Justia Contracts Opinion Summaries

The Supreme Court reversed the order of the circuit court entering summary judgment favor of Eastern Shore Community Services Board (ESCSB) and holding that Oreze Healthcare LLC's conveyance of real property to a third party prohibited Oreze from pursuing its breach of contract claim against ESCSB, holding that ESCSB was not entitled to summary judgment as a matter of law.ESCSB and Oreze entered into a commercial lease agreement under which ESCSB agreed to lease the four buildings comprising an assisted living facility whose license had been suspended and to provide interim care to its residents until a permanent solution was reached. When water damaged the buildings and no remedy was reached before ESCSB terminated the lease Oreze brought this complaint for breach of contract. While the lawsuit was pending, Oreze conveyed the property to a third party by general warranty deed. The circuit court granted summary judgment for ESCSB, ruling that Oreze failed to reserve its claims in the deed. The Supreme Court reversed, holding that the deed did not extinguish or transfer Oreze's right to sue ESCSB for property damage arising from an alleged breach of the lease. View "Oreze Healthcare v. Eastern Shore Community Services Bd." on Justia Law

Appellant Texxon Petrochemicals, LLC (“Texxon”) filed for bankruptcy. In that proceeding, Texxon filed a motion to assume executory contract, alleging that it entered into a contract with Getty Leasing in 2018 to purchase the property. Getty Leasing objected to the motion. After an evidentiary hearing, the bankruptcy court denied the motion on the grounds that, for multiple reasons, there was no valid contract to assume. The district court affirmed, finding there was insufficient evidence to show that, as required under Texas law, the alleged contract was sufficient as to the property identity or comprised an unequivocal offer or acceptance. Texxon appealed. Getty Leasing primarily contends that the appeal is mooted by the dismissal of the underlying bankruptcy proceeding.   The Fifth Circuit affirmed. The court held that the brief email exchange did not demonstrate an offer or acceptance, as required for a contract to be binding under Texas law. Texxon fails to show that the email exchange satisfied any of the three required elements of an offer. A statement that a party is “interested” in selling a property is not an offer to sell that property—it is an offer to begin discussions about a sale. Nor were the terms of the offer clear or definite. Finally, the alleged offer failed to identify the property to be conveyed. For these reasons, Texxon is unable to show the existence of a binding contract. View "Texxon v. Getty Leasing" on Justia Law

The Supreme Court vacated the judgment of the superior court entered favor of Allstate Property and Casualty Insurance Company in this breach of contract action, holding that, under the circumstances, the court erred in granting Allstate's motion for summary judgment.Plaintiff made a claim for loss under its homeowners policy with Allstate after a water loss Plaintiff's property suffered. While Plaintiff sought to invoke a provision in the policy that either party could seek appraisal in the event of a dispute as to the amount of the loss Allstate refused to proceed to appraisal. Plaintiff filed suit for breach of contract in his first action. Allstate counterclaimed seeking a declaration that the parties were required to submit the matter to appraisal. The trial justice granted summary judgment for Allstate without prejudice. Thereafter, Plaintiff demanded that Allstate move forward with the appraisal process. Allstate refused, asserting that Plaintiff's demand was untimely under the policy. Plaintiff then commenced the instant action seeking relief in the form of a judgment ordering Allstate to designate an appraiser and to complete the appraisal process. Final judgment entered for Allstate. The Supreme Court vacated the judgment below, holding that Plaintiff's initial demand for appraisal was not time-barred, and therefore, the trial court erroneously granted summary judgment for Allstate. View "Romeo v. Allstate Property & Casualty Insurance Co." on Justia Law

The Supreme Court affirmed the order of the district court granting petitions made by Lorri Williams to formally probate the estate of Gerry Williams, her ex-husband, and to remove Vicki Hofedlt as personal representative of Gerry's estate, holding that the district court did not err or abuse its discretion.Gerry and Lorri had two daughters, Brittany Williams and Vicki, during their marriage and later divorced. After Gerry died, Lorri paid for his funeral expenses. Vicki then filed an application for informal probate. Lorri filed a creditor's claim claiming funeral expenses and then filed a petition for formal probate asserting that the divorce decree was a testamentary instrument that needed to be probated along with Gerry's will. Lorri also filed a petition to remove Vicki as personal representative of Gerry's estate. The district court granted both petitions. The Supreme Court affirmed, holding that Vicki was not entitled to relief on her claims of error. View "In re Estate of Williams" on Justia Law

Thirteen’s building suffered fire damages covered by Foremost’s policy. Thirteen retained Paramount as its public adjuster and general contractor for repairs. Paramount was “to be [Thirteen’s] agent and representative to assist in the preparation, presentation, negotiation, adjustment, and settlement” of the fire loss. Thirteen also “direct[ed] any insurance companies to include Paramount … on all payments on” the fire loss claim. Paramount negotiated the fire loss. Foremost delivered settlement checks to Paramount. The checks named Thirteen, its mortgagee, and Paramount as co-payees. Paramount endorsed the names of all co-payees, cashed the checks, and kept the proceeds. Paramount performed some repair work on the building before Thirteen sought a declaratory judgment that the insurer had breached its policy by not paying the claim.The Seventh Circuit affirmed summary judgment for Foremost. Paramount received and cashed the checks, discharging the insurer’s performance obligation under the policy. The court rejected Thirteen’s arguments that Foremost waived payment as an affirmative defense by failing to plead it in its answer; that, under controlling Illinois law, Foremost’s policy obligation was not discharged when it delivered the checks to Paramount, which cashed the checks; and that Foremost agreed to make claim payments to Thirteen in installments after Foremost had inspected repair work performed. View "Thirteen Investment Co., Inc. v. Foremost Insurance Co. Grand Rapids Michigan" on Justia Law

