Justia Contracts Opinion Summaries

Barbie Jean Schwinn and Deborah Schwinn Bailey filed a lawsuit against Robert Schwinn, TJ Schwinn, and Terry Ann Palazzo to wind up and terminate the Ignaz Schwinn Family Partnership Co. The district court found that the appellants wrongfully dissociated from the partnership, there were no grounds to terminate or wind up the partnership, and the appellants could no longer participate in the management of the partnership. The court granted the appellants a lien against the partnership’s assets for their interests, to be satisfied when the partnership eventually wound up.The district court held a bench trial and dismissed the appellants' claims for breach of contract, breach of fiduciary duty, and breach of the duty of good faith and fair dealing. The court also dismissed the appellants' claims to dissolve and wind up the partnership, finding it was a partnership for a definite term or particular undertaking under Illinois law. The court determined the appellants' dissociation was wrongful and that they were not entitled to payment for their interests until the completion of the undertaking. The court denied the appellees' other counterclaims.The Wyoming Supreme Court reviewed the case and found that the partnership was an at-will partnership, not one for a particular undertaking. The court held that the appellants' dissociation was not wrongful and that their withdrawal triggered the dissolution and winding up of the partnership under Section 801(1) of the Revised Uniform Partnership Act (RUPA). The court reversed the district court's decision and remanded the case for further proceedings to determine if the partnership agreement varied the RUPA's default rules and whether winding up was required under Section 801(5)(iii) due to a deadlock in management. The court also instructed the district court to determine if judicial supervision of the winding up was warranted. View "Schwinn v. Schwinn" on Justia Law

Rodney Alexander and Steve Hobart entered into an agreement granting Alexander a right of first refusal to purchase Steve’s cattle and to have Steve’s national forest livestock grazing permit transferred to him. An addendum later clarified that the agreement extended to Steve’s son, Nick. Years later, Nick sold the cattle and transferred the permit to a third party without notifying Alexander, who then sued for breach of contract and fraud. The defendants moved for judgment on the pleadings, arguing the contract was void due to impossibility of performance or because it was for an unlawful object, and that the right of first refusal was an unreasonable restraint on property alienation.The Circuit Court of the Seventh Judicial Circuit, Pennington County, South Dakota, granted the motion, ruling the contract void for impossibility of performance. Alexander appealed, asserting the court erred in its conclusion. Nick, through notice of review, sought to challenge the court’s ruling that the right of first refusal was not an unreasonable restraint on alienation.The Supreme Court of the State of South Dakota reviewed the case de novo. It found that the contract did not require the Hobarts to transfer the permit directly, but rather that the purchase was contingent on the USFS transferring the permit to Alexander. The court concluded that the contract was not void for impossibility of performance. Additionally, the court affirmed the lower court’s ruling that the right of first refusal was not an unreasonable restraint on alienation, considering the purpose, price, and duration of the agreement, and the mutual consent of the parties.The Supreme Court reversed the circuit court’s order and judgment, remanding the case for further proceedings. View "Alexander v. Estate Of Hobart" on Justia Law

Golden View Ready-Mix, LLC (Golden View) supplied concrete to Grangaard Construction, Inc. (Grangaard) for a bridge project. Golden View alleged that Grangaard failed to pay for the concrete, breached the implied obligation of good faith and fair dealing, and committed fraud. A jury found in favor of Golden View on the breach of contract and good faith claims, awarding damages and punitive damages, but found no liability for fraud. Grangaard appealed the punitive damages award and the decision to submit the fraud issue to the jury.The Circuit Court of the First Judicial Circuit, McCook County, South Dakota, presided over the case. Grangaard moved for partial summary judgment on the fraud claim, arguing there was no independent tort duty outside the contract. The court denied this motion, allowing the fraud claim to proceed. During the trial, the court permitted the jury to consider punitive damages based on the breach of the implied obligation of good faith, despite Grangaard's objections.The Supreme Court of the State of South Dakota reviewed the case. The court determined that punitive damages are only recoverable for breaches of obligations not arising from a contract, as per SDCL 21-3-2. The court found that the implied obligation of good faith arises from the contract itself and does not constitute an independent tort that could support punitive damages. Consequently, the court vacated the punitive damages award. However, the court affirmed the lower court's judgment in all other respects, concluding that the error regarding punitive damages did not affect the jury's decision on the breach of contract and good faith claims. View "Goldenview Ready-Mix, LLC v. Grangaard Construction, Inc." on Justia Law

