Justia Contracts Opinion Summaries

A property owner sought to develop a parcel of land in a town, which required rezoning and environmental review. In 2017, while preparing its zoning petition, the owner and the town entered into a memorandum of understanding (MOU) that purported to bind the town and its successors to continue reviewing the zoning petition until a final determination was reached, based on empirical data. The owner submitted its petition and participated in the environmental review process, investing significant resources. After local elections in 2019, a new town supervisor and board, who opposed the project, voted to terminate review of the zoning petition and the related environmental process.The property owner filed suit against the town, its board, and the supervisor, alleging breach of contract and breach of the implied covenant of good faith and fair dealing, based on the town’s termination of the review process. The defendants moved to dismiss, arguing that the MOU was unenforceable under the term limits doctrine and contract zoning doctrine. The Supreme Court, Dutchess County, dismissed the complaint, holding the MOU invalid. The Appellate Division, Second Department, affirmed that decision.The New York Court of Appeals reviewed the case after granting leave to appeal. The Court held that the MOU was invalid and unenforceable under the term limits doctrine because it impermissibly bound successor town boards in the exercise of their legislative discretion over zoning matters. The Court found that such an agreement was not specifically authorized by statute or charter, and did not fall within an exception for proprietary acts. As a result, the property owner’s contractual claims failed as a matter of law. The Court affirmed the Appellate Division’s order. View "Hudson View Park Co. v Town of Fishkill" on Justia Law

A carpenter employed by a subcontractor was injured after falling from a ladder owned by another subcontractor, DAL Electrical Corporation, while working on a renovation project at an office building. The injured worker was using his own employer’s equipment in the morning but, after lunch, returned to the worksite without his equipment and used an unattended DAL ladder, which was defective and marked with blue tape. He was injured when the ladder wobbled and he fell, impaling himself on a tool in his belt. The worker brought claims under New York Labor Law and for common-law negligence against the project’s general contractor, premises owner, and DAL, asserting the defective ladder caused his injuries. The general contractor and owner sought indemnification from DAL under their subcontract.The Supreme Court of Bronx County granted the worker’s motion for partial summary judgment on one Labor Law claim and denied DAL’s motion to dismiss other claims and cross-claims by the general contractor and owner. The court also granted the general contractor and owner summary judgment on their contractual indemnification claim against DAL. The Appellate Division, First Department, modified this order by denying summary judgment on contractual indemnification and granting summary judgment for DAL on all claims and cross-claims against it. The general contractor and owner appealed to the New York Court of Appeals.The New York Court of Appeals affirmed the Appellate Division’s decision. The Court held that none of the indemnification provisions in the subcontract required DAL to indemnify the general contractor or owner for the worker’s injuries because the injuries did not arise from DAL’s performance of its contractually defined work. The Court also found that DAL did not owe a duty of care in tort to the injured worker, as the facts did not fit within any recognized exception to the general rule against extending contractual duties to non-contracting third parties. The certified question was answered in the affirmative. View "Dibrino v Rockefeller Ctr. N., Inc." on Justia Law

In August 2021, following the withdrawal of U.S. military and diplomatic personnel from Afghanistan due to the Doha Agreement with the Taliban, the U.S. government vacated several leased properties in Kabul, comprising five residential villas owned by Abdul Mutakaber and two military vehicle storage lots owned by Hamidullah. These leases were executed between 2013 and 2020, during Afghanistan’s Ghani administration. After the Taliban seized control of Kabul, they occupied all the properties previously leased by the U.S., preventing the owners from regaining access. The U.S. government then sent notices to terminate the leases, invoking force majeure, and requested refunds of advance rental payments from both landlords.Both Mutakaber and Hamidullah filed certified claims with the State Department under the Contract Disputes Act, seeking unpaid rent, restoration of possession, or purchase of the properties. After the contracting officer denied their claims, they appealed to the United States Civilian Board of Contract Appeals. The Board denied their breach of contract claims, finding that the government did not properly terminate the leases under the force majeure clause but did validly terminate for convenience under the leases’ termination provisions. The Board also determined the government was not obligated to return physical possession of the properties, as the leases did not impose such a duty. The Board awarded judgments for unpaid rent and refunds based on pre-paid amounts: Mutakaber was found to owe the government $115,429.85, while Hamidullah was awarded $193,270.15.The United States Court of Appeals for the Federal Circuit reviewed the Board’s legal conclusions de novo. The court held that the leases did not expressly or impliedly obligate the government to restore physical possession of the properties to the landlords upon termination, nor did Afghan law require such action under the circumstances. The court affirmed the Board’s judgments. View "Mutakaber v. Secretary of State" on Justia Law

