Justia Contracts Opinion Summaries

Baek purchased property through his LLC and obtained financing from Labe Bank; Frank was the loan officer. Frank later moved to NCB and asked Baek to move his business, representing that NCB would provide a larger construction loan at a lower rate. In 2006, Baek entered a construction loan with NCB for $11,750,000. Baek executed a loan agreement, mortgage, promissory note, and commercial guaranty. Baek’s wife did not sign the guaranty at closing. NCB maintains that, 18 months after closing, she signed a guaranty. One loan modification agreement bears her signature but Baek‐Lee contends that it was forged and that she was out of the country on the signing date. NCB repeatedly demanded additional collateral and refused to disburse funds to contractors. The Baeks claim that NCB frustrated Baek’s efforts to comply with its demands. In 2010, NCB filed state suits for foreclosure and on the guaranty. The Baeks filed affirmative defenses and a counterclaim, then filed a breach of contract and fraud suit against NCB. The Baeks later filed a federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1964(c), suit alleging fraud. The state court granted NCB summary judgment. The federal district court dismissed, citing res judicata. The Seventh Circuit affirmed. There has been a final judgment on the merits with the same parties, in state court, on claims arising from a single group of operative facts. View "Baek v. Clausen" on Justia Law

Nautilus Insurance Company ("Nautilus") and Lyon Fry Cadden Insurance Agency, Inc. ("LFC"), separately petitioned the Alabama Supreme Court for writs of mandamus directing the the trial court to vacate its orders denying their motions to dismiss the action filed against them by Precision Sand Products, LLC ("Precision"). From June 10, 2015, to June 10, 2016, Precision had in place a commercial general-liability insurance policy it had purchased from Nautilus through LFC, an insurance broker. In March 2016, Terry Williams sued Precision seeking recovery for injuries he allegedly suffered on Precision's property during the period the policy was in effect. Pursuant to the terms of the policy, Precision demanded that Nautilus defend and indemnify it against the Williamses' claims. Nautilus agreed, under reservation of rights, to defend Precision against the Williamses' claims. Then Nautilus filed a declaratory-judgment action against Precision and the Williamses at the federal district court, seeking a judgment declaring that, pursuant to an exclusion in the policy, Nautilus was not obligated to defend and indemnify Precision against the Williamses' claims. Precision filed in the Williamses' action a "crossclaim complaint" against Nautilus and LFC ("the state action"), asserting against both Nautilus and LFC various contract and negligence claims. Before the Alabama Supreme Court, LFC argued Precision could not recover against LFC for fraudulently procuring inadequate insurance or for negligently failing to procure adequate insurance unless and until Precision was actually denied coverage for, or a defense against, the Williamses' claims. The Supreme Court found the trial court, as a court of general jurisdiction, clearly had the constitutional and statutory authority to hear the types of claims Precision asserted against LFC. Thus, LFC did not demonstrate it had a clear legal right to dismissal from the state action based on a lack of subject-matter jurisdiction over Precision's claims. Nautilus has demonstrated that, under section 6-5-440 Ala. Code 1975, it had a clear legal right to dismissal from the state action. Accordingly, the Court granted Nautilus's petition and issued the writ directing the trial court to dismiss Nautilus from the state action. Furthermore, the Court determined LFC failed to carry its burden of demonstrating that it had a clear legal right to dismissal from the state action. Accordingly, LFC's petition was also denied. View "Ex parte Nautilus Insurance Company." on Justia Law

