Justia Contracts Opinion Summaries

A group of investors (Borrowers) bought a golf course by contributing part of the purchase amount in cash and financing the remaining balance through a nonrecourse loan with Community Bank of Nevada (CBN). To facilitate the sale, William Walters entered into a separate guaranty with CBN where he personally guaranteed the loan. Prior to the Borrowers' default and the eventual foreclosure of the golf course, Walters filed a complaint against CBN, asserting causes of action for declaratory relief and breach of the implied covenant of good faith and fair dealing. CBN counterclaimed, asserting breach of guaranty against Walters. The district court granted summary judgment in part to CBN, concluding that no genuine issues of material fact existed as to Walters' guaranty liability to CBN. Walters filed a petition for a writ compelling the district court to vacate its partial summary judgment in favor of CBN and to preclude CBN from recovering any amount from Walters under his guaranty. The Supreme Court denied the writ, holding (1) CBN complied with the deficiency application requirements of Nev. Rev. Stat. 40, and (2) CBN was not attempting double recovery because double recovery was not an issue in this case.

The parties to this lawsuit claimed rights to a punch press used in the manufacturing business of now-defunct Vitco Industries. Plaintiff, Gibraltar Financial Corporation, held a perfected security interest in Vitco's tangible and intangible property, including its equipment. Defendants, several entities including Prestige Equipment, who had acquired the press, and Key Equipment Finance, claimed that the security interest did not cover the press because the press was not Vitco's equipment, but rather, the press had been leased to Vitco by Key Equipment. The trial court granted summary judgment in favor of Defendants after concluding that the lease was a true lease. The court of appeals affirmed. The Supreme Court reversed, holding that genuine issues of material fact existed regarding whether the press was leased. The Court noted that no evidence was on the record relating to the economic expectations of Vitco and Key Equipment at the time the transaction was entered into. Remanded.

Plaintiff brought a class action against the Bank, alleging that the Bank breached its contract by charging interest in excess of the rate specified in the promissory note. The court affirmed the district court's grant of the Bank's motion to dismiss where the district court correctly concluded that the relevant provisions were clear, did not conflict with one another, and adequately disclosed the interest to be charged.

The companies are direct competitors in importing and distributing pharmaceutical ingredients manufactured in China. Plaintiff claimed that defendant intentionally interfered with one of its contracts and sought damages. In court-ordered settlement negotiations, plaintiff demanded $675,000. Defendant made a counter-offer, demanding that plaintiff pay it $444,444.44 in order to settle the case and avoid a motion for sanctions and a suit for malicious prosecution. The court noted that the peculiar amount was due to the fact that the number four is considered an unlucky number in Chinese culture because it is homophonous with the Chinese word for death, but concluded that it was not a death threat and declined to impose sanctions. The court later entered summary judgment for defendant. The First Circuit affirmed the court's refusal to impose sanctions under FRCP 11. Plaintiff's claims were not patently frivolous.

In a loan-and-supply contract, plaintiff agreed to provide defendant with a $150,000 loan that would be gradually forgiven over five years as defendant purchased specified quantities of motor-oil products from plaintiff. The typewritten contract included a handwritten note stating that the "Agreement will terminate after 225,000 gallons and 225,000 filters of Exxon/Mobil is purchased or 60 months, whichever comes first." Defendant stopped buying products from plaintiff after only two years, having purchased only 55,296 gallons and 61,551 filters. The district court entered summary judgment for plaintiff. The Seventh Circuit affirmed, rejecting an argument that the handwritten provision relieved plaintiff of any liability after 60 months (after July 1, 2008) regardless of the amount of product it purchased.

A limited liability company (MIC) was formed for the purpose of building and operating a hotel. The original members of MIC were a revocable trust (the Trust), trustee Michael Siska, and Thomas, Jane, and Jason Dowdy. Later, Thomas and Jane Dowdy transferred, without the Trust's involvement, MIC's assets to Milestone Development, the Dowdy's family company. The Trust filed an amended complaint derivatively on behalf of MIC against Defendants, Milestone and the Dowdys. In its amended complaint, the Trust claimed that the transfer of assets to Milestone was not in the best interests of MIC or its members and alleging, inter alia, breach of fiduciary duty, breach of contract, unlawful distribution, and conversion, and seeking to recover damages. The Trust, however, did not join MIC as a party to the derivative action. The circuit court dismissed the Trust's amended complaint, holding that the Trust lacked standing to maintain the derivative action on behalf of MIC because the Trust could not fairly represent the interests of the Defendant shareholders. The Supreme Court reversed, holding that it would not entertain the appeal on the merits because MIC was a necessary party to the proceeding and had not been joined. Remanded.

Plaintiff Fox Rest Associates (Fox Rest) was formed to purchase Fox Rest Apartments. Defendants in this case were George Little, Fox Rest's legal counsel through his law firm, George B. Little and Associates (GBL&A), George Little's wife, and GBL&A. This action took place after Mr. Little sold the Apartments without knowledge of Fox Rest and transferred a portion of the proceeds from the sale in an account he held with Mrs. Little. Unable to satisfy a previous judgment finding Mr. Little and GLB&A liable to Fox Rest for, inter alia, malpractice and double billing, Fox Rest filed this action against Defendants, seeking to void various transactions by Mr. Little as fraudulent conveyances and voluntary conveyances. The court granted Defendants' motion to strike, finding that Fox Rest did not present sufficient evidence in its case in chief to establish a prima facie case for its claims. The Supreme Court affirmed in part and reversed in part, holding that, except for a portion of the claims relating to the sale of certain equipment, the circuit court erred in striking Fox Rest's fraudulent conveyance and voluntary conveyance claims. Remanded.

A successful Ford dealership in Iowa offered to assist struggling Middleton, Wisconsin dealership. The parties agreed that Iowa's general manager would provide management services to Middleton with compensation to begin after he turned Middleton profitable and also that Iowa would provide capital in exchange for an ownership interest. Negotiations continued after the manager started working at Middleton, but the parties never reached a more specific agreement. The relationship broke down after 11 months because Iowa failed to come forward with the expected cash. Still not earning a profit, Middleton did not pay for the manager's services. After a remand, the district court again entered judgment for Iowa, finding that Middleton became profitable during the manager's tenure and fired him before he had a fair opportunity to restore profitability. The Seventh Circuit reversed, stating that the factual findings were inconsistent and clearly erroneous. Iowa is not entitled to quasi-contractual compensation for services under either quantum meruit or unjust enrichment.

A company that provides employee training filed suit against a client, claiming breach of contract based both on alleged failure to pay a gain sharing fee and breach of confidentiality provisions.It sought an accounting for disclosures or uses of its materials inconsistent with the copyright license provided by the agreement. The court granted summary judgment for the client. The First Circuit affirmed, finding that the training company did not support its figures with respect to the fee or the breach of confidentiality.

At issue in this extraordinary writ proceeding was whether Nev. Rev. Stat. 11.259(1) compels dismissal where the initial pleading in an action alleging nonresidential construction malpractice was served without filing the attorney affidavit and expert report required by Nev. Rev. Stat. 11.258(1) and (3). The Supreme Court granted the writ, holding that a defective pleading served in violation of section 11.258 is void ab initio and of no legal effect and, thus, cannot be cured by amendment. The Court held that because the initial pleadings served by certain real parties in interest in this case did not include the attorney affidavit and expert report as required by section 11.258, those pleadings were void ab initio, and the district court did not have discretionary authority to allow the parties to amend their pleadings to cure their failure to comply with section 11.258.