Justia Contracts Opinion Summaries

Amira Manderson-Saleh was the daughter of an oncology nurse (Mother) who worked at the University of California at San Diego (UCSD) for about 12 years until she retired shortly before her death. Mother earned a pension under rules permitting the employee to designate a beneficiary to receive specified monthly pension benefits upon the employee’s death. When Manderson-Saleh claimed her rights as the designated beneficiary shortly after Mother’s death, The Regents of the University of California (Regents) denied her claim, finding Mother did not properly identify Manderson-Saleh as the contingent beneficiary before her death. Thus, none of the earned pension benefits were paid. Manderson-Saleh filed a complaint against the Regents, alleging breach of contract. Alternatively, she sought a writ of mandate to overturn the Regents’ decision. The Regents demurred only to the contract claim, and the court sustained the demurrer without leave to amend. Proceedings on the mandate petition, the court found Manderson-Saleh was not entitled to relief because the Regents had the right to strictly apply its rule that contingent-annuitant pension benefits were conditioned on the Regents receiving a signed beneficiary-election form before the employee’s death, and the Regents received this form one week after Mother’s death. The court rejected Manderson-Saleh’s different interpretation of the rule and her arguments this rule was satisfied by the Regents receiving Mother’s election worksheet before her death. The court entered a final judgment sustaining the demurrer and denying the mandate petition. Manderson-Saleh challenged both rulings. Finding the trial court properly sustained the demurrer, the Court of Appeal affirmed in part. However, the trial court erred in denying the mandate petition. "The undisputed evidence establishes Mother substantially complied with the Regents’ pension rules and the Regents abused its discretion in failing to consider and apply the substantial compliance doctrine in evaluating Manderson-Saleh’s claim." The matter was remanded with directions for the trial court to grant mandamus relief, and to issue a a writ ordering the Regents to grant Manderson-Saleh's contingent-annuitant pension claim. View "Manderson-Saleh v. Regents of the University of California" on Justia Law

At issue in this appeal was whether the arbitration provision in the retainer agreement plaintiff Brian Delaney signed when he engaged the representation of Sills Cummis & Gross P.C. was enforceable in light of the fiduciary responsibility that lawyers owe their clients and the professional obligations imposed on attorneys by the Rules of Professional Conduct (RPCs). In 2015, Delaney, a sophisticated businessman, retained Sills to represent him in a lawsuit. He met with a Sills attorney who presented him with a four-page retainer agreement. It was understood that Trent Dickey was slated to be the attorney primarily responsible for representing Delaney reviewed and signed the retainer agreement in the presence of the Sills attorney without asking any questions. After the representation was terminated, a fee dispute arose and, in August 2016, Sills invoked the JAMS arbitration provision in the retainer agreement. While the arbitration was ongoing, Delaney filed a legal malpractice action against Dickey and the Sills firm. The complaint alleged that Dickey and Sills negligently represented him. The complaint also alleged that the mandatory arbitration provision in the retainer agreement violated the Rules of Professional Conduct and wrongly deprived him of his constitutional right to have a jury decide his legal malpractice action. The trial court held that the retainer agreement’s arbitration provision was valid and enforceable. Additionally, the court determined that Delaney waived his right to trial by jury by agreeing to the unambiguously stated arbitration provision. The Appellate Division disagreed, stressing that Sills should have provided the thirty-three pages of JAMS arbitration rules incorporated into the agreement, that Sills did not explain the costs associated with arbitration, and that the retainer included a fee-shifting provision not permissible under New Jersey law. The New Jersey Supreme Court held that, for an arbitration provision in a retainer agreement to be enforceable, an attorney must generally explain to a client the benefits and disadvantages of arbitrating a prospective dispute between the attorney and client. "Delaney must be allowed to proceed with his malpractice action in the Law Division. We affirm and modify the judgment of the Appellate Division and remand to the Law Division" for further proceedings. View "Delaney v. Dickey" on Justia Law

