Justia Contracts Opinion Summaries

The Supreme Judicial Court affirmed in part and vacated in part the summary judgment entered by the Business and Consumer Docket in an action brought by Defendant's neighbors issuing a declaratory judgment and injunction based on the court's determination that Defendant's short-term rentals had violated a deed restriction that limits the use and occupancy of certain property and the structures on it, holding that remand was required.Specifically, the Supreme Judicial Court (1) affirmed the lower court's declaration that Defendant's short-term rentals of his oceanfront property had violated a deed restriction that limited the use and occupancy of the property and the structures upon it, holding that there was no error in the summary judgment as to these issues; but (2) vacated the court's injunction against further violations, holding that the injunction lacked specificity on what did and did not comply with the deed restriction in question. View "Morgan v. Townsend" on Justia Law

The Supreme Court reversed the judgment of the district court and court of appeals finding that a repurchase rate in a litigation financing agreement violated Minnesota's usury statute, Minn. Stat. 334.01, holding that such an agreement is not subject to the usury law when repayment of the purchase price is contingent upon a recovery in the underlying litigation.Appellants sought enforcement of a litigation financing agreement they entered into with Respondent. The lower courts deemed the agreement unenforceable as violating the common-law prohibition on champerty. Following reversal, Respondent challenged the enforceability of the agreement on several different grounds. The district court and court of appeals held that the repurchase rate violated section 334.01 and that the rate, reduced to eight percent, began to accrue after the date of the Court's decision in Maslowski I. The Supreme Court reversed and remanded the case, holding (1) the agreement was not subject to section 334.01; (2) remand was required to address Respondent's challenge to the repurchase rate under the common-law doctrine of unconscionability; and (3) the repurchase rate began to accrue after the litigation financing agreement was signed, not after this Court's abolition of the former prohibition on champerty. View "Maslowski v. Prospect Funding Partners LLC" on Justia Law

Westlands Water District (Westlands) appeals from a judgment of dismissal entered in a validation action filed pursuant to, inter alia, Code of Civil Procedure section 860 et seq. The subject matter was an anticipated contract between Westlands and the United States concerning the ongoing delivery of federal reclamation project water and repayment of certain financial obligations. The superior court declined to grant relief and ultimately dismissed Westlands’ validation action for multiple reasons. Most pertinently, the draft was found to be materially deficient in its failure to specify Westlands’ financial obligations under the anticipated contract.   The Fifth Appellate District affirmed the judgment. The court explained that the “Repayment Obligation” cannot be determined without knowing the “Existing Capital Obligation” and/or the contents of exhibit D. The “Existing Capital Obligation” cannot be determined without knowing the contents of exhibit D. In the absence of exhibit D, both terms are useless for purposes of determining Westlands’ financial obligations, i.e., “the scope of the duty and the limits of performance.” Moreover, as Westlands admitted during the motion proceedings, exhibit D was not merely omitted from the draft attached to the complaint. Despite being expressly incorporated into the contract by reference, exhibit D did not exist when the complaint and the December 2019 motion were filed. Even when the motion was heard, there was only meager parol evidence of estimates ranging from $200 million to $362 million. Given the circumstances, the court agreed the contract presented for validation was missing an essential term and, therefore uncertain, i.e., not sufficiently definite to be binding and enforceable. View "Westlands Water Dist. v. All Persons Interested" on Justia Law

The Court of Appeals held that an heirship judgment that conveyed mineral rights to a good faith buyer’s predecessor in interest was void for lack of jurisdiction. The issue presented for the New Mexico Supreme Court was whether the buyer was entitled to rely on the void judgment in its claim of bona fide purchaser status. In accordance with its Court’s decision in Archuleta v. Landers, 356 P.2d 443, the Court concluded that a party who purchases property sold under a judgment that is not void on its face is entitled to bona fide purchaser status. The Court further clarified that extrinsic evidence of lack of jurisdiction was not permitted to overcome the rights of a purchaser who properly relied upon the order of the court as “an authority emanating from a competent source.” Here, the Court held that Respondent Premier Oil & Gas, Inc. (Premier) was a bona fide purchaser, and affirmed the Court of Appeals. View "Premier Oil & Gas v. Welch" on Justia Law

In this appeal from the orders and opinions entered in December 2019, February 2020, May 2020, and April 2021 by the superior court after the case was designated a mandatory complex business case, the Supreme Court affirmed in part and reversed in part, holding that remand was required as to some issues.Plaintiffs and Defendants entered into an asset purchase agreement under which three software applications for use in the clinical trial process would be sold to Defendants by Plaintiffs in exchange for stock and $2.5 million. After the deal soured Plaintiffs brought this lawsuit asserting claims for, among other things, breach of contract and negligent misrepresentation. The trial court granted Defendants' motions to dismiss as to some claims and then granted summary judgment for Defendants on all remaining claims. The Supreme Court affirmed the trial court as to all issues except for the order granting summary judgment on the issues of breach of portions of the asset purchase agreement, holding that further discovery was required. View "Value Health Solutions, Inc. v. Pharmaceutical Research Associates, Inc." on Justia Law