SCI Alabama Funeral Services, LLC, d/b/a Elmwood Cemetery and Mausoleum ("SCI"); Service Corporation International; SCI Funeral Services, LLC; Elmwood Cemetery Co.; Phyllis Pesseackey; and Jonathan Wheatley (collectively, "the defendants") appealed an order denying their motion to compel arbitration. The circuit court denied the motion to compel because it concluded that the relevant arbitration provision was unconscionable and thus unenforceable. In 2004, Johnnie Hinton ("Johnnie") signed a contract with SCI to purchase the interment rights to two burial spaces in Elmwood Cemetery. The contract contained an arbitration provision stating that "any claim" that Johnnie "may have" against SCI must be resolved by arbitration. In August 2016, Johnnie's husband, Nathaniel Hinton, passed away. Johnnie began to make arrangements to have Nathaniel buried in one of the two burial spaces to which she had acquired interment rights in 2004. SCI then informed Johnnie that someone else had mistakenly been buried in Nathaniel's space. According to Johnnie's complaint, the space she acquired for Nathaniel is next to the space where her father is buried. At Johnnie's request, SCI disinterred the deceased who was buried in the space Johnnie had acquired and buried him elsewhere so that Nathaniel could be buried in the space; Nathaniel was subsequently buried there. In September 2016, Johnnie sued SCI and the other defendants, alleging breach of contract and several other claims. The defendants moved to compel arbitration, citing the arbitration provision in the contract. Johnnie argued that the arbitration provision was unenforceable because, she said, the contract does not evidence a transaction affecting interstate commerce and the arbitration provision is unconscionable. The circuit court denied the motion to compel, concluding that the arbitration provision is unconscionable. Both substantive unconscionability and procedural unconscionability must be shown to establish unconscionability as a defense to an arbitration provision; these are separate, independent elements. The Alabama Supreme Court determined the arbitration provision in this case was not substantively unconscionable, and did not need to consider the issue of procedural unconscionability. The circuit court erred in denying the motion to compel arbitration. Therefore, the Court reversed the order and remanded the case for the circuit court to enter an order granting the motion to compel arbitration. View "SCI Alabama Funeral Services, LLC v. Hinton" on Justia Law

Terex USA, LLC ("Terex"), petitioned the Alabama Supreme Court for a writ of mandamus directing the Circuit Court to enforce an outbound forum-selection clause contained in a distributorship agreement between Terex and Cowin Equipment Company, Inc. ("Cowin"), and to dismiss Cowin's action against Terex based on improper venue pursuant to Rule 12(b)(3), Ala. R. Civ. P. Before August 2015, Cowin, a heavy-equipment dealer, had served as an authorized dealer of heavy equipment manufactured by the Liebherr Group for approximately 30 years. Cowin alleged Terex, a heavy-equipment manufacturer, began aggressively recruiting Cowin to become a dealer of its equipment in Alabama, Georgia, and Florida. At the time, Warrior Tractor & Equipment Company, Inc. ("Warrior"), was serving as the dealer for Terex's equipment in the region. Based on assurances from Terex that Cowin would be the only Terex dealer in the territory, Cowin allowed its relationship with Liebherr Group to expire. In August 2015, Cowin entered into a distributorship agreement with Terex to sell Terex heavy equipment in Alabama, Georgia, and Florida. Subsequent to entering into the distributorship agreement with Cowin, Terex entered into a new distributorship agreement with Warrior without providing notice to Cowin that Warrior would be reentering the heavy-equipment market. Cowin alleged Terex's failure to give it notice that Warrior would be reentering the market was contrary to common industry practices. Cowin sued Terex and Warrior, asserting various claims arising from Terex's alleged violation of the Alabama Heavy Equipment Dealer Act, sec. 8-21B-1 et seq., Ala. Code 1975 ("the AHEDA"). Terex moved the trial court pursuant to Rule 12(b)(3), Ala. R. Civ. P., to dismiss Cowin's complaint, arguing that venue in Jefferson County was improper because of the forum-selection clause in the distributorship agreement designating either the United States District Court for the Northern District of Georgia or the Georgia state court in Atlanta as the proper forum for any dispute between the parties arising from the distributorship agreement. "An outbound forum-selection clause is exactly the type of provision the legislature intended to prohibit because it would undermine the remedial measures and protections the legislature clearly intended to afford heavy-equipment dealers under the AHEDA; this is especially so as to the outbound forum-selection clause in this case, which also contains a choice-of-law provision designating Georgia law as controlling." The Alabama Supreme Court concluded Terex failed to establish a clear legal right to the relief it sought, so the Court denied its petition for a writ of mandamus. View "Ex parte Terex USA, LLC." on Justia Law

