Justia Contracts Opinion Summaries

The Supreme Court reversed the order of the district court enforcing a noncompete covenant against three of its former employees (collectively, Respondents) on the basis that the covenant was unenforceable due to procedural unconscionability, holding that the court erred in invalidating the covenant based on procedural unconscionability and in failing adequately to consider whether the overbroad scope of the covenant could be modified.In determining that the noncompete agreement was unenforceable, the district court called into question whether employees could readily ascertain its terms and found that the noncompete covenant was overbroad. The court, however, declined to modify the covenant, stating that it could be redrafted in a manner to allow for injunctive relief. The Supreme Court reversed the portion of the order denying injunctive relief as to the noncompete provision, holding that the district court (1) erred in invalidating the noncompete covenant as procedurally unconscionable and therefore unenforceable as a matter of law; and (2) failed properly to analyze whether the noncompete covenant could be revised under Nev. Rev. Stat. 613.195(6). View "Tough Turtle Turf, LLC v. Scott" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the circuit court granting the motion brought by Robert and Shannon Bathurst to dismiss the underlying lawsuit because a statute of limitations barred Linda Paul from bringing her claim against them, holding that dismissal was improper.Paul brought this action against Robert, Shannon, and Stonemeadow Ranch, LLC, alleging breach of contract, quantum merit, unjust enrichment, and promissory estoppel. Shannon and Robert moved to dismiss for failure to state a claim and, in the alternative, argued that Paul's claims were time-barred by the statute of limitations set forth in S.D. Codified Laws 15-2-15(4). The Supreme Court applied a two-year statute of limitations and granted the motion to dismiss based on the alternative argument of the statute of limitations. The Supreme Court reversed in part, holding (1) the record did not allow a determination of which statute of limitation applied at this early stage of the proceedings; and (2) the circuit court did not err when it denied the motion to dismiss for failure to state a claim upon which relief could be granted. View "Paul v. Bathurst" on Justia Law

Consolidated appeals arose from an employment dispute between Dr. Margot Potter and her former employer, Women's Care Specialists, P.C. ("Women's Care"), and out of a dispute between Potter and three Women's Care employees: Dr. Karla Kennedy, Dr. Elizabeth Barron, and Beth Ann Dorsett ("the WC employees"). In case no. CV-21-903797, Potter alleged claims of defamation, tortious interference with a business relationship, and breach of contract against Women's Care. In case no. CV-21-903798, Potter alleged claims of defamation and tortious interference with a business relationship against the WC employees. After the cases were consolidated by the circuit court, Women's Care and the WC employees moved to compel arbitration on the basis that Potter's claims were within the scope of the arbitration provision in Potter's employment agreement with Women's Care and that the arbitration provision governed their disputes even though Potter was no longer a Women's Care employee. The trial court denied those motions. In appeal no. SC-2022-0706, the Alabama Supreme Court held Potter's breach of-contract claim and her tort claims against Women's Care were subject to arbitration. In appeal no. SC-2022-0707, the Court likewise held Potter's tort claims against the WC employees were subject to arbitration. The trial court's orders were denied and the cases remanded for further proceedings. View "Women's Care Specialists, P.C. v. Potter" on Justia Law

Seneathia K. Porter initiated an unlawful-detainer action against Tracy Murray, doing business as Tracy's Treasure Company, LLC ("Murray"), seeking possession of commercial property and the recovery of, among other things, unpaid rent, late fees, insurance costs, taxes, and attorney's fees. Porter claimed she owned the property, she had leased the property to Murray on a month-to-month basis for the sum of $1,500 per month, Murray defaulted under the lease by failing to pay rent in accordance with the lease, and that she had provided Murray with written notice that her right of possession of the property had been terminated. Murray, on the other hand, denied that she had leased the property. Rather, she claimed she had executed a contract to purchase the property and had made improvements to the property. Following a bench trial, the circuit court purported to enter a judgment in favor of Porter and against Murray. Murray appealed. The Alabama Supreme Court dismissed the appeal, finding no evidence that the district court had adjudicated the unlawful-detainer action. Thus, the circuit court lacked jurisdiction over the action and the judgment it entered was void and, therefore, would not support an appeal. View "Murray v. Porter" on Justia Law

Amanda Howard Real Estate, LLC ("Howard Real Estate"), appealed a partial summary judgment in favor of Clair Lee and JRHBW Realty, Inc. ("RealtySouth"), in Howard Real Estate's suit to enforce a noncompete agreement against Lee. The circuit court ruled that the noncompete agreement was void because it was not signed by both parties as required by statute. The Alabama Supreme Court affirmed the judgment because none of Howard Real Estate's arguments established that it satisfied the statutory signatures requirement. View "Amanda Howard Real Estate, LLC v. Lee, et al." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals in this dispute arising out of environmental-cleanup and remediation work at two Superfund sites in Bronson, Michigan, holding that Restatement (Second) 193 does not govern the choice-of-law analysis for bad faith claims.Scott Fetzer Company filed this action asserting a breach of contract claim against certain insurance companies, including Travelers Casualty and Surety Company, alleging breaches of certain insurance contracts. Fetzer also asserted a tort claim against each company, arguing that they had acted in bad faith when handling his claims. As to Travelers, an administrative judge concluded that Ohio law applied to a discovery dispute concerning Scott Fetzer's bad faith claim. The court of appeals affirmed, determining that Ohio law governed the bad-faith discovery dispute because the cause of action was a tort. In affirming, the court applied the choice-of-law rules set forth in section 145 of the Restatement. Travelers appealed, arguing that section 193 governs the choice-of-law analysis for bad faith claims because they arise out of insurance contracts. The Supreme Court affirmed, holding that the court of appeals correctly ruled that the choice-of-law analysis applicable to a bad-faith claim as provided by section 145. View "Scott Fetzer Co. v. American Home Assurance Co." on Justia Law

