Justia Contracts Opinion Summaries

CSX Transportation, Inc. is a freight railroad company. General Mills, Inc. operates a cereal processing plant in Georgia near one of CSX’s rail lines. A small connecting railroad connects CSX’s main rail line to General Mills’s plant. A contract between CSX and General Mills governs the use of the sidetrack.A General Mills employee suffered severe injuries while working on the sidetrack and then sued CSX for negligence. A jury found CSX liable, and CSX sought indemnification from General Mills, citing a contractual provision providing General Mills was required to indemnify CSX—regardless of whether CSX alone was responsible. The district court dismissed one of CSX’s breach-of-contract claims and granted General Mills summary judgment on the other.The Eleventh Circuit found that, under the parties’ agreement, General Mills was not required to indemnify CSX if CSX was solely negligent. However, the court disagreed with the district court that Georgia's vouchment doctrine barred CSX from litigating the issue of General Mills’s negligence. Thus, the Eleventh Circuit remanded for the district court to determine if General Mills was at least partially at fault for the injury. If so, then General Mills must indemnify CSX for at least a portion of the settlement and related expenses. View "CSX Transportation, Inc. v. General Mills, Inc." on Justia Law

Plaintiff was hired as the Superintendent of Dothan City Schools in Dothan, Alabama. The employment contract stated Plaintiff could only be terminated for cause. Furthermore, the contract stated that the termination would not be effective until the Board provided Plaintiff with a statement of the cause for termination and allowed her an opportunity for a hearing. Lastly, the employment contract provided that Plainitff could resign with or without cause as long as she gave at least 120 days notice in writing of her resignation to the Board. Six days after Plaintiff’s intent to resign was sent, Plaintiff alleges that the Board voted to terminate Plaintiff’s contract. She brought claims for deprivation of due process and the Fifth and Fourteenth Amendments, conspiracy to violate civil rights in violation of 42 U.S.C. Section 1985, and breach of contract. The district court dismissed Plaintiff’s claims with prejudice.   The Eleventh Circuit reversed the district court’s denial of Plaintiff’s due process claims and affirmed the district court’s denial of Plaintiff’s conspiracy and breach of contract claims. The court explained that instead of construing all ambiguities in Plaintiff’s favor, the district court used the minutes to recharacterize the allegations within Plaintiff’s complaint. When taking the factual allegations in Plaintiff’s complaint as true, there is a plausible claim for relief. In paragraph 18 of the complaint, Plaintiff’s classifies her communication as an “intent” to resign, not an actual resignation. The court wrote that the district court erred by ignoring that Plaintiff had a plausible claim to relief and not drawing reasonable inferences in her favor. View "Phyllis Edwards v. Dothan City Schools, et al" on Justia Law

Plaintiffs sued Defendant for breach of contract in connection with their rental of Defendant’s home. Defendant failed to file an answer, and the trial court entered a default judgment for $59,191. The judgment included $1,000 in attorneys’ fees pursuant to a provision in the parties’ lease agreement authorizing attorneys’ fees to the prevailing party not to exceed $1,000. Defendant appealed, and the Second Appellate District affirmed. While the appeal was pending, the trial court granted in part Plaintiffs’ motion under Code of Civil Procedure section 685.080, subdivision (a), for an order allowing their costs of enforcing the judgment. The trial court awarded $27,721 in attorneys’ fees under section 685.040, which allows as an award of costs attorneys’ fees incurred in enforcing a judgment “if the underlying judgment includes an award of attorney’s fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of Section 1033.5.” Section 1033.5, subdivision (a)(10)(A), in turn, provides that attorneys’ fees may be awarded as costs where authorized by contract. In this appeal, Defendant contends the trial court erred in awarding over $1,000 in attorneys’ fees for enforcing the judgment because the lease authorized attorneys’ fees “not to exceed $1,000.”   The Second Appellate District affirmed. The court explained that once the judgment was entered, the terms of the lease, including the $1,000 limitation on fees, were merged into and extinguished by the judgment. Because the judgment included an award of attorneys’ fees authorized by contract, section 685.040 allowed an award of reasonable attorneys’ fees incurred in enforcing the judgment. View "Nash v. Aprea" on Justia Law

