Superior Court held a jury trial in July 2018, which resulted in a $36 million verdict in LCT's favor.NGL appealed the Superior Court's decision, challenging the $36 million final judgment and a set of evidentiary rulings. LCT cross-appealed, contesting the Superior Court's methodology for computing post-judgment interest. NGL argued that the Superior Court erred by admitting evidence and arguments about the value/benefit supposedly gained by NGL in the Transaction, asserting that such evidence is prejudicial and irrelevant to a quantum meruit claim. NGL also argued that the Superior Court erred by admitting evidence of benefit-of-the-bargain or expectancy damages when assessing the quantum meruit value of LCT’s services.The Supreme Court of the State of Delaware affirmed the Superior Court’s evidentiary rulings and rejected NGL's contention that the Superior Court incorrectly allowed LCT to recover benefit-of-the bargain/expectancy damages. However, the Supreme Court disagreed with the Superior Court’s post-judgment interest determination. The Supreme Court held that prejudgment interest is part of the judgment upon which post-judgment interest accrues under Section 2301(a). Therefore, the Supreme Court reversed the Superior Court as to this issue and remanded the case to the Superior Court for entry of judgment consistent with its opinion. View "NGL Energy Partners LP v. LCT Capital, LLC" on Justia Law