Justia Contracts Opinion Summaries

Willis Swenson appealed, and Kyle Mahlum cross-appealed dismissal of Swenson’s claims against Mahlum and Mahlum’s claims against Carol Hodgerson, Gerard Swenson, Lee Alan Swenson, and Mary Ann Vig (“third-party defendants”). This suit arose over the ownership and leasing of real property in Burke County, North Dakota. Willis Swenson (“Swenson”) and the third-party defendants are the children of Robert and Junietta Swenson. In 2004, Robert and Junietta conveyed the property to their children as joint tenants, reserving a life estate for themselves. In 2005, Robert died and Junietta became the sole life tenant. In 2008, Junietta leased the property to Swenson. Swenson agreed to rental payments of $20,016 per year, due in installments. In December 2009, Swenson leased the property to Mahlum for $31,022.50 per year. The Swenson-Mahlum lease became effective in March 2010 and stated it would expire in October 2019. In November 2011, Swenson signed a new lease with Junietta, beginning in 2012 and ending in 2022. The lease permitted Swenson to assign or sublet the property to any person. In July 2012, Lee Swenson was appointed guardian and conservator for Junietta. In January 2013, Lee Swenson, as guardian and conservator, leased the same property to Mahlum that Willis Swenson already was leasing to Mahlum in the December 2009 lease. The new lease required Mahlum to pay Junietta $31,122.50 each year. Junietta died in November 2013. Mary Vig, as personal representative of Junietta’s estate, informed Mahlum that future rental payments should be split and made to each of Junietta’s children in equal amounts. In January 2017, Willis and his daughter, Dayna Johnson, sued Mahlum for unpaid rent. Swenson alleged Mahlum was required to pay him under the 2009 lease, and Mahlum failed to pay any rent in 2013, 2014, 2015, and 2016. Mahlum answered and filed a third-party complaint, suing the third-party defendants for unjust enrichment. He alleged in 2013 he paid Junietta under the terms of the 2013 lease. He also alleged in 2014, 2015, and 2016 he paid rent to each of Junietta children. Mahlum claimed that the third-party defendants have been unjustly enriched, and that the third-party defendants be ordered to pay Mahlum any amounts the court finds he owed Swenson if Swenson obtained a judgment against him. After review of the circumstances of this case, the North Dakota Supreme Court determined the trial court erred in its findings, and reversed dismissal of Swenson’s breach of contract claim. On remand, the court must decide the amount of damages Swenson was entitled to recover for his breach of contract claim against Mahlum for unpaid rent in 2013, including whether Swenson failed to mitigate those damages. In addition, the court must decide Mahlum’s claims against the third-party defendants. View "Swenson, et al. v. Mahlum, et al." on Justia Law

Keith Candee appealed an order entered on remand that denied his motion for contractual attorney fees and costs. Because the North Dakota Supreme Court found the parties’ settlement agreement and mutual release of claims was not “evidence of debt” under N.D.C.C. 28-26-04, the district court misapplied the law in holding the parties’ contractual provision providing for attorney fees was against public policy and void. The court abused its discretion in its decision denying his motion for attorney fees, and the Supreme Court reversed and remanded for further proceedings. View "Candee, et al. v. Candee" on Justia Law

Debra Heitkamp, the personal representative of the Estate of Nick Lyons, appealed a district court judgment in favor of Kevin Kabella following cross-motions for summary judgment, alleging the district court improperly determined the parties’ agreement was invalid because it fell within the limitation on the length of agricultural leases provided by N.D.C.C. 47-16-02. Kabella and Lyons entered into an agreement pertaining to farmland on March 29, 2007. The agreement gave Lyons possession and use of the property “in perpetuity.” In addition to receiving the property in perpetuity, the agreement stated Kabella could sell the property subject to Lyons’ right to purchase the property. Prior to the 2012 farming season, Kabella attempted to lease the property to Kermit Anderson Jr. Lyons refused to vacate the property asserting he was entitled to the use and possession of the property pursuant to his agreement with Kabella. Anderson brought an eviction action to remove Lyons from the property. Kabella was included as a defendant to allow a resolution of any issues regarding the agreement between Kabella and Lyons. In the litigation initiated by Anderson, Anderson and Kabella asserted the March 29, 2007 agreement between Kabella and Lyons was invalid under N.D.C.C. 47-16-02. Lyons passed away in May 2013, and Heitkamp was appointed personal representative of the estate. The estate used the property since that time. In March 2017, Heitkamp on behalf of Lyons' estate. sued for a declaration the agreement was valid in perpetuity. The district court granted summary judgment to Kabella and found the agreement was a lease that fell within the restrictions of N.D.C.C. 47-16-02, and due to the non-occurrence of any of the contingencies contained in the agreement, it expired on its tenth anniversary, March 29, 2017. The court awarded Kabella damages equal to the fair value of the use of the property subsequent to March 29, 2017. The North Dakota Supreme Court concluded "reasonable persons can draw more than one conclusion regarding the nature of the parties’ agreement," and therefore reversed judgment and remanded for a determination of whether this agreement was a lease subject to the limitations of N.D.C.C. 47-16-02, or a grant, option to purchase, or contract for deed outside the limitations of N.D.C.C. 47-16-02. Because the question of whether the limitation within N.D.C.C. 47-16-02 applied to the parties’ agreement remained undetermined, the Supreme Court declined to decide if the agreement was invalid after extending for a period of ten years. View "Heitkamp v. Kabella" on Justia Law

