Justia Contracts Opinion Summaries

In 2020, Cody Sturzenbecher and his mother, Judy Sturzenbecher, entered into a series of transactions with Sioux County Ranch, LLC (Sioux County) related to the purchase of their family farm from a trust. Judy bought the farm using a loan from Sioux County, then sold the property to Sioux County, which leased it to Cody. The lease included an option for Cody to purchase the property. Cody defaulted on the lease, leading Sioux County to terminate the lease and list the property for sale.The Sturzenbechers sought declaratory and injunctive relief, arguing that Judy’s conveyance of the farm to Sioux County created an equitable mortgage rather than an absolute sale. The Circuit Court of the First Judicial Circuit in Turner County, South Dakota, granted the Sturzenbechers’ request for a preliminary injunction and denied Sioux County’s motion for judgment on the pleadings. Sioux County appealed both decisions.The Supreme Court of the State of South Dakota reviewed the case and affirmed the lower court’s decisions. The court concluded that the arrangement between the Sturzenbechers and Sioux County was intended as a financing agreement rather than an absolute sale. The court found that the agreements between the parties were unambiguous but unenforceable as an absolute sale due to public policy favoring a mortgagor’s right of redemption. The court held that the Sturzenbechers were likely to succeed on their equitable mortgage claim and that the circuit court did not abuse its discretion in granting the preliminary injunction. The court also affirmed the denial of Sioux County’s motion for judgment on the pleadings, finding that the Sturzenbechers had pled sufficient facts to support their claim. View "Sturzenbecher v. Sioux County Ranch" on Justia Law

The defendant, Clough, Harbour & Associates LLP (CHA), agreed to design a new athletic field for the plaintiff, Trustees of Boston University (university). The contract included an express indemnification provision, which required CHA to indemnify the university for any expenses resulting from CHA's negligent design. A defect in CHA's design caused the university to incur expenses to fix the field. The university demanded indemnification from CHA, which CHA refused. More than six years after the field opened, the university sued CHA for breach of the indemnification provision.The Superior Court judge granted summary judgment in favor of CHA, relying on the tort statute of repose, which bars tort actions for damages arising from design defects in real property improvements six years after the improvement's opening. The judge concluded that the university's claim was barred by this statute. The university appealed the decision.The Supreme Judicial Court of Massachusetts reviewed the case. The court held that the tort statute of repose does not apply to the university's contract claim for indemnification. The court emphasized that the claim was based on an express contractual provision, not a tort duty imposed by law. The court distinguished between claims for breach of an implied warranty, which are barred by the statute of repose, and claims for breach of an express warranty or indemnification provision, which are not. The court reversed the Superior Court's decision and remanded the case for further proceedings. View "Trustees of Boston University v. Clough, Harbour & Associates LLP" on Justia Law

The Orange County Transportation Authority (OCTA) awarded a contract to OC 405 Partners Joint Venture (OC 405) for improvements to Interstate 405. OC 405 then awarded subcontracting work to Golden State Boring & Pipe Jacking, Inc. (GSB). However, the parties disagreed on the scope of the subcontract work and did not execute a written subcontract. OC 405 subsequently contracted with another subcontractor, leading GSB to file a lawsuit seeking benefit of the bargain damages, claiming OC 405 did not comply with Public Contract Code section 4107’s substitution procedures.The Superior Court of Orange County granted summary judgment in favor of OC 405 and other defendants, holding that GSB was not entitled to the protections of section 4107 because it did not meet the requirements of section 4100 et seq. Specifically, GSB was not a "listed subcontractor" in the original bid, and its proposed work did not exceed one-half of 1 percent of the prime contractor’s total bid, a threshold requirement under section 4104.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court affirmed the lower court’s decision, concluding that section 4107’s substitution procedures did not apply to OC 405’s substitution of GSB. The court emphasized that the protections of section 4100 et seq. only apply to subcontractors whose proposed work exceeds the one-half of 1 percent threshold of the prime contractor’s total bid. Since GSB’s bid did not meet this threshold, it was not entitled to the protections under section 4107. The court also noted that the contractual provisions in the prime contract did not alter this statutory requirement. Thus, the judgment in favor of the defendants was affirmed. View "Golden State Boring & Pipe Jacking, Inc. v. Astaldi Construction" on Justia Law

