Justia Contracts Opinion Summaries

Plaintiff appealed the district court's judgment granting Chase's motion to dismiss her putative class action claim brought pursuant to the Maryland Credit Grantor Closed End Credit Provisions (CLEC), Md. Code Ann., Com. Law 12-1001 et seq. The district court concluded that federal regulations preempted relevant portions of the CLEC and that the retail sales installment contract signed by plaintiff and Chase's predecessor in interest did not mandate that Chase comply with the CLEC. The court held that the district court erred in concluding that the CLEC was preempted by the National Bank Act (NBA), 12 U.S.C. 1 et seq., or the Office of the Comptroller of the Currency (OCC) regulations. The court also held that the district court erred in dismissing plaintiff's breach of contract claim and remanded for further proceedings.

The issue presented to the Supreme Court in this case was whether under the Unfair Trade Practices and Consumer Protection Act a misrepresentation by a seller of a used motor home is subject to a defense that the misrepresentation was made in good faith. Plaintiff Robert Borgen bought a used Travelaire motor home from A&M Motors, Inc. in 2004. The motor home had previously been owned by Thom and Linda Janidlo; the Janidlos traded in the vehicle to A&M Motors about two weeks before Borgen bought it. When the Janidlos traded in the motor home, they indicated that it was a 2002 model. At some point, someone changed the model year to 2003 on the documents at A&M Motors. The title from the State of Alaska showed that the motor home was a 2003 model, but the vehicle identification number (VIN) indicated that the motor home was a 2002 model. Both trial experts testified that the tenth digit of a VIN of a chassis indicates the model year of the chassis, but their testimony as to whether the same holds true for the VIN of a coach was unclear. The VIN on the chassis is the VIN on the vehicle’s title, but a motor home’s model year is determined by the model year of the coach. A&M Motors sold the Travelaire to Borgen as a 2003 model. In August 2005 Borgen discovered documents in the motor home indicating the motor home was actually a 2002 model. He contacted A&M Motors to complain; the only compensation they offered him was a $1,000 service contract. Borgen sued A&M Motors, pleading three causes of action: (1) misrepresentation, (2) violation of the Unfair Trade Practices and Consumer Protection Act (UTPA), and (3) breach of contract. Borgen moved for summary judgment on his UTPA claim in February 2008. The trial court denied that motion, and a jury ultimately decided that A&M Motors had not engaged in an unfair or deceptive act in its dealings with Borgen. Finding that the trial court did not err by finding the UTPA implied an unknowing affirmative misrepresentation of material fact would not give rise to liability, the Supreme Court affirmed the trial court's judgment with respect to Borgen's UTPA claims, but remanded for further proceedings on treble damages.

At issue in this consumer protection case was which Tennessee Rule of Civil Procedure applied to a motion that sought relief from a default judgment of liability on a counter-complaint, where the motion was filed within thirty days of entry of the default, the trial court did not expressly direct the entry of judgment on the counter-complaint pursuant to Tenn. R. Civ. P. 54.02, and neither liability on the original complaint nor damages on the counter-complaint were determined. The trial court entered default judgment in favor of the consumer on her counterclaims against Discover Bank and awarded the consumer damages. The court of appeals upheld the default judgment, vacated the award of damages, and remanded the case for a new hearing on damages. The Supreme Court affirmed, holding (1) Rule 54.02, rather than Tenn. R. Civ. P. 60.02, applies in this situation, but the same test applies to motions seeking relief from default judgment, under either rule, on the basis of "excusable neglect"; and (2) actual damages are recoverable for loss of available credit under Tennessee Consumer Protection Act where the plaintiff suffers a demonstrable loss of credit, proximately caused by the defendant, resulting in actual harm.

Plaintiff commenced a putative class action against Bloomberg alleging a violation of General Obligations Law 5-901 and 5-903; breach of contract; unjust enrichment; negligent misrepresentation; violation of General Business Law 349; and sought declaratory and injunctive relief. The Appellate Division subsequently granted Bloomberg's motion to dismiss plaintiff's complaint in its entirety. The court affirmed, holding that, even affording plaintiff every favorable inference, when reviewing the pleadings and factual allegations of his complaint, plaintiff's failure to identify a cognizable injury proved fatal to his action against Bloomberg.

Plaintiff-Appellant Sean Weeks appealed a summary judgment that dismissed his claims against Michael Geiermann and Collection Center, Inc. (collectively "Collection Center") for violations of the Fair Debt Collection Practices Act. In 2009, Plaintiff brought this action against the Center for its attempt to collect $3,034.21 in interest on a debt he owed to Medcenter One for clinic and hospital services. Plaintiff obtained medical services from Medcenter's clinic and hospital. According to billing records for the clinic, Plaintiff received services between 2002 and 2008 and was billed $6,752.46, of which his insurance paid $4,698.72. After an insurance adjustment of $1,427.26, Weeks was responsible for $626.48. Weeks paid $453.40, and after another adjustment of $2.03, $171.05 remained unpaid. In July 2009, attorney Geiermann on behalf of Collection Center sent Plaintiff a letter, demanding payment to the hospital for $4,481.22 and to the clinic for $171.05. The letter also demanded $3,003.28 in interest for the hospital and $30.93 in interest for the clinic. The district court granted Collection Center's summary judgment motion and dismissed Plaintiff's action, stating the case was "fairly straightforward." The court held there was no disagreement that Plaintiff had incurred a debt to Medcenter for medical services that remained unpaid which constituted a "legal indebtedness." The court further held that, according to Plaintiff's affidavit, he never received anything in writing from Medcenter indicating any interest would be assessed in the event of nonpayment of this debt after a specified period of time. The court concluded "as a matter of law, that [Collection Center was] rightfully entitled to collect interest from Weeks at the rate of six percent (6%) per annum on the legal indebtedness owed by Weeks to [Collection Center], as the assignee of Medcenter One." Upon review, the Supreme Court affirmed, concluding that a "medical services provider," who does not make disclosures required under N.D.C.C. 13-01-15 to charge the "late payment charge" allowed under N.D.C.C. 13-01-14.1, is still entitled to prejudgment interest under N.D.C.C. 47-14-05 at the legal rate of six percent per annum.

Plaintiff filed a putative class action against M&T Bank, alleging that it improperly charged its checking account customers overdraft fees. The district court denied M&T Bank's renewed motion to compel arbitration, finding that plaintiff's claims were not within the scope of the parties' arbitration agreement. The court held that, under the delegation provision, the decision of whether plaintiff's claims were within the scope of the arbitration agreement was a decision for an arbitrator, and the district court erred in making the decision itself. Further, the court believed that it was prudent for the district court to reconsider its unconscionability determination in light of AT&T Mobility LLC v. Conception, so the court did not reach whether the arbitration agreement was unconscionable. Accordingly, the court vacated and remanded.

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.