Justia Contracts Opinion Summaries

A Delaware limited liability company entered into an agreement to purchase real property in Jefferson County, Alabama, from an Alabama limited partnership. The agreement included provisions for the recovery of attorneys’ fees by the prevailing party in litigation arising from the contract. Disputes arose regarding whether the buyer satisfied conditions to extend the closing date, leading the seller to declare the agreement terminated. The buyer sued the seller, the seller’s general partner (a California corporation), and various individual limited partners (in both their personal capacities and as trustees of family trusts), seeking among other relief, damages for breach of contract and a declaration of rights under the agreement. The contract also provided for reimbursement of transaction costs and attorneys’ fees under certain circumstances.The case proceeded in the Jefferson Circuit Court. The court granted summary judgment for the buyer on liability, finding the seller had breached the agreement, and set the issue of damages for a jury trial. Subsequently, disputes arose about whether attorneys’ fees should be decided by the jury or the court. The circuit court ruled that attorneys’ fees recoverable by the prevailing party under the contract would be determined by the court after trial, not by the jury. The seller, general partner, and limited partners sought a writ of mandamus from the Supreme Court of Alabama, arguing they were entitled to a jury trial on attorneys’ fees.The Supreme Court of Alabama denied the petition for writ of mandamus. The Court held that the petitioners failed to demonstrate a clear legal right to a jury determination of prevailing party attorneys’ fees under the contract, because they did not adequately show that the Alabama Constitution or statutes provide such a right for this type of claim. The Court declined to overrule the circuit court’s decision to reserve the issue of attorneys’ fees for judicial determination following the trial on damages. View "Ex parte Vestavia Hills, Ltd." on Justia Law

Reinhardt Enterprises, LLC entered into a contract with BNG Holdings, Inc. to market BNG's services, with the contract set to automatically renew each year unless either party provided notice of non-renewal. After several years of automatic renewal, and shortly before BNG’s sale to Kaseya U.S., LLC, the parties amended the contract to include a provision entitling Reinhardt to a buyout fee if the agreement was "terminated" by BNG under certain circumstances. After acquiring BNG, Kaseya continued the contractual relationship for over two years before sending Reinhardt a letter of non-renewal, invoking the contract’s renewal clause, and explicitly refusing to pay the termination buyout fee.The case began after Reinhardt sued Kaseya in state court for breach of contract, alleging entitlement to the buyout fee. Kaseya removed the case to the United States District Court for the District of North Dakota, where it moved to dismiss under Rule 12(b)(6). The district court granted the motion and dismissed the case with prejudice, holding that the non-renewal of the contract did not constitute a "termination" as contemplated by the contract, and thus Reinhardt was not entitled to the buyout fee.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the district court’s contract interpretation de novo. The appellate court found the term "termination" to be ambiguous in the context of the contract, as it could reasonably refer both to ending the agreement midterm or simply to the end of the contractual relationship, including non-renewal. Because of this ambiguity, the Eighth Circuit held that the parties’ intent regarding the buyout fee must be resolved as a question of fact, reversed the district court’s dismissal, and remanded the case for further proceedings. View "Reinhardt Enterprises, LLC v. Kaseya U.S., LLC" on Justia Law

A law firm leased office space in downtown Washington, D.C. from a commercial landlord. In the spring of 2020, following the onset of the COVID-19 pandemic and in response to orders issued by the Mayor of the District of Columbia, the law firm curtailed most of its in-office operations and directed employees to work remotely. The firm subsequently invoked a rent abatement provision in its lease, arguing that the pandemic and the government’s orders constituted a force majeure event, which resulted in a material interference with its use and enjoyment of the premises due to an alleged interruption of the essential building service of “secure access” or “prompt access” to the building.The law firm filed a breach of contract suit in the Superior Court of the District of Columbia after the landlord denied the rent abatement request. Both parties moved for summary judgment. The Superior Court denied the law firm’s motion and granted summary judgment to the landlord. The court found that the contract was unambiguous, and that there was no interruption of “secure or prompt access” to the premises, as the building remained physically accessible and the landlord did not impede entry. The court also determined that the government’s orders did not amount to a force majeure “taking” as defined by the lease. The law firm appealed.The District of Columbia Court of Appeals affirmed the trial court’s decision. The appellate court held that under the plain meaning of the lease, “secure and prompt access” refers to physical ability to enter the premises, as provided by the landlord, and not to a generalized right to use the premises free from government restrictions. Because the law firm’s access to the building was never impeded by the landlord, the rent abatement provision was not triggered. View "Crowell & Moring, LLP v. Trea 1001 Pennsylvania Avenue Trust" on Justia Law

