Justia Contracts Opinion Summaries

This was the second of two related lawsuits filed by Torrington Livestock Cattle Company (TLCC) against Daren and Jennifer Berg. In the first suit, Daren was found liable for breach of contract, conversion, and fraud. The court entered judgment in the favor of TLCC in the amount of $517,635, but the judgment remained unsatisfied. While the first suit was pending, the Bergs signed a promissory note with the First Bank of Torrington. As collateral, the bank acquired security interests in a variety of the Bergs' property, including livestock and ranching equipment. Later, the bank assigned the promissory note to TLCC. After the Bergs did not make the first payment, TLCC commenced the instant action, alleging breach of contract for promissory note and to enforce security agreement. The district court determined that no material issues of fact existed and TLCC was entitled to summary judgment. The Supreme Court summarily affirmed the judgment of the trial court based upon the deficient brief offered by the Bergs and their failure to follow the rules of appellate procedure.

Plaintiffs, current and former customers of AT&T, filed a class action against AT&T, alleging unjust enrichment and and breach of contract. AT&T responded by seeking to enforce an arbitration agreement contained in its contracts with plaintiffs. The district court refused to enforce the arbitration agreement on state-law unconscionability grounds, relying primarily on the agreement's class-action waiver provision. The court reversed the district court's substantive unconscionability ruling where the FAA preempted the Washington state law invalidating the class-action waiver. The court remanded for further proceedings related to plaintiffs' procedural unconscionability claims for the district court to apply Washington choice-of-law rules.

Metropolitan National Bank (MNB) loaned Grand Valley Ridge several million dollars for the completion of a subdivision. After Grand Valley failed to make its interest payments, MNB filed a petition for foreclosure. Grand Valley and Thomas Terminella, a member of Grand Valley (collectively, Appellants), filed an amended counterclaim alleging various causes of action. During the trial, the circuit court granted Appellants' motion to take a voluntary nonsuit of their claims of negligence and tortious interference with contract. The circuit court held in favor of MNB. The court subsequently granted MNB's petition for foreclosure and awarded a judgment against Appellants. Thereafter, Appellants filed a complaint alleging their original nonsuited counterclaims and adding additional claims. MNB moved to dismiss Appellants' complaint and filed a motion for sanctions. The circuit court granted both motions. The Supreme Court affirmed, holding, inter alia, (1) because Appellants brought claims clearly barred by the statute of limitations, the circuit court did not abuse its discretion in awarding sanctions; and (2) the circuit court properly granted summary judgment for MNB on Grand Valley's nonsuited issues based on the applicable statute of limitations.

Appellants, Leland and Ilene Haugen and Haugen Nutrition and Equipment, defaulted on promissory notes held by respondent United Prairie Bank-Mountain Lake (UPB). The various loan agreements between the parties contained provisions in which Appellants agreed to pay UPB's reasonable costs and attorney fees associated with the protection of UPB's security interests and the enforcement of Appellants' obligation to repay the loans. The district court denied Appellants' motion to submit the question of reasonable attorney fees to the jury and subsequently awarded UPB over $400,000 in attorney fees. The court of appeals affirmed, holding that UPB's claim for the recovery of attorney fees was equitable in nature and thus did not give rise to a jury trial right under the Minnesota Constitution. The Supreme Court reversed in part, holding that Appellants were constitutionally entitled to a jury determination on UPB's claim for attorney fees because the nature of the claim was contractual and the remedy sought was legal.

The brokerage entered into agreements with customers that set a fee for handling, postage, and insurance for mailing confirmation slips after each securities trade. Plaintiff filed claims of breach of contract and unjust enrichment, seeking class certification and recovery of fees charged since 1998. The brokerage removed to federal court under the Class Action Fairness Act, 28 U.S.C. 1332(d), or the Securities Litigation Uniform Standards Act 15 U.S.C. 78p(b) and (c) and 78bb(f), and obtained dismissal. The Seventh Circuit affirmed, first holding that SLUSA did not apply because any alleged misrepresentation was not material to decisions to buy or sell securities, but CAFA's general jurisdictional requirements were met. The agreement did not suggest that the fee represents actual costs, and it was not reasonable to read this into the agreement. Nor did the brokerage have an implied duty under New York law to charge a fee reasonably proportionate to actual costs where it notified customers in advance and they were free to decide whether to continue their accounts.

In 2007, Scottie and Dawn Pederson (the Pedersons) and Rocky Mountain Bank (the Bank) entered into a construction loan agreement pursuant to which the Bank agreed to lend the Pedersons several thousand dollars. In 2008, the Pedersons and the Bank agreed to finance the construction loan through three short term loans. In 2009, the Pedersons tried to refinance their loans but were unable to do so. Due to alleged failures on the part of the Bank, the Pedersons brought suit against the Bank in 2011, asserting claims for, inter alia, negligence, constructive fraud, and negligent misrepresentation. After it was served with the complaint, the Bank filed a Mont. R. Civ. P. 12(b)(6) motion to dismiss, asserting the statutes of limitations had run on all of the Pedersons' claims. The district court granted the Bank's motion and dismissed the Pedersons' claims. The Supreme Court affirmed, holding (1) the applicable statutes of limitations began to run in 2008 because the Pedersons' claims had accrued and they had discovered the facts constituting the claims; and (2) by filing their complaint more than three years later, the Pedersons failed to commence their action within any of the applicable statutes of limitations.