The facts of this case involved the formation of a promissory note between James Rhea and Career General Agency, Inc, GuideOne America Insurance Co. and Dennis Basden. The promissory note was allegedly signed in 2007 and paid off by 2017. Rhea filed this suit in 2018 claiming unconscionability, unjust enrichment, conversion and negligent infliction of emotional distress against Career General. Career General filed a motion to dismiss, asserting that the general three year statute of limitations expired in 2010. Rhea argued that under the doctrine of equitable estoppel and the continuing tort doctrine, the statute of limitations did not begin to run until he finished paying the note in 2017. In February 2020, the trial court granted Career General’s motion to dismiss finding that equitable estoppel and the continuing tort doctrine did not apply and that the statute of limitations barred Rhea’s claim. Ninety-nine days later, Rhea filed a “Motion for New Trial, Amended Judgment or Reconsideration under Mississippi Rule of Civil Procedure 59” stating that he had not received notice of the court’s order and asking the court to reconsider whether equitable estoppel and the continuing tort doctrine should apply. In June 2020, Career General responded to the Rule 59 motion and argued that Rhea had failed to present: (1) an intervening change in controlling law; (2) new evidence not previously available; or (3) a need to correct a clear error of law or prevent manifest injustice. But Career General did not raise the issue of timeliness in their response. After a hearing in April 2021, the trial court denied Rhea's motion. The Mississippi Supreme Court found after review that the Court of Appeals in this case reached the correct decision but for the wrong reason. Regardless of whether the parties or the court raised the issue of timeliness, the Supreme Court held the Court of Appeals correctly found that it did not have appellate jurisdiction to review the February 2020 order. The judgment of the Court of Appeals was thus affirmed. View "Rhea v. Career General Agency, Inc., et al." on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the conclusion of the trial court that Plaintiff failed to establish Defendant's requisite minimum contacts with Tennessee, and thus the court lacked personal jurisdiction over Defendant with respect to Plaintiff's suit, holding that the trial court correctly dismissed Plaintiff's complaint.Plaintiff, a Tennessee resident, hired Defendant, an Alabama corporation with its principal place of business in Alabama, to build a house on a parcel of land in Alabama. Upon becoming dissatisfied with the quality and expense of the construction work Plaintiff filed suit in the Davidson County Chancery Court. The trial court granted Defendant's motion to dismiss for lack of jurisdiction, concluding that Defendant's contacts with Tennessee were minor and attenuated. The court of appeals reversed. The Supreme Court reversed, holding that Plaintiff failed to establish a prima facie case of the minimum contacts necessary for a Tennessee court to exercise specific personal jurisdiction over Defendant. View "Baskin v. Pierce & Allred Construction, Inc." on Justia Law

Darren and Tamara Berger (“Bergers”) appealed a judgment dismissing their claims of violation of a planned unit development (PUD), breach of contract, breach of fiduciary duty, private nuisance, and negligence against their neighbors Jason and Krysta Sellers (“Sellers”), Sellers’ homebuilder Jordan Anderson and Big River Builders, Inc. (together, “Builder”), and the Misty Waters Owners’ Association (“Association”). Sellers and Builder cross-appealed the judgment dismissing their claims of defamation, interference with contract and business, and negligence against Bergers and neighbor Jeff Carlson. The central issue in this case was whether the PUD minimum setback from the bay could be changed by obtaining a new Letter of Map Revision (LOMR) from the Federal Emergency Management Agency (FEMA) without an amendment to the PUD. To this, the North Dakota Supreme Court concluded the PUD unambiguously set the minimum setback from the bay as the contour line in the 2005 LOMR-F and therefore Sellers’ home violated the PUD. The Supreme Court reversed the district court’s grant of summary judgment on Bergers’ claims against Sellers for violation of the PUD, breach of restrictive covenants, negligence (drainage), and private nuisance (setbacks). The Court remanded with instructions to grant Bergers partial summary judgment on their claims against Sellers for violation of the PUD and breach of restrictive covenants and for declaratory relief (against Sellers) as requested in their motion for partial summary judgment. The Court reversed the trial court’s grant of summary judgment on Bergers’ claims against the Association for breach of fiduciary duty and negligence. The Court affirmed the court’s grant of summary judgment on all of Bergers’ claims against Builder, namely the PUD violation, breach of restrictive covenants, and negligence. The Court affirmed the grant of summary judgment on Bergers’ claims against the Association for breach of restrictive covenants and private nuisance. The Court affirmed the grant of summary judgment on all of Sellers’ and Builder’s claims. View "Berger, et al. v. Sellers, et al." on Justia Law

Fitness International, LLC was operating an indoor gym and fitness center when it entered into an amended lease with KB Salt Lake III, LLC, that required Fitness International to renovate the premises. However, the COVID-19 pandemic prompted government orders that closed indoor gyms but allowed commercial construction to continue. Fitness International nevertheless stopped construction at the Chatsworth site, remained in possession of the premises, and stopped paying rent. KB Salt Lake filed an unlawful detainer action, and the trial court granted KB Salt Lake’s motion for summary judgment. Fitness International appealed.   The Second Appellate District affirmed the trial court’s judgment. The court explained that Fitness International argued that the lease is a “monthly installment contract” and that each month it could not operate the premises as a fitness facility, frustrated the purpose of the contract. The court wrote that neither the pandemic nor the COVID-19 closure orders, however, prevented Fitness International from reopening the gym. Thus, even if California law recognized temporary frustration of purpose, and even if the lease was an “installment contract,” Fitness International still had to make rent payments under the lease. Moreover, the court explained that Fitness International argues the purpose of section 1511 “is to excuse performance under circumstances like these,” but Fitness International cites no authority describing the purpose of section 1511, nor does Fitness International explain how the trial court’s ruling was contrary to any such purpose. View "Fitness International v. KB Salt Lake III" on Justia Law

