Justia Contracts Opinion Summaries

In this consolidated appeal, three sets of landowners asserted claims against Arrington for breach of contract, promissory estoppel, and unjust enrichment relating to Arrington's failure to pay cash bonuses under oil and gas leases. The district court granted summary judgment to the landowners on the breach of contract claims and thereafter dismissed the landowners' other claims with prejudice on the landowners' motions. The court rejected the landowners' assertion that the lease agreements could be construed without considering the language of the bank drafts; the drafts' no-liability clause did not prevent enforcement of the lease agreements; Arrington entered into a binding contract with each respective landowner despite the drafts' no-liability clause; the lease approval language of the drafts was satisfied by Arrington's acceptance of the lease agreements in exchange for the signed bank drafts and as such, did not bar enforcement of the contracts; Arrington's admitted renunciation of the lease agreement for reasons unrelated to title precluded its defense to the enforceability of its contracts; Arrington's admission that it decided to dishonor all lease agreements in Phillips County for unrelated business reasons entitled the landowners to summary judgment; there was no genuine issue of material fact as to whether Arrington disapproved of the landowner's titles in good faith. Accordingly, the district court did not err in granting summary judgment on the breach of contract claims.

The company, which issues preprinted travelers' checks, challenged 2010 N.J. Laws Chapter 25, amending New Jersey's unclaimed property statute, N.J. Stat. 46:30B, to retroactively reduce the period after which travelers checks are presumed abandoned from 15 years to three years, after which the funds must be turned over to the state. The district court denied an injunction. The Third Circuit affirmed, rejecting arguments under the Due Process Clause, the Contract Clause, the Takings Clause, and the Commerce Clause. The law has a rational basis. It does not substantially impairment contractual relationships; while the company has the right to use and invest TC funds until the date the TC is cashed or sold, the duration of use is further subject to the lawful abandonment period set by unclaimed property laws. The company has no investment-backed expectation with respect to the longer period of investment.The law does not directly regulate sales in other states.

Merchants challenged 2010 N.J. Laws Chapter 25, amending the unclaimed property statute, N.J. Stat. 46:30B, to provide for escheat of stored value cards (gift cards). Chapter 25 presumes cards to be abandoned after two years of inactivity and requires issuers to transfer remaining value to the state. Issuers must obtain name and address of the purchaser or owner of each card. If the issuer's state exempts cards from its unclaimed property statute, unredeemed balances of cards previously-issued in New Jersey, where information was not recorded, must be reported to New Jersey. The address where the card issued or sold is presumed to be the owner's domicile. The district court enjoined retroactive application of Chapter 25 and prospective enforcement of the place-of-purchase presumption, but declined to enjoin data collection and two-year abandonment provisions. The Third Circuit affirmed. Chapter 25 substantially impaired contractual relationships by imposing unexpected obligations and did not reasonably accommodate the rights of the parties in light of the public purpose. The abandonment period is not preempted by the Credit CARD Act, 15 U.S.C. 1693l-1(c). The place-of-purchase presumption is preempted by federal common law, under which the first opportunity to escheat belongs to the state of the last known address of the creditor, shown by the debtor's records. If the primary rule does not apply, the right to escheat is with the state in which the debtor is incorporated.

Campbell Farming Corporation had its shares controlled by three shareholders: Stephanie Gately controlled fifty-one percent of the shares, and H. Robert Warren and Joan Crocker controlled the remaining forty-nine percent. Stephanie awarded her son, Robert Gately, who was president of the company, a bonus after a vote by the shareholders. Warren and Crocker filed a derivative and direct action against the company and the Gatelys in federal district court seeking to void the bonus. The district court entered judgment in favor of Defendants. The Supreme Court accepted certification from the Tenth Circuit to answer several questions and held (1) the safe harbor provision of Mont. Code Ann. 35-1-462(2)(c) can be extended to cover a conflict-of-interest transaction involving a bonus that lacks consideration and would be void under Montana common law; (2) the business judgment rule does not apply to situations involving a director's conflict-of-interest transaction; and (3) the holding in Daniels v. Thomas, Dean & Hoskins does not apply to the claim challenging Stephanie's role in the director conflict of interest transaction, but the Daniels test does apply to the claim of breach of fiduciary duties alleged by the minority shareholders against Stephanie in her capacity as majority shareholder.

Gary Martin and Lewistown Miller Construction Company entered into a written contract for the construction of a dwelling on Martin's property. When construction was completed, Martin refused to pay additional amounts above the bid price, and LMCC filed a construction lien on the property. LMCC then filed suit, seeking damages for breach of contract, unjust enrichment, and foreclosure of the lien. Martin counterclaimed for declaratory relief that the lien was invalid and to quiet title, among other things. The district court (1) granted foreclosure of LMCC's construction lien and awarded damages to LMCC; and (2) denied LMCC's and Martin's request for attorney fees. The Supreme Court affirmed in part and reversed in part, holding (1) the district court did not err in ordering foreclosure of the construction lien, and the award of damages was not clearly erroneous; but (2) the district court erred in failing to award statutorily mandated attorney fees to LMCC, as it established its lien. Remanded.

