Justia Contracts Opinion Summaries

The Supreme Court affirmed in part and reversed in part the judgment of the circuit court in this action, holding that the circuit court properly denied a motion to dismiss based on the doctrine of forum non conveniens but erred in dismissing the case based on forum selection clauses.RMBS Recovery Holdings I, LLC and others (collectively, Funds) filed suit against HSBC Bank USA, National Association (HSBC) asserting that HSBC served as an indenture trustee of three trusts in which the Funds had invested and that the trusts were filled with defective mortgage loans. Based on HSBC's failure to act to have sponsors of the trusts repurchase the deficient loans or to file suit against the sponsors, the Funds claimed breach of contract, breach of fiduciary duty, and other causes of action. The circuit court denied HSBC's motion to dismiss for forum non conveniens but granted HSBC's motion to dismiss based upon forum selection clauses in confidentiality and indemnification agreements between the parties. The Supreme Court reversed in part, holding that HSBC's delay in asserting the forum selection clauses, while actively continuing litigation, resulted in a waiver of the right to rely upon that contractual provision. View "RMBS Recovery Holdings I, LLC v. HSBC Bank USA, N.A." on Justia Law

On October 30, 2013, Consuelo Prieto Mariscal was driving her minivan in Pasco, Washington, with her daughter. There were vehicles, including an orange, pickup truck and a van, on the right side of the road. As Prieto passed the orange pickup truck, she heard a noise, felt her van jump a little, and saw a boy, Brayan, lying on the ground. Realizing Brayan was seriously hurt, her daughter called 911. Brayan was taken to a nearby hospital. Prieto and her daughter both told the police they did not see how the accident happened. There were no other eyewitnesses, and though the officer only spoke to Prieto and her daughter, he noted in his report the "bicyclist pulled into the roadway [and] was stuck on the left side and fell to the ground. The passenger side front tire drove over the child['s] right front leg." Brayan gave a number of statements, the most detailed of which related his right shoelace got stuck in the spokes of his bicycle and his right leg was run over when he leaned over to untangle the lace. Monica Diaz Barriga Figueroa, Brayan's mother, retained counsel, and signed a blank personal injury protection (PIP) application form. The English-speaking legal assistant completed the form for the Spanish-speaking Diaz, pulling language of the accident from the police report. The significant difference between the PIP form and Brayan's testimony became a central issue at trial. Prieto's counsel stressed the differences between Diaz's and Brayan's testimony and the PIP form; Diaz's counsel stress the PIP form was based on accounts from people who did not see the accident. At trial, and over Diaz's counsel's objection, Prieto's counsel referenced the PIP form as a statement against interest. Diaz's counsel moved to exclude the PIP form as privileged. The issue before the Washington Supreme Court was whether the form could be considered work product entitled to protection from disclosure. The Court determined that in this instance, where the insured gained the status of insured by statute, rather than contract, the form at issue was privileged. The Court affirmed the Court of Appeals and remanded this matter back to the trial court for a new trial. View "Figueroa v. Mariscal" on Justia Law