The Nelson Estate claimed an interest in a coin shop and alleged conversion of its property. Dr. Earl Nelson had provided funds for the business, resulting in a 50% ownership interest, which was confirmed by William Tinkcom. After Dr. Nelson's death in 2013, Tinkcom continued to operate the business and assured Nelson's heirs of their 50% interest. Tinkcom died in 2022, and the business was sold to Eddie Welch without including the Nelson Estate in the final agreement. The Nelson Estate sued the Tinkcom Estate, Welch, and Mere Coin Company, LLC, for breach of contract, unjust enrichment, and other claims, including conversion of valuable coins and collectibles.The Circuit Court of the Second Judicial Circuit in Minnehaha County, South Dakota, granted the defendants' motion for judgment on the pleadings, concluding that the statute of limitations barred all claims. The Nelson Estate argued that the statute of limitations had not expired and that equitable estoppel or fraudulent concealment should prevent the statute of limitations defense.The Supreme Court of South Dakota reviewed the case and affirmed the circuit court's determination that the first six business interest claims accrued upon Dr. Nelson's death in 2013. However, the court reversed the dismissal of these claims because the circuit court did not address the Nelson Estate's defenses of equitable estoppel and fraudulent concealment. The court also reversed the dismissal of the tortious interference and civil conspiracy claims, as these claims arose from the 2022 sale of the business. Lastly, the court reversed the dismissal of the conversion claim, noting that the record did not establish when the conversion occurred or when the Nelson Estate became aware of it. The case was remanded for further proceedings. View "Nelson v. Tinkcom" on Justia Law

A wholesale food supplier, Vista Food Exchange, Inc. ("Vista"), sued Comercial De Alimentos Sanchez S De R L De C.V. ("Sanchez") for breach of contract, alleging that Sanchez failed to pay for over $750,000 worth of meat products. Vista claimed that Sanchez was required to make payments to Vista's headquarters in New York, but Sanchez contended it had paid the invoices in cash to Vista's salesman, Eduardo Andujo Rascón, in Tijuana, Mexico. Sanchez supported its claim with declarations and documents, including an affidavit from Rascón stating he received the cash payments.The United States District Court for the Southern District of New York granted summary judgment in favor of Sanchez, dismissing Vista's breach-of-contract claim. The court found that Sanchez provided unrefuted evidence of cash payments to Rascón, fulfilling its contractual obligations. It also ruled that even if paying Rascón in cash breached the contract, Vista could not show that its damages were proximately caused by the breach because Rascón's theft of the money was unforeseeable. The court dismissed Vista's other claims for breach of implied contract, promissory estoppel, and unjust enrichment, citing New York law that forecloses such claims when an enforceable contract exists.On appeal, the United States Court of Appeals for the Second Circuit found that genuine disputes of material fact existed regarding Sanchez's claimed performance, the modification of the contract, and the foreseeability of damages. The appellate court vacated the district court's judgment dismissing Vista's claims for breach of contract and unjust enrichment and remanded the case for trial on those claims. The appellate court affirmed the dismissal of Vista's claims for implied contract and promissory estoppel. View "Vista Food Exchange, Inc. v. Comercial de Alimentos Sanchez" on Justia Law

Lezah Roberts entered into a fixed-price contract with Advanced Building Design, a Maryland-based firm, to build a handicap-accessible addition to her home in the District of Columbia. The project, which began in 2017 and was expected to take six months, remained unfinished nearly two years later. The project went over budget due to price increases and change orders, and Advanced sought to recoup these overages from Roberts. After initially agreeing to cover some additional costs, Roberts eventually refused to pay further increases, leading Advanced to cease work on the project. Roberts then filed a complaint in the Superior Court of the District of Columbia, alleging breach of contract, fraudulent misrepresentation, breach of the implied covenant of good faith and fair dealing, and a claim under the D.C. Consumer Protection Procedures Act (CPPA) for unfair trade practices.The Superior Court granted Advanced’s motion to dismiss Roberts’s suit, citing a mandatory forum selection clause in the contract that designated Maryland as the exclusive forum for litigation. Roberts appealed, arguing that the forum selection clause was unenforceable because it conflicted with the CPPA and was unconscionable.The District of Columbia Court of Appeals reviewed the case and disagreed with Roberts on both counts. The court held that the CPPA does not preclude parties from selecting their preferred forum and that the forum selection clause did not contravene public policy or demonstrate procedural or substantive unconscionability. Consequently, the court affirmed the Superior Court’s dismissal of Roberts’s complaint. View "Roberts v. Advanced Building Design" on Justia Law

In this case, the husband filed for an absolute divorce, and the wife counterclaimed. The parties attempted mediation but did not reach a settlement. The wife’s counsel later sent a settlement package to the husband’s counsel, which included a Voluntary Separation and Property Settlement Agreement, a promissory note, and a guaranty. The cover letter specified that the husband needed to sign the agreement and note by the end of the day on September 25, 2020. The husband signed the documents on September 28, 2020, and filed an amended complaint for divorce based on mutual consent, incorporating the agreement.The Circuit Court for Anne Arundel County found that the husband had timely accepted the wife’s offer and that a binding settlement agreement was formed. The court granted the husband’s motion to enforce the settlement agreement and entered a judgment for absolute divorce based on mutual consent, incorporating but not merging the agreement into the judgment. The wife appealed, and the Appellate Court of Maryland reversed the circuit court’s judgment, finding that the husband had not timely accepted the wife’s offer and that no contract was formed.The Supreme Court of Maryland reviewed the case and affirmed the Appellate Court’s judgment. The court held that the wife’s offer was conditioned on the husband signing the agreement and note by September 25, 2020, and that the husband’s failure to meet this deadline meant that no contract was formed. The court also found no evidence that the wife had waived the deadline. The court concluded that the husband’s signing of the documents on September 28, 2020, constituted a counteroffer, which the wife was not obligated to accept. View "Pattison v. Pattison" on Justia Law