Darilyn Baker, individually and on behalf of a class of more than 500 persons similarly situated, appealed dismissal of her class action against Autos, Inc. d/b/a Global Autos, Robert Opperude, James Hendershot, RW Enterprises, Inc., and Randy Westby, for claimed violations of the North Dakota Retail Installment Sales Act, N.D.C.C. ch. 51-13, and state usury laws. Baker also appealed an order denying her motion to amend the judgment. Baker argued the retail sellers failed to make required disclosures of certain finance charges and late fees in retail installment contracts and they lost their regulated lender status and were subject to state usury laws. After review, the North Dakota Supreme Court concluded the retail installment contracts failed to disclose loan fees as finance charges, and therefore reversed and remanded for further proceedings. View "Baker v. Autos, Inc., et al." on Justia Law

The Supreme Court vacated the judgments of the superior court granting summary judgment in favor of the defendant and the third-party defendant (collectively, Defendants) on Plaintiff's complaint alleging negligence for her injuries and the third-party complaint seeking to defend, indemnify, and hold the third-party defendant harmless for claims arising out of the third-party defendant's duty under Defendants' snow services agreement, holding that genuine issues of material fact existed precluding summary judgment.Specifically at issue before the trial justice was whether there were genuine issues of material fact as to the dangerous condition that caused Plaintiff's fall that would preclude summary judgment. The trial justice weighed the evidence before her at least twice during the summary judgment hearing. The Supreme Court vacated the superior court's judgments, holding that the trial justice improperly weighed the evidence before her at the summary judgment hearing. View "Voccola v. Stop & Shop Supermarket Co." on Justia Law

At issue in this case before the Mississippi Supreme Court was a dispute between an automobile manufacturer and one of its dealerships. Specifically, the issue reduced to whether the dealer filed a timely complaint under Mississippi Code section 63-17-73(1)(d)(iii) after the dealer received the manufacturer’s notice it would terminate the applicable dealership agreement. The Court determined the statute was unambiguous, and its plain meaning provided a dealer may file its verified complaint within the sixty day notice period, i.e., the sixty days preceding the effective date of termination. Because the statute was unambiguous and conveyed a clear and definite meaning, the Court did not resort to the rules of statutory construction. The Court found the dealer’s complaint was timely filed within the sixty days immediately preceding the effective date of termination. View "Nissan North America, Inc. v. Great River Nissan, LLC d/b/a Great River Nissan" on Justia Law

The Supreme Court affirmed the judgment of the trial court dismissing Plaintiff's claims against Indiana-resident defendants without prejudice, holding that the trial court erred in basing its dismissal on lack of personal jurisdiction but that dismissal was nevertheless warranted on the record.The parties in this case entered into an independent contractor agreement that contained a forum-selection clause providing that the parties agreed to litigate their disputes in Texas. Plaintiff later brought suit in an Indiana circuit court alleging breach of contract and fraudulent inducement. Defendants moved to dismiss under Trial Rule 12(B)(2). The court court dismissed the complaint without prejudice, concluding that the Indiana trial court lacked personal jurisdiction over the Indiana-resident defendants because the parties agreed to litigate their dispute in Texas. The Supreme Court affirmed but on different grounds, holding (1) the forum-selection clause was mandatory and unambiguous in requiring that suit be brought in Texas; and (2) Plaintiff failed to satisfy its burden of showing that the clause was invalid. View "O'Bryant v. Adams" on Justia Law