Plaintiffs created accounts on justanswer.com and paid to ask questions. According to JustAnswer's Terms of Service, paying for answers automatically enrolled plaintiffs in a recurring monthly subscription. Plaintiffs alleged that JustAnswer violated the Electronic Funds Transfer Act and various state consumer protection laws by enrolling them in the subscription service without their consent and making cancellation difficult. JustAnswer sought to compel arbitration based on a provision in its Terms of Service, asserting that plaintiffs were put on inquiry notice of those terms and agreed to arbitrate any claims arising from their use of the site.The United States District Court for the Northern District of California denied JustAnswer's motion to compel arbitration. The court held that plaintiffs did not receive sufficient notice of JustAnswer's Terms of Service containing the arbitration clause, and thus no contract was formed. The court found that the payment pages and other advisals presented to plaintiffs were not sufficiently conspicuous to put them on inquiry notice of the terms, and the advisals did not explicitly inform users that clicking a button would constitute assent to the terms.The United States Court of Appeals for the Ninth Circuit affirmed the district court's order. The Ninth Circuit concluded that no contracts were formed between plaintiffs and JustAnswer under an inquiry theory of notice. The court held that the website did not provide reasonably conspicuous notice of the terms, and the advisals did not unambiguously manifest the plaintiffs' assent to those terms. Therefore, plaintiffs were not bound by the arbitration provision in JustAnswer's Terms of Service, and the motion to compel arbitration was denied. View "GODUN V. JUSTANSWER LLC" on Justia Law

NCO Financial Systems, Inc. (NCO) entered into a lease agreement with Montgomery Park, LLC (Montgomery Park) for over 100,000 square feet of office space in Baltimore, Maryland. The lease allowed NCO to terminate early after eight years if certain conditions were met. NCO attempted to terminate early, but Montgomery Park claimed the conditions were not satisfied. NCO vacated the premises and stopped paying rent, leading Montgomery Park to send a default notice. NCO then filed a lawsuit seeking a declaratory judgment that it had properly terminated the lease and that the rent was based on misrepresented square footage.The United States District Court for the District of Maryland found in favor of Montgomery Park after a bench trial, awarding it $9,854,566.95 plus ongoing interest. The court also set a schedule for determining Montgomery Park’s claim for costs, fees, and expenses. Montgomery Park filed a motion seeking approximately $3.8 million for these costs, which NCO opposed on several grounds, including the lack of a proper demand for payment and the inclusion of fees for defending against NCO’s initial suit.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court concluded that Montgomery Park made a valid demand for payment when it filed its motion for costs, fees, and expenses on August 24, 2022. The court held that default interest should run only from the date of this demand, not from when the costs were incurred, and remanded the case to recalculate the interest. The court affirmed the district court’s award of costs, fees, and expenses, including those incurred in defending against NCO’s claims and expert witness fees, finding no abuse of discretion or error in the district court’s decisions.The Fourth Circuit affirmed in part, vacated in part, and remanded with instructions to recalculate the default interest. View "NCO Financial Systems, Inc. v. Montgomery Park, LLC" on Justia Law

Maria Wilson purchased an insurance policy from Union National Fire Insurance Company (UNFIC) through agent Robin Wilson. The policy covered personal property at 2170A Tillman Chapel Road, which included a house and a travel trailer. Maria, who is illiterate, relied on Robin's verbal description of the policy. After a fire destroyed the house and her personal property, Maria filed a claim, which was denied by UNFIC, citing that she did not live in the house, a purported requirement for coverage.Maria sued UNFIC, Kemper Corporate Services, Robin Wilson, and others in the Circuit Court of Claiborne County, Mississippi, alleging breach of contract, negligence, fraud, and other claims. The defendants removed the case to federal court, asserting diversity jurisdiction and claiming that the non-diverse defendants were improperly joined. The district court agreed, denied Maria's motion to remand, and compelled arbitration based on the policy's arbitration clause. The arbitrator ruled in favor of the defendants, and the district court confirmed the arbitration award.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the district court erred in denying Maria's motion to remand because non-diverse defendant Robin Wilson was properly joined. The court found that the insurance policy did not clearly require Maria to live in the house for her personal property to be covered, thus her negligence claim against Robin Wilson was viable. Consequently, the Fifth Circuit reversed the district court's denial of the motion to remand, vacated the order compelling arbitration and the confirmation of the arbitration award, and remanded the case to the district court with instructions to remand it to state court. View "Wilson v. Kemper Corporate Services" on Justia Law

Overhead Door Company of Indianapolis contracted with Blue Giant Equipment Corporation, a Canadian company, for the purchase of multiple dock levelers. After installation, Overhead experienced issues with the levelers and sued Blue Giant in federal court under diversity jurisdiction for breach of contract and warranty. Blue Giant moved to dismiss, citing a provision in its standard terms requiring arbitration in Ontario, Canada. The district court denied the motion, concluding that the standard terms were not incorporated into the parties' contract.The United States District Court for the Southern District of Indiana reviewed the case and denied Blue Giant's motion to dismiss. The court found that the mere reference to standard terms on a website was insufficient to incorporate those terms into the contract between Overhead and Blue Giant. Blue Giant appealed the decision.The United States Court of Appeals for the Seventh Circuit reviewed the case and reversed the district court's decision. The appellate court held that Blue Giant's reference to its Terms and Conditions on its website was sufficient to incorporate those terms into the contract. The court noted that the reference was conspicuous and provided Overhead with reasonable opportunity to take notice of the terms. The court concluded that the parties were obligated to resolve their dispute through arbitration in Ontario, Canada, as specified in the incorporated terms. The case was reversed and remanded for further proceedings consistent with this opinion. View "Garage Door Systems, LLC v Blue Giant Equipment Corp." on Justia Law