A nonprofit organization, which hosts an annual art auction, held its 2022 event virtually. To facilitate the livestreamed auction and online bidding, it contracted with two vendors: one to provide the video feed and another to supply bidding software. The video vendor created a YouTube link for attendees to view the auction, and the bidding software synced with this feed, enabling participants to watch and bid on a single screen. Minutes before the event, the video vendor lost its internet connection, causing the YouTube link to break and severing the connection between the video feed and the bidding platform. As a result, auction attendees could neither view the auction nor place bids through the intended system. The auction was hurriedly redirected to a different platform, which resulted in a less effective, asynchronous experience and significantly lower fundraising.The nonprofit threatened legal action against the video vendor for breach of contract and negligence. The vendor, unable to pay, assigned its insurance claim to the nonprofit. The vendor’s insurer, Auto-Owners Insurance Company, had issued a general liability policy that covered certain types of property damage but contained a specific exclusion for damages arising out of the loss or inability to access electronic data. Auto-Owners filed for a declaratory judgment in the United States District Court for the Western District of Missouri, seeking a ruling that its policy did not provide coverage. The district court granted summary judgment to Auto-Owners, holding that the policy’s electronic-data exclusion barred recovery.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the district court’s interpretation of Missouri law de novo. The appellate court held that the policy’s electronic-data exclusion clearly and unambiguously applied to the circumstances, barring coverage for the losses. Therefore, the Eighth Circuit affirmed the district court’s grant of summary judgment in favor of Auto-Owners Insurance Company. View "Auto-Owners Insurance Company v. Halo Foundation: Helping Art Liberate Orphans" on Justia Law

An individual seeking to refinance his mortgage visited a website that offers mortgage information and referrals to affiliated lenders. During three separate visits, he entered personal information and clicked buttons labeled “Calculate” or “Calculate your FREE results.” Immediately below these buttons, the website displayed language in small font stating that clicking would constitute consent to the site’s Terms of Use, which included a mandatory arbitration provision and permission to be contacted by the site or affiliates. The Terms of Use were accessible via a hyperlinked phrase. After using the site, the individual was matched with a particular lender but did not pursue refinancing. Later, he received multiple unwanted calls from the lender and filed a class-action lawsuit under the Telephone Consumer Protection Act, alleging violations such as calling numbers on the Do Not Call registry.The United States District Court for the Eastern District of Michigan initially dismissed the complaint on the merits and denied the lender’s motion to compel arbitration as moot. Upon realizing the arbitration issue should have been decided first, the court reopened the case but found no enforceable agreement to arbitrate existed, denying the motion to compel arbitration. The court also denied reconsideration and allowed the plaintiff to amend his complaint. The lender appealed the denial of arbitration.The United States Court of Appeals for the Sixth Circuit reviewed the denial de novo. It held that, under California law, the website provided reasonably conspicuous notice that clicking the buttons would signify assent to the Terms of Use, including arbitration. The court found that the plaintiff’s conduct objectively manifested acceptance of the offer, forming a binding arbitration agreement. The court also concluded that the agreement was not invalid due to unspecified procedural details and that questions of arbitrability were delegated to the arbitrator. The Sixth Circuit reversed the district court’s decision and remanded for further proceedings. View "Dahdah v. Rocket Mortgage, LLC" on Justia Law

