Justia Contracts Opinion Summaries

This appeal and cross-appeal involved a residential lease agreement with an option to purchase executed by Tony Hiett, Sr., and his wife Kelly ("the tenants") and Beverlye Brady ("the landlord"). The landlord leased to the tenants a house ("the property") located in Auburn for a term of five years, beginning September 1, 2011, and ending August 31, 2016, for $2,000 per month. By letter dated August 29, 2016, the tenants informed the landlord that they were exercising their option to purchase the property. According to the tenants, they accepted the first option to purchase the property presented in an email from the landlord and began making monthly holdover rental payments of $2,500. In April 2017, they informed the landlord that they had obtained financing and were ready to close on the property by April 30, 2017. The landlord, however, refused to convey title to the property because, she claimed, the tenants had never responded to her email; thus, according to the landlord, the option to purchase had expired. The tenants thereafter stopped paying rent under the lease agreement, but continued to occupy the property, and sued the landlord, seeking specific performance of the option to purchase. The landlord counterclaimed, asserting a claim for ejectment and a claim of breach of contract, based on unpaid rent and late fees owed under the lease agreement. The Alabama Supreme Court affirmed judgment on a jury’s verdict in favor of the tenants on their specific performance claim, and against the landlord on her ejectment claim. The Supreme Court reversed judgment entered on the jury’s verdict in favor of the landlord on her breach-of-contract claim based on the inadequacy of damages awarded, and the Court remanded the case with directions to the trial court to grant a new trial only as to that claim unless the tenants consented to an additur. View "Brady v. Hiett" on Justia Law

Appellants lost over $850,000 when an alleged BB&T employee and a co-conspirator impersonated them, changed their passwords, and transferred the money out of their BB&T bank accounts. Appellants sued BB&T under contract and tort theories. The district court dismissed the tort claims as duplicative of the contract claim, concluding that Appellants’ demand was time-barred because BB&T’s standard bank account contract limited the time to assert a demand from the statutory one-year period to just 30 days. In the alternative, the district court entered summary judgment for BB&T because it concluded the bank had and had followed commercially reasonable security procedures.The Eleventh Circuit vacated (1) the district court’s order dismissing the complaint and (2) the district court’s order entering summary judgment for BB&T on the remaining counts in the Fourth Amended Complaint, finding, as a matter of law, that Appellants’ claim for statutory repayment is not time-barred. View "Jesus Alonso Alvarez Rodriguez, et al v. Branch Banking & Trust Company, et al" on Justia Law

Siri sued her former employer, Trinchero, for wrongful termination. Trinchero served an offer to compromise by paying Siri $500,000 in exchange for dismissal, Code of Civil Procedure section 998. During the 30-day period in which Trinchero’s offer remained in effect, the parties communicated about whether Siri’s acceptance would trigger a right to prejudgment interest of approximately $379,000. After Trinchero declined to modify the offer, Siri served “objections” to the offer, contending it was defective because it did not address the availability of interest. Days later, Siri served a “Notice of Conditional Acceptance,” then filed the objections to Trinchero’s offer and requested that the court enter a judgment, “consistent with [her] conditional acceptance” and including prejudgment interest. Trinchero filed a “Notice of Plaintiff’s Acceptance of 998 Offer,” stating that “Although [Trinchero] does not waive any right" to "separately respond to the substantive issues” and characterizing the conditions as “simply requests that the court clarify post-resolution questions.”Trinchero moved to enforce the purported settlement agreement. The court found that Siri’s service of her conditional acceptance created a binding settlement and did not condition acceptance on particular findings by the court. Siri then filed an unsuccessful motion seeking interest. The court of appeal reversed. Siri’s “conditional acceptance” included additional terms and did not create a binding settlement enforceable under section 998. View "Siri v. Sutter Home Winery, Inc." on Justia Law