In 2014, appellant-cross-appellee LCT Capital, LLC (“LCT”) helped appellee- cross-appellants NGL Energy Partners, LP and NGL Energy Holdings LLC (collectively, “NGL”) acquire TransMontaigne, a refined petroleum products distributor. LCT played a valuable role in the transaction: bringing the sale to NGL’s attention, helping NGL to understand opaque but profitable aspects of TransMontaigne’s business, and enabling NGL to submit its winning bid outside of an auction process. The transaction generated $500 million in value for NGL, more than double the $200 million price that NGL paid to acquire TransMontaigne. LCT’s CEO Mike Krimbill represented on several occasions that LCT would receive an unusually large investment banking fee, but the parties failed to reach an agreement on all of the material terms. After negotiations broke down completely, LCT filed suit seeking compensation for its work under several theories, including quantum meruit and common law fraud. The jury verdict sheet had two separate lines for damages awards: one for the quantum meruit claim and another for the fraud claim. The jury found NGL liable for both counts, awarded LCT an amount of quantum meruit damages equal to a standard investment banking fee, and awarded LCT a much larger amount of fraud damages approximately equal to the unusually large fee that Krimbill proposed. The Superior Court set aside the jury's awards and ordered a new trial on damages. The court set aside the fraud award on the basis that the jury impermissibly awarded LCT benefit-of-the-bargain damages in the absence of an enforceable contract. The court set aside the quantum meruit award on the basis that providing the jury with multiple damages lines for a unitary theory of damages was confusing and may have caused the jury to spread a single award between the quantum meruit and fraud claims. Both sides appealed. The Delaware Supreme Court found LCT was not entitled to benefit-of-the-bargain damages, and that the Superior Court did not abuse its discretion by ordering a new trial on quantum meruit damages. Nonetheless, the Supreme Court also held the Superior Court abused its discretion by ordering a new trial on fraud damages because LCT did not assert any independent damages to support its fraud claim. Accordingly, the Court affirmed in part and reversed in part the Superior Court’s judgment. View "LCT Capital, LLC v. NGL Energy Partners LP" on Justia Law

Kathleen Melaas appealed a district court order granting a motion to compel arbitration and dismissing her complaint against Diamond Resorts U.S. Collection Development, LLC. She alleged Diamond Resorts offered vacation and timeshare packages, she attended a sales meeting with a Diamond Resorts representative, the sales meeting lasted approximately five hours, and she asked to leave the meeting on at least one occasion and Diamond Resorts refused to allow her to leave. She claimed Diamond Resorts knew she was a diabetic and experienced fatigue and confusion, Diamond Resorts knew she was a vulnerable adult subject to a durable power of attorney for financial management, and Diamond Resorts would not allow her to leave the sales meeting until she signed the timeshare agreement. Melaas asserted she lacked the capacity to enter into the agreement, Diamond Resorts used high-pressure and abusive sales tactics and knowledge of her medical condition to unduly influence and coerce her into signing the agreement, and any consent was obtained by duress and menace. After a hearing, the district court granted Diamond Resorts’ motion to compel arbitration and dismissed Melaas’ complaint. The North Dakota Supreme Court found that the forum selection clause in section 17 of the contract was not part of the arbitration agreement. The forum selection clause stated, “This Agreement is governed by Nevada law without regard to Nevada’s choice of law rules. You must bring any legal action in Clark County, Nevada.” When the term “Agreement” was used in the contract, the Court found it referred to the entire contract and not the arbitration agreement. To the extent Diamond Resorts argued the action should have been brought in Nevada, it was a venue issue and not a jurisdictional issue, and the right could be waived. The issue of improper venue was waived if it was omitted from a motion to dismiss or if it was not made by motion or included in the responsive pleading. On remand, if any of the parties argue the case must be dismissed under the forum selection clause, the district court must first determine whether a contract exists. If the court determines a contract exists, it could then consider the forum selection clause issue, including whether the issue was waived. The order compelling arbitration and dismissing Melaas' complaint was reversed, and the matter remanded for further proceedings. View "Melaas v. Diamond Resorts U.S. Collection Development" on Justia Law