Tommy Brooks Oil Co. (“Brooks Oil”) challenged the trial court’s grant of summary judgment in favor of Jerry Wilburn. According to Brooks Oil, Wilburn Oil Co., Inc. (“Wilburn Oil”) had amassed nearly $1 million in unpaid fuel bills before Brooks Oil refused to sell Wilburn Oil any more fuel until Wilburn executed two personal guaranties for $250,000. After Brooks Oil sued Wilburn to enforce the guaranties, Wilburn moved for summary judgment, claiming a unilateral or mutual mistake concerning the guaranties. According to Wilburn, the parties never intended the guaranties to include Wilburn Oil’s past debt. The trial court agreed and granted summary judgment, dismissing Brooks Oil’s suit against Wilburn with prejudice. The Mississippi Supreme Court found Wilburn did not meet his summary-judgment burden, therefore, it reversed the trial court’s judgment and remanded the case for further proceedings. View "Tommy Brooks Oil Co. v. Wilburn Oil Company, Inc." on Justia Law

In 2012, Dobbs hired McLaughlin to represent him in a products liability suit against DePuy for a 35% contingency fee agreement. The attorney filed Dobbs’s complaint in the DePuy Hip Implant Multidistrict Litigation in the Northern District of Ohio. In 2013, DePuy proposed a settlement, offering parties represented by counsel on a certain date $250,000 and parties not represented $177,500. Dobbs stated that he did not want to settle. McLaughlin advised Dobbs to accept the settlement due to the costs of going to trial. Dobbs moved to remove McLaughlin as his counsel. The motion was granted in January 2015, leaving Dobbs unrepresented. In February 2015, Dobbs decided to accept the settlement offer. Though he was then unrepresented, he was considered a represented party under the settlement terms, entitling him to a base award of $250,000. McLaughlin asserted a lien on Dobbs’s award and sought attorneys’ fees under quantum meruit. The fee dispute was transferred to the Northern District of Illinois, which awarded McLaughlin 35% of Dobbs’s base settlement award, $87,500. Following a remand, the court considered evidence, addressed each quantum meruit factor, and again awarded $87,500. The Seventh Circuit affirmed. The district court considered all of the relevant evidence and engaged in a thoughtful analysis of the factors required by Illinois law, given that it was not the court that presided over the underlying litigation. View "Dobbs v. DePuy Orthopaedics, Inc." on Justia Law

Paul Fairchild Jr. asked the district court to grant summary judgment on his cross-claims against Defendants Richard Love and R.H. Love Galleries, Inc. (collectively Love) on the ground that Love failed to timely file a response to Fairchild’s motion for summary judgment and was therefore “in default.” Jerald Freeman, The Tea Leaf, Inc., and Thomas Nygard, Inc. (collectively Plaintiffs) jointly owned a painting by Albert Bierstadt they purchased for $180,000. In October 2002, three transactions involving the Bierstadt painting occurred in quick succession: (1) Freeman agreed on behalf of Plaintiffs to sell the painting to Paul Benisek for $240,000, to be paid in twelve monthly installments; (2) Benisek agreed to sell the painting to Love for $300,000, also to be paid in twelve monthly installments; and (3) Love sold the painting to Fairchild for $375,000, which Fairchild paid in full with a combination of cash and the trade-in of three other pieces of artwork. In accordance with their respective agreements, Love made several payments to Benisek, and Benisek made several payments to Freeman. But in spring 2003, Love experienced financial trouble and stopped making payments to Benisek, who in turn stopped making payments to Freeman. Meanwhile, Fairchild consigned the Bierstadt painting for sale at a gallery in New York City. Freeman, who had not received full payment from Benisek, became aware that the New York gallery was attempting to sell the Bierstadt painting and asked the gallery to ship the painting to Santa Fe for inspection. Freeman obtained possession of the Bierstadt painting and refused to return it to the gallery. Love, whose counsel had withdrawn while his motion was pending, explained that he lacked legal representation and had been experiencing health problems, and he requested an opportunity to submit a late response. The district court did not allow Love additional time to respond and granted Fairchild’s motion for summary judgment without considering whether Fairchild had established a prima facie case for summary judgment under Rule 1-056 NMRA. After review, the New Mexico Supreme Court held the district court erred by granting summary judgment: “Prior to granting an uncontested motion for summary judgment, the district court must assess whether the moving party has demonstrated that no genuine issue of material fact exists ‘and that the moving party is entitled to a judgment as a matter of law.’” The Court of Appeals erred in its application of the right-for-any-reason doctrine to affirm the district court. The Supreme Court reversed the summary judgment order and vacated the resulting award of damages, and the case was remanded to the district court with instructions to permit Love to file a response to Fairchild’s motion for summary judgment and for further proceedings. View "Freeman v. Fairchild" on Justia Law