Selina Anderson, a federal employee with a history of severe lung disease, broke her leg in a parking lot accident and subsequently died less than a week later following complications from surgery. Her official cause of death was a pulmonary embolism, but her autopsy noted that her longstanding interstitial lung disease contributed to her death. Anderson’s daughter, Brittany Finney, was the beneficiary of Anderson’s life insurance policy under the Federal Employees’ Group Life Insurance Act (FEGLI), which included both standard and accidental death benefits.After Anderson’s death, Finney submitted claims for both types of benefits to Metropolitan Life Insurance Company (MetLife), the insurer. MetLife paid the standard life insurance benefit but denied the additional accidental death benefit. The denial was based on two grounds: that Anderson’s death was not “accidental” within the policy’s meaning, and that her death was “contributed to by” her pre-existing physical illness, thus falling under an exclusion in the policy. Finney filed suit in the United States District Court for the Northern District of Alabama, arguing that the denial breached the insurance contract. Both parties moved for judgment as a matter of law. The district court ruled in favor of MetLife, finding that the denial was reasonable under the policy’s physical illness exclusion.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s judgment. The Eleventh Circuit held that MetLife’s decision to deny accidental death benefits was not arbitrary or capricious, as the policy clearly excluded coverage when a physical illness contributed to the insured’s death. The court concluded that Anderson’s pre-existing lung disease contributed to her death and that MetLife’s denial was reasonable under the terms of the insurance contract. View "Finney v. Metropolitan Life Insurance Company" on Justia Law

Ten nonprofit organizations that received federal grants through the U.S. Citizenship and Immigration Services’ “Citizenship and Integration Grant Program” filed suit after the Department of Homeland Security (DHS) froze and subsequently terminated their grant funding. The freeze and termination followed an executive order issued by the incoming President in January 2025 directing DHS to pause and review grants that funded services to undocumented immigrants, with the aim of ensuring compliance with law and preventing waste, fraud, or abuse. DHS notified grantees of the freeze in February 2025 and terminated the grants in March 2025, prompting the plaintiffs to seek a preliminary injunction to restore the program and funding.The United States District Court for the District of Maryland denied the plaintiffs’ motion for a preliminary injunction. The court determined that the plaintiffs’ claims were essentially contractual—seeking disbursement of funds based on grant agreements—and thus fell under the exclusive jurisdiction of the United States Court of Federal Claims pursuant to the Tucker Act. The court also found that the plaintiffs had not identified a reviewable “final agency action” under the Administrative Procedure Act (APA). Additionally, it concluded that the plaintiffs had failed to provide adequate legal authority for their ultra vires and separation-of-powers claims.Reviewing the appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court’s decision. The Fourth Circuit held that the relief sought by the plaintiffs was materially indistinguishable from relief denied in recent Supreme Court cases, Department of Education v. California and National Institutes of Health v. Public Health Association. It concluded that claims seeking to enforce contractual obligations to pay money must be brought in the Court of Federal Claims and that the plaintiffs had not shown a likelihood of success on their alternative constitutional or statutory claims. The district court’s denial of the preliminary injunction was therefore affirmed. View "Solutions in Hometown Connections v. Noem" on Justia Law

A dispute arose from a contingency fee agreement between the heirs of an Alaska Native allotment and an attorney who helped them recover substantial compensation from the federal government for mismanagement of oil and gas leases on their land. After a settlement was reached, years later, one of the heirs was sued by the attorney in federal court for allegedly failing to make required payments under the fee agreement. The heir then invoked mandatory fee arbitration under Alaska Bar Association rules, which prompted the federal court to stay the proceedings pending the outcome of arbitration.The arbitration was conducted before an Alaska Bar Association panel, which, following guidance from Bar Counsel, limited its review to whether the amount of the attorney’s fee was reasonable, and declined to address broader challenges to the enforceability of the fee agreement, including claims of duress and illegality under federal Indian law. The panel ultimately found the fee amount reasonable. Dissatisfied, the heir petitioned the Alaska Superior Court to vacate the panel’s decision, arguing that the panel exceeded its authority by not deciding enforceability issues and raising other statutory grounds under the Revised Uniform Arbitration Act (RUAA). The Superior Court denied the petition, confirmed the arbitration award, and granted enhanced attorney’s fees to the attorney for post-arbitration litigation.On appeal, the Supreme Court of the State of Alaska affirmed the Superior Court’s confirmation of the arbitration award. The Supreme Court held that a fee arbitration panel’s decision to narrow the scope of review is subject to a “reasonably possible” standard and that the panel did not exceed its authority in this case. The court also held that awards of attorney’s fees under Alaska Civil Rule 82 are permissible in post-arbitration proceedings governed by the RUAA and found no abuse of discretion in the Superior Court’s award. View "Oenga v. Givens" on Justia Law

