Justia Contracts Opinion Summaries

Petitioner John Van Rees, Sr. contracted with respondent Unleaded Software, Inc. to perform web-related services and to design additional websites. After Unleaded missed deadlines and failed to deliver the promised services, Van Rees sued, asserting multiple tort claims, a civil theft claim, three breach of contract claims, and a claim for violations of the Colorado Consumer Protection Act (CCPA). The trial court granted Unleaded's 12(b)(5) motion, dismissing all but Van Rees' contract claims, on which a jury found in Van Rees' favor. Van Rees appealed, and the court of appeals affirmed. After its review, the Colorado Supreme Court affirmed in part and reversed in part. The appellate court had determined that the tort and civil theft claims were barred by the "economic loss rule" because they were related to promises memorialized in the contracts, and the CCPA claim failed to allege a significant public impact. The Supreme Court found the issue pertaining to the economic loss rule was not whether the tort claims related to a contract, but whether they stemmed from a duty independent of the contact. The Court found pre-contractural misrepresentations in this case distinct from the contract itself, and could have formed the basis of an independent tort claim. Accordingly, the Court reversed as to Van Rees' tort claims. With respect to civil theft, the court affirmed the court of appeals on the ground that the claim failed to adequately allege the "knowing deprivation of a thing of value." View "Van Rees v. Unleaded Software, Inc." on Justia Law

In May 2013, plaintiffs Annemarie Morgan and Tiffany Dever filed suit against defendants Sanford Brown Institute, its parent company, Career Education Corporation, and Sanford Brown's chief executive officer, admission and financial aid officers, and clinical director. Sanford Brown was a private, for-profit educational institution with a campus in Trevose, Pennsylvania, that offered medical-related training programs. In the complaint, plaintiffs claimed that defendants misrepresented the value of the school's ultrasound technician program and the quality of its instructors, instructed students on outdated equipment and with inadequate teaching materials, provided insufficient career-service counseling, and conveyed inaccurate information about Sanford Brown's accreditation status. The complaint further alleged that Sanford Brown employed high-pressure and deceptive business tactics that resulted in plaintiffs financing their education with high-interest loans, passing up the study of ultrasound at a reputable college, and losing career advancement opportunities. The Sanford Brown enrollment agreement included payment terms for tuition and fees, disclaimers, and an arbitration provision. Without answering the complaint, defendants filed a motion to compel arbitration and to dismiss plaintiffs' claims. The Appellate Division found the parties clearly and unmistakably agreed an arbitrator would determine issues of arbitrability and that plaintiffs failed to specifically attack the delegation clause. The panel therefore determined that arbitrability [was] for the arbitrator to decide. The Supreme Court reversed, finding that the Appellate Division and trial court did not have the benefit of "Atalese v. U.S. Legal Servs. Grp.," (219 N.J. 430, 436 (2014), cert. denied, __ U.S. __, 135 S. Ct. 2804, 192 L. Ed.2d 847 (2015)) at the time they rendered their decisions. The New Jersey Court held in "Atalese" that an arbitration provision in a consumer contract that fails to explain in some minimal way that arbitration is a substitute for a consumer s right to pursue relief in a court of law was unenforceable. This case was therefore remanded for further proceedings in light of Atalese. View "Morgan v. Sanford Brown Institute" on Justia Law

This appeal arose out of a $17 million verdict rendered in favor of Francis Maybank for claims sounding in contract, tort, and the South Carolina Unfair Trade Practices Act (UTPA). Maybank brought this action alleging he received faulty investment advice from Branch Banking and Trust (BB&T - the Bank) through BB&T Wealth Management (Wealth Management) and BB&T Asset Management (Asset Management), all operating under the corporate umbrella of BB&T Corporation (collectively, Appellants). Appellants appealed on numerous grounds, and Maybank appealed the trial court's denial of prejudgment interest. After review, the Supreme Court reversed as to an award of punitive damages based on a limitation of liability clause. The Court affirmed on all other grounds. View "Maybank v. BB&T" on Justia Law

