Justia Contracts Opinion Summaries

John Doe was a motivational speaker who, for nearly thirty years, was featured, promoted, and endorsed by the California Association of Directors of Activities (CADA) to intermediate and high school audiences. In 2022, CADA received an email from a former church youth group member alleging that Doe, under a different name in the 1990s, had engaged in an inappropriate sexual relationship with a 17-year-old student. After an independent investigation, CADA concluded that Doe was likely the person in question and terminated its association with him. CADA notified its members of the termination without disclosing the nature of the accusation.Doe filed suit in Santa Cruz County Superior Court against both CADA and the accuser, asserting tort and contractual claims. Both defendants filed special motions to strike under California’s anti-SLAPP statute. The trial court granted the accuser’s motion, finding Doe’s claims against her were protected by the common interest privilege and lacked evidence of malice. Regarding CADA, the trial court found the claims arose from protected activity but denied CADA’s motion to strike most of Doe’s claims, concluding Doe showed a sufficient probability of prevailing, particularly on contract-based claims.On appeal, the California Court of Appeal, Sixth Appellate District, reviewed the trial court’s order denying CADA’s anti-SLAPP motion. The appellate court held that all of Doe’s tort claims and contractual claims based on CADA’s communications were subject to the common interest privilege and must be stricken, as Doe did not show CADA acted with malice. However, the court affirmed the denial of the motion as to Doe’s contractual claims based on his termination, concluding Doe demonstrated minimal merit and that public policy did not bar enforcement. The appellate court reversed in part and remanded, directing the lower court to strike the specified claims and allegations. View "Doe v. California Assn. of Directors of Activities" on Justia Law

Joel Ward performed construction work for Bishop Construction, LLC and its sole member, Ren Bishop, in Idaho, Montana, and Wyoming, with an agreed hourly wage and travel compensation. Despite keeping detailed records of his hours, Ward was not paid for work completed between 2017 and 2019, leading him to pursue payment through legal action. The dispute centered on whether Ward should be classified as an employee or an independent contractor and whether he was required to register as a contractor under Idaho law.The case was first heard in the District Court of the Seventh Judicial District of Idaho, Bonneville County. After a bench trial, and based on the parties’ stipulation that Ward was an independent contractor, the court dismissed his wage claims, leaving only breach of contract and unjust enrichment claims. The district court initially awarded Ward full damages for breach of contract. However, after Bishop raised the issue of contractor registration under the Idaho Contractor Registration Act (ICRA) in post-trial motions, the court amended its findings, limited contract damages to out-of-state work, awarded unjust enrichment damages for Idaho work, and granted costs and attorney fees.On appeal, the Supreme Court of the State of Idaho reviewed whether Ward was required to register as a contractor under ICRA and whether the contract was illegal. The Court held that Bishop failed to meet his burden to prove Ward was required to register under ICRA, as the record did not establish Ward’s status as a contractor for those purposes. The Supreme Court vacated the district court’s amended judgment and remanded with instructions to reinstate its original findings and amended judgment, including the previously awarded attorney fees and costs. The Court also awarded Ward attorney fees and costs on appeal as the prevailing party. View "Ward v. Bishop Construction" on Justia Law

LJP Consulting LLC, a New Jersey business, entered into a Referral Agreement with Total Card, Inc. (TCI) under which LJP would receive a 3% referral fee on servicing revenue generated from businesses it referred to TCI. In 2014, LJP referred First Equity Credit Card Corp. to TCI, resulting in a servicing relationship. In late 2020, Vervent, Inc. acquired TCI and its associated obligations, including those under the Referral Agreement. Vervent paid LJP the referral fee for two months post-acquisition, then terminated the Referral Agreement and ceased payments in January 2021. LJP sued, seeking a declaratory judgment confirming the validity of the agreement and its entitlement to ongoing referral fees while Vervent serviced First Equity accounts.The Circuit Court of the Second Judicial Circuit, Minnehaha County, denied Vervent's motion to dismiss and granted partial summary judgment to LJP, finding Vervent liable for breaching the Referral Agreement but leaving damages for trial. After Vervent’s sister company acquired First Equity in March 2022, Vervent argued it no longer owed referral fees. The court initially excluded evidence of this acquisition but later reversed that ruling during trial. A jury awarded LJP over $1 million in damages, including fees post-acquisition, and the court issued a permanent injunction requiring future payments so long as Vervent serviced First Equity accounts. Vervent’s post-trial motions for judgment as a matter of law and remittitur were denied.The Supreme Court of the State of South Dakota affirmed the circuit court’s determination that the Referral Agreement was not terminable at will. However, it reversed the denial of Vervent’s motions for judgment as a matter of law regarding damages after the First Equity acquisition, holding that Vervent’s obligation to pay referral fees ended once its affiliate acquired First Equity and there was no renewed client contractual relationship. The permanent injunction and post-acquisition damages award were vacated. View "LJP Consulting, LLC v. Vervent, Inc." on Justia Law