Defendant was a successful franchise operator of several tax preparation businesses under the umbrella of JTH Tax, Inc. and SiempreTax+ LLC (together, "Liberty Tax"). In this case, Liberty Tax requested that defendant assign it the leases for the franchise properties, as provided for by the Purchase and Sale Agreement (PSA). However, the parties could not agree to terms for the assignment. Liberty Tax subsequently filed suit and defendant countersued. Defendant largely prevailed and was awarded a significant sum of damages. The Fourth Circuit vacated a substantial portion of the damages award but upheld the judgment in defendant's favor. On remand, the district court recalculated damages based on the Fourth Circuit's instructions and then, on defendant's motion, subsequently amended the judgment, increasing the damages based on purportedly new evidence. Both parties appealed again.The Fourth Circuit found no error in the district court's denial of defendant's arguments for reinstatement of much of the original damages. The court explained that the district court did not err in concluding that the Rule 59(e) standard and the mandate rule precluded defendant's disgorgement theory. However, the court found error in the district court's conclusion that defendant met the standard for relief based on newly discovered evidence and in the award of nominal damages. The court concluded that, in the declaration and now on appeal, defendant does not show he exercised reasonable due diligence during the three years of litigation to discover and present evidence of unpaid rent on the Burnside property. Furthermore, nominal damages were unavailable because defendant was awarded compensatory damages to remedy Liberty Tax's breach of contract, regardless of the finding that Liberty Tax also breached the contract by breaching the implied covenant. Accordingly, the court affirmed in part, reversed and vacated in part, and remanded with instructions to recalculae damages. View "JTH Tax, Inc. v. Aime" on Justia Law

SE Property Holdings, LLC ("SEPH"), the successor by merger to Vision Bank, and FNB Bank ("FNB") separately appealed a circuit court's judgments on their breach-of-contract claims against Bama Bayou, LLC, formerly known as Riverwalk, LLC ("Bama Bayou"), and Marine Park, LLC ("Marine Park"), and the individuals and entities guaranteeing Bama Bayou's and Marine Park's contract obligations, challenging the trial court's damages awards. Bama Bayou and Marine Park were the developers of a planned mixed-use development in Orange Beach consisting of a marine park, residential condominiums, retail shops, hotels, and commercial entertainment venues. Marine Park specifically intended to develop a special-use facility for the exhibition of marine animals. Vision Bank made four loans to Bama Bayou and Marine Park related to the development project. The Marine Park loan was fully funded by FNB pursuant to a participation agreement with Vision Bank. The participation agreement provided that the Marine Park parcel would be owned by FNB in the event it was acquired by foreclosure. Bama Bayou and Marine Park were having financial problems with regard to the project by August 2007. Vision Bank demanded payment at that time, and Bama Bayou, Marine Park, and the guarantors failed and/or refused to pay the indebtedness owed on the loans. In 2009, Vision Bank conducted a public auction to separately foreclose the mortgages. No bids were submitted; Vision Bank purchased the properties. Neither Bama Bayou, nor Marine Park, nor the guarantors exercised their rights to redeem the properties. Vision Bank sued Bama Bayou and its guarantors, and Marine Park and its guarantors for amounts owed under those loans, including all principal, accrued interest, late charges, attorney's fees and collection costs. After review, the Alabama Supreme Court reversed the trial court's judgments in these consolidated cases and remanded for a determination of the appropriate awards on the breach-of-contract claims. "Such awards should account for all accrued interest, late charges, attorney's fees, collection costs, and property- preservation expenses owed." View "FNB Bank v. Marine Park, LLC, et al." on Justia Law

Wayne Farms LLC appealed a circuit court order compelling it to arbitrate its claims asserted against Primus Builders, Inc., and staying the action. Wayne Farms was a poultry producer located in Dothan, Alabama. Wayne Farms sought to expand its poultry-processing facility, and, to that end, entered into a "Design/Build Agreement" with Primus in 2017, that specifically addressed work to be completed by Primus in connection with the expansion of Wayne Farms' freezer warehouse. Primus subcontracted with Republic Refrigeration, Inc.; Republic hired Steam-Co, LLC for "passivation services." Upon draining a condenser for the freezer warehouse, it was discovered that the interior of the condenser was coated with corrosive "white rust." Primus then replaced the damaged condenser at a cost of approximately $500,000 under a change order, pursuant the Design/Build Agreement with Wayne Farms. Wayne Farms paid Primus for both the original damaged condenser and the replacement condenser. Both Primus and Steam-Co have claimed that the other is responsible for the damage to the condenser. Wayne Farms sued Primus and Steam-Co asserting claims of breach of contract and negligence and seeking damages for the damaged condenser and the cost of replacing it. Primus moved the trial court to compel arbitration as to the claims asserted against it by Wayne Farms. Primus also moved the trial court to dismiss, or in the alternative, stay Steam-Co's cross-claims against it. Wayne Farms opposed Primus's motion to compel arbitration, arguing that no contract existed between the parties requiring it to arbitrate claims arising from the passivation process. The Alabama Supreme Court found that the contract between Wayne Farms and Primus specified arbitration would apply to only those disputes arising from obligations or performance under the Design/Build Agreement, Wayne Farms could not be compelled to arbitrate with Primus a dispute arising from the performance of passivation work that was not an obligation agreed to in the Design/Build Agreement. Judgment was reversed and the matter remanded for further proceedings. View "Wayne Farms LLC v. Primus Builders, Inc." on Justia Law

