Justia Contracts Opinion Summaries

Indiana law previously provided that, when school districts needed to reduce their teaching staffs, tenured teachers that were qualified for an available position had a right to be retained over non-tenured teachers. A 2012 amendment eliminated that right and orders school districts to base layoff choices on performance reviews without regard for tenure status. Madison Consolidated Schools relied on the new law to lay off Elliott, a teacher who earned tenure 14 years before the new law took effect, while it retained non-tenured teachers in positions for which Elliott was qualified. Elliott, who had been elected as president of his union, sued, claiming that the amendment violated the Contract Clause when applied to him. The Seventh Circuit affirmed summary judgment in Elliott’s favor. The statute, not the annual contracts, granted Elliott his contractual tenure rights, which became enforceable the year Elliott earned tenure. A decrease in job security necessarily impairs his rights under that contract. The change substantially disrupted teachers’ important and reasonable reliance interests. Improving teacher quality and public-education outcomes are important public interests of the highest order but even important goals and good intentions do not justify this substantial impairment of the tenure contract for already-tenured teachers. View "Elliott v. Board of School Trustees of Madison Consolidated Schools" on Justia Law

Robbin Taylor filed a statement of charges seeking recall of Black Diamond City council member Patricia Pepper. In November 2015, Pepper defeated opponent Ron Taylor (husband of Robbin Taylor) in an election for Black Diamond City Council in King County. Beginning in January 2016, a chasm developed with Mayor Carol Benson and council members Tamie Deady and Janie Edelman on one side, and a majority of the city council - Pepper, Erika Morgan, and Brian Weber - on the other. After Pepper, Morgan, and Weber passed R-1069, they voted to fire city attorney Carol Morris. Upon passing R-1069, Pepper and a majority of the council made decisions to alter contracts regarding the Master Development Review Team (MDRT) contracts for two large development projects planned in Black Diamond that had been approved by Mayor Benson and former council members. Mayor Benson hired emergency interim city attorney Yvonne Ward. Ward submitted two memoranda to the council, concluding that R-1069 violated the Black Diamond Municipal Code (BDMC) and the Open Public Meetings Act (OPMA), chapter 42.30 RCW. The council had also received advice from prior city attorney Morris and from the city's risk management pool that the resolution could create liability for the city if council members violated the OPMA. Ultimately, the council's decision to enact R-1069 and revisit the MDRT contracts, among other actions, led to a lawsuit: MDRT contractor CCD Black Diamond Partners LLC (Oakpointe) filed suit against the city and council members Pepper, Morgan, and Weber, alleging violations of the OPMA, which has led to litigation and costs for the city. Pepper was a member of council standing committees; allegations were made that Pepper, Morgan, and Weber held secret council and standing committee meetings conducting city business in violation of the OPMA. After approximately a year and a half of tensions, Taylor filed a statement of charges with the King County Elections Division, requesting Pepper's recall. The superior court ruled that four of those charges were factually and legally sufficient to support a recall petition. Pepper appealed. After review, the Washington Supreme Court affirmed the trial court's decision with regard to the first three charges, but reversed with regard to the fourth charge. View "In re Recall of Pepper" on Justia Law

The Supreme Court affirmed the district court’s dismissal of Plaintiffs’ putative class action lawsuit in which they alleged that Salt Lake City unjustly enriched itself by fining them for failing to use a parking meter at a time when there were no longer any parking meters in the City - only pay stations - but the City had not yet prohibited parking without paying at a pay station. Plaintiffs also alleged that the City’s notices violated due process. The district court granted the City’s motion to dismiss. The Supreme Court affirmed, holding (1) the City’s notices were sufficient to apprise Plaintiffs of both their right to challenge their parking tickets and their opportunity for a hearing on that challenge; and (2) because Plaintiffs did not exhaust their legal remedies before seeking to challenge their tickets through an equitable action Plaintiffs failed to state an equitable enrichment claim. View "Bivens v. Salt Lake City" on Justia Law