Plaintiffs David and Lisa McDaniel petitioned the Alabama Supreme Court for a writ of mandamus to direct the Shelby Circuit Court to vacate its order staying the proceedings against defendants Southern Craftsman Custom Homes, Inc. ("SCCH"); Jeffrey Rusert; Larry Curry, Sr.; SouthFirst Bancshares, Inc., d/b/a SouthFirst Bank ("SouthFirst"); Mari Gunnels; and Danny Keeney. At the time of this opinion, Rusert was awaiting the outcome of a federal criminal investigation against him. In 2017, the McDaniels contacted Rusert for the purpose of entering into an agreement with SCCH to build a house. According to the McDaniels, Rusert represented himself as the president of SCCH. At some point, Rusert recommended that the McDaniels speak with Gunnels, who worked for SouthFirst, to secure a loan to pay for the construction of the new house. In November 2017, with Gunnels's assistance, the McDaniels began the process of applying for a construction loan with SouthFirst. The loan closing occurred on January 26, 2018. The McDaniels executed, among other agreements, a written construction-loan agreement, a promissory note, and a construction-loan disbursement agreement. The McDaniels met with Rusert to discuss some concerns they had with the ongoing construction. During that meeting, Rusert provided the McDaniels with a credit application from a local building-supply company and asked them to execute it so that, he said, he could use the McDaniels' credit to purchase building materials and supplies. The McDaniels learned that the company refused to do business with SCCH, Rusert, and Curry because all three had purportedly failed to pay significant amounts owed the company. The McDaniels immediately contacted Gunnels and placed a "stop-payment" order on the most recent draw request from SCCH and Rusert. Thereafter, the McDaniels sued SCCH, Rusert, Curry, SouthFirst, Gunnels, and Keeney. In their complaint, the McDaniels sought damages for negligence, suppression, fraudulent misrepresentation, civil conspiracy, conversion, and the infliction of emotional distress. The McDaniels further alleged breach-of-contract claims against SouthFirst, SCCH, Rusert, and Curry, as well as a claim of breach of fiduciary duties against SouthFirst. Finally, the McDaniels sought a judgment against SouthFirst, Gunnels, and Keeney declaring the loan agreement and mortgage void. Rusert and SCCH moved to stay the civil proceedings against them pending the outcome of a federal criminal investigation against Rusert, which the trial court granted. The Alabama Supreme Court determined, however, the McDaniels established a clear legal right to relief from the trial court's order. Accordingly, the Supreme Court granted the petition for a writ of mandamus and directed the trial court to vacate its order staying the underlying case. View "Ex parte David and Lisa McDaniel." on Justia Law

Jessie and Rickey Castleberry appealed a circuit court order dismissing their claims against Angie's List, Inc., based on a forum-selection clause in a contract between Angie's List and the Castleberrys. The Castleberrys, who are father and son, became members of Angie's List in 2014. They claim that they used their membership with Angie's List to locate a contractor, Dream Baths of Alabama, LLC ("Dream Baths"), which the Castleberrys hired to renovate a bathroom in Jessie Castleberry's house to make it handicapped accessible. According to the Castleberrys, Dream Baths was not properly licensed and poorly performed the work it contracted to do. The Alabama Supreme Court found the Castleberrys simply pointed out in the argument section of their brief that, in addition to suing Angie's List, they also sued Dream Baths. They asserted that "[t]his action pertains not only to the agreement between the Castleberrys and Angie's List, but to improper work performed upon a home located in Montgomery County, Alabama by defendant Dream Baths." The Castleberrys provided no significant discussion of the specific claims against Dream Baths and Angie's List. To the Supreme Court, it appealred that the Castleberrys' claims against Angie's List and Dream Baths were based on different categories of wrongdoing that were only tangentially related. The trial court, therefore, did not err in enforcing the forum-selection clause simply because the Castleberrys also sued Dream Baths. View "Castleberry v. Angie's List, Inc." on Justia Law

David Kosmann appealed a district court judgment relating to a dispute that arose from the sale of real property. He claimed the district court erred in enforcing an oral settlement agreement reached in mediation between Kosmann, Kevin Dinius, and Dinius & Associates, PLLC (collectively “Dinius”). Kosmann also argued the trial court erred in: (1) awarding attorney fees to Dinius as a sanction against Kosmann and his attorney; (2) declining to impose sanctions against Dinius and his attorney; and (3) striking an untimely memorandum and declaration in support of his motion to reconsider. After review of the trial court record, the Idaho Supreme Court affirmed in part and reversed in part. The Supreme Court determined the district court did not err in enforcing the settlement agreement; the court also did not err in declining to impose sanctions against Dinius on ethics violations. However, the Supreme Court determined the district court abused its discretion in imposing I.R.C.P. 11 sanctions against Kossman and his counsel: the district court did not act consistently with the applicable legal standard for imposing sanctions pursuant to I.R.C.P. 11(b). The Supreme Court declined to address all other issues Kossman raised, and determined he was not entitled to attorney fees on appeal. "The record in this case is so tarnished with questionable conduct that it has presented this Court with a vexing ethical and legal dilemma. While we are gravely concerned over the potential ethical lapses which allegedly occurred during the mediation of this matter, there are no findings in the record concerning these matters. Therefore, as the trial court determined, we will leave to the Idaho State Bar, if properly called upon, the responsibility to investigate this matter further and make the necessary findings and conclusions as to the ethical issues presented." View "Kosmann v. Dinius" on Justia Law