Between 2002-2006, Lucht purchased treated lumber for a deck on his vacation home in the Virgin Islands. The lumber allegedly decayed prematurely and he began replacing boards in 2010; he claims he did not discover the severity of the problem until the fall of 2011. Lucht sued the retailer, wholesaler, and treatment company of the lumber in February 2013, alleging a Uniform Commercial Code contract claim; a common law contract claim; a breach of warranty claim; a negligence claim; a strict liability claim; and a deceptive trade practices claim under the Virgin Islands Deceptive Trade Practices Act. The district court rejected the claims as time-barred. The Third Circuit affirmed, citing the “‘gist of the action doctrine,” which bars plaintiffs from bringing a tort claim that merely replicates a claim for breach of an underlying contract. View "MRL Dev. I, LLC v. Whitecap Inv. Corp" on Justia Law

Montgomery bought a Tassimo, a single-cup coffee brewer manufactured by Kraft Foods, expecting it to brew Starbucks coffee. After the purchase she struggled to find Starbucks T-Discs—single-cup coffee pods compatible with the brewer. The Starbucks T-Disc supply eventually disappeared as Kraft’s business relationship with Starbucks soured. Montgomery sued Kraft and Starbucks on behalf of a class for violations of various Michigan laws. After dismissing several claims and denying class certification on the rest, the district court entered judgment in Montgomery’s favor when she accepted defendants’ joint offer of judgment under FRCP 68. Montgomery appealed the dismissal of her breach of express and implied warranty claims, the denial of class certification on her consumer-protection claims, and the attorney’s fees awarded as part of the Rule 68 settlement (about 3% of what she had requested). The Sixth Circuit affirmed, noting that Montgomery did not purchase the item directly from defendants, for purposes of express warranty, and did not allege that the coffee maker was unfit for its ordinary purpose. View "Montgomery v. Kraft Foods Global, Inc." on Justia Law

James Cherry appealed the grant of summary judgment entered against him and in favor of Pinson Termite and Pest Control, LLC, and Jerry Pinson. In 2011, Cherry purchased a home. The sales contract required the seller to provide a "Wood Infestation Inspection Report (WIIR)." A termite-services contract with Pinson Termite ("termite bond") was transferrable from the seller to Cherry, but it was disputed whether the bond actually transferred to Cherry. In late 2011, Cherry began remodeling him home when he discovered extensive termite damage. A State inspector confirmed the damage and sent Pinson a letter that it had "observed findings of subterranean termite damage" that were not mentioned on the WIIR and that, although the WIIR "indicates the structure was treated by your company, ... we did not observe all mechanics of subterranean control work." The State inspector monitored Pinson's re-treatment of the house. At about the same time, Cherry and Pinson signed a contract for an extension of the termite bond. Shortly thereafter, cherry hired an attorney, who sent Pinson a letter offering to settle his claim for the re-treatment of his home. The State inspector sent Cherry a letter advising that it had supervised Pinson's re-treatment of the house and that if Cherry had any question he should contact the State within 10 days of receiving the letter. If he did not contact, the letter stated the State would "assume that the matter has been resolved." There was no record of any further contact between Cherry and State inspector. Approximately one year after the State letter, Cherry sued Pinson Pest, and Pinson alleging fraud; negligence; negligent hiring, training, and supervision; and breach of contract and seeking "equitable relief pursuant to the 'made whole' doctrine." When summary judgment was granted in favor of Pinson, Cherry appealed arguing that the trial court erred. After review, the Alabama Supreme Court agreed that the trial court erred in entering summary judgment in favor of Pinson, reversed and remanded for further proceedings. View "Cherry v. Pinson Termite & Pest Control, LLC" on Justia Law