Chicago awarded a construction contract to a joint venture formed by Gillen and other entities. The joint venture subcontracted some of the work to Gillen, which subcontracted with others for labor and materials. The joint venture obtained over $30 million in Fidelity performance and payment bonds. Fidelity received an indemnity agreement and a net worth retention agreement, both executed by Gillen. Gillen promised to maintain a net worth greater than $7.5 million. During 2012, several subcontractors sued Gillen in state court and named Fidelity as a co-defendant based on its bond obligations. Fidelity sued Gillen in federal court, alleging: breach of the indemnity agreement; a request for an accounting of contract payments; breach of the net worth retention agreement; quia timet; and a demand for access to books and records. Historically, litigants have used bills quia timet to pursue preemptive relief; on that claim, Fidelity sought $2.5 million from Gillen as bond collateral and an order requiring Gillen to satisfy all bond obligations and prohibiting Gillen from disbursing money without court approval. The parties settled all claims in mediation, except for Fidelity’s quia timet claim, agreeing their settlement would not impact the quia timet claim or Gillen’s defenses. The district court granted Gillen summary judgment on the quia timet claim. The Seventh Circuit affirmed. Fidelity negotiated for specific indemnification and collateralization rights, sued on those rights, and settled its breach of contract claims. It may not augment its contractual rights with the ancient equitable doctrine of quia timet. View "Fidelity and Deposit Co. of Maryland v. Edward E. Gillen Co." on Justia Law

The federal United States District Court for the Middle District of Georgia certified questions of Georgia law to the Georgia Supreme Court regarding the scope of the “acceptance doctrine” in negligent construction tort cases. At issue was whether and how the acceptance doctrine applied as a defense against a claim brought by a subsequent purchaser of allegedly negligently constructed buildings. Thomaston Crossing, LLC (the “original owner”) entered into a construction contract with appellee Piedmont Construction Group, Inc. to build an apartment complex in Macon. Piedmont then retained two subcontractors – appellees Alan Frank Roofing Company and Triad Mechanical Company, Inc. – to construct the roof and the HVAC system, respectively. In 2014, the complex was completed, turned over to, and accepted by the original owner. In 2016, the original owner sold the apartment complex to appellant Thomaston Acquisition, LLC (“Thomaston”) pursuant to an “as is” agreement. Shortly after the sale, Thomaston allegedly discovered evidence that the roof and HVAC system had been negligently constructed. Thomaston filed suit against Piedmont, asserting a claim for negligent construction of the roof and HVAC system and a claim for breach of contract/implied warranty. Piedmont then filed a third-party complaint against Alan Frank Roofing and Triad Mechanical because both companies had allegedly agreed to indemnify Piedmont for loses arising out of their work. Each of the appellees later moved for summary judgment based in part on the defense that Thomaston’s negligent construction claim is barred by the acceptance doctrine. The Georgia Supreme Court concluded the acceptance doctrine applied to Thomaston’s claim, and that “readily observable upon reasonable inspection” referred to the original owner’s inspection. “Without any real claim of privity, Thomaston nevertheless contends that it should be treated like the original owner because it is the current owner-occupier of the property. But doing so would undermine the acceptance doctrine’s foundational purpose of shielding contractors from liability for injuries occurring after the owner has accepted the completed work, thereby assuming responsibility for future injuries. There is no ‘current owner-occupier’ or ‘subsequent purchaser’ exception to the acceptance doctrine, and the facts of this case do not compel us to recognize one here.” View "Thomaston Acquisition, LLC v. Piedmont Construction Group, Inc." on Justia Law

A group of customers filed suit against SuperValu after hackers accessed customer financial information from hundreds of grocery stores operated by defendant. The Eighth Circuit previously affirmed the dismissal of all but one of the suit's named plaintiffs for lack of standing and, on remand, the district court dismissed the remaining plaintiff for failure to state a claim and denied plaintiffs' motion for leave to amend.The court affirmed, holding that the district court did not abuse its discretion by denying the motion for leave to amend because plaintiffs' postjudgment motion was untimely. The court also held that the remaining plaintiff's allegations fell short of stating a claim for relief under Illinois law for negligence, consumer protection, implied, contract, and unjust enrichment. View "Alleruzzo v. SuperValu, Inc." on Justia Law