Justia Contracts Opinion Summaries

This case involves a dispute over two adjacent properties, each containing a multi-unit apartment complex with on-site parking. The plaintiffs, Eli and Maha Batta, sought to establish easement rights for additional parking and trash dumpsters on a disputed area of the adjacent property owned by the defendant, Therese Hunt. The Battas purchased their property from Hunt in 1994 and claimed that their tenants had used the disputed area for parking and dumpsters since then. Hunt refused to sign a parking covenant in 2019, leading the Battas to file a lawsuit seeking to quiet title to an easement by grant, prescription, or irrevocable license, and for breach of contract.The Superior Court of Los Angeles County conducted a bench trial and ruled in favor of the Battas, finding they had established easement rights by oral grant, prescription, and implication. The court ordered that the easement would expire upon a bona fide sale of either property. Both parties appealed the decision. Hunt argued that the trial court erred in granting the easement rights, while the Battas contended that the court abused its discretion by ruling that the easement would expire upon a sale.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case and found that the trial court's findings were inconsistent. The trial court had found both that Hunt had granted an easement and that the Battas' use of the property was adverse, which are mutually exclusive conditions. The appellate court concluded that these inconsistent findings required reversal. Additionally, the appellate court found that the trial court abused its discretion by allowing the Battas to amend their complaint to add a cause of action for an easement by implication without giving Hunt the opportunity to rebut the evidence. Consequently, the judgment was reversed and the case was remanded for further proceedings. View "Batta v. Hunt" on Justia Law

In 2019, Jesse Hubbell was hired to film a scuba-diving campaign advertisement. He and John Mues rented scuba gear from Gull Scuba Center. Gull’s instructor, Chris Hanson, asked for their diving certification cards. Mues provided his “Advanced Diver” certification, but Jesse did not have his card. Jesse claimed he was PADI certified, and Hanson either did not verify this or did not recall doing so. Jesse drowned three days later while using the rented gear.Ellen Hubbell, Jesse’s widow, sued several defendants, including Gull, alleging negligence for renting the equipment without verifying Jesse’s certification. The District Court of the Fourth Judicial District, Missoula County, granted summary judgment in favor of Gull, finding no dispute of material fact regarding Gull’s liability.The Supreme Court of the State of Montana reviewed the case. The court held that the District Court did not abuse its discretion by relying on the PRA Membership Standards to establish Gull’s duty to Jesse, as both parties’ experts indicated these standards were generally accepted in the scuba rental industry. The court also upheld the exclusion of Ellen’s expert, Thomas Maddox’s, opinion on industry standards, as it differed substantively from the prior expert’s report, which was beyond the scope allowed by the District Court’s amended scheduling order.Finally, the court agreed with the District Court’s determination that Hanson’s failure to check Jesse’s certification did not cause his death. The court found that even if Hanson had checked Jesse’s certification, Mues, who was of legal age and held an Advanced Diver certification, could have rented the equipment for Jesse. Therefore, the failure to check the certification was not the cause-in-fact of Jesse’s death. The Supreme Court affirmed the District Court’s summary judgment in favor of Gull. View "Hubbell v Gull Scuba Center" on Justia Law

Vernon K. Stensvad, the plaintiff, owns a small cattle herd and entered into a Grazing Lease Contract with Newman Ayers Ranch, Inc. in July 2022. The contract stipulated that Stensvad would graze his cattle on Ayers Ranch's property for a fee, with higher winter rates to be determined. Stensvad paid the fees for July and August but later agreed orally to perform labor in exchange for reduced fees. Disputes arose over the quality of Stensvad's work and the amount owed. In October 2023, Ayers Ranch issued an agister’s lien for $78,662.50, seizing Stensvad’s herd. Stensvad sought a preliminary injunction to prevent the sale of his cattle under the lien.The Seventh Judicial District Court in Prairie County granted Stensvad’s application for a preliminary injunction, ordering the cattle to be moved to a third-party feed lot. Ayers Ranch appealed, arguing that the District Court failed to consider all four factors required for a preliminary injunction under Montana law and that a preliminary injunction was not an appropriate remedy for challenging an agister’s lien.The Montana Supreme Court reviewed the case and held that the District Court manifestly abused its discretion by not addressing all four factors of the preliminary injunction standard. The Supreme Court clarified that under the revised standard, a party must satisfy all four factors: likelihood of success on the merits, likelihood of irreparable harm, balance of equities, and public interest. The Court adopted the "serious questions" test from the Ninth Circuit, allowing for flexibility in evaluating these factors. The case was remanded for the District Court to make supplemental findings consistent with this standard. The Supreme Court also held that a preliminary injunction is an appropriate remedy to challenge an agister’s lien and that Stensvad did not have an adequate remedy at law. View "Stensvad v. Newman Ayers Ranch" on Justia Law