A husband and wife entered into a premarital agreement before their 2018 marriage, which set forth a comprehensive division of assets in case of divorce. The agreement categorized both parties’ assets and anticipated inheritances as separate property, except for their marital home. It specified that, upon divorce, the wife would receive 50% of the increase in the appraised value of the marital home, paid by the husband in installments. The agreement also required proportional contributions to living expenses, allocation of taxes, and provided for attorney’s fees if either party breached the agreement.After their separation in 2021, the husband filed for divorce in 2023. Both parties sought enforcement of the premarital agreement in the Vermont Superior Court, Chittenden Unit, Family Division. The wife moved to enforce the agreement, including her share of the marital home’s appreciation and attorney’s fees, arguing the court lacked jurisdiction over the home designated as separate property. The husband claimed offsets for damages the wife allegedly caused to the home and for her failure to pay household expenses and taxes. The family division granted the wife’s motion, enforced the agreement in her favor, and awarded attorney’s fees, ruling that it lacked jurisdiction to consider the husband’s counterclaims, which it said belonged in civil court.The Vermont Supreme Court reviewed the case and held that the family division had jurisdiction to interpret and enforce the premarital agreement—including claims of breach—within the context of divorce proceedings under Vermont statutes. The Court reversed the lower court’s decision and remanded the case to the family division to determine whether the wife materially breached the premarital agreement and to consider appropriate remedies, if any, consistent with principles governing such contracts. View "Gade v. Gade" on Justia Law

37celsius Capital Partners, a Milwaukee-based firm specializing in healthcare-related businesses, sought to acquire Care Innovations, a subsidiary of Intel Corporation. The parties entered into a nondisclosure agreement containing a “Hold Harmless” clause that limited damages, and subsequently executed a term sheet outlining the proposed transaction. The term sheet required 37celsius to contribute $12 million by a specified closing date and granted it an exclusivity period during which Intel could not negotiate with other parties regarding Care Innovations. The term sheet expressly limited legal obligations, stating that no binding contract would exist until a definitive agreement was executed, except for certain provisions such as confidentiality and exclusivity.After 37celsius failed to provide proof of the required funds by the closing date, Intel sold Care Innovations to another buyer. 37celsius filed suit in Wisconsin state court, alleging breach of contract based on Intel’s communications with third parties during the exclusivity period. The defendants removed the case to the United States District Court for the Eastern District of Wisconsin, which ruled that 37celsius was not entitled to expectation damages under the NDA and subsequently granted summary judgment for Intel, finding no reliance damages and no evidence of causation.The United States Court of Appeals for the Seventh Circuit reviewed the district court’s summary judgment de novo. It held that the term sheet was not a binding “Type II” preliminary agreement under Delaware law, as its language did not obligate the parties to negotiate in good faith. Further, even if a binding obligation existed, 37celsius could not show that Intel’s alleged breach was the but-for cause of the failed transaction, as 37celsius did not have the required funds. The court also concluded that the NDA barred expectation damages and 37celsius did not appeal the denial of reliance damages. The Seventh Circuit affirmed the district court’s judgment for Intel. View "37celsius Capital Partners, L.P. v Intel Corporation" on Justia Law