Defendant CarMax Auto Superstores California LLC (CarMax) advertised and sold cars as "certified" used vehicles. It sold a 2008 used Jeep Wrangler to plaintiff Jessica Brooks. CarMax had promoted the Jeep as a certified used vehicle, inspected the Jeep, made some repairs, and ultimately placed a signed "Certified Quality Inspection" document (the CQI Certificate) for the Jeep in the Jeep's glove box. The CQI Certificate remained in the glove box at all relevant times. Several months after Brooks purchased the Jeep, she drove it through a deep puddle and the engine was so severely damaged that it had to be replaced. She thereafter demanded (among other things) that CarMax rescind the purchase agreement and buy the Jeep back. When CarMax rejected her demands, she filed this action alleging it violated Vehicle Code section 11713.18, because neither the content of the CQI Certificate nor its method of delivery to her complied with CarMax's duties under section 11713.18. Brooks pleaded claims against CarMax under California's Consumer's Legal Remedies Act and Unfair Competition Law. The trial court ruled Brooks had suffered no damage from CarMax's alleged violations of section 11713.18, and therefore concluded she did not have standing to pursue claims under the CLRA or the UCL. Brooks argued on appeal to the Court of Appeal that reversal was warranted because she adequately demonstrated the type of damage necessary to prosecute a claim under the CLRA or the UCL or, alternatively, she was entitled to prosecute her claims under the CLRA or the UCL without showing any injury. Finding no reversible error, the Court of Appeal affirmed the trial court. View "Brooks v. CarMax Auto Superstores" on Justia Law

This case arose under California's Unclaimed Property Law (UPL). Plaintiff Vanacore and Associates, Inc., dba Vanacore International (Vanacore) was a private investigation firm that specialized in the recovery of unclaimed property. Vanacore entered into a memorandum of understanding (MOU) with defendant Kenneth Rosenfeld. The MOU contemplated that Vanacore would locate and recover shares of stock belonging to Rosenfeld in exchange for a fee. After signing the agreement, Rosenfeld found and recovered the shares himself and refused to pay Vanacore's fee. Vanacore sued for breach of contract, fraud, and unjust enrichment. Rosenfeld demurred on the ground that the MOU violated the Unclaimed Property Law, which precluded certain asset recovery agreements. The trial court sustained the demurrer without leave to amend, finding the MOU illegal and unenforceable. Finding no reversible error in the trial court's judgment, the Court of Appeal affirmed. View "Vanacore and Associates, Inc. v. Rosenfeld" on Justia Law

Sgouros purchased a “credit score” package from TransUnion. Armed with the number TransUnion gave him, he went to a car dealership and tried to use it to negotiate a favorable loan. The score he had bought, however, was useless: it was 100 points higher than the score pulled by the dealership. Sgouros filed suit, asserting that TransUnion violated the Fair Credit Reporting Act, 15 U.S.C. 1681g(f)(7)(A); the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1; and the Missouri Merchandising Practices Act, Mo. Rev. Stat. 407.010, by misleading consumers by failing to inform them that the formula used to calculate their purchased credit scores was materially different from the formula used by lenders. TransUnion moved to compel arbitration, asserting that the website through which Sgouros purchased his product included an agreement to arbitrate. The district court concluded that no such contract had been formed and denied TransUnion’s motion. The Seventh Circuit affirmed after evaluating the website and concluding that TransUnion had not put consumers on notice of the terms of agreement, as required by Illinois law, but actually distracted them from noticing those terms. View "Sgouros v. TransUnion Corp." on Justia Law

Plaintiff filed suit for breach of contract, negligence, wrongful foreclosure, and violations of the Texas Deceptive Trade Practices Act (DTPA), Tex. Bus. & Com. Code 17.50(a)(1)). On appeal, plaintiff challenged the district court's dismissal of her claims, as well as her motion to join a non-diverse defendant. The court concluded that the district court's dismissal of plaintiff's breach-of-contract claim was proper because she failed to allege any facts showing her own performance and did not refute the facts in documents referred to in her complaint, central to her claims, and attached to the motion to dismiss; the dismissal of the negligence claim was proper where any damages stemming from an alleged violation of those solely contractual duties are not redressable in tort; the wrongful-foreclosure claim was properly dismissed where plaintiff never alleged that Wells Fargo disposed of the house at a “grossly inadequate selling price,” nor does she allege that Wells Fargo fraudulently chilled the bidding at the foreclosure sale; and, where plaintiff bases her DTPA claims on Wells Fargo’s failure to make automatic withdrawals to pay the loan, such services cannot form the basis of a DTPA claim because they are incidental to the loan and would serve no purpose apart from facilitating the mortgage loan. Finally, in regard to the motion to join a non-diverse defendant, the district court applied the correct legal standard and its finding of fact were not clearly erroneous. Accordingly, the court affirmed the judgment. View "Villarreal v. Wells Fargo Bank, N.A." on Justia Law