Four plaintiffs were injured when a railing collapsed at FedExField during a professional football game. They sued the owner of the football team, the owner of the stadium, the security services provider, and unidentified maintenance persons for negligence. The defendants moved to compel arbitration based on an arbitration clause in the terms and conditions of the tickets, which were purchased online by a friend of the plaintiffs, Brandon Gordon.The United States District Court for the District of Maryland denied the motion to compel arbitration. The court found factual disputes regarding whether Gordon agreed to the arbitration clause. Additionally, the court held that even if Gordon had agreed to the arbitration clause, the defendants did not demonstrate that Gordon was an agent of the plaintiffs who could bind them to the arbitration clause.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court reversed the district court's decision regarding the plaintiffs being bound by any contract Gordon may have entered into, finding that Gordon had apparent authority to bind the plaintiffs to the arbitration clause. The court held that the Washington Football Team's reliance on Gordon's apparent authority was reasonable and traceable to the plaintiffs' actions of using the tickets to enter the stadium. The court vacated the district court's order denying arbitration and remanded the case to resolve the factual disputes about whether Gordon entered into a contract that included the arbitration clause. View "Naimoli v. Pro-Football, Inc." on Justia Law

The case involves Meisam Sedighi, who sought reimbursement from his employer, Schnackel Engineers, Inc., for $3,000 he paid to an immigration attorney for the preparation and filing of a permanent labor certification application. Sedighi argued that under 20 C.F.R. § 656.12(b), Schnackel Engineers was responsible for these costs. Schnackel Engineers contended that Sedighi was to pursue his green card at his own expense, as stipulated in his employment contract, and that it did not agree to pay for the certification application.The small claims court of the county court for Douglas County ruled in favor of Sedighi, finding that Schnackel Engineers was responsible for the attorney fees under 20 C.F.R. § 656.12(b). Schnackel Engineers appealed to the district court for Douglas County, which reversed the small claims court's decision. The district court found that the employment contract controlled the parties' obligations and that Sedighi was responsible for his own green card expenses. It concluded that the Michigan immigration attorney represented Sedighi, not Schnackel Engineers.The Nebraska Supreme Court reviewed the case and found that the district court erred in its appellate review. The Supreme Court noted that the small claims court's judgment was supported by competent evidence showing that Schnackel Engineers actively participated in the preparation and filing of the permanent labor certification application. The Supreme Court held that the district court should have presumed that the small claims court found the Michigan immigration attorney represented both Sedighi and Schnackel Engineers. Consequently, the Supreme Court reversed the district court's judgment and directed it to reinstate the small claims court's judgment in favor of Sedighi. View "Sedighi v. Schnackel Engineers" on Justia Law