A restaurant operated by PFPCO.’s Noble Pie Parlor leased space in the El Cortez Hotel in Reno, Nevada, which was owned by El Cortez Reno Holdings, LLC. After initially peaceful relations, the parties’ relationship deteriorated due to disputes over property maintenance and incidents such as a gas leak and a stolen camera. Tensions escalated when El Cortez locked Noble Pie out, resulting in litigation that ended largely in Noble Pie’s favor, with the judgment affirmed on appeal. Later, Noble Pie permanently closed its restaurant, prompting El Cortez to allege breach of the lease’s agreed-use provision and file a new complaint. Noble Pie moved to dismiss; the district court granted the motion but allowed El Cortez to amend its complaint. After further procedural exchanges, El Cortez filed an amended complaint, and Noble Pie again moved to dismiss.The Second Judicial District Court, Washoe County, presided by Judge Egan K. Walker, reviewed El Cortez’s late opposition to the motion to dismiss and its request for an extension of time. El Cortez’s request, based on “professional courtesy,” was submitted just before the deadline. The district court denied the extension, finding no good cause for the delay and noting El Cortez’s pattern of tardiness in filings. The court treated El Cortez’s failure to timely oppose the motion as an admission under DCR 13(3), granted the motion to dismiss with prejudice, denied leave to further amend, and awarded attorney fees to Noble Pie as the prevailing party under the lease.On appeal, the Supreme Court of Nevada considered whether the district court abused its discretion in denying the extension, granting the motion to dismiss, refusing leave to amend, and awarding attorney fees. The Supreme Court of Nevada held that the district court did not abuse its discretion or err in any of these rulings and affirmed the judgment, emphasizing the importance of adhering to procedural rules in litigation. View "El Cortez Reno Holdings, LLC v. PFPCO.'s Noble Pie Parlor" on Justia Law

Industrial Park Center LLC, operating as Mainspring Capital Group, owned a commercial building in Tempe, Arizona, insured under an all-risk property insurance policy issued by Great Northern Insurance Company. The building suffered structural damage attributed to years of water exposure from routine cleaning practices by a seafood distribution tenant. After an initial incident in 2010, Mainspring took several remediation steps but did not implement all recommended preventative measures. A subsequent episode of damage was discovered in 2021, leading Mainspring to file an insurance claim. Great Northern denied coverage, citing policy exclusions such as wear-and-tear and settling, and disputed whether the loss was “fortuitous.”Mainspring initiated suit in the Superior Court for Maricopa County, alleging breach of contract and breach of the implied covenant of good faith and fair dealing. The case was removed to the United States District Court for the District of Arizona. Both parties moved for summary judgment. The district court granted summary judgment to Great Northern and denied Mainspring’s motion, concluding that the loss was not fortuitous, as it was “reasonably foreseeable and almost certain to occur” given the tenant’s ongoing practices and Mainspring’s failure to take all preventative steps. The district court also awarded Great Northern attorneys’ fees.Upon appeal, the United States Court of Appeals for the Ninth Circuit observed that Arizona law does not define “fortuitous” for insurance purposes. Recognizing the issue’s novelty and importance for public policy and contract interpretation, the Ninth Circuit certified the following question to the Arizona Supreme Court: Whether property damage is “fortuitous” when, based on the insured’s knowledge at the time the policy was issued, it was reasonably foreseeable that such damage was almost certain to occur if certain preventative measures were not taken. The court’s disposition was to certify this question, not to affirm, reverse, or vacate the lower court’s judgment. View "INDUSTRIAL PARK CENTER LLC V. GREAT NORTHERN INSURANCE COMPANY" on Justia Law

Two couples entered into a written agreement for the sale and purchase of a condominium in Idaho, using a standard real estate contract form. The property was identified by its street address, unit number, and condominium name. After agreeing to terms and signing the contract, the sellers informed the buyers that they no longer wished to sell. The buyers, who had already paid earnest money, secured financing, and prepared for closing, sought to enforce the agreement. The sellers refused to proceed, claiming the contract was unenforceable due to an inadequate property description under the statute of frauds and asserting the parties had mutually rescinded the agreement.The case was first heard in the District Court of the First Judicial District, Bonner County. The court denied both parties’ motions for summary judgment on the statute of frauds and specific performance, finding factual disputes. After a bench trial, the district court ruled that the property description in the contract was sufficient to satisfy the statute of frauds. At a subsequent jury trial, the jury found that the contract was valid, had not been rescinded or abandoned, and that the sellers breached it, awarding the buyers damages. The district court, however, granted the sellers’ motion for partial summary judgment, finding the remedy of specific performance unavailable because the buyers had not tendered the full purchase price at closing.On appeal, the Supreme Court of the State of Idaho affirmed that the contract’s property description satisfied statutory requirements and thus dismissed the sellers’ statute of frauds defense. The court held that the district court erred in denying specific performance solely for failure to tender the full purchase price, especially since the sellers’ conduct prevented completion. The Idaho Supreme Court reversed the denial of specific performance and remanded for the district court to consider equitable factors. The court also affirmed the award of attorney fees to the buyers and awarded them costs and fees on appeal. View "McLaughlin v. Moore" on Justia Law