The dispute arose when a company provided estimating services related to property damage at a property in North Providence, Rhode Island. The company claimed it had an agreement with the property owner to perform these services and subsequently invoiced the owner for $3,100. The property owner, however, asserted that there was no signed contract for repairs and that an employee of the company had assured her that there would be no charge unless a formal appraisal was required. Despite this, the owner signed a document labeled as a request for a formal appraisal.A civil action for payment was initiated in the Third Division District Court, which found in favor of the company and entered judgment for $3,100 plus statutory interest. The property owner filed a timely appeal to the Kent County Superior Court. At the Superior Court, a bench trial was held, during which testimony from both parties and a co-owner was heard. The trial justice found that a contract for estimation work had existed, based on the evidence presented, and awarded the company the amount requested. The court noted the repeated attempts by the company to send the invoice and the owner’s refusal to accept it. The Superior Court subsequently dismissed the owner’s appeal from the District Court judgment.When the appeal reached the Supreme Court of Rhode Island, the defendant failed to provide complete transcripts of the trial or to present any substantive legal arguments. The Supreme Court determined that, because of these deficiencies and the lack of meaningful appellate argument, any issues were deemed waived. The Supreme Court affirmed the order of the Superior Court and remanded the case as appropriate. The main holding is that, in the absence of proper appellate procedure and argument, the Superior Court’s decision stands. View "Future Contracting & Estimators, LLC v. Allen" on Justia Law

Several individuals who worked as waitstaff at a club operated by Benelux Corporation brought a lawsuit in 2024, alleging violations of the Fair Labor Standards Act. In 2020, Benelux had distributed an arbitration agreement to its employees. The agreement included two signature boxes—one for the employee and one for Benelux’s representative—and stated that by signing, both parties represented that they had read and understood the agreement and agreed to be bound by its terms. One employee, Cadena, signed both signature boxes, but Benelux’s general manager did not sign the agreement due to an oversight.After being sued, Benelux moved to compel arbitration based on the unsigned agreement. Cadena argued that the agreement was not enforceable because Benelux had not signed it, stating she did not intend to be bound unless Benelux also signed. The United States District Court for the Western District of Texas adopted the Magistrate Judge’s recommendation and denied Benelux’s motion to compel, finding that the agreement required signatures from both parties to be enforceable, and Benelux had not signed.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the district court’s decision de novo. Applying Texas contract law, the Fifth Circuit held that the language of the arbitration agreement clearly required signatures from both the employee and Benelux’s representative for the agreement to be enforceable. Because Benelux did not sign, there was no valid arbitration agreement between Benelux and Cadena. The court affirmed the district court’s judgment denying Benelux’s motion to compel arbitration. View "Mertens v. Benelux Corporation" on Justia Law

A commercial landlord leased property in downtown Boston to a restaurant operator. As part of their lease agreement, the landlord sold the restaurant a liquor license for one dollar, with the understanding that the license would be transferred back to the landlord for one dollar at the end of the lease. The lease included a provision prohibiting the restaurant from pledging the liquor license as collateral for any loan without the landlord’s written consent. Despite this, before the lease ended, the restaurant pledged the license to its principal as collateral for a loan. When the landlord discovered this, it terminated the lease and demanded the return of the license.The landlord and its related entities filed suit in the Massachusetts Superior Court, alleging breach of contract, unfair or deceptive business practices under General Laws c. 93A, and conversion. The Superior Court granted partial summary judgment for the landlord on the contract claims, finding the anti-pledge provision enforceable and the pledge a default. After a bench trial, the court found for the landlord on the c. 93A and conversion claims, awarding treble damages, attorney's fees, and costs. The defendants appealed these decisions.The Supreme Judicial Court of Massachusetts reviewed the case after transferring it from the Appeals Court. The Supreme Judicial Court held that the anti-pledge provision did not violate public policy or state law and was therefore enforceable. The court affirmed that the principal’s conduct in falsely affirming to regulatory authorities that the pledge did not violate any agreements constituted willful and knowing unfair or deceptive conduct under c. 93A. However, while the court affirmed the breach of contract claim, it reversed the conversion judgment, finding that the landlord did not have actual or immediate right to possession of the license at the relevant time. The award of attorney's fees and costs was affirmed. View "Nicosia v. Burns, LLC" on Justia Law

Several business entities formed two limited partnerships to develop and manage affordable housing complexes in Tampa, Florida. Creative Choice Homes XXX, LLC and Creative Choice Homes XXXI, LLC acted as general partners in these partnerships, with various investor and special limited partners. The partnership agreements required the general partners to follow strict financial protocols, including restrictions on advances to affiliates and requirements for the proper distribution of profits. Over several years, financial audits revealed the general partners had made unauthorized advances to related entities, violating the agreements' terms. Despite repeated warnings from the limited partners, the general partners failed to cure the breaches within the periods specified in the agreements.After the limited partners provided formal notice of default, the general partners did not fully remedy the violations in a timely manner, including continuing improper transfers and attempting to cure by making late and improperly sourced payments. The limited partners consequently removed the general partners from their positions. The general partners filed suit in state court, seeking a declaration that their removal was improper and alleging breach of contract by the limited partners. The limited partners removed the case to the United States District Court for the Middle District of Florida and counterclaimed for breach of contract and declaratory relief.Following a bench trial, the district court ruled in favor of the limited partners, finding that the general partners materially breached the partnership agreements, failed to cure, and that removal did not constitute an impermissible forfeiture, waiver, or estoppel. On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed. The court held that the general partners’ breaches were material, their cure efforts were insufficient, and that enforcing removal under the partnership agreements was proper and not inequitable. The district court’s judgment was affirmed. View "Creative Choice Homes XXX, LLC v. Amtax Holdings 690, LLC" on Justia Law

