Justia Contracts Opinion Summaries

Defendant was assigned the serving rights to Plaintiff's mortgage on a piece of property. Plaintiff sued Defendant, claiming that Defendant attempted to collect more than was due on the loan. The parties settled. Plaintiff then filed this action against Defendant, alleging breach of the settlement agreement, defamation, and violations of the Maryland Consumer Debt Collection Act and the Maryland Consumer Protection Act. An order of default was later entered against Defendant. Defendant subsequently filed a motion for a new trial or to alter or amend the judgment, requesting that the default judgments be set aside because Plaintiff's claims were legally deficient. The trial court denied the motion. The court of special appeals affirmed. The Court of Appeals affirmed, holding that a defaulting party who does not file a motion to vacate the order of default after a default judgment has been entered cannot file a Maryland Rule 2-534 motion to alter or amend a judgment to contest liability, and the defaulting party cannot appeal that judgment in order to contest liability. View "Franklin Credit Mgmt. Corp. v. Nefflen" on Justia Law

Benjamin and Keri Fidelak filed a petition for damages in Caddo Parish district court (a court of proper venue) against Foreign & Classic Auto Centre, Inc., a small, independent repair shop in Shreveport, which specialized in the repair of high end foreign automobiles. The Fidelaks claimed that Foreign & Classic sold them a defective engine for their 2004 Land Rover. In response, Foreign & Classic raised numerous defenses and asserted a third party demand against British Parts International (BPI) for reimbursement and indemnification because BPI sold the engine to Foreign & Classic. BPI is headquartered in Houston, Texas, and conducts business nationwide. The issue before the Supreme Court in this matter centered on the enforceability of a forum selection clause. After reviewing the record and the applicable law, the Court reversed the judgments of the lower courts and held that the forum selection clause at issue here was not enforceable because a third party defendant may not object to venue where the principal action has been instituted in the proper venue. View "Fidelak v. Holmes European Motors, LLC" on Justia Law

Plaintiffs filed suit against RAC after entering into a rental agreement with RAC for a wooden trundle bed and mattress infested with bedbugs. On appeal, plaintiffs challenged the district court's order compelling arbitration of their breach of warranty claim under the Magnuson-Moss Warranty Act, 15 U.S.C. 2301 et seq. Relying on regulation promulgated by the FTC under its authority to interpret the Act, plaintiffs argued that RAC could not require binding arbitration as part of a consumer warranty. The court concluded that the district court erred in holding that the FTC regulations contained no ban on binding arbitration. However, the FTC arbitration ban simply did not apply to plaintiffs' rental agreement with RAC. Because plaintiffs have not linked RAC's warranty to any sale, they failed to establish the existence of a written warranty under FTC regulations. Accordingly, the binding arbitration clause was enforceable and the court affirmed the judgment of the district court. View "Seney v. Rent-a-Center, Inc." on Justia Law

The parties in this case entered into an agreement with two writings drafted by U-Haul of West Virginia. The first writing was a rental contract signed by the three plaintiffs. The second writing was a rental contract addendum that was not signed. The addendum contained a provision requiring that any disputes between the parties be arbitrated and was not made available to U-Haul customers prior to their execution of the rental contract. Plaintiffs filed a lawsuit against U-Haul for breach of contract and false advertising, among other claims. U-Haul sought to compel Plaintiffs to resolve their claims in arbitration, arguing that the addendum was incorporated by reference into the signed rental contracts, and thus, U-Haul was allowed to enforce the arbitration provision. The circuit court denied U-Haul's motion to compel arbitration. U-Haul then filed a petition with the Supreme Court seeking a writ of prohibition to set aside the circuit court order that refused to compel Plaintiffs to participate in arbitration. The Supreme Court affirmed, holding that the circuit court did not err in finding that the addendum was not incorporated by reference into the signed rental contracts. View "State ex rel. U-Haul Co. of W. Va. v. Zakaib" on Justia Law

Robert and Tracy Barrett appealed the grant of two summary judgments in favor of Carlos Roman d/b/a Carlos Roman Roofing ("Roman") and Bobby Beach d/b/a Just Brick Masonry ("Beach") on all of the Barretts' claims against Roman and Beach. The issues before the Supreme Court in this appeal required resolution of the same issues that were in claims pending in the circuit court against a third party. A November 2012 judgment disposed of all of the Barretts' claims against Beach and Roman, but it did not dispose of the Barretts' claims against the third party. Thus, the Court's consideration of the circuit court's summary judgments in favor of Beach and Roman as final would mean that the intertwined claims against the subcontractors named as defendants in this action would have been litigated in piecemeal fashion. "The piecemeal adjudication of the claims against the subcontractors pose[d] an unreasonable risk of inconsistent results. Therefore, we must conclude that the circuit court exceeded its discretion in certifying the summary judgments in favor of Beach and Roman as final." Accordingly, the Court dismissed the Barretts' appeal. View "Barrett v. Roman" on Justia Law