Two companies, Gulf Coast Investments, LLC and Trigger Energy Holdings, LLC, sold their membership interests in Blueprint Energy Partners, LLC to TCU Holdings, LLC. Blueprint, formed in 2017 for shale oil operations in Wyoming, originally had three equal members: Gulf Coast, Trigger, and TCU, with Aladdin Capital, Inc. as the manager and primary creditor. After financial struggles and interpersonal conflicts, the parties negotiated the buyout in 2019. TCU’s principal, Kent Stevens, threatened to leave and take staff and clients unless Gulf Coast and Trigger agreed to a set price, known as the “dynamite option.” Despite these threats, the plaintiffs were represented by counsel who advised them of alternatives, and negotiations spanned several months, culminating in a signed purchase agreement.The Circuit Court of the Second Judicial Circuit, Minnehaha County, South Dakota, reviewed the plaintiffs’ post-sale lawsuit alleging economic duress, breach of operating agreement, breach of fiduciary duty, tortious interference, shareholder oppression, unjust enrichment, and sought accounting and injunctive relief. The circuit court granted summary judgment for the defendants on all counts, reasoning that the plaintiffs voluntarily entered the agreement, had legal alternatives, and that the contract itself contained a waiver of further claims. The court also addressed each substantive claim on its merits, finding no legal basis for recovery.On appeal, the Supreme Court of the State of South Dakota affirmed the circuit court’s grant of summary judgment. The Supreme Court held that, under either the three-part or two-part test for economic duress, the plaintiffs failed to show involuntary acceptance or lack of reasonable alternatives. The court also found no breach of the operating agreement or fiduciary duties, no tortious interference or shareholder oppression, and no basis for unjust enrichment or usurpation. The holding confirms the validity and enforceability of the purchase agreement and disposes of all claims against the defendants. View "Trigger Energy Holdings v. Stevens" on Justia Law

Two entities formed a limited liability company in 2012 to operate a high-end hair salon in Portsmouth, New Hampshire. One party contributed financial resources and business expertise, while the other, an established stylist, provided day-to-day management and became the public face of the business. In 2016, they amended their operating agreement to clarify their roles, contributions, and restrictions, including a provision that neither member could transfer their interest in the company without majority approval from disinterested members. The agreement required the stylist to devote all her business time to the company and prohibited competition during membership but was silent on withdrawal by a member.In 2022, after unsuccessful buyout negotiations, the stylist gave notice of her withdrawal from the company. The remaining members sued for breach of fiduciary duty, breach of contract, and sought a declaratory judgment requiring the stylist to continue dedicating her business time to the company. The Superior Court for Rockingham County granted in part and denied in part the stylist’s motion to dismiss, ruling her withdrawal was valid under the operating agreement and the New Hampshire Limited Liability Company Act. As a result, claims relying on her continued membership were dismissed, though the breach of contract claim for pre-withdrawal conduct was initially preserved. The plaintiffs withdrew the remaining contract claim, and the dismissal orders were finalized for appeal.Upon review, the Supreme Court of New Hampshire affirmed the lower court’s decision. It held that the operating agreement did not prohibit member withdrawal and that withdrawal was not a “transfer” requiring approval under the agreement. The court determined that the stylist retained her economic interest but lost membership rights upon withdrawal, consistent with the statute. The court further found no viable claim for damages or wrongful conduct, as the withdrawal did not breach the agreement or applicable law. View "Peregrine Interests LLC v. Todd" on Justia Law