Justia Contracts Opinion Summaries

Plaintiffs purchased Ford vehicles from various dealerships, signing sales contracts that included arbitration provisions. They later sued Ford Motor Company, alleging defects in the vehicles and claiming Ford violated express and implied warranties and engaged in fraudulent concealment. Ford, not a party to the sales contracts, sought to compel arbitration based on the arbitration clauses in the sales contracts between plaintiffs and the dealerships.The trial court denied Ford's motion to compel arbitration. Ford appealed, and the Court of Appeal affirmed the trial court's decision. The appellate court concluded that the arbitration clauses in the sales contracts did not apply to Ford, as Ford was not a party to those contracts and the plaintiffs' claims were not intimately founded in or intertwined with the sales contracts.The Supreme Court of California reviewed the case and affirmed the Court of Appeal's judgment. The court held that the estoppel approach, which allows a nonsignatory to compel arbitration if the plaintiff's claims are intimately founded in and intertwined with the contract containing the arbitration clause, did not apply here. The court found that plaintiffs' claims against Ford were based on statutory obligations and fraud, not on the sales contracts themselves. Therefore, plaintiffs were not estopped from pursuing their claims in court, and Ford could not compel arbitration based on the sales contracts between plaintiffs and the dealerships. View "Ford Motor Warranty Cases" on Justia Law

Bighorn Construction, LLC (Bighorn) and JED Spectrum, Inc. (JED) filed mechanic’s liens against property owned by Keith Stoakes, seeking to foreclose on the liens. Stoakes denied the validity of the liens and counterclaimed for slander of title against both companies, and for breach of contract, promissory estoppel, and fraud against JED. After a bench trial, the circuit court denied Bighorn’s and JED’s claims for lien foreclosure and ruled in favor of Stoakes on his slander of title claims, awarding him $252,225.27 in damages and $33,394.20 in attorney fees. The court denied relief on the remaining claims.The circuit court found that Bighorn had no reasonable grounds to file the lien after receiving a check for full payment, and that JED’s lien was untimely and insufficiently itemized. The court also found that Stoakes reasonably relied on JED’s promise of a shared well system, awarding him damages for promissory estoppel. However, the court later reversed its decision on the promissory estoppel claim and reduced the attorney fee award accordingly.The Supreme Court of South Dakota reviewed the case. It reversed the circuit court’s ruling on the slander of title claims, finding insufficient evidence to prove that Jerry, acting on behalf of Bighorn and JED, knew or recklessly disregarded the falsity of the liens. The court affirmed the denial of Stoakes’s promissory estoppel claim, concluding that Stoakes did not suffer substantial economic detriment. The court also affirmed the attorney fee award of $33,394.20 to Stoakes, as it was within the court’s discretion under SDCL 44-9-42. View "Jed Spectrum, Inc. v. Stoakes" on Justia Law

In March 2020, the COVID-19 pandemic led to a surge in demand for personal protective equipment (PPE). Bay Promo, LLC, a merchandise supplier, sought to profit by supplying PPE to various entities. Arely Nicolle Moncada Alaniz, a college student, was brought in to assist. Disputes arose over who was responsible for securing lucrative contracts, leading to litigation.The case was first heard in the Massachusetts Federal District Court. After a two-day bench trial, the court found that Bay Promo breached a contract, entitling Moncada to a commission on one PPE order. However, the court denied Moncada's claims for commissions on nine other orders, determining there was no agreement for those commissions.The United States Court of Appeals for the First Circuit reviewed the case. Bay Promo argued that the district court erred in its breach of contract finding and in admitting certain evidence. Moncada contended she was entitled to commissions on all orders and sought equitable relief. The appellate court found no abuse of discretion in the district court's evidentiary rulings and upheld the factual findings that Bay Promo breached the contract by failing to deliver FDA-approved masks on time. The court also agreed that Moncada did not establish new contracts for additional commissions and was not entitled to equitable relief.The First Circuit affirmed the district court's judgment, concluding that Moncada was only entitled to a commission on the initial PPE order and not on subsequent orders. View "Moncada Alaniz v. Bay Promo, LLC" on Justia Law