Two individuals worked as delivery drivers for a transportation company for over a decade, primarily out of the company’s New Jersey terminal. Their work mainly involved picking up and delivering goods in New Jersey, with occasional deliveries in neighboring states. Each driver had a contract with the company that included a forum-selection clause requiring any disputes to be litigated in Memphis, Tennessee, and a choice-of-law clause providing that Tennessee law would govern any disputes. The company is incorporated in Delaware, headquartered in Illinois, and has operations nationwide, including in Tennessee, but neither the drivers nor the company’s relevant activities were based in Tennessee.The drivers filed a putative class action in the United States District Court for the District of New Jersey, alleging that the company violated New Jersey wage laws by withholding earnings and failing to pay overtime, among other claims. The case was transferred to the United States District Court for the Western District of Tennessee pursuant to the forum-selection clause. The company then moved to dismiss the complaint, arguing that the Tennessee choice-of-law provision applied and that Tennessee law did not recognize the claims brought under New Jersey statutes. The district court agreed, upheld the choice-of-law provision, and dismissed the case.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed the enforceability of the choice-of-law provision under Tennessee’s choice-of-law rules. The court held that the contractual choice-of-law clause was unenforceable because there was no material connection between Tennessee and the transactions or parties. As a result, the Sixth Circuit reversed the district court’s dismissal and remanded the case for further proceedings. The court did not reach the question of whether Tennessee law was contrary to the fundamental policies of New Jersey. View "Andujar v. Hub Group Trucking, Inc." on Justia Law

A married couple underwent in vitro fertilization and created two frozen embryos, signing a written agreement with the IVF provider that specified options for disposing of the embryos in the event of legal separation or divorce. The agreement offered several choices, including discarding the embryos, donating them, or making them available to one partner if desired. The couple selected and initialed the option stating the embryos would be “made available to the partner if he/she wishes.” After the couple separated, the husband sought to have the embryos discarded, while the wife wanted to use them to attempt pregnancy.In the Superior Court of Orange County, the husband filed a motion to discard the embryos, and the wife requested immediate rights to them. Following an evidentiary hearing at which both parties acknowledged the agreement and their signatures, the court found the contract valid, clear, and unambiguous, and awarded the embryos to the wife. The court issued a minute order and later a formal order reflecting this decision.On appeal, the California Court of Appeal, Fourth Appellate District, Division Three, determined the order was not directly appealable but exercised its discretion to treat the appeal as a petition for writ of mandate. Reviewing the IVF agreement independently, the appellate court held that when parties have entered a valid contract specifying the disposition of embryos in the event of divorce, that agreement governs. The court found the contract’s language unambiguous and concluded the embryos should be made available to the wife, as specified. The court further found no violation of public policy or constitutional rights and denied the husband’s petition, affirming that the wife was entitled to the embryos under the contract. View "Pham v. Super. Ct." on Justia Law

Several individuals who were former partners at Cantor Fitzgerald L.P., BGC Holdings L.P., and Newmark Holdings L.P. separated from those partnerships and were entitled to receive certain payments after their departure. These payments included an initial amount plus four annual installment payments, but the partnership agreements allowed the partnerships to withhold the annual payments if the former partners engaged in broadly defined “Competitive Activity.” The partnerships exercised this right and withheld payments from the plaintiffs after determining they had engaged in such activity. The plaintiffs alleged that these provisions constituted unreasonable restraints of trade in violation of Section 1 of the Sherman Act and, for two plaintiffs, a violation of Delaware’s implied covenant of good faith and fair dealing.The United States District Court for the District of Delaware dismissed the plaintiffs’ complaint. The court found that the plaintiffs had failed to plead an “antitrust injury,” which is necessary to assert a claim under the Sherman Act, and further held that the implied covenant claims failed because the partnership agreements gave the partnerships express contractual discretion to withhold the payments when a former partner competed, leaving no contractual gap for the implied covenant to fill. The plaintiffs appealed the dismissal.The United States Court of Appeals for the Third Circuit affirmed the District Court’s judgment. The court held that the plaintiffs’ pecuniary injuries, stemming from the withholding of payments, were not antitrust injuries because they did not result from anticompetitive conduct affecting their status as market participants, nor were their injuries inextricably intertwined with any anticompetitive scheme. Regarding the implied covenant claims, the Third Circuit found that the relevant agreements expressly permitted withholding the payments under the circumstances, and there was no plausible allegation that the partnerships exercised their discretion in bad faith. View "McLoughlin v. Cantor Fitzgerald L.P." on Justia Law