The trial court did not err in dismissing Plaintiffs’ action for lack of subject matter jurisdiction due to Plaintiffs’ failure to exhaust administrative remedies in seeking damages for denied Medicaid reimbursement claims.The court of appeals reversed the trial court’s order, ruling that the trial court erred in dismissing Plaintiffs’ complaint without resolving certain factual issues and that Plaintiffs sufficiently demonstrated that it would be futile to pursue administrative remedies. The Supreme Court reversed, holding that the court of appeals erred in reversing the dismissal of Plaintiffs’ claims where Plaintiffs failed to exhaust their administrative remedies prior to filing suit and failed to demonstrate futility of the available remedies at this time. View "Abrons Family Practice & Urgent Care, PA v. North Carolina Department of Human Services" on Justia Law

The trial court did not err in dismissing Plaintiffs’ action for lack of subject matter jurisdiction due to Plaintiffs’ failure to exhaust administrative remedies in seeking damages for denied Medicaid reimbursement claims.The court of appeals reversed the trial court’s order, ruling that the trial court erred in dismissing Plaintiffs’ complaint without resolving certain factual issues and that Plaintiffs sufficiently demonstrated that it would be futile to pursue administrative remedies. The Supreme Court reversed, holding that the court of appeals erred in reversing the dismissal of Plaintiffs’ claims where Plaintiffs failed to exhaust their administrative remedies prior to filing suit and failed to demonstrate futility of the available remedies at this time. View "Abrons Family Practice & Urgent Care, PA v. North Carolina Department of Human Services" on Justia Law

A defendant can prevail on the merits of its counterclaims against a governmental entity when the governmental entity recovers monetary relief on its affirmative claims by filing a lien and a lis pendens and then nonsuits its affirmative claims where the defendant seeks an offset against the amount the governmental entity recovered through the litigation process.Petitioner, which operated pecan orchards, entered into water-supply agreements with Respondent, a political subdivision. Respondent sued Petitioner for breach of contract. Petitioner counterclaimed for breach of contract and fraud. After Respondent recorded a crop lien and a lis pendens against Petitioner’s orchards, Petitioner paid Respondent the amount it sought to remove the lien and lis pendens but continued to pursue its counterclaims seeking an offset against that payment. Respondent later nonsuited its claims. The trial court granted summary judgment for Respondent, ordering that Petitioner take nothing on its counterclaims. The court of appeals affirmed. The Supreme Court reversed, holding that the court of appeals erred in concluding that Petitioner could not prevail on the merits of its counterclaims merely because Respondent obtained its recovery by filing a lien and lis pendens. View "C. Borunda Holdings, Inc. v. Lake Proctor Irrigation Authority of Comanche County" on Justia Law