An investor, Snowden Investment LLC, was denied its contractual right to purchase a membership interest in two companies, Boomerang Franchise LLC and Ashburn Indoor Play LLC, which were formed by Maryland Indoor Play, LLC (MIP) and its members. Snowden had a right to invest in these ventures under a Loan and Security Agreement but was not given the required notice.The Circuit Court for Howard County granted summary judgment to Snowden on liability for breach of contract and awarded specific performance for Boomerang and compensatory damages for Ashburn. Snowden's expert valued the damages for Ashburn at $453,333 using a "fair value" approach, which the court accepted. The court also ordered specific performance for Boomerang, requiring the defendants to offer Snowden the opportunity to invest on the same terms as the original members.The Appellate Court of Maryland upheld the Circuit Court's decisions, rejecting the defendants' arguments that specific performance was inappropriate without evidence that Snowden was ready, willing, and able to invest, and that damages should have been measured at the time of breach using "fair market value" rather than "fair value."The Supreme Court of Maryland reviewed the case and held that the proper measure of damages for the breach of an investor’s right is general damages, calculated using the fair market value at the time of the breach minus the price the investor would have paid. The court found that the Circuit Court erred in awarding specific performance for Boomerang without sufficient evidence that Snowden was ready, willing, and able to meet the terms of membership. The Supreme Court reversed the specific performance order and remanded the case for the Circuit Court to enter nominal damages for the Ashburn breach and reconsider attorneys' fees. View "Maryland Indoor Play v. Snowden Investment" on Justia Law

The plaintiff, Dino J. Guilmette, owned a property in North Providence, Rhode Island, and executed a mortgage in favor of Option One Mortgage Corporation in 2006. The mortgage was later assigned to Wells Fargo, with PHH Mortgage Services as the servicing company. Guilmette requested a modification of his mortgage in 2014, resulting in a Shared Appreciation Modification Agreement. This agreement increased the principal balance and included a provision for a shared appreciation amount if the property value increased and was sold.Guilmette sold the property in 2022 and disputed the calculation of the shared appreciation amount provided by PHH. He argued that PHH's calculation was incorrect and that they overcharged him by $40,708.33. Guilmette filed a breach of contract action, claiming that PHH did not properly calculate the shared appreciation amount according to the modification agreement.The Superior Court granted summary judgment in favor of the defendants, PHH and Wells Fargo, concluding that the modification agreement was clear and unambiguous. The court found that the defendants correctly calculated the shared appreciation amount based on the terms of the agreement and the attached disclosure statement, which provided specific examples of the calculation method.The Rhode Island Supreme Court reviewed the case de novo and affirmed the Superior Court's judgment. The Supreme Court held that the modification agreement was unambiguous and that the defendants' calculation of the shared appreciation amount was correct. The court emphasized that the disclosure statement, which was part of the agreement and signed by Guilmette, clearly illustrated the calculation method, and there was no ambiguity in the contract terms. View "Guilmette v. PHH Mortgage Services FKA Ocwen Loan Servicing LLC" on Justia Law

Kratzer Construction entered into a subcontract with Hardy Construction Co. to perform work on a building addition for Ekalaka Public Schools. Kratzer completed the work and submitted pay applications, including one for $92,856.45, which Hardy partially disputed due to unapproved change orders. Hardy offered to pay $81,153 upon Kratzer signing a release, but Kratzer refused, demanding the full amount plus interest. Hardy later offered the same amount without requiring a release, but Kratzer still declined, insisting on interest.The Sixteenth Judicial District Court granted summary judgment to Kratzer, ruling that Hardy owed $81,153 plus 18% interest from January 6, 2022, and attorney fees, as Kratzer was deemed the prevailing party. Hardy appealed, arguing that Kratzer failed to meet a condition precedent in the subcontract requiring submission of releases from his subcontractors before final payment.The Supreme Court of Montana reviewed the case and concluded that the subcontract's provisions were clear and unambiguous. The court determined that Kratzer's failure to submit the required releases constituted a breach of the subcontract, and Hardy was entitled to withhold payment. The court found that Hardy's offers to settle did not constitute a waiver of the condition precedent or a novation of the contract.The Supreme Court reversed the District Court's summary judgment in favor of Kratzer, including the awards for interest and attorney fees. The court remanded the case for entry of judgment in favor of Hardy, requiring Hardy to pay Kratzer $81,153 for services rendered under the subcontract, less reasonable attorney fees and costs incurred by Hardy. View "Kratzer Construction v. Hardy Construction" on Justia Law

In 2016, Tucker Cianchette secured a multimillion-dollar judgment in Maine Superior Court against his father, step-mother, and two LLCs after they backed out of a 2015 agreement that would have given him sole control of a Ford dealership. Following this, in 2021, Eric and Peggy Cianchette, along with Cianchette Family, LLC, and Better Way Ford, LLC, filed a lawsuit alleging that Ford Motor Company violated state and federal laws during the failed 2015 negotiations and through false testimony by Ford employees in Tucker's 2016 suit.The 2021 lawsuit was initially filed in Maine Superior Court but was removed to the United States District Court for the District of Maine. The District Court dismissed all claims against Ford, leading the plaintiffs to appeal. The plaintiffs argued that Ford's actions during the 2015 negotiations and the 2016 lawsuit constituted violations of Maine's civil perjury statute, the Dealers Act, the federal Automobile Dealers' Day in Court Act, and also amounted to breach of contract and tortious interference with contract.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the District Court's dismissal. The Court of Appeals held that the plaintiffs failed to plausibly allege that Ford made any false representations or that any reliance on such representations was justified. The court also found that the plaintiffs' claims under the Dealers Act were barred by res judicata due to a prior ruling by the Maine Motor Vehicle Franchise Board. Additionally, the court concluded that the implied covenant of good faith and fair dealing did not apply to the breach of contract claims under Michigan law, as the SSA explicitly granted Ford the right to approve changes in ownership. View "Better Way Ford, LLC v. Ford Motor Company" on Justia Law

