Justia Contracts Opinion Summaries

A dispute arose from a contingency fee agreement between the heirs of an Alaska Native allotment and an attorney who helped them recover substantial compensation from the federal government for mismanagement of oil and gas leases on their land. After a settlement was reached, years later, one of the heirs was sued by the attorney in federal court for allegedly failing to make required payments under the fee agreement. The heir then invoked mandatory fee arbitration under Alaska Bar Association rules, which prompted the federal court to stay the proceedings pending the outcome of arbitration.The arbitration was conducted before an Alaska Bar Association panel, which, following guidance from Bar Counsel, limited its review to whether the amount of the attorney’s fee was reasonable, and declined to address broader challenges to the enforceability of the fee agreement, including claims of duress and illegality under federal Indian law. The panel ultimately found the fee amount reasonable. Dissatisfied, the heir petitioned the Alaska Superior Court to vacate the panel’s decision, arguing that the panel exceeded its authority by not deciding enforceability issues and raising other statutory grounds under the Revised Uniform Arbitration Act (RUAA). The Superior Court denied the petition, confirmed the arbitration award, and granted enhanced attorney’s fees to the attorney for post-arbitration litigation.On appeal, the Supreme Court of the State of Alaska affirmed the Superior Court’s confirmation of the arbitration award. The Supreme Court held that a fee arbitration panel’s decision to narrow the scope of review is subject to a “reasonably possible” standard and that the panel did not exceed its authority in this case. The court also held that awards of attorney’s fees under Alaska Civil Rule 82 are permissible in post-arbitration proceedings governed by the RUAA and found no abuse of discretion in the Superior Court’s award. View "Oenga v. Givens" on Justia Law

Gunwerks sought to expand its business by constructing a new manufacturing facility in Cody, Wyoming, a project involving public funds and coordinated through Forward Cody Wyoming, Inc. Forward Cody retained Plan One Architects and Sletten Construction of Wyoming, Inc. as the project's designer and general contractor, respectively. Sletten hired various subcontractors, including Big Horn Glass, Inc. (BHG), to perform specific tasks. After completion, Gunwerks alleged numerous construction defects in the facility, including issues with concrete, finishes, HVAC, siding, drainage, ceiling heights, door and window flashings, and the shooting tunnel. Gunwerks sued Forward Cody, Plan One, and Sletten for breach of contract and breach of the covenant of good faith and fair dealing.Sletten responded to Gunwerks’s lawsuit by filing a third-party complaint against its subcontractors, including BHG. Sletten claimed that, should it be found liable to Gunwerks, subcontractors responsible for any deficient work should indemnify it for those damages. Sletten did not specifically admit or allege deficiencies in BHG’s work but sought to preserve its right to recovery if any subcontractor was found at fault. Approximately ten months after Sletten’s third-party complaint, BHG moved for summary judgment in the District Court of Park County, arguing that Sletten had not presented evidence showing BHG caused any of the alleged damages. The district court granted summary judgment for BHG, finding that Sletten had not countered BHG’s prima facie showing with disputed facts, relying instead on speculation.On appeal, the Supreme Court of Wyoming reviewed the district court’s summary judgment ruling de novo, applying the same standard as the lower court and viewing the record most favorably to Sletten. The Supreme Court affirmed the district court’s decision, holding that Sletten failed to present admissible, competent evidence creating a genuine issue of material fact regarding BHG’s liability for any alleged defects. The court found Sletten’s evidence speculative and conclusory, insufficient to defeat summary judgment. The disposition was affirmed. View "Sletten Construction of Wyoming, Inc. v. Big Horn Glass, Inc." on Justia Law