Gunwerks sought to expand its business by constructing a new manufacturing facility in Cody, Wyoming, a project involving public funds and coordinated through Forward Cody Wyoming, Inc. Forward Cody retained Plan One Architects and Sletten Construction of Wyoming, Inc. as the project's designer and general contractor, respectively. Sletten hired various subcontractors, including Big Horn Glass, Inc. (BHG), to perform specific tasks. After completion, Gunwerks alleged numerous construction defects in the facility, including issues with concrete, finishes, HVAC, siding, drainage, ceiling heights, door and window flashings, and the shooting tunnel. Gunwerks sued Forward Cody, Plan One, and Sletten for breach of contract and breach of the covenant of good faith and fair dealing.Sletten responded to Gunwerks’s lawsuit by filing a third-party complaint against its subcontractors, including BHG. Sletten claimed that, should it be found liable to Gunwerks, subcontractors responsible for any deficient work should indemnify it for those damages. Sletten did not specifically admit or allege deficiencies in BHG’s work but sought to preserve its right to recovery if any subcontractor was found at fault. Approximately ten months after Sletten’s third-party complaint, BHG moved for summary judgment in the District Court of Park County, arguing that Sletten had not presented evidence showing BHG caused any of the alleged damages. The district court granted summary judgment for BHG, finding that Sletten had not countered BHG’s prima facie showing with disputed facts, relying instead on speculation.On appeal, the Supreme Court of Wyoming reviewed the district court’s summary judgment ruling de novo, applying the same standard as the lower court and viewing the record most favorably to Sletten. The Supreme Court affirmed the district court’s decision, holding that Sletten failed to present admissible, competent evidence creating a genuine issue of material fact regarding BHG’s liability for any alleged defects. The court found Sletten’s evidence speculative and conclusory, insufficient to defeat summary judgment. The disposition was affirmed. View "Sletten Construction of Wyoming, Inc. v. Big Horn Glass, Inc." on Justia Law

A Nebraska limited liability company owned by Michael Perkins hired RMR Building Group, LLC, managed and solely owned by Robert M. Ryan II, as a general contractor to redevelop a shopping center. Their contract used a cost-plus billing arrangement, where Perkins paid RMR in advance for specific construction costs, including a substantial sum for HVAC equipment and RMR’s fee. RMR deposited the funds into its general operating account but did not pay for the HVAC equipment; instead, it used the money to cover other business obligations. Perkins terminated the contract after RMR failed to provide proof of payment for the equipment and then sued RMR and Ryan for breach of contract, unjust enrichment, conversion, and fraudulent misrepresentation, also seeking to pierce the corporate veil and hold Ryan personally liable.The District Court for Douglas County found that RMR breached the contract and was liable under theories of money had and received and unjust enrichment, but not for conversion or fraudulent misrepresentation. The court declined to disregard RMR’s corporate entity, finding no sufficient evidence that Ryan diverted funds for personal use or that RMR was a mere facade for Ryan’s dealings. Perkins appealed these findings.The Nebraska Court of Appeals reversed in part, concluding that the corporate veil should be pierced and Ryan held jointly and severally liable for the misappropriated funds, relying on factors from United States Nat. Bank of Omaha v. Rupe. On further review, the Nebraska Supreme Court reversed the Court of Appeals, holding that the evidence did not establish by a preponderance that RMR’s entity should be disregarded, nor did it support fraud or conversion claims against Ryan. The Supreme Court remanded with direction to affirm the district court’s judgment. View "Perkins v. RMR Building Group" on Justia Law