In 2006, Respondents obtained an adjustable rate mortgage loan from a mortgage company. Respondents executed a deed of trust on the real property being purchased and separately executed an arbitration rider. Respondents later defaulted on the loan, and Petitioner, which serviced the loan, assessed a number of fees. Respondents filed an action against Petitioner alleging violations of the West Virginia Consumer Credit and Protection Act. Petitioner filed a motion to compel arbitration. The circuit court denied the motion, concluding that the arbitration agreement was unenforceable under the Dodd-Frank Act and that it was procedurally and substantively unconscionable. The Supreme Court granted Petitioner's requested writ of prohibition to prevent enforcement of the circuit court's order, holding (1) the Dodd-Frank Act did not apply to the mortgage loan because the loan was executed prior to the Act's enactment; and (2) the arbitration agreement was neither procedurally nor substantively unconscionable. View "State ex rel. Ocwen Loan Servicing, LLC v. Circuit Court of Kanawha County" on Justia Law

In 2005, James Wiese attended an auction held by Alabama Powersport Auction, LLC (APA) and purchased a "Yerf Dog Go-Cart," for his two minor sons. The go-cart was on consignment to APA from FF Acquisition; however, Wiese was not aware that FF Acquisition had manufactured the go-cart. Soon after purchasing the go-cart, Wiese discovered that the engine would not operate for more than a few minutes at a time. After several failed attempts to repair the go-cart, Wiese stored the go-cart in his garage for almost two years. In 2007, Wiese repaired the go-cart. Matthew Wiese was riding the go-cart and had an accident in which he hit his head on the ground causing a brain injury that resulted in his death in 2010. The elder Wiese brought contract claims against APA stemming from his purchase of the go-cart and for his son's death. APA appealed the circuit court's denial of its motion for summary judgment. Upon review of the matter, the Supreme Court concluded that based on the common-law principles of agency, an auctioneer selling consigned goods on behalf of an undisclosed principal may be held liable as a merchant-seller for a breach of the implied warranty of merchantability under 7-2-314, Ala. Code 1975. As a result,the Court affirmed the circuit court's judgment denying APA's summary-judgment motion as to Wiese's breach-of-the-implied-warranty-of-merchantability claim. View "Alabama Powersport Auction, LLC v. Wiese" on Justia Law

Plaintiff Janet Knutsen appealed a superior court decision to deny her motion for summary judgment and and for granting defendant Vermont Association of Realtors, Inc.'s (VAR) motion for summary judgment on her consumer fraud claim arising out of her purchase of a home in Moretown. Plaintiff argued that VAR's form purchase and sale agreement, which was used in her real estate purchase (to which VAR was not a party) violated the Vermont Consumer Fraud Act (CFA) in that two provisions of the form were unfair and deceptive, and that she was therefore entitled to damages under section 2461(b) of the CFA. Upon review of the facts of this case, the Supreme Court concluded that the trial court correctly held that 'VAR's sole connection to this case was its drafting of the template clauses that [plaintiff] and her buyer's broker used for the purchase of the house, and that could not support a consumer fraud claim. View "Knutsen v. Dion" on Justia Law

After purchasing a car from Defendant, a car dealership, Plaintiff discovered that the car had extensive problems. Plaintiff sued Defendant, alleging that advertising the car as a "Sporty Car at a Great Value Price" violated the Indiana Deceptive Consumer Sales Act and that the salesperson's representation to her that the car would "just need a tune-up" was fraudulent. The trial court granted summary judgment for Defendant. The Supreme Court affirmed in part and reversed in part, holding (1) the trial court correctly found that Defendant's advertisement was classic puffery, which was fatal to Plaintiff's deception claims; but (2) Plaintiff established an issue of material fact as to her fraud claim based on the salesperson's statements. Remanded. View "Kesling v. Hubler Nissan, Inc." on Justia Law

Plaintiffs Peter and Nicole Dernier appealed the dismissal of their action for: (1) a declaratory judgment that defendant U.S. Bank National Association could not enforce the mortgage and promissory note for the debt associated with plaintiffs' purchase of their house based on irregularities and fraud in the transfer of both instruments; (2) a declaration that U.S. Bank has violated Vermont's Consumer Fraud Act (CFA) by asserting its right to enforce the mortgage and note; and (3) attorney's fees and costs under the CFA. They also appealed the trial court's failure to enter a default judgment against defendant Mortgage Electronic Registration Systems, Inc. (MERS). Plaintiffs fell behind on their mortgage, and brought suit against two parties: Mortgage Network, Inc. (MNI), which is in the chain of title for both the note and the mortgage, and MERS, which is in the chain of title for the mortgage as a "nominee" for MNI. Plaintiffs sought a declaratory judgment that the mortgage was void, asserting that: (1) MERS, as a nominee, never had any beneficial interest in the mortgage; (2) MNI had assigned its interest in both instruments to others without notifying plaintiffs; and (3) no party with the right to foreclose the mortgage had recorded its interest. MNI responded that plaintiffs had named MNI as a party in error, because MNI did "not own the right to the mortgage in question." MERS did not respond. Around this time, plaintiffs received a letter in which U.S. Bank represented that it possessed the original promissory note and mortgage and that it had the right to institute foreclosure proceedings on the property. The trial court denied plaintiffs' motion to amend and dismissed plaintiffs' case for failure to state a claim. Plaintiffs appealed. After careful consideration of the trial court record, the Supreme Court concluded the trial court erred in dismissing Counts 1 and 2 of plaintiffs' amended complaint for lack of standing, to the extent that these counts alleged irregularities in the transfer of the note and mortgage unconnected to the pooling and servicing agreement. The Court affirmed as to dismissal of Counts 3 and 4 of plaintiffs' proposed amended complaint. The case was remanded for further proceedings. View "Dernier v. Mortgage Network, Inc." on Justia Law