The case involves disputes over horse consignment contracts between Ramsey and Hickstead Farms and Dapple Stud, LLC. Ramsey and Hickstead entered into agreements with Dapple Stud to sell their horses at auction, with Dapple Stud acting as the consigning agent. The sales proceeds were deposited into Dapple Sales' checking account, managed by Mike Akers, who allegedly misappropriated the funds, resulting in Ramsey and Hickstead not receiving their due proceeds.The Fayette Circuit Court granted summary judgment in favor of Dapple Stud and Dapple Sales, dismissing Ramsey and Hickstead's breach of contract claims. The court also required Ramsey and Hickstead to pay restitution to Dapple Stud for amounts previously paid. Additionally, the court denied Ramsey and Hickstead's motions to file third-party complaints against Akers and Dapple Sales, citing the statute of limitations.The Supreme Court of Kentucky reviewed the case and found that Ramsey and Hickstead had valid consignment contracts with Dapple Stud, which were breached when the sales proceeds were not remitted. The court held that Akers, as the manager of Dapple Stud, had the authority to bind the company in these transactions. The court reversed the summary judgment in favor of Dapple Stud and Dapple Sales and the restitution orders, remanding the case for further proceedings to determine the amounts owed to Ramsey and Hickstead, including interest.However, the court affirmed the lower court's decision to bar the third-party complaints against Akers and Dapple Sales due to the statute of limitations. The court also upheld the dismissal of the conversion and theft claims against Dapple Sales. The case was remanded to the Fayette Circuit Court for further proceedings consistent with the Supreme Court's opinion. View "RAMSEY V. DAPPLE STUD, LLC" on Justia Law

The plaintiffs, employees of the State of California providing dental care to inmates, filed a lawsuit seeking compensation for time spent on pre- and post-shift safety and security activities. These activities included going through security and handling alarm devices. The defendants, including the State of California and related departments, filed a demurrer, arguing that these activities were not compensable under the Portal-to-Portal Act of the Fair Labor Standards Act (FLSA). The trial court sustained the demurrer without leave to amend, leading to the plaintiffs' appeal.The trial court ruled that the activities in question were not integral and indispensable to the plaintiffs' principal work of providing dental care, thus not compensable under the FLSA. The plaintiffs argued that the trial court improperly decided a factual question and that their claims were viable. The defendants maintained that the trial court's decision was correct and also argued that the plaintiffs' claims were precluded by the Memorandum of Understanding (MOU) governing their employment, that the relevant statutes did not apply to government employers, that the plaintiffs failed to exhaust contractual remedies, and that the claims were time-barred.The California Court of Appeal, First Appellate District, Division Two, concluded that the trial court erred in not accepting the plaintiffs' allegations as true for the purposes of the demurrer. The appellate court found that the plaintiffs had stated a claim for breach of contract and that the defendants' affirmative defense of failure to exhaust contractual remedies could not be resolved at the demurrer stage. The court also determined that the plaintiffs' contract claim was not time-barred. Consequently, the appellate court affirmed the trial court's decision in part and reversed it in part, allowing the breach of contract claim to proceed. View "Bath v. State" on Justia Law

Richard Andrew Justice filed a claim against the Georgia Department of Public Safety (DPS) for breach of an employment contract, alleging that DPS failed to pay him for overtime hours as required under the Fair Labor Standards Act (FLSA). Justice argued that the FLSA provisions were incorporated into his employment contract. The central issue was whether Justice had demonstrated the existence of a written contract sufficient to overcome DPS’s motion to dismiss on sovereign immunity grounds.The trial court allowed limited discovery and reviewed documents submitted by Justice, including a written offer of employment and subsequent communications. The trial court ultimately granted DPS’s motion to dismiss, finding that the documents did not constitute a valid written contract and that there was no meeting of the minds regarding FLSA overtime compensation provisions. The Court of Appeals reversed this decision, concluding that the documents did form a written contract that included FLSA provisions, thereby waiving sovereign immunity.The Supreme Court of Georgia reviewed the case and determined that Justice had shown the existence of a written contract with DPS, which established a waiver of sovereign immunity under the ex contractu clause of the Georgia Constitution. The Court held that the question of whether the FLSA obligations were part of the written contract was a merits question, not a sovereign immunity question, and thus was not properly before the trial court on a motion to dismiss for lack of subject-matter jurisdiction. The Supreme Court affirmed the Court of Appeals' decision in part, vacated it in part, and remanded the case for further proceedings consistent with its opinion. View "GEORGIA DEPARTMENT OF PUBLIC SAFETY v. JUSTICE" on Justia Law

The plaintiffs, who operate restaurants under franchise agreements, filed a Chapter 11 bankruptcy petition based on advice from their legal counsel. This led to the franchisor terminating the franchise agreements. The plaintiffs then sued their lawyers and law firms for legal malpractