Justia Contracts Opinion Summaries

Two attorneys verbally agreed to jointly propose providing legal services to a public entity for Hurricane Katrina-related insurance claims on a contingency fee basis. After a meeting with the entity’s officials, they submitted several joint proposals, all based on a contingency fee arrangement. The entity, however, offered only an hourly fee contract, which one attorney accepted and the other declined to participate in. Subsequently, the accepting attorney was retained alone and performed all legal work. Over a year later, the entity entered a contingency fee agreement with the accepting attorney and another law firm. The attorney who had declined the hourly arrangement was not included in this contract and performed no work for the entity.The Civil District Court for the Parish of Orleans held a bench trial and found that a valid oral joint venture existed between the two attorneys when the contingency fee contract was executed. It concluded that the accepting attorney breached his fiduciary duty by failing to inform the other of the opportunity to participate, awarding damages equal to half the contingency fee. The Fourth Circuit Court of Appeal affirmed, reasoning that the contract breach—not attorney fee rules—was controlling, and upheld the damages award.The Supreme Court of Louisiana reviewed the case and found clear legal errors in the lower courts’ analysis. The Court held that the initial joint venture terminated when the entity refused the proposed contingency fee arrangement, and no enforceable joint venture or other contractual relationship existed thereafter. Furthermore, the Court clarified that the Louisiana Rules of Professional Conduct govern such relationships and preclude fee-sharing without written client consent and meaningful legal services by all lawyers involved. The Supreme Court reversed the lower courts’ judgments and entered judgment for the defendant, holding that the plaintiff was not entitled to any portion of the contingency fee. View "SPEARS VS. HALL" on Justia Law

The dispute centers on a series of complex financial transactions involving a Wyoming family and their businesses, a local bank, and a commercial lender. The plaintiffs, including a married couple and their closely held LLC, entered into various loans and mortgages related to their commercial property and business operations. When financial difficulties arose—exacerbated by a downturn in the oil and gas industry—the parties restructured their debt, resulting in a 2017 mortgage and, after the operating company filed for bankruptcy, a 2019 settlement agreement. The plaintiffs later alleged that the bank and lender’s actions and omissions caused them to lose equity in both their home and commercial property, and the defendants counterclaimed for breach of the settlement agreement and sought attorney fees.The District Court of Natrona County dismissed or granted summary judgment for the bank and lender on all claims and counterclaims, finding the mortgage unambiguously secured two loans and the bank had no duty to release it after only one was repaid. It also concluded the plaintiffs could not establish justifiable reliance on any alleged misrepresentations, interpreted the settlement agreement as permitting (but not requiring) the lender to record the quitclaim deed after a sale period, and found no breach by the lender. The district court further ruled the plaintiffs breached the agreement by filing suit, thus entitling the bank and lender to attorney fees.On review, the Supreme Court of Wyoming affirmed the district court’s decisions dismissing the plaintiffs’ claims, holding the mortgage secured both loans and the bank acted within its rights. The Supreme Court, however, reversed the grant of summary judgment to the bank and lender on their counterclaims, finding that filing the lawsuit was not a breach of the settlement agreement or its implied covenant of good faith and fair dealing. Consequently, the award of attorney fees and costs to the bank and lender was also reversed. View "Adams v. ANB Bank" on Justia Law