The issue this appeal presented for the Delaware Supreme Court’s review asked for a determination of whether premiums paid on insurance policies declared void ab initio for lack of an insurable interest should be returned. Geronta Funding argued Delaware law required the automatic return of all premiums paid on the void policy. Brighthouse Life Insurance Company argued a party must prove entitlement to restitution. The trial court agreed with Brighthouse and relied on the Restatement (Second) of Contracts to determine whether Geronta was entitled to restitution. Specifically, the court held that Geronta could obtain restitution if it could prove excusable ignorance or that it was not equally at fault. Applying this test, the court ruled that Geronta was only entitled to the return of the premiums it paid after alerting Brighthouse to the void nature of the policy at issue. Geronta appealed this ruling, arguing that the court erred when it adopted the Restatement instead of automatically returning the premiums, erred in its actual application of the Restatement, even assuming that is the proper test, and erred by precluding certain testimony from Geronta witnesses. Because this was a matter of first impression, the Supreme Court adopted restitution under a fault-based analysis as framed by the Restatement as the test to determine whether premiums should be returned when a party presents a viable legal theory, such as unjust enrichment, and seeks the return of paid premiums as a remedy. The Court held, however, that despite applying the Restatement, the Superior Court’s application of the Restatement failed to account for the relevant questions encompassed by that approach. The Supreme Court reversed the trial court’s holdings regarding entitlement to premiums and remanded for further consideration, but found no fault in the Superior Court preclusion of certain testimony from Geronta’s witnesses. View "Geronta Funding v. Brighthouse Life Insurance Company" on Justia Law

The Supreme Court affirmed the judgment the district court denying TEP Rocky Mountain LLC's (TEP RM) motion to dismiss this action, granting summary judgment to Record TJ Ranch Limited Partnership (TJ Ranch) on several issues, and ruling that TEP RM had breached the parties' agreements, holding that there was no error.TJ Ranch brought this action seeking payment under a surface use and damage agreement governing oil and gas development and production of ranch lands. TEP RM filed a motion to dismiss for lack of personal jurisdiction, which the district court denied. The court ultimately concluded that TJ Ranch was entitled to payment. The Supreme Court affirmed, holding that the district court (1) correctly exercised personal jurisdiction over TEP RM; (2) did not clearly err in its findings; and (3) did not abuse its discretion in denying TEP RM's motions to stay. View "TEP Rocky Mountain LLC v. Record TJ Ranch Limited Partnership" on Justia Law

The Supreme Court quashed the decision of the court of appeal issuing a writ of prohibition to prevent the circuit court from exercising jurisdiction over certain claims, holding that the court of appeal erred in issuing the writ.Plaintiff brought this lawsuit against an insurance company and the law firm representing the company in the underlying suit Plaintiff brought against the insurer, arguing that Defendants violated confidentiality requirements applicable to a mediation. After the circuit court denied Defendants' motions to dismiss Defendants petitioned the Third District relief. The Third District granted a writ of prohibition, concluding that the circuit court had exceeded its jurisdiction by entertaining Defendants' collateral estoppel affirmative defense. The Supreme Court quashed the decision below, holding that the writ of prohibition was used in an improper manner here. View "Mintz Truppman, P.A. v. Cozen O'Connor, PLC" on Justia Law

The U.S. Department of Housing and Urban Development (HUD) oversees the Section 8 low-income housing assistance program, 42 U.S.C. 1437f. New Lansing renewed its Section 8 contract with Columbus Metropolitan Housing Authority in 2014 for a 20-year term. In 2019, at the contractual time for its fifth-year rent adjustment, New Lansing submitted a rent comparability study (RCS) to assist CM Authority in determining the new contract rents. Following the 2017 HUD Section 8 Guidebook, CM Authority forwarded New Lansing’s RCS to HUD, which obtained an independent RCS. Based on the independent RCS undertaken pursuant to HUD’s Guidebook requirements, the Housing Authority lowered New Lansing’s contract rents amount.The Sixth Circuit affirmed the dismissal of New Lansing’s suit for breach of contract. The Renewal Contract requires only that the Housing Authority “make any adjustments in the monthly contract rents, as reasonably determined by the contract administrator in accordance with HUD requirements, necessary to set the contract rents for all unit sizes at comparable market rents.” HUD has authority to prescribe how to determine comparable market rents, the Renewal Contract adopted those requirements, and thus the Housing Authority was required to follow those HUD methods. The Housing Authority did not act unreasonably by following the requirements in the 2017 HUD guidance. View "New Lansing Gardens Housing Limited Partnership v. Columbus Metropolitan Housing Authority" on Justia Law