Putnam County Memorial Hospital ("Putnam") appealed a circuit court denial of its motion to set aside a default judgment entered in favor of TruBridge, LLC ("TruBridge"), and Evident, LLC ("Evident"). In September 2015, Putnam entered into a "Master Services Agreement" with TruBridge ("the MSA agreement") and a license and support agreement with Evident ("the LSA agreement"). In the MSA agreement, TruBridge agreed to provide accounts-receivable management services for Putnam for five years. The MSA agreement provided that TruBridge would receive 5.65 percent of the "cash collections," as that term is defined in the MSA agreement, to be paid monthly, for its account and billing services. In the LSA agreement, Evident agreed to provide Putnam with Evident's electronic health-records system as well as maintenance and support for that system. According to Putnam, starting in 2016, Putnam entered into a series of agreements with Hospital Partners, Inc. ("HPI"), in which HPI agreed to manage and control the operations of the hospital and its facilities. TruBridge and Evident alleged that at that time, Putnam began entering patient information and billing services through a different computer system than the one provided by Evident pursuant to the LSA agreement and used by TruBridge for accounts receivable pursuant to the MSA agreement. When a TruBridge manager contacted Putnam to inquire about this drop in new-patient admissions into their system, Putnam claimed to have almost no new patients and that it was barely surviving. TruBridge and Evident alleged Putnam was deliberately false and that Putnam was, in fact, simply entering new patients into a different system. Putnam did not enter an appearance in the lawsuit brought by TruBridge and Evident for breach of contract. The circuit court entered a default judgment. Putnam's motion to set aside the judgment was denied. The Alabama Supreme Court concluded Putnam met its evidentiary threshold to trigger the statutory requirement the circuit court reconsider its motion to set aside and for reconsideration relating to the default judgment. Therefore, the Court reversed the circuit court and remanded for further proceedings. View "Putnam County Memorial Hospital v. TruBridge, LLC, and Evident, LLC" on Justia Law

This case concerned a disagreement over a claim for flood damage submitted by Plaintiff-Respondent Creekstone/Juban I, LLC (“Creekstone”), a Delaware limited liability company, under a commercial property and casualty insurance policy issued by Defendant-Appellant XL Insurance America, Inc. (“XL Insurance”), a Delaware corporation. The Policy was issued to named insured MRMG Commercial and delivered to MRMG Commercial in Lufkin, Texas. According to the parties, though not evident from the record, Creekstone was one of 20 unrelated additional insureds who obtained coverage under the Policy, which covered over 100 properties in more than 20 states. The Louisiana Supreme Court granted certiorari review to resolve the question of whether La. R.S. 22:868(A)(2) prohibited the enforcement of the forum selection clause in dispute. The Court determined the statute did not prohibit enforcement of the forum selection clause to which these parties contractually agreed. Accordingly, the Supreme Court reversed the ruling of the trial court and remanded the matter to the trial court for further proceedings. View "Creekstone Juban I, LLC v. XL Insurance America, Inc." on Justia Law

The Louisiana Supreme Court accepted a certified question of Louisiana law presented by the U.S. District Court of Appeals for the Fifth Circuit. This case involves a dispute between two creditors, each of which attached the same pig iron owned by the common debtor, America Metals Trading L.L.P. (“AMT”). Daewoo International Corp. (“Daewoo”), a South Korean trading company, entered into a series of contracts with AMT in May 2012 for the purchase of pig iron, to be delivered in New Orleans. The sale contracts contained arbitration clauses. Although Daewoo made payments under the contracts, AMT never shipped the pig iron. Daewoo sued AMT in the United States District Court for the Eastern District of Louisiana seeking an order compelling AMT to arbitrate the dispute pursuant to the terms of the contract and also seeking a writ of attachment of AMT’s pig iron on board the M/V Clipper Kasashio under the Louisiana non-resident attachment statute, Louisiana Code of Civil Procedure article 3542. The writ was granted and served by the U.S. Marshals Service on December 22, 2012. Noting that La. C.C.P. art. 3542, Louisiana’s non-resident attachment statute, allows a party to obtain a writ of attachment in "any action for a money judgment, whether against a resident or a nonresident, regardless of the nature, character, or origin of the claim, whether it is for a certain or uncertain amount, and whether it is liquidated or unliquidated," the federal court stated the issue as "whether Daewoo’s suit to compel arbitration and obtain provisional relief is an 'action for a money judgment' to which Louisiana’s non-resident attachment statute applies." The Louisiana Supreme Court responded: "Louisiana Code of Civil Procedure article 3542 allows for attachment in aid of arbitration if the origin of the underlying arbitration claim is one pursuing money damages and the arbitral party has satisfied the statutory requirements necessary to obtain a writ of attachment." View "Stemcor USA Inc. v. CIA Siderurgica Do Para Cosipar" on Justia Law