A judgment creditor, Green Belt Bank & Trust, sought to collect on a $2.6 million judgment against Mashon Van Mill and others. After initial efforts to collect failed, Green Belt initiated garnishment proceedings against Unverferth Manufacturing Company, alleging that Unverferth owed substantial sums to Mashon for services. Unverferth initially indicated payments were for Mashon’s personal services but later clarified that Mashon worked as an independent contractor, invoicing through “Hill Top Industries,” a name also connected to Mashon. The parties disputed whether funds paid to Hill Top Industries were subject to garnishment and, if so, whether statutory limits applied.The Iowa District Court for Butler County found that Hill Top Industries was not distinct from Mashon, so the funds paid by Unverferth were subject to garnishment. However, the court limited the garnishment amount to 10% of the total payments, applying the cap in Iowa Code section 642.21(1), which restricts garnishment of an employee’s earnings. Green Belt challenged this ruling, arguing that the cap did not apply because Mashon was not an employee, and appealed after the district court denied reconsideration.The Iowa Court of Appeals affirmed the district court’s application of the statutory limit, following its own prior precedent. On further review, the Supreme Court of Iowa held that the statutory garnishment limits in Iowa Code section 642.21(1) apply only to earnings of employees, not independent contractors. The Court reasoned that “employee” has a distinct legal meaning that excludes independent contractors and overruled contrary appellate precedent. The Supreme Court affirmed in part and vacated in part the decision of the Court of Appeals, and reversed in part the district court’s judgment, remanding for entry of a judgment without application of the statutory garnishment cap. View "Green Belt Bank & Trust v. Van Mill" on Justia Law

A business agreement was made in early 2020 for the rental of a yacht for an event. The agreement involved a payment of $18,280, which was to cover a deposit and a down payment toward the rental fee. The event was canceled due to the COVID-19 pandemic, and the party that made the payment requested a refund. The yacht provider did not return the funds. The party seeking the refund sued under several theories, including unjust enrichment and breach of contract.After mandatory arbitration resulted in an award for the plaintiff, the defendant requested a trial de novo, and the matter proceeded under Nevada’s Short Trial Program. A short trial judge rendered a proposed judgment in favor of the plaintiff. The defendant objected to this proposed judgment, but the short trial judge, after consulting with the Alternative Dispute Resolution Office, ruled on the objection and later denied the defendant’s NRCP 59 motion to alter or amend the judgment, or for a new trial. The district court then entered judgment in favor of the plaintiff, apparently approving the short trial judge’s proposed judgment.On appeal, the Supreme Court of Nevada considered whether a short trial judge has authority to adjudicate objections to a proposed judgment and post-judgment NRCP 59 motions. The court held that under the plain language of NSTR 3(d), only the district court—not a short trial judge—may review and adjudicate objections to proposed judgments and NRCP 59 motions. The court found that the short trial judge exceeded her authority by ruling on these matters. The Supreme Court of Nevada vacated the district court’s judgment and the short trial judge’s post-judgment orders, remanding the case to the district court for further proceedings consistent with its opinion. View "VEGAS AQUA, LLC VS. JUPITOR CORP." on Justia Law

Richard Marschner and Roxane Marschner divorced in 2016 after reaching a settlement agreement dividing their marital property. Richard received a lump sum from Roxane’s retirement account, and Roxane was to receive a portion of Richard’s Army National Guard pension and Federal Employees’ Retirement System benefits upon his retirement. The divorce judgment included provisions that if Richard took action to prevent or reduce Roxane’s share of his military retirement pay—including by waiving retirement pay in favor of disability pay—he would be required to indemnify Roxane. Both parties waived spousal support in the original settlement.After Richard was separated from the National Guard for medical reasons, he began receiving military disability retired pay and waived all his retirement pay. When Roxane attempted to collect her share, the Defense Finance and Accounting Service denied her request, stating that disability pay was not divisible under the Uniformed Services Former Spouses’ Protection Act. Roxane then sought an amended judgment or redistribution of the marital estate from the District Court of Burleigh County, South Central Judicial District. The district court awarded Roxane spousal support equivalent to her lost share of Richard’s retirement pay, relying on the indemnification provision and reasoning that federal law did not prevent enforcement of the parties’ agreement.The Supreme Court of North Dakota reviewed the case de novo, focusing on whether federal law preempts enforcement of the indemnification provision. The court held that federal law, as interpreted in Howell v. Howell, prohibits state courts from dividing military disability retired pay or enforcing indemnification provisions, even if contractually agreed upon. The district court’s award of spousal support was deemed an impermissible division of disability pay. The Supreme Court of North Dakota reversed the amended judgment. View "Marschner v. Marschner" on Justia Law