Creighton Preparatory School expelled Plaintiff after he made lewd remarks about a teacher. Plaintiff sued Creighton under Title IX of the Education Amendments of 1972 on the theory that the school had discriminated against him by failing to perform an “adequate and impartial investigation.” The district court granted Creighton’s motion to dismiss. It first dismissed the Title IX claim because Plaintiff had failed to “allege [that] his sex played any part in the disciplinary process at all.” Then, with the federal question gone, it declined to exercise supplemental jurisdiction over Plaintiff’s breach-of-contract claim.The Eighth Circuit affirmed. The court explained that Plaintiff does not allege that Creighton faced external pressure to punish male students, much less gave in by expelling him. The court reasoned that without an allegation of that kind, the complaint fails to plausibly allege the sort of “causal connection between the flawed outcome and gender bias” required to make an erroneous outcome theory work.Further, the court wrote that treating men and women differently can support an inference of sex discrimination, but it requires identifying a similarly situated member of the opposite sex who has been “treated more favorably.” For Plaintiff, he had to find “a female accused of sexual harassment” who received better treatment. There are no female students at Creighton, an all-boys school, let alone any who have faced sexual-misconduct allegations. The court explained that to the extent that Plaintiff argues that believing them over him raises an inference of discrimination, there is nothing alleged that the school did so because of his sex. View "Elijah Wells v. Creighton Preparatory School" on Justia Law

Plaintiff Davis Boat Manufacturing-Nordic, Inc. (Davis Boat), which prevailed in a breach-of-contract action against Defendant applied for an order to sell Defendant’s home. The Stanislaus County Superior Court denied the application on the basis of Code of Civil Procedure section 699.730, a recently added statute that prohibits the forced sale of a judgment debtor’s principal place of residence to satisfy a “consumer debt” except under certain circumstances.   The Fifth Appellate affirmed. The court rejected Davis Boat’s assertions on appeal and held that the definition of “consumer debt” in section 669.730 is not latently ambiguous, and that section 669.730 neither violates the contract nor the equal protection clauses of the federal and state Constitutions. The court explained that section 699.730, subdivision (a) defines “consumer debt” as “debt incurred by an individual primarily for personal, family, or household purposes.” Thus, a debt incurred for business or commercial reasons would not be a debt incurred for “personal, family, or household purposes.” The court wrote that notwithstanding the plain meaning of the statute, Davis Boat suggests “consumer debt” is latently ambiguous. The court reasoned that it does not believe that the purpose of Assembly Bill No. 2463 is frustrated simply because the language approved by the Legislature means debt incurred by an individual primarily for personal, family, or household purposes.” Moreover, the court wrote that it cannot deem a statutory exemption that allows financial institutions to force the sale of a judgment debtor’s principal place of residence to satisfy a high-priced debt “so devoid of even minimal rationality that it is unconstitutional as a matter of equal protection. View "Davis Boat Manufacturing-Nordic, Inc. v. Smith" on Justia Law

Between 2015 and 2019, BitterSweet Ranch and its managers (“BitterSweet”) leased three parcels of farmland from Frank Sullivan and two of his business entities, The Green Desert, LLC, and The Sullivan Limited Partnership (collectively, “Sullivan”). The parties signed three identical five-year leases (“the Leases”) involving three separate parcels of real property, each owned by one of the three Sullivan parties. The Leases specified that Sullivan was to be responsible for payment of the property taxes, but that those parties were to be reimbursed by BitterSweet, and that BitterSweet was to be responsible for bi-annual rent payments, utilities, and water assessments. For a variety of reasons, the parties purportedly orally agreed to modify the Leases to offset amounts owed to each other throughout the terms of the Leases. Shortly before the Leases were set to expire at the end of their five-year terms, Sullivan claimed that BitterSweet was in breach of the Leases for its alleged failure to make timely rent payments, to pay all property taxes, and to pay the water assessments pursuant to the terms of the Leases. Sullivan then filed three lawsuits (one for each of the Leases and in the names of each of the three parties) in district court. The district court ordered the cases consolidated and then granted summary judgment in favor of BitterSweet, concluding that a genuine issue of material fact had not been created as to whether BitterSweet had breached the Leases. Sullivan appealed the adverse order. Finding no reversible error, the Idaho Supreme Court affirmed. View "Sullivan v. BitterSweet Ranch, LLC" on Justia Law