This appeal grew out of Brent Sloan’s participation in two transactions: (1) a merger between Advanced Recovery Systems, LLC and Kinum, Inc.; and (2) the sale of software from Kinum to Sajax Software, LLC. American Agencies, LLC alleged harm from these transactions and sued Sloan for damages and restitution. After the close of evidence, Sloan filed a motion for judgment as a matter of law. Following the denial of this motion, a jury found Sloan liable on American Agencies’ claims of tortious interference with business relations, conspiracy to interfere with business relations, tortious interference with contract, copyright infringement, unjust enrichment, and misappropriation of trade secrets. Sloan unsuccessfully renewed his motion for judgment as a matter of law. After the district court denied this motion, Sloan appealed. The Tenth Circuit affirmed in part and reversed in part finding Sloan did not preserve his arguments as to tortious interference with business relations, conspiracy to interfere with business relations, and tortious interference with contract. The Tenth Circuit agreed the district court erred in instructing the jury on improper means, and the Court concurred with Sloan that on the claim of unjust enrichment, the jury could not have reasonably inferred the value of a benefit to him. View "Sloan v. American Agencies, LLC" on Justia Law

Plaintiff Pro Done, Inc. appealed a superior court order dismissing its amended complaint against defendants Teresa Basham, individually and as non-independent trustee of the Paul R. Hooper 1998 GST Exempt Trust, Terrence Hooper, Timothy Hooper, and John Ransmeier, trustee of the Paul R. Hooper 1997 Trust, for breach of contract, tortious interference with contractual relations, and civil conspiracy. Specifically, plaintiff challenged the trial court’s ruling that an alleged violation of a certain contractual provision did not provide a basis for plaintiff’s claims. After their father's death, defendant each received a portion of their father’s one-third ownership interest in three companies known as the Pro-Cut entities, to be held in trust by John Ransmeier. In 2012, the sibling defendants negotiated with Joseph Willey, another owner of the Pro-Cut entities, to sell their ownership interests. They eventually agreed upon a sale price, and in November 2013, Ransmeier, on the sibling defendants’ behalf, executed fifteen Securities Redemption Agreements (SRAs) with the Pro-Cut entities, the terms of which were stated to be binding upon “the heirs, personal representatives, successors and assigns of the parties.” After these transactions, one of the Pro-Cut entities, Brake Solutions, Inc., acquired another Pro-Cut entity. It then changed its name to Pro-Cut International, Inc. In May 2014, three unrelated companies, collectively known as Snap-on, purchased the Pro-Cut entities. Pro-Cut was renamed Pro Done, Inc. Plaintiff alleged it was a successor to the Pro-Cut entities. After Snap-on’s purchase of the Pro-Cut entities, the sibling defendants filed a lawsuit, with the assistance of Ransmeier, in federal district court, against Willey and trustees of trusts that were members of the Pro-Cut entities at the time of the Snap-on transaction. Plaintiff thereafter filed the underlying lawsuit to this appeal. Its central arguments were mainly the trial court erred by ignoring express terms of the release agreements - in which the defendants “covenant[ed] not to sue and otherwise agree[d] not to enforce any claim” against the plaintiff - and denied the plaintiff the opportunity to seek consequential damages for breach of the contract, contrary to New Hampshire law. The parties’ arguments presented a question of first impression for this the New Hampshire Supreme Court: whether New Hampshire law recognized a cause of action for breach of contract based upon a covenant not to sue where the contract did not expressly provide that the non-breaching party was entitled to consequential damages for breach of the covenant. The Court held that it did, reversed the trial court, and remanded for further proceedings. View "Pro Done, Inc. v. Basham" on Justia Law