A black-owned construction company was not invited to bid as general contractor on a major Boston public housing redevelopment project after participating in pre-construction work. Years earlier, the developer had called the company’s president to discuss possible involvement, but the parties disputed what promises, if any, were made during that conversation. The construction company performed pre-construction work and was later selected as general contractor for the first phase (Camden), but after performance and communication issues arose during that project, the developer chose a different, white-owned company for the second phase (Lenox). The construction company did not protest at the time but later sued, alleging breach of contract, quasi-contract, violation of Massachusetts consumer protection law, and racial discrimination under 42 U.S.C. § 1981.The matter was first brought in Massachusetts state court, then removed to the United States District Court for the District of Massachusetts based on federal question jurisdiction. After discovery, the developer moved for summary judgment. The District Court granted summary judgment for the developer, finding no enforceable contract or promise had been made regarding the Lenox phase, that the quasi-contract and Chapter 93A claims failed as derivative, and that there was insufficient evidence of racial discrimination.The United States Court of Appeals for the First Circuit affirmed the District Court’s decision. The First Circuit held that the summary judgment record did not contain evidence from which a reasonable jury could find an enforceable implied-in-fact contract or a promise sufficient for promissory estoppel. It further held that the plaintiff failed to create a triable issue of fact regarding pretext or discriminatory intent under § 1981, given the legitimate business reasons cited for the company’s exclusion. Thus, summary judgment on all claims was proper. View "John B. Cruz Construction Co. v. Beacon Communities Corp." on Justia Law

An environmental remediation company and an oil corporation entered into a Master Services Contract in 2008, which included a Texas choice-of-law and venue provision and an indemnification clause requiring the remediation company to defend and indemnify the oil corporation for claims arising from violations of applicable laws. In 2012, it was discovered that the remediation company’s then-president, along with subcontractors, had engaged in fraudulent overbilling for work performed for the oil corporation. Upon discovery, ownership of the remediation company changed hands, and litigation ensued in Louisiana state court. The remediation company’s new owner alleged that the oil corporation’s employee was complicit in the fraud, making the corporation vicariously liable.The oil corporation then filed suit in the United States District Court for the Southern District of Texas seeking a declaratory judgment that the remediation company had a duty to defend and indemnify it in the Louisiana litigation, and also sought attorney’s fees as damages for breach of contract. The district court granted summary judgment for the oil corporation, holding that Texas law applied, the remediation company owed both a duty to defend and to indemnify, and awarding attorney’s fees for both the Texas and Louisiana lawsuits.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the district court’s rulings de novo regarding summary judgment and attorney’s fees. The appellate court held that Texas law governed under the contract’s choice-of-law clause since Louisiana did not have a more significant relationship or materially greater interest, and applying Texas law did not contravene Louisiana public policy. The indemnity provision was not void as against public policy or for illegality. The court affirmed the duty to defend and to indemnify, but vacated the judgment to the extent it would require indemnification for punitive and exemplary damages, and remanded for modification. It also vacated attorney’s fees awarded for the underlying Louisiana litigation, affirming only those fees related to the declaratory judgment action. View "Anadarko v. Alternative Environmental Solutions" on Justia Law