In a matter of first impression, the Pennsylvania Supreme Court granted review in this case to consider whether Section 310.74(a) of the Insurance Department Act of 1921 prohibited a licensed insurance producer from charging fees in addition to commissions in non-commercial, i.e. personal, insurance transactions. During its investigation, the Department discovered that, between March 2011 and October 2015, appellants charged a non-refundable $60- $70 fee to customers seeking to purchase personal insurance products. These fees were collected from the customers before appellants prepared the insurance policy applications. One consumer complaint indicated appellants kept an “un- refundable broker application fee” when the consumer declined to buy a policy. The Department’s investigation also revealed appellants paid a “one-time” $50 referral fee to car dealership sales personnel when they referred their customers in need of insurance. The Department concluded appellants’ fee practices included improper fees charged to consumers “for the completion of an application for a contract of insurance” and prohibited referral payments to the car dealerships. The Supreme Court held lower tribunals did not err when they determined Section 310.74(a) of the Act did not authorize appellants to charge the $60-$70 non-refundable fee to their customers seeking to purchase personal motor vehicle insurance. The Commonwealth Court’s decision upholding the Commissioner’s Adjudication and Order was affirmed. View "Woodford v. PA Insurance Dept." on Justia Law

Originally, Western Pacific Timber, LLC (WPT) was solely owned by Timothy Blixseth (Blixseth). Andrew Hawes contended Blixseth hired him to be general counsel for WPT in 2005, and that when he was hired, Blixseth agreed on behalf of WPT to provide him with a severance package based on the length of his employment. After 2012, Blixseth no longer retained any ownership interest or management responsibility in WPT. When WPT terminated Hawes’ employment in 2017, Hawes asserted that he had a severance agreement in place that had been negotiated with Blixseth on behalf of WPT, by which he would receive $100,000 for each year of employment, capped at five years, for a total of $500,000. However, Hawes could not produce a signed copy of any agreement. WPT refused to pay the claimed severance pay, and instead offered a significantly smaller severance package. Hawes rejected WPT’s offer. Hawes then sued WPT for breach of contract. The case proceeded to trial on Hawes’ claim of an oral contract. Ultimately, the jury returned a special verdict finding that WPT was liable to Hawes for $500,000 in severance pay, an award which was later trebled by the district court. The district court also awarded Hawes the full amount of his requested attorney fees which constituted 35% of Hawes’ gross recovery. WPT unsuccessfully moved for a new trial. Finding no reversible error, the Idaho Supreme Court affirmed the district court. View "Hawes v. Western Pacific Timber LLC" on Justia Law

Discover Bank (Discover) appealed a district court order denying its motion for judgment and dismissing the case. Discover sued Bryan Hornbacher, alleging he was indebted to it on a credit card debt for $14,695.13. The parties entered into a stipulation and consent. The stipulation provided an acknowledgment by Hornbacher that he had been served with the summons and complaint and an admission that he had no defenses to the allegations in the complaint. Hornbacher consented to entry of judgment in the amount of $14,695.13 in exchange for Discover’s agreement to accept $10,080.00 payable over three years as full satisfaction of the judgment, and to forego execution on the judgment unless there were a default in the agreed-upon payment schedule. In its order, the trial court found that “[p]laintiff files a stipulation stating it will not move for judgment unless the terms of the agreement are [breached].” The North Dakota Supreme Court found this was an error, as was the trial court's focus on the lack of default under the stipulation having occurred: "Discover was not moving to execute the judgment, but rather was, by affidavit, moving for judgment to be entered against Hornbacher pursuant to the stipulation. The court misread the stipulation and misapplied the law." Because the plain language of the stipulation provided for judgment against Hornbacher to be entered, the Supreme Court reversed and remanded for entry of judgment. View "Discover Bank v. Hornbacher" on Justia Law