The Supreme Court reversed the judgment of the court of appeals in the underlying insurance dispute, holding that the insurance policy at issue did not incorporate the payout limits in an underlying service agreement.ExxonMobil Corporation hired Savage Refinery Services to work as an independent contractor at Exxon's Baytown refinery, and the parties memorialized their arrangement with a service agreement. Under the agreement, Savage promised to obtain at least a minimum stated amount of liability insurance for its employees and to name Exxon as an additional insured. Savage ultimately procured five different insurance policies, three of which were underwritten by National Union Fire Insurance Company and Starr Indemnity & Liability Insurance Company. After a workplace accident at the Baytown Refinery two injured employees sought compensation. Plaintiffs settled with Exxon for $24 million. When National Union and Starr denied Exxon coverage under their umbrella policies Exxon sued for breach of contract. The trial court ruled for Exxon. The court of appeals reversed, concluding that Exxon was not insured under National Union's umbrella policy. The Supreme Court reversed, holding that Exxon was an "insured" under National Union's umbrella policy and that the lower court's ruling with respect to Starr's bumbershoot policy was predicated on a similar error. View "ExxonMobil Corp. v. Nat'l Union Fire Insurance Co. of Pittsburgh, PA" on Justia Law

The Supreme Court reversed the trial court's denial of Defendant's motion to compel arbitration, holding that remand was required for reconsideration in light of this Court's holdings in TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, 667 S.W.3d 694 (Tex. 2023).Lone Star Cleburne Autoplex filed this suit asserting that Alliance Auto Auctions of Dallas conspired with two of Lone Star's employees in order to embezzle money from Lone Star. Alliance moved to compel arbitration based on arbitration clauses contained in authorization agreements between Lone Star and a company Alliance used to verify and authorize car dealerships to buy and sell in the company's auctions. In opposing the motion Lone Star asserted that its claims fell outside the scope of the arbitration agreement. The trial court denied Alliance's motion to compel. The court of appeals affirmed. The Supreme Court reversed, holding that because the court of appeals decided this case without addressing arguments rejected in TotalEnergies, remand was required. View "Alliance Auto Auction of Dallas, Inc. v. Lone Star Cleburne Autoplex, Inc." on Justia Law

The Supreme Court vacated the judgment of the court of appeals in this case involving the question of deed construction within the oil and gas context as to whether a royalty interest was fixed or floating, holding that further proceedings were required to evaluate this case in light of the framework articulated in Van Dyke v. Navigator Group, 668 S.W.3d 353 (Tex. 2023).The 1956 deed at issue expressly reserved an undivided 3/32's interest "(same being three-fourths (3/4's) of the usual one-eighth (1/8th) royalty)" in the oil, gas, and other minerals. The question before the Supreme Court was whether the reservation was a floating 3/4 interest of the royalty rather than a fixed 3/32 interest. The court of appeals concluded that the reservation was a floating 3/4 interest. Because the court of appeals' decision preceded Van Dyke, the Court's most recent double-fraction case, the Supreme Court granting the petition for review and vacated the lower court's decision, holding that this case must be remanded this case for further proceedings in light of Van Dyke. View "Thomson v. Hoffman" on Justia Law

On appeal from the trial court's denial of a motion to compel arbitration in this wrongful death lawsuit brought against Defendant, a nursing home, the Supreme Court held that Defendant did not meet the requirements for limited statutory immunity from civil liability under either Tennessee's Durable Power of Attorney for Health Care Act, Tenn. Code Ann. 34-6-201 to -218, or the Health Care Decisions Act, Tenn. Code Ann. 68-11-1801 to -1815.After a resident of the nursing home died his estate brought the underlying wrongful death suit. Defendant moved to compel arbitration based on an arbitration agreement executed by Plaintiff on the decedent's behalf pursuant to a durable power of attorney for health care (POA) form. Plaintiff objected, arguing that the decedent did not have the mental capacity to appoint an agent when he executed the POA. The trial court concluded that the POA was invalid. The court of appeals reversed, concluding that the trial court erred in looking beyond the face of the POA to determine whether Defendant had the mental capacity to execute it. The Supreme Court reversed and affirmed the trial court, holding that the trial court did not err in considering evidence on whether the principal had the requisite mental capacity to execute the POA. View "Welch v. Oaktree Health & Rehabilitation Center LLC" on Justia Law

Plaintiff sued The Savannah College of Art and Design, Inc. (“SCAD”) for race discrimination and retaliation after he was fired from his job as Head Fishing Coach. As part of his employment onboarding, however, Plaintiff signed a document agreeing to arbitrate—not litigate—all legal disputes that arose between him and SCAD. Accordingly, SCAD moved to dismiss and compel arbitration. The district court, approving and adopting the magistrate judge’s Report and Recommendation (“R & R”), granted SCAD’s motion. On appeal, Plaintiff argued that the district court erred by ignoring that his agreement with SCAD was unconscionable and that SCAD waived its right to arbitrate. He also argued that the district court abused its discretion in rejecting his early discovery request.   The Eleventh Circuit affirmed the district court’s order granting SCAD’s motion to dismiss and compel arbitration. The court concluded that the Plaintiff’s arbitration agreement is neither substantively nor procedurally unconscionable. Further, the court found that SCAD did not waive its right to enforce arbitration and that the district court did not abuse its discretion in overruling Plaintiff’s request for early discovery. In short, the court concluded that Plaintiff is bound by his agreement to arbitrate his legal claims against SCAD. View "Isaac Payne v. Savannah College of Art and Design, Inc." on Justia Law