Starlight Cinemas, Inc., Akarakian Theaters, Inc. (collectively, Starlight) appealed from a judgment entered in favor of Defendant Massachusetts Bay Insurance Company (MBIC) after the trial court granted MBIC’s motion for judgment on the pleadings without leave to amend. Starlight, which owns and operates movie theaters in Southern California, sued MBIC for breach of an insurance contract and bad faith denial of coverage after MBIC denied Starlight’s claim for losses sustained when it was compelled by government orders to suspend operations during the COVID-19 pandemic. Starlight contends a policy term providing coverage for lost business income due to a suspension of operations “caused by direct physical loss of or damage to property” can be reasonably construed to include loss of use of its theaters without any physical alteration to the property.   The Second Appellate District affirmed. The court concluded Starlight has not alleged a covered loss because the policy language requires a physical alteration of the covered property, which was not alleged. The court explained that Starlight did not allege that the COVID-19 virus was present in its theaters or that there was any physical alteration of its property as a result of either the virus or the government orders. As discussed, most California appellate courts have held the allegation of temporary loss of use of property resulting from pandemic-related government closure orders—without any physical loss of the property—is not sufficient to support a claim against an insurer for business income coverage under a policy that requires the suspension be caused by “direct physical loss of or damage to” insured property. View "Starlight Cinemas, Inc. v. Massachusetts Bay Insurance Company" on Justia Law

The Supreme Court affirmed the judgments of the superior court granting six motions for summary judgment in three underlying cases, holding that the motion justice did not err by ordering reformation of the warranty deeds of both Raymond Burt and Tammy Lacoste and the mortgage deed of Burt.The superior court's order of reformation was based on the uncontested facts that the warranty deeds and mortgage deed at issue did not reflect the parties' intent and the motion judge's conclusion that the deeds were the product of a mutual mistake. The Supreme Court affirmed, holding (1) uncontested evidence in the record clearly and convincingly demonstrated that the warranty deeds and mortgage deed failed correctly to express the parties' agreement and were thus the product of mutual mistake; and (2) summary judgment was properly granted with respect to each of the six motions for summary judgment. View "Burt v. Furtado" on Justia Law

This case involves a rare procedural maneuver called snap removal. Federated Mutual Insurance Company removed an insurance dispute to federal court before Plaintiff, M & B Oil, Inc., “properly joined and served” one of the Defendants, the City of St. Louis. The question is whether this maneuver eliminates the requirement of complete diversity.   The Eighth Circuit answered no, and vacated the order denying remand and sent the case back for a second look. The court explained that from the beginning, M & B sued two Defendants: St. Louis and Federated. One of them is a fellow Missourian, so there has never been complete diversity. And without complete diversity, there is no “original jurisdiction. Further, the court wrote that snap removal cannot cure a lack of complete diversity. Moreover, the court explained that there is reason to doubt that any fraudulent-joinder argument will succeed now that M & B has amended its complaint to include an inverse condemnation claim against St. Louis. View "M & B Oil, Inc. v. Federated Mutual Insurance Co" on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the judgment of the district court that Insured was not entitled to preaward interest from Insurer on an appraisal award based on Minn. Stat. 549.09, holding that the policy language limited interest on a loss to amounts accruing after an appraisal award is issued.After a fire damaged his home, Insured disagreed with Insurer's valuation and demanded an appraisal. The claim was submitted to appraisal, but Insurer did not pay Insured any additional amounts. Insured then demanded preaward interest on the appraisal award, arguing that interest accrued from the date of written notice of his fire claim and until the appraisal award was issued. When Insurer refused to pay, Insured brought this action. The district court concluded that Insured was not entitled to preaward interest. The court of appeals reversed, concluding that the policy language must "explicitly preclude" reward interest to avoid the obligation to pay preaward interest under section 549.09. The Supreme Court reversed, holding that a fire insurance policy provision stating that "no interest accrues on the loss until after the loss becomes payable" precludes preaward interest under section 549.09. View "Wesser v. State Farm Fire & Casualty Co." on Justia Law

The landlord is a four-member LLC with a single asset--a building in downtown Napa. The tenant, Stone Brewing, a large beer brewing and retail corporation, operates a brewpub in the building. Stone Brewing did not pay rent for several months during the pandemic. The landlord sued for unlawful detainer. Stone argued it was excused from paying rent because COVID-19 regulations and business interruptions triggered a force majeure provision in its lease.The trial court granted the landlord summary judgment, finding that the force majeure provision only excused performance if the claiming party was unable to meet its obligations due to factors outside its control; the tenant admitted during discovery it had the financial resources to pay rent during the period of the COVID-19 regulations but simply refused to do so. The court of appeal affirmed. The force majeure provision does not apply where the tenant had the ability to meet its contractual obligations but chooses not to perform due to financial constraints. The plain meaning of the force majeure provision does not support an interpretation that ties a party’s obligation to pay rent to its profitability or revenue stream instead of a delay or interruption caused by the force majeure event itself. View "West Pueblo Partners, LLC v. Stone Brewing Co., LLC" on Justia Law