A Nebraska limited liability company owned by Michael Perkins hired RMR Building Group, LLC, managed and solely owned by Robert M. Ryan II, as a general contractor to redevelop a shopping center. Their contract used a cost-plus billing arrangement, where Perkins paid RMR in advance for specific construction costs, including a substantial sum for HVAC equipment and RMR’s fee. RMR deposited the funds into its general operating account but did not pay for the HVAC equipment; instead, it used the money to cover other business obligations. Perkins terminated the contract after RMR failed to provide proof of payment for the equipment and then sued RMR and Ryan for breach of contract, unjust enrichment, conversion, and fraudulent misrepresentation, also seeking to pierce the corporate veil and hold Ryan personally liable.The District Court for Douglas County found that RMR breached the contract and was liable under theories of money had and received and unjust enrichment, but not for conversion or fraudulent misrepresentation. The court declined to disregard RMR’s corporate entity, finding no sufficient evidence that Ryan diverted funds for personal use or that RMR was a mere facade for Ryan’s dealings. Perkins appealed these findings.The Nebraska Court of Appeals reversed in part, concluding that the corporate veil should be pierced and Ryan held jointly and severally liable for the misappropriated funds, relying on factors from United States Nat. Bank of Omaha v. Rupe. On further review, the Nebraska Supreme Court reversed the Court of Appeals, holding that the evidence did not establish by a preponderance that RMR’s entity should be disregarded, nor did it support fraud or conversion claims against Ryan. The Supreme Court remanded with direction to affirm the district court’s judgment. View "Perkins v. RMR Building Group" on Justia Law

Atlanta Gas Light Company and Southern Company Gas contracted with United States Infrastructure Corporation (USIC) to locate and mark gas lines in Georgia. In 2018, USIC failed to mark a line, leading to a gas explosion that seriously injured three people. The injured parties settled with USIC but not with Atlanta Gas Light. After being sued in Georgia state court, Atlanta Gas Light sought defense and indemnification under USIC’s excess liability policy issued by Navigators Insurance Company, claiming status as an additional insured. Navigators denied coverage, asserting Atlanta Gas Light was not an additional insured for these claims because they were based solely on Atlanta Gas Light's conduct.Before the United States District Court for the Southern District of Indiana, Atlanta Gas Light sued Navigators for breach of contract, breach of fiduciary duty, and bad faith. The district court dismissed claims related to Navigators’s conduct prior to USIC’s primary policy exhaustion but allowed the breach of contract claim to proceed. On summary judgment, the district court ruled that Atlanta Gas Light was an additional insured under the excess policy and denied Navigators's motion as to breach of contract. The court entered final judgment for Atlanta Gas Light, and both parties appealed aspects of the ruling.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. It held that, under Indiana law and the policies’ language, Atlanta Gas Light was an “additional insured” because its liability in the underlying suits arose, at least in part, from USIC’s acts or omissions. The court also held that Navigators had no duty to defend or indemnify Atlanta Gas Light before the primary policy was exhausted, and that Navigators’s denial of coverage, based on a nonfrivolous interpretation of the policy, did not constitute bad faith or breach any fiduciary duty. View "Atlanta Gas Light Company v Navigators Insurance Company" on Justia Law

Taylor L. Wood, her husband, and her son received medical care from physicians employed by Intermountain Emergency Physicians, PLLC (IEP). The resulting medical debt was assigned to Medical Recovery Services, LLC (MRS) for collection. After Wood’s attorneys alleged violations of state law, the Woods and IEP entered into a settlement that discharged the debt and provided payment to the Woods. Nevertheless, MRS later sued Wood to collect the same debt. Wood responded by counterclaiming and bringing IEP into the case as a third-party defendant, relying on the settlement agreement. MRS dismissed its complaint upon learning of the prior settlement, and all claims were eventually dismissed by the court.After judgment was entered, both sides sought a determination of the prevailing party and an award of attorney fees. The District Court of the Seventh Judicial District, Bingham County, found that Wood was the prevailing party over MRS and ordered MRS to pay Wood’s costs and attorney fees, concluding that MRS’s complaint was frivolous due to lack of proper investigation and communication regarding the settlement. MRS and IEP filed a first motion for reconsideration of the fees order, which was denied. They then filed a second motion for reconsideration, also denied, and subsequently appealed.The Supreme Court of the State of Idaho reviewed the case. It held that it lacked jurisdiction to review the district court’s order awarding costs and attorney fees to Wood because MRS and IEP’s notice of appeal from that order was untimely under Idaho Appellate Rule 14(a). The court did have jurisdiction to review the denial of the second motion for reconsideration, but because MRS and IEP failed to provide argument or authority on that issue, they waived it. The Supreme Court affirmed the district court’s denial of the second motion for reconsideration. View "Medical Recovery Services, LLC v. Wood" on Justia Law