The City of Fort Collins contracted with Open International, LLC, for software services, which led to mutual breach-of-contract claims. The City also alleged that Open's precontractual statements were negligent or fraudulent misrepresentations. A jury found that Open fraudulently induced the City to enter the contract. The City elected to rescind the contract, and the district court held a bench trial on restitution, ordering a judgment of nearly $20 million against Open.The United States District Court for the District of Colorado denied Open's motions for judgment as a matter of law, which argued that the City’s tort claims were barred by the economic-loss rule and the contract’s merger clause. The court also denied Open's motion to require the City to elect a remedy before trial. The jury found in favor of the City on the fraudulent inducement claim, and the City chose rescission, leading to the dismissal of the jury and a bench trial on restitution.The United States Court of Appeals for the Tenth Circuit reviewed the case and affirmed the district court’s rulings and the jury’s verdict. The court held that the City’s tort claims were not barred by the economic-loss rule or the contract’s merger clause. The court found sufficient evidence to support the jury’s finding of fraud, particularly regarding Open’s grading of the functionality matrix and the use of a different software portal. The court also upheld the finding that the City did not waive its right to rescind the contract, as there was conflicting evidence about when the City discovered the fraud. Finally, the court affirmed the district court’s denial of Open’s Rule 50(b) motion, which argued that Open Investments could not be liable for rescission. View "City of Fort Collins v. Open International" on Justia Law

Lisa Bodenburg, an Apple customer, purchased a 200 GB iCloud data storage plan, expecting it to add to the 5 GB of free storage she already had, resulting in a total of 205 GB. When she discovered that the plan only provided 200 GB in total, she filed a putative class action against Apple, alleging breach of contract and violations of California’s consumer protection laws due to Apple’s allegedly deceptive representations about its iCloud storage plans.The United States District Court for the Northern District of California dismissed Bodenburg’s action with prejudice. The court found that Bodenburg could not state a claim for breach of contract because Apple had fulfilled its contractual obligations by providing the additional storage as described in the iCloud Legal Agreement. The court also found that Bodenburg’s claims under California’s consumer protection laws did not satisfy the “reasonable consumer” test or the heightened pleading standard of Fed. R. Civ. P. 9(b).The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The panel held that Bodenburg could not state a claim for breach of contract because the iCloud Legal Agreement did not promise an additional 200 GB of storage but rather additional storage, which Apple provided. The court also held that Bodenburg’s claims under California’s consumer protection laws failed the reasonable consumer test, as Apple’s statements were not misleading when considered in context. Additionally, the claims did not meet Rule 9(b)’s heightened pleading requirements because Bodenburg could not demonstrate that Apple’s statements were false or deceptive. Thus, the dismissal of Bodenburg’s action was affirmed. View "Bodenburg v. Apple, Inc." on Justia Law

Michael Lindell, a Minnesota entrepreneur, challenged the legitimacy of the 2020 presidential election, claiming to have data proving Chinese interference. Lindell Management LLC (LMC) hosted a "Cyber Symposium" in August 2021, offering a $5 million reward to anyone who could prove the data provided was not from the November 2020 election. Robert Zeidman, a software developer, participated in the challenge, reviewed the data, and concluded it did not contain any information related to the election. The challenge judges disagreed and denied his claim.Zeidman filed for arbitration, and the arbitration panel unanimously found in his favor, ordering LMC to pay the $5 million reward. The panel determined that the contract required participants to prove the data was not related to the election and that Zeidman had met this burden. Zeidman then moved to confirm the arbitration award in the United States District Court for the District of Minnesota, while LMC sought to vacate it. The district court confirmed the panel's decision, finding that the panel had arguably interpreted and applied the contract.The United States Court of Appeals for the Eighth Circuit reviewed the case and concluded that the arbitration panel had exceeded its authority by using extrinsic evidence to interpret the unambiguous contract terms. The court held that the panel effectively amended the contract by requiring the data to be packet capture data, which violated Minnesota contract law and arbitration precedents. Consequently, the Eighth Circuit reversed the district court's decision and remanded the case with directions to grant LMC's motion to vacate the arbitration award. View "Zeidman v. Lindell Management LLC" on Justia Law