Fifty-four individuals and business entities sued Appellants-Defendants Tyson Foods, Inc., Tyson Poultry, Inc., and Russell Adams (collectively, Tyson), in association with contracts under which they were to raise chickens owned by Tyson on feed supplied by the company. Tyson moved to sever the claims for separate trials. The trial judge denied the motion, allowing the plaintiffs to select eleven individuals and entities to proceed to trial under theories of violation of the Oklahoma Consumer Protection Act and fraud. The poultry growers contended that Tyson targeted them for failure by delivering unhealthy birds and feed in retaliation for their refusal to modernize operations. The jury, in a nine to three split, awarded the growers compensatory and punitive damages approaching $10 million. Alleging evidentiary errors and juror misconduct, Tyson filed a motion for new trial. The trial judge recused and the new trial motion was heard by an assigned judge. Acknowledging concerns about the conduct of the trial, the substitute judge denied the motions for new trial and judgment notwithstanding the verdict, staying further proceedings pending resolution of the appeal. Upon review, the Supreme Court held that: 1) where attorneys were advised that voir dire would be limited to questions not covered in the juror questionnaire and jurors gave incomplete, untruthful, and/or misleading answers in those documents, Appellants were entitled to a new trial; and 2) a poultry grower having no title to the chickens or feed placed with the grower for fattening and future marketing of the birds by the flock's owner is not an "aggrieved consumer" for purposes of the Consumer Protection Act. The case was remanded for further proceedings.

In April and June of 2008, Best of the Best Auto Sales, Inc. purchased seven vehicles from Dealers Auto Auction of Idaho and Brasher's Idaho Auto Auction with checks that were returned for insufficient funds. As a result, Dealers and Brasher refused to provide Best of the Best with the titles to the vehicles. Best of the Best then sold the vehicles to Idaho consumers without providing them with titles. Dealers and Brasher filed claims with CNA Surety d/b/a Western Surety Company which acted as a surety for a "$20,000 Vehicle/Vessel Dealer Bond." Best of the Best was the principal. Upon Best of the Best's failure to provide evidence or defenses for Dealers' and Brasher's claims, Western Surety alleged that it lawfully settled those claims in good faith upon the condition that the consumers received their titles, even though they were not based on final judgments. Plaintiff Nick Hestead submitted his claim, which was based on a final judgment. Plaintiff's claim involved fraud and fraudulent representation concerning a separate vehicle that he purchased from Best of the Best that was previously branded a lemon in California. Western Surety responded by asserting that the Dealer Bond was exhausted. Plaintiff contended that the plain meaning of I.C. 49-1610(4) provides that his claim should be given priority because it was submitted thirty days after a final judgment was entered, unlike Dealers' and Brasher's claims. Western Surety asserted that the plain meaning of I.C. 41-1839(3) permits sureties to settle Dealer Bond claims in good faith. Upon review, the Supreme Court found that the payments on the surety bond were lawfully made in good faith pursuant to I.C. 49-1610(1) and I.C. 41-1839(3) because Dealers' and Brasher's claims were undisputed and supported by competent evidence.

In 2003, Appellant Bridge Tower Dental hired Respondent Meridian Computer Center to provide its dental practice with a computer hardware system subject to a warranty contract. In June of 2005, Bridge began experiencing problems with its server. Bridge Tower Dental entrusted its computer server, including both of its hard drives, to Meridian in order to repair or restore the failing hard drive. While attempting to restore the failing hard drive, Respondent mistakenly confused the source and destination locations on the motherboard and inadvertently erased all of Bridge's data, including the practice's patient records, from the working hard drive. Bridge filed suit against Meridian for breach of contract and negligence under the law of bailment. At trial, the district court denied Bridge's request to submit different jury instructions for the separate claims, and instead combined the contract claim with the negligent bailment claim in the final jury instructions. The jury entered a general verdict in favor of Meridian. Bridge filed a Motion for Judgment Notwithstanding the Verdict, or alternatively, a Motion for New Trial, both of which were denied by the district court. The court entered an order awarding attorney's fees and costs to Meridian. Bridge appealed to the Supreme Court, arguing that the district court erred in denying its Motion for Judgment Notwithstanding the Verdict because Meridian failed to prove that it was not negligent in erasing the data contained on the working hard drive, that the court erred in denying the Motion for New Trial because the jury instructions were improper, and that the district court erred in awarding attorney's fees and costs. Upon review, the Supreme Court reversed the district court's denial of Bridge's post-trial motion and vacated the lower court's award of attorney's fees because Meridian was no longer the prevailing party.

Norfolk Redevelopment and Housing Authority (NRHA) filed a complaint against the St. Joe Company and Advantis Real Estate Services Company alleging unjust enrichment and seeking imposition of a constructive trust and recovery of funds supplied by NRHA to its agent, Advantis, for the payment of contractors who had performed services for NRHA. St. Joe held a perfected secured interest in Advantis's operating account and exercised its rights as a secured creditor over that account to have funds from Advantis's account, including those entrusted to Advantis as NRHA's agent, transferred to a St. Joe account. The circuit court entered summary judgment in favor of NRHA. The Supreme Court affirmed, holding that the imposition of a constructive was was proper and necessary to prevent a failure of justice and unjust enrichment.