Cody Durham filed suit against Jacob Cooper, alleging breach of a purchase agreement between them involving the sale of Cooper's residence. In August 2020, Durham saw a listing on the Facebook Marketplace social-media website advertising for sale Cooper's house and the two acres of real property on which the house was situated. Over text messages between Durham and Cooper, they agreed to a purchase price and closing date, with Cooper paying the closing costs. Durham testified that he did not engage any realtor or lawyer to help him with drafting the purchase agreement. Instead, he just Google-searched for "residential purchase agreement" and used the first fillable form generated by that search. One of the conditions of Durham's FHA loan was that the loan would not be approved unless the subject property's appraised value was confirmed by a certified appraiser. A certified appraiser appraised the property's value, but that value was subject to the condition that a storage shed in Cooper's backyard needed to be fixed or torn down. Cooper told Durham he "don't have the money" to fix or tear down the storage shed, so it would be up to Durham to take care of it. Cooper then sent Durham a text stating he was backing out of the deal because the closing date had passed, and the issue of the shed had not been resolved. Durham sought specific performance of the purchase agreement. Following a bench trial, the trial court awarded Durham $79,000 in damages. Cooper appealed. The Alabama Supreme Court concluded the trial court misapplied the law to the facts by measuring Durham's damages based on the difference between the contract price and the subject property's assessed market value in a new appraisal because the proper legal standard for measuring damages for the breach of a contract involving the sale of real property was the difference between the contract price and the subject property's market value at the time of the breach. The judgment was reversed and the case remanded for a recalculation of damages. View "Cooper v. Durham" on Justia Law

Antero Resources, Corp., an oil and gas production company, sued a former employee (“Appellant”)  for breach of fiduciary duty, alleging that Appellant abused his position of operations supervisor to award service contracts to companies owned by his close friend Tommy Robertson. Antero also alleged that, after winning the contracts, Robertson’s companies deliberately delayed providing “drillout” operations, resulting in millions of dollars of overbilling. A jury found Appellant liable in the amount of $11,897,689.39, which consists of $11,112,140.00 in damages and $775,549.39 as recoupment for the value Appellant received as a result of the breach. The district court entered a final judgment in the same amount, along with post-judgment interest. The district court ordered Appellant to pay pre-judgment interest and to forfeit 130,170 shares of stock in Antero Midstream. Appellant challenged the judgment on two bases.   The Fifth Circuit concluded that sufficient evidence supported the jury’s finding on damages. The court further held that the district court’s decision to deny Appellant the opportunity to pursue post-trial discovery was an abuse of discretion. The court explained that discovery is procedural; federal law governs the question of whether a party is entitled to take post-trial discovery. Discovery after evidence has closed is typically reserved for situations where the trial reveals a new basis for seeking further information. Accordingly, the court vacated the order denying Appellant’s motion to amend the judgment. The court remanded to reconsider whether to allow Appellant to pursue discovery relating to Antero’s settlement with the Robertson companies and whether to offset the judgment in light of that settlement. View "Antero Resources v. Kawcak" on Justia Law

Monarch Casino & Resort, Inc. appealed a district court’s grant of Affiliated FM Insurance Company’s (“AFM”) motion for partial judgment on the pleadings, which denied Monarch coverage under AFM’s all-risk policy provision, business-interruption provision, and eight other additional-coverage provisions. Monarch also moved the Tenth Circuit Court of Appeals to certify a question of state law or issue a stay. Monarch presented AFM with claims incurred through business interruption losses from COVID-19 and government orders directing Monarch to close its casinos. AFM denied certain coverage on the ground that COVID-19 did not cause physical loss of or damage to property. Monarch sued for breach of contract, bad faith breach of insurance contract, and violations of state law. The Tenth Circuit denied Monarch’s motions to certify a question of state law and issue a stay. And it affirmed the district court’s judgment: (1) AFM’s policy had a Contamination Exclusion provision that excludes all-risk coverage and business-interruption coverage from the COVID-19 virus; and (2) Monarch could not obtain coverage for physical loss or damage caused by COVID-19 under AFM’s all-risk provision, business-interruption provision, or eight additional-coverage provisions because the virus could not cause physical loss or damage and no other policy provisions distinguished this case. Accordingly, Monarch could not obtain the coverage that the district court denied. View "Monarch Casino & Resort v. Affiliated FM Insurance Company" on Justia Law

In this case surrounding the acquisition of Twitter Inc., the Court of Chancery denied Plaintiff's motion for mootness fees, holding that Plaintiff's claim was without merit.Defendants Elon R. Musk, X Holdings I, Inc., and X Holdings II, Inc. agreed to acquire Twitter Inc. pursuant to an agreement and plan of merger (merger agreement). After Defendants' counsel sent a letter to Twitter claiming to terminate the merger agreement Twitter filed a complaint seeking specific enforcement. Thereafter, the deal closed on the original terms of the merger agreement. Plaintiff, who held 5,500 shares of Twitter common stock, brought suit seeking specific performance and damages, claiming that Elon Musk breached his fiduciary duties as a controller of Twitter and that Defendants breached the merger agreement. This Court issued a memorandum opinion dismissing most of Plaintiff's complaint, leaving open the possibility that the damages provision in the merger agreement conveyed third-party beneficiary status to stockholders claiming damages for breach of the agreement. Months later, Plaintiff claimed partial credit for the consummation of the deal and petitioned for mootness fees in the amount of $3 million. The Court of Chancery denied Plaintiff's motion for mootness fees, holding that Plaintiff's claim was not meritorious when filed. View "Crispo v. Musk" on Justia Law