A minor league baseball team in Oregon lost its longstanding affiliation with a Major League Baseball (MLB) club after MLB restructured its relationship with minor league teams in 2020. The team’s owner alleges that a minority owner of an MLB franchise, who also served on the board and a negotiation committee of the national minor league association, acted to reduce the number of minor league clubs for personal gain, which resulted in the team’s exclusion from the new affiliation structure. The owner claims that the association’s rules left it dependent on the board and committee members to protect its interests.The United States District Court for the District of New Jersey dismissed the owner’s complaint, finding that it failed to plausibly allege the existence of a fiduciary relationship between the board member and the team. The owner appealed, arguing that fiduciary duties arose under Florida’s non-profit statute, by contract, or by implication due to the structure of the association and the interactions between the parties.The United States Court of Appeals for the Third Circuit reviewed the District Court’s dismissal de novo. The Third Circuit held that Florida’s non-profit statute does not create a fiduciary duty from a director to the members of the non-profit, only to the corporation itself. The court also found no express or implied fiduciary duty arising from contractual provisions or the surrounding circumstances. The court distinguished direct and derivative actions and concluded that the complaint did not allege facts to support a direct or implied fiduciary relationship. Accordingly, the Third Circuit affirmed the District Court’s dismissal of the complaint for failure to state a claim. View "Sports Enterprises Inc v. Goldklang" on Justia Law

480 King Street, LLC hired Glick/Boehm & Associates, Inc. (GBA), an architectural firm, to design and administer construction of a stair tower. 480 King alleged that GBA negligently designed elements of the project, including the elevator, electrical, HVAC, windows, and stairs, and also failed to properly administer construction, resulting in code violations and additional costs. As the statute of limitations was approaching, 480 King filed its complaint without the expert affidavit required by the South Carolina Frivolous Civil Proceedings Sanctions Act, later submitting an affidavit from Louis Hackney, a professional engineer, attesting to deviations from the standard of care in both design and contract administration.The Circuit Court of Charleston County, after allowing time for the affidavit, ultimately dismissed all claims against GBA, finding Hackney was not qualified to opine on the standard of care for architects. On appeal, the South Carolina Court of Appeals affirmed the dismissal of negligent design claims but reversed as to claims for negligent construction administration, finding Hackney qualified under statutory standards for expert witnesses. The appellate court also reversed dismissal of breach of contract and warranty claims, remanding them for further proceedings.The Supreme Court of South Carolina affirmed in part and reversed in part. It held that the expert witness affidavit requirement under section 15-36-100 does not mandate the affiant be from the same profession as the defendant, provided the statutory qualifications are met. Hackney’s affidavit was sufficient for the negligent construction administration claim, but not for negligent architectural design, as he declined to opine on the latter. Claims for negligent supervision were subsumed under construction administration. The breach of contract claim may proceed only as to construction administration, while breach of warranty and negligent design claims were properly dismissed. The disposition was affirmed in part and reversed in part. View "Blanchard v. 480 King Street, LLC" on Justia Law