Mark Radford and the State Board of Land Commissioners and the Idaho Department of Lands (collectively, "the State") were involved in a contract dispute over the State's easement on Radford's property. The State used the easement to access and manage state endowment lands leased for grazing. Historically, the State accessed the easement through the Hallo Property, which Radford purchased in 2020, subsequently revoking the State's access. Radford claimed that an email from the State indicated the easement was no longer needed, leading him to file a lawsuit alleging the State breached the termination clause of the easement agreement by not providing a statement confirming termination.The District Court of the Seventh Judicial District of Idaho granted summary judgment in favor of the State, determining that the termination clause gave the State sole and subjective power to decide whether the easement was necessary. The court found that the State had not made any determination that the easement was no longer needed, thus dismissing Radford's breach of contract claim. Radford appealed the decision.The Supreme Court of the State of Idaho reviewed the case and affirmed the district court's decision. The court held that the State had no contractual duty to assess whether the easement was necessary for its granted purposes. The agreement's termination clause did not impose an obligation on the State to periodically reassess the easement's necessity. The court also rejected Radford's argument that the State's refusal to terminate the easement violated the covenant of good faith and fair dealing, as the State had not determined the easement was no longer needed. The court awarded attorney fees and costs on appeal to the State, concluding that Radford's appeal was unreasonably pursued. View "Radford v. Van Orden" on Justia Law

Just Funky, LLC, an Ohio company, and Think 3 Fold, LLC, an Arkansas company, entered into a business relationship in 2020 to supply plush toys to Walmart. Think 3 Fold issued purchase orders to Just Funky in late 2021, but the parties could not agree on a final price. Concurrently, Just Funky provided a loan to Think 3 Fold, which defaulted on the payments. The parties attempted to settle the loan dispute, but Think 3 Fold's late payment complicated matters. They also discussed a larger plush toy deal as part of the settlement, but no agreement was reached. Think 3 Fold paid for a smaller plush toy order, which Just Funky did not deliver.The United States District Court for the Western District of Arkansas ruled in favor of Think 3 Fold, granting summary judgment on Just Funky's breach of contract claim for the larger plush deal, finding no contract was formed due to lack of agreement on essential terms. The court also ruled in favor of Think 3 Fold on its counterclaim for the smaller plush deal, rejecting Just Funky's setoff defense.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court affirmed the district court's summary judgment, agreeing that no contract was formed for the larger plush deal as there was no meeting of the minds on the price term. The court also upheld the rejection of Just Funky's setoff defense, finding that the $173,000 was part of settlement negotiations and never became due. The judgment of the district court was affirmed. View "Just Funky, LLC v. Think 3 Fold, LLC" on Justia Law

An investor, Snowden Investment LLC, was denied its contractual right to purchase a membership interest in two companies, Boomerang Franchise LLC and Ashburn Indoor Play LLC, both related to a children's indoor play facility business called Hyper Kidz. The right was stipulated in a Loan and Security Agreement with Maryland Indoor Play, LLC (MIP), which required MIP to notify Snowden of new ventures and offer an opportunity to invest. Snowden was not given the required notice for either Boomerang or Ashburn.The Circuit Court for Howard County granted summary judgment to Snowden on liability for breach of contract and awarded specific performance for Boomerang and compensatory damages for Ashburn. Snowden's expert valued the damages for Ashburn at $453,333 using a "fair value" approach, which the court accepted. The court also ordered specific performance for Boomerang, requiring the Founders to offer Snowden the opportunity to invest on the same terms as the original members.The Supreme Court of Maryland reviewed the case and found that the Circuit Court erred in its rulings. The court held that the proper measure of damages for the breach of the investment right should be general damages, calculated using the fair market value of the interest at the time of the breach, not "fair value" as used by Snowden's expert. The court also found that specific performance was not appropriate for Boomerang because the Circuit Court failed to consider all relevant facts and circumstances, including whether Snowden was ready, willing, and able to meet the terms of membership.The Supreme Court of Maryland reversed the judgment for specific performance regarding Boomerang and vacated the compensatory damages award for Ashburn, remanding the case for further proceedings consistent with its opinion. The court also vacated the award for attorneys' fees, costs, and interest, instructing the Circuit Court to revisit these in light of the new findings. View "Maryland Indoor Play v. Snowden Investment" on Justia Law