Crozer owns healthcare companies that operate as wholly owned subsidiaries: Prospect, employs professionals working at hospitals; CCMC, is a hospital and hired Abdurahman as an emergency medical resident. Abdurahman signed new-hire paperwork, including an at-will employment agreement with Crozer and an arbitration agreement with Prospect. Several weeks later, Abdurahman signed a residency agreement with CCMC. Dr. Jacobs was an employee of Prospect, working as CCMC’s Director of Toxicology and supervised Abdurahman. Abdurahman alleged that Jacobs sexually harassed her; Jacobs claimed the opposite and informed CCMC Human Resources that Abdurahman had assaulted her. The dispute escalated until Abdurahman was fired.Abdurahman filed a complaint with the Pennsylvania Human Relations Commission and the EEOC, alleging defamation and discrimination under Title VII, Title IX, 42 U.S.C. 1981, and the Pennsylvania Human Relations Act. She subsequently filed suit against CCMC and Jacobs. The district court denied a motion to compel arbitration. The Third Circuit affirmed. Abdurahman signed an arbitration agreement with Prospect, not CCMC. That agreement cannot stretch to govern Abdurahman’s employment with CCMC. The court noted that the corporations are sophisticated entities that drafted the forms. View "Abdurahman v. Prospect CCMC LLC" on Justia Law

Plaintiff CAM-Carson, LLC sued the City of Carson (City), the Carson Reclamation Authority (CRA) and others for breach of contract and breach of the covenant of good faith and fair dealing. Plaintiff is a commercial real estate developer. Plaintiff entered contracts with the City and CRA to develop a 40-acre site after the City and CRA remediated soil and groundwater contamination, installed infrastructure, and built roads. Plaintiff alleged the City and CRA engaged in gross mismanagement and malfeasance that created a massive funding deficit that derailed the project, causing damages to Plaintiff of over $80 million. Plaintiff sought to hold the City liable in equity under alter ego principles for the CRA’s breach of a contract between Plaintiff and the CRA.   The Second Appellate District reversed the trial court’s judgment of dismissal and remanded the cause to the trial court to vacate its order sustaining the City’s demurrer and to enter a new order overruling the demurrer. The court held the alter ego doctrine may be applied to government entities where the facts justify an equitable finding of liability. Here, the allegations in Plaintiff’s second amended complaint are sufficient to survive the City’s demurrer. The court wrote, as a matter of law, the City cannot be held the alter ego of the CRA if Plaintiff is able to prove the facts alleged. Accordingly, the trial court erred in sustaining the City’s demurrer to Plaintiff’s breach of contract claim. For the same reason, the trial court erred in sustaining the City’s demurrer to Plaintiff’s breach of implied covenant claim. View "Cam-Carson, LLC v. Carson Reclamation Authority" on Justia Law

Plaintiff signed a Financial Responsibility Agreement (“FRA”) with Baylor University to secure her enrollment for the Spring 2020 semester. The FRA required Plaintiff to pay Baylor for “educational services,” and she paid her tuition bill in full. During the second half of the semester, Baylor responded to the COVID-19 pandemic by severely limiting on-campus activities and opportunities while conducting classes remotely. It did not, however, refund any tuition or fees. Plaintiff filed a class action against Baylor asserting a breach of contract claim, alternatively sought unjust enrichment.   The Fifth Circuit affirmed in part and reversed in part, and remanded. The court explained that the FRA is a valid contract because it describes the essential terms with a reasonable degree of certainty and definiteness. Plaintiff failed to state a claim for contract invalidity. But the crux of the parties’ dispute remains the interpretation of “educational services”. The court explained that on remand, the district court must consider whether Baylor’s or Plaintiff’s interpretation of “educational services” prevails. If the term is latently ambiguous, then further proceedings may be necessary to explore its meaning. Also on remand, the court must examine the surrounding circumstances pertinent to the making of the FRA. View "King v. Baylor University" on Justia Law