In 2003, the Trust sought group accident and life insurance policies as a benefit for its union members. Consistent with the Trust's request, the broker's RFP specifically sought a policy where the "Trust is the owner of the policy and also [a] beneficiary." Defendant's proposal contained only a summary of proposed terms, expressly cautioned that it was not a contract, and omitted reference to the Trust’s desired beneficiary provision. The policy drafts sent to the Trust did not contain the beneficiary provision the Trust wanted and stated that payment of the required premium after delivery of the policies would constitute acceptance. The Trust's chairman signed and paid the first premium in 2003 In May, 2004, the Trust made a claim on the group life policy. Defendant responded that the terms of the policy required it to pay the full benefit to the decedent's beneficiaries. The Trust terminated the policy, stopped paying premiums, and filed suit seeking a declaratory judgment and rescission of the contract. The district court dismissed the Trust's claims and entered judgment for defendant for $95,059.99 in unpaid premiums. The Seventh Circuit affirmed, finding that the parties had an enforceable contract.

A casino-hotel filed for bankruptcy. Appellant, the administrative agent for a syndicate of lenders that loaned money to the casino's developers, and Respondents, contractors, subcontractors, and suppliers who asserted statutory liens against the property, entered into a dispute over the priority of their respective liens on the property. The Supreme Court accepted questions certified to it from the bankruptcy court regarding the application of contractual subordination, equitable subordination, and equitable subrogation in the context of a mechanic's lien. Appellant moved to strike Respondents' appendix, contending that the included documents contained information beyond the facts certified to the Court by the bankruptcy court. Respondents opposed the motion, arguing that the additional information was necessary for the Court's understanding of the certified legal questions. The Supreme Court granted the motion to strike after determining that Respondents' appendix was filed solely to contradict the certification order and the complaint, holding that while an appendix may be filed to assist the Court in understanding the matter, it may not be used to controvert the facts as stated in the certification order.

Arrow Financial Services filed a complaint against Sarah Guiliani alleging breach of contract and unjust enrichment. Arrow then filed a motion for summary judgment seeking to establish that Arrow owned a credit card account registered to Guiliani and that Guiliani owed an unpaid balance of $5044 on the account. In support of its motion, Arrow asserted in an affidavit that it was the assignee of Guiliani's credit card account with Washington Mutural. The district court granted Arrow's motion and awarded Arrow $3493, plus interest and court costs. The Supreme Court vacated the district court's judgment, holding that the district court incorrectly granted summary judgment in favor of Arrow because disputes remained as to material facts regarding the balance due on the account and its assignment to Arrow.

JLB Corporation, a mortgage brokering service, entered into an agreement with Bonnie Hargis to refinance her home. JLB then prepared Hargis's loan application and other financial disclosure documents. JLB alleged it played no role in drawing the note or deed of trust, which were prepared by third parties, and it did not charge for their preparation. Hargis, however, filed a three-count petition against JLB, alleging, inter alia, that JLB engaged in the unauthorized practice of law. The trial court granted summary judgment in favor of JLB on all counts. The Supreme Court (1) affirmed the grant of summary judgment to JLB as to the first two counts relating to the unauthorized practice of law where the record showed that JLB assisted Hargis only in preparing financial documents and did not show that JLB procured or assisted in the drawing of Hargis' note, deed of trust, or other legal documents; and (2) reversed the grant of summary judgment to JLB on the third count alleging unjust enrichment, as JLB's summary judgment motion failed to negate any element of Hargis' unjust enrichment claim. Remanded.

Liberty Group (Liberty) retained Reliable Copy Service (Reliable) to provide services in connection with litigation. Later, Reliable filed a complaint in a Pennsylvania court of common pleas in an effort to collect on the sums owed. The Pennsylvania court subsequently entered a default judgment against Liberty. Following the end of the litigation in the Pennsylvania court, a Maine superior court entered a judgment in favor of Reliable and issued a writ of execution at Reliable's request. Liberty filed a motion for relief from judgment, arguing that the Pennsylvania default judgment was not enforceable in Maine because the Pennsylvania default judgment was void. The superior court denied the motion. The Supreme Court affirmed, holding (1) the Pennsylvania judgment suffered from no jurisdiction defect or due process impediment that would render it void pursuant to Me. R. Civ. P. 60(b)(4); and (2) Liberty's procedural due process rights were not violated when Reliable requested and received from the Pennsylvania court an increased damages award.