A fire severely damaged a church building in southeastern Indiana. The church promptly notified its insurer, which had issued a policy covering actual cash value (subject to depreciation) and additional replacement-cost benefits if the property was repaired or replaced “as soon as reasonably possible.” The parties disputed the cost of rebuilding, but the insurer paid the church nearly $1.7 million—the undisputed actual cash value and additional agreed amounts—while the church continued to contest the estimates and did not begin repairs or replacement. About two years after the fire, the church sued the insurer for breach of contract and bad faith denial of replacement-cost benefits.The insurer removed the case to the United States District Court for the Southern District of Indiana and moved for summary judgment, arguing that the church had not complied with the policy’s requirement to repair or replace the property promptly. The church, represented by counsel, responded with arguments about factual disputes over estimates and the credibility of insurance adjusters, but did not address the legal basis concerning the contractual precondition for replacement-cost benefits. The district court granted summary judgment to the insurer, finding the church had failed to engage with the insurer’s core argument.On appeal, with new counsel, the church raised for the first time that ongoing disputes over replacement-cost estimates excused its failure to begin repairs, citing two Indiana Court of Appeals cases. The United States Court of Appeals for the Seventh Circuit held that this argument was waived because it was not presented to the district court. The Seventh Circuit further held that plain-error review in civil cases is available only in extraordinary circumstances not present here. The court affirmed the district court’s judgment in favor of the insurer. View "Crothersville Lighthouse Tabernacle Church v. Church Mutual Insurance Company" on Justia Law

An investment fund specializing in gems and minerals filed for bankruptcy in October 2019. Prior to this, one of the fund’s managing members, through his own companies, had engaged a law firm to represent him and his separate business interests in connection with federal investigations and anticipated arbitration involving the fund and its leadership. The law firm’s engagement letters were addressed to the individual and his other company, not the fund itself, and did not state that the fund was responsible for payment. Some of the legal work benefited all respondents, including the fund, and the fund issued two checks to the law firm. However, a significant balance remained unpaid.During the bankruptcy proceedings, the law firm filed a claim against the fund for unpaid legal fees. The Official Committee of Equity Security Holders, appointed to represent the fund’s equity holders, objected, arguing the fund was not liable for the debt. The United States Bankruptcy Court for the Eastern District of Wisconsin granted summary judgment to the Equity Committee, finding the fund had no obligation to pay the law firm based on the evidence presented. The law firm appealed to the United States District Court for the Eastern District of Wisconsin, which affirmed the bankruptcy court’s decision.The United States Court of Appeals for the Seventh Circuit reviewed the district court’s affirmance de novo. The Seventh Circuit held that the law firm had not provided sufficient evidence of an enforceable promise by the fund to pay the legal fees, either as a primary obligor or under promissory estoppel. Additionally, the court found that neither Wisconsin’s statutory indemnification provision for LLC managers and members nor the fund’s operating agreement extended indemnification rights to the individual who had retained the law firm. The Seventh Circuit affirmed the district court’s judgment. View "Ballard Spahr LLP v Official Committee of Equity Security Holders" on Justia Law

A homeowner alleged that he hired a roofing company in 2011 to install a specific type of roof on his residence. After installation, problems with roof materials became apparent, including issues with a protective layer that remained unresolved despite multiple repair attempts by both the roofing company and the manufacturer over more than a decade. The homeowner asserted that these defects persisted, and that communication from the roofing company ceased in early 2024. As a result, he filed a lawsuit in Etowah County, Alabama, alleging breach of express and implied warranties, as well as negligent or wanton installation and repair, and sought damages.The roofing company moved to dismiss the lawsuit for improper venue, arguing that a forum-selection clause in a “Service Agreement” required all disputes to be heard in Madison County, Alabama. The company attached an unsigned and undated sample agreement to its motion, but did not produce a copy signed by the homeowner or any evidence that the homeowner had agreed to such a clause. The homeowner responded that he had never signed, nor was he aware of, the agreement submitted by the company and also challenged the clause’s reasonableness. The Etowah Circuit Court denied the company’s motion to dismiss for improper venue.The Supreme Court of Alabama reviewed the company’s petition for a writ of mandamus, which sought to compel the lower court to dismiss the case or transfer it to Madison County. The Supreme Court held that the company failed to meet its burden of proving that the forum-selection clause applied, as it did not present evidence linking the blank agreement to the parties’ actual contract. Therefore, the Supreme Court of Alabama denied the petition, concluding that the circuit court did not clearly err in refusing to dismiss or transfer the case. View "Ex parte Continental Roofing Company, LLC" on Justia Law