The case centers on a dispute between a former employee and his employer regarding an alleged agreement to transfer company stock. The plaintiff, who had worked for the employer for many years and was promoted several times, claimed that he was promised a portion of stock if he remained employed through a specific date. This promise was allegedly memorialized in a 2018 letter from one of the company’s owners. After the plaintiff fulfilled his employment commitment but did not receive the stock, he sued the company and several individuals for promissory estoppel, fraud, and breach of contract.Previously, the District Court of the Fourth Judicial District, Ada County, reviewed the case. The court granted summary judgment to two individual defendants, dismissing them from the suit. The plaintiff’s claims against the remaining defendants proceeded to a bench trial. After trial, the district court found in favor of the company and its owner on all counts, concluding there was no enforceable contract due to the absence of an essential term—price—and insufficient evidence of fraud. The court also awarded attorney fees to both the company and the owner.The Supreme Court of the State of Idaho affirmed the district court’s dismissal of the breach of contract and fraud claims, agreeing that the 2018 letter did not create an enforceable contract and that there was no clear and convincing evidence of fraud. The Supreme Court also affirmed the award of attorney fees to the owner but vacated the fee award to the company, finding the company’s initial fee request procedurally deficient. The case was remanded for entry of an amended judgment consistent with these findings. Attorney fees and costs on appeal were awarded to the owner, but not to the company. View "York v. Kemper Northwest, Inc." on Justia Law

A publicly traded investment banking corporation entered into a stockholders agreement with an entity controlled by its founder in 2014, contemporaneous with its initial public offering. The agreement granted the founder’s entity extensive governance rights, including restrictions on board actions and control over board and committee composition, provided certain ownership and other conditions remained met. These arrangements and the founder’s control were disclosed in the company’s IPO prospectus and subsequent public filings. Nearly nine years later, a Class A stockholder filed suit seeking a declaratory judgment that key provisions of the stockholders agreement were facially invalid under Section 141(a) of the Delaware General Corporation Law, which vests management authority in the board of directors unless otherwise provided in the certificate of incorporation.The Court of Chancery of the State of Delaware denied the company’s time-bar and laches defenses, holding that if the challenged provisions violated Section 141(a), they were void rather than voidable, and therefore not subject to equitable defenses like laches. The court further reasoned that the alleged statutory violation was ongoing, so the claim was not untimely even though it was brought many years after the agreement was executed. The court proceeded to find that several provisions of the stockholders agreement facially violated Section 141(a), declared them void and unenforceable, and later awarded attorney fees to the plaintiff.On appeal, the Supreme Court of the State of Delaware reversed. It held that to the extent the challenged provisions conflicted with Section 141(a), they were voidable—not void—and thus subject to equitable defenses, including laches. The Supreme Court concluded that the plaintiff’s claim accrued when the agreement was executed in 2014, that the delay in bringing suit was unreasonable, and that the claim was barred by laches. The Supreme Court vacated the declaratory judgment and fee award, declining to reach the merits of the facial validity of the agreement’s provisions. View "Moelis & Company v. West Palm Beach Firefighters' Pension Fund" on Justia Law

Daevieon Towns purchased a new Hyundai Elantra in 2016, and over the next 19 months, the car required multiple repairs for alleged electrical and engine defects. In March 2018, either Towns or his wife, Lashona Johnson, requested that Hyundai buy back the defective vehicle. Before Hyundai acted, the car was involved in a collision, declared a total loss, and Johnson’s insurance paid her $14,710.91.Towns initially sued Hyundai Motor America in the Superior Court of Los Angeles County for breach of express warranty under the Song-Beverly Consumer Warranty Act. As trial approached, Towns amended his complaint to add Johnson as a plaintiff, arguing she was the primary driver and responsible for the vehicle. The trial court allowed the amendment, finding Johnson was not a buyer but permitted her to proceed based on its interpretation of Patel v. Mercedes-Benz USA, LLC. At trial, the jury found for Towns and Johnson, awarding damages and civil penalties. However, the court reduced the damages by the insurance payout and adjusted the prejudgment interest accordingly. Both parties challenged the judgment and costs in post-trial motions.The California Court of Appeal, Second Appellate District, Division Four, reviewed the case. It held that only a buyer has standing under the Act, so Johnson could not be a plaintiff. The court also held that third-party insurance payments do not reduce statutory damages under the Act, following the Supreme Court’s reasoning in Niedermeier v. FCA US LLC. Furthermore, prejudgment interest is available under Civil Code section 3288 because Hyundai’s statutory obligations do not arise from contract. The court affirmed in part, reversed in part, and remanded for the trial court to enter a modified judgment and reconsider costs. View "Towns v. Hyundai Motor America" on Justia Law