Under 42 U.S.C. 1485, the USDA's Rural Housing Service (RHS) makes loans for construction of affordable rental housing. From 1972-1982, each of 10 limited partnerships (with a common general partner, Olsen) entered into a 50-year loan agreement that stated that each borrower could pay off the loan and convert its properties to conventional housing after 15 or 20 years. The 1987 Emergency Low Income Housing Preservation Act, 42 U.S.C. 1472(c)), provided that before accepting prepayment, the USDA must attempt to enter into an agreement with the borrower. In 2002, Olsen was negotiating to sell to a nonprofit organization. He notified the RHS of “intent . . . to convert [some] units into conventional housing” and sought approval to pay off the mortgages. RHS responded with a checklist. Olsen did not proceed; the potential acquirer decided against purchasing the properties. In 2011, Olsen submitted more definite prepayment requests. RHS responded with an incentive offer concerning four properties, which Olsen accepted, remaining in the program. For three other properties, RHS informed Olsen that prepayment was not an option. Olsen purportedly believed that pursuing prepayment on any properties was futile. He did not submit additional applications. In 2013, the partnerships sued, alleging that the government, through the 1987 enactment or the 2011 correspondence, violated their prepayment rights. The Federal Circuit reversed the Claims Court's dismissal. The 2002 correspondence did not trigger the RHS’s duty to accept prepayment; RHS did not take any steps inconsistent with prepayment. The government did not breach its contractual obligation in 2002. Because the alleged breaches occurred no earlier than 2011, the contract claims are not barred by the six-year limitations period. The Claims Court implicitly premised the dismissal of takings claims on the same erroneous rationale. View "Airport Road Associates, Ltd. v. United States" on Justia Law

Lincoln Park’s dire financial condition led Michigan officials to place the city under the purview of an Emergency Manager pursuant to the Local Financial Stability and Choice Act, Mich. Comp. Laws 141.1541. Emergency Manager Coulter, with the approval of Michigan’s Treasurer, issued 10 orders that temporarily replaced Lincoln Park retiree health-care benefits with monthly stipends that retirees could use to purchase individual health-care coverage. Retirees filed sui under 42 U.S.C. 1983, asserting violations of the Contracts Clause, the Due Process Clause, and the Takings Clause. The district court rejected the Treasurer’s motion to dismiss, arguing qualified immunity and Eleventh Amendment immunity. The Sixth Circuit reversed. The court held, as a matter of first impression, that an alleged Contracts Clause violation cannot give rise to a cause of action under section 1983. With respect to other constitutional claims, the claimed property right derives from contract; a state contract action would be sufficient to safeguard the retirees’ contractual property rights. Because the state contract action is available as a remedy for any uncompensated taking the challenges to the constitutionality of Coulter’s orders are not ripe for resolution. As the claims fail on the merits, there is no need to evaluate the alleged immunity defenses. View "Kaminski v. Coulter" on Justia Law

Gary Jet began operating as a Fixed Base Operator (FBO) at the Authority's Gary/Chicago International Airport in 1991. The 2006 “Minimum Standards,” regulations governing FBOs, contained a 1.5% charge on gross revenue for commercial FBO services beginning in 2001, “pending the expiration of existing leases which do not incorporate these terms.” Gary Jet’s lease did not contain this provision. During negotiations for a new lease, the parties agreed that Gary Jet would instead pay “supplemental rent” of 10% of certain fees. A January 2007 “First Amended Lease” with a 39-year term, required Gary Jet to pay base rent plus supplemental rent and stated Gary Jet “shall abide by” the Minimum Standards, except when they conflict with the 2007 Lease. The lease stated that the Minimum Standards “shall be … made applicable to” subsequent lease agreements. In 2013, Gary Jet sued for breach of contract. The parties entered settled in 2014. Gary Jet agreed that New Minimum Standards controlled any conflict with its lease. A 2014 revised lease stated that the Minimum Standards controlled any conflicts. The initial draft of new Minimum Standards did not require Gary Jet to pay a percentage of gross revenue. In 2015, the Authority stated that it intended require that each FBO pay a percentage of gross revenues. Gary Jet objected, but the Authority approved the New Minimum Standards with the provision. The Seventh Circuit affirmed dismissal of Gary Jet’s suit under the Contracts Clause. Gary Jet cannot plausibly demonstrate that it is without a remedy for any violation of its contractual rights, which is essential to a Contracts-Clause claim. View "Gary Jet Center, Inc. v. AFCO AvPORTS Management, LLC" on Justia Law