Robert Caldwell was recruited by Champlain College's then-president Don Laackman in September 2016 and worked as Vice President of Advancement and later as Chief Advancement Officer from January 2017 to September 2019. His role was primarily as chief fundraiser. In fiscal year 2018, he missed his fundraising goal by approximately seventeen percent, and in fiscal year 2019, he missed his goal by more than 56 percent, resulting in a shortfall of over 2.2 million dollars. In May 2019, Caldwell was diagnosed with chronic kidney disease and informed President Laackman of his diagnosis. Laurie Quinn replaced Laackman as interim-president in June 2019 and discussed Caldwell's performance with him in July 2019. Caldwell mentioned he was dealing with health issues. In September 2019, Quinn fired Caldwell, citing his poor fundraising performance.Caldwell sued Champlain College in March 2021, alleging disability discrimination under the Fair Employment Practices Act (FEPA) and promissory estoppel. The Superior Court, Chittenden Unit, Civil Division granted summary judgment in favor of Champlain College on both claims. Caldwell appealed the decision.The Vermont Supreme Court reviewed the case and affirmed the lower court's decision. The court applied the McDonnell Douglas framework for assessing disability discrimination claims and found that Champlain College provided a legitimate, nondiscriminatory reason for Caldwell's termination—his failure to meet fundraising goals. Caldwell failed to provide evidence that this reason was pretextual. Additionally, the court found that Caldwell did not present any evidence of a specific and definite promise that would support his promissory estoppel claim. Therefore, the court affirmed the summary judgment in favor of Champlain College. View "Caldwell v. Champlain College Inc." on Justia Law

Hembree Insurance Trust ("Hembree") leased a 135,847-square-foot industrial building in Scottsboro to Maples Industries, Inc. ("Maples") for five years starting January 1, 2020. The lease required Maples to maintain the property and share roof repair costs with Hembree. Hembree initiated a lawsuit against Maples in March 2024, alleging that Maples failed to repair or replace the roof as required by the lease.The Jackson Circuit Court treated Maples's motion to dismiss as a motion for summary judgment and ruled in favor of Maples. The court found the lease "null and void" because Hembree did not own the property, which had been transferred to Woods Cove Industrial Property, LLC ("Woods Cove") in 2014. Hembree argued that it was the sole member of Woods Cove and had the authority to lease the property, but the trial court disagreed.The Supreme Court of Alabama reviewed the case de novo. It found that Hembree, as the sole and controlling member of Woods Cove, had the authority to lease the property. The court noted that a tenant in possession generally cannot dispute the landlord's title and that Maples had accepted and benefited from the lease. The court concluded that Maples was estopped from challenging the lease based on Hembree being the named lessor. The Supreme Court of Alabama reversed the trial court's judgment and remanded the case for further proceedings. View "Hembree Insurance Trust v. Maples Industries, Inc." on Justia Law

Kenneth Tilley sought financing from Malvern National Bank (MNB) for a real estate development project in 2009 and 2010, totaling $350,000. Tilley claimed MNB engaged in unfair dealings and sued for breach of contract, promissory estoppel, violations of the Arkansas Deceptive Trade Practices Act (ADTPA), tortious interference, negligence, and fraud. The case has been appealed multiple times, with the Arkansas Supreme Court previously reversing decisions related to Tilley's right to a jury trial.Initially, the Garland County Circuit Court struck Tilley's jury demand, which was reversed by the Arkansas Supreme Court. After remand, the circuit court reinstated a bench trial verdict, citing Act 13 of 2018, which was again reversed by the Supreme Court. On the third remand, MNB moved for summary judgment on all claims. The circuit court granted summary judgment, citing Tilley's reduction of collateral as a material alteration of the agreement, a rationale not argued by MNB. Tilley appealed this decision.The Arkansas Supreme Court reviewed the case and held that the circuit court did not violate the mandate by considering summary judgment. However, it was reversible error for the circuit court to grant summary judgment based on an unargued rationale. The Supreme Court affirmed summary judgment on Tilley's ADTPA, tortious interference, and negligence claims, finding no genuine issues of material fact. However, it reversed and remanded the summary judgment on Tilley's breach of contract, promissory estoppel, and fraud claims, determining that there were disputed material facts that required a jury trial. The case was remanded for further proceedings consistent with this opinion. View "Tilley v. Malvern National Bank" on Justia Law