Jewels by Park Lane, Inc. ("JBPL"), and Kathy Cassidy, the national director for JBPL, sought a writ of mandamus compelling the Circuit Court to vacate its order denying their motion to dismiss an action against them on the ground of improper venue arising out of a forum-selection clause, and to enter an order dismissing the case. JBPL was a multilevel marketing company that sold jewelry through independent contractors who host parties offering JBPL's jewelry line for sale. Jennifer Miller became a “director” for LBPL. Miller sued JBPL and Cassidy, alleging JBPL promised to employ her for a 12-month period and to pay her $4,000 a month for that period. Miller set out claims alleging account stated, open account, breach of contract, and fraud. Miller sought compensatory damages, punitive damages, and attorney fees. The employment agreement contained a “forum selection clause” in which any disputes between the parties would be settled in accordance with the laws of Illinois. Miller admitted that the director agreement contained a forum selection clause but argued that she would not have entered into the agreement but for the fraud perpetuated by JBPL and Cassidy. The Alabama Supreme Court concluded JBPL and Cassidy have shown a clear legal right to have the action against them dismissed on the basis that venue in the Tallapoosa Circuit Court was, by application of the outbound forum-selection clause, improper. The trial court exceeded its discretion in denying their motion to dismiss Miller's action. View "Ex parte Jewels by Park Lane, Inc." on Justia Law

This case arose from an allegedly forged home-equity loan. Plaintiff sued the lenders, bringing several claims, including statutory fraud and violations of the Texas Finance Code and Texas Deceptive Trade Practices Act. The trial court granted summary judgment for the lenders without stating its reasons. The court of appeals affirmed. The Supreme Court affirmed in part and reversed and remanded in part, holding that the court of appeals (1) properly affirmed summary judgment on Plaintiff’s constitutional forfeiture claim; and (2) erred in holding that Plaintiff’s remaining claims were barred on statute of limitations and waiver grounds. View "Kyle v. Strasburger" on Justia Law

The circuit court determined that appropriations made by ordinances or resolutions of the cities of Little Rock and North Little Rock (Appellants) to the cities’ chambers of commerce and related economic development entities were in violation of article 12, section 5 of the Arkansas Constitution. The court concluded that Appellants had appropriated city funds to private corporations using “service contracts” that violated article 12, section 5 and were invalid due to lack of consideration and absence of benefits to the taxpayers. The court permanently enjoined Appellants from passing such ordinances or resolutions. The Supreme Court remanded the case to the circuit court with instructions to lift the injunction and dismiss Appellees’ complaint, holding that an amendment to article 12, section 5 rendered the basis for the circuit court’s injunction moot. View "Stodola v. Lynch" on Justia Law

Plaintiff, an African-American, filed suit against defendants after her application to lease a space for her hair salon was denied. Plaintiff alleged that the denial infringed her right to freedom from racial discrimination in the making of a contract. The district court granted summary judgment for defendants. The court affirmed the district court's alternative conclusion that plaintiff failed to rebut the legitimate, nondiscriminatory reasons defendants proffered for denying her lease application. Defendants' reasons included: odors emanating from the salon would disturb the residential tenants on the upper floors; plaintiff's business would not survive given the number of other salons in the area; a salon would not generate cross-shopping with other commercial tenants; plaintiff's credit score was too low; and defendants would not break even given the high cost of building out the unit. View "Flournoy v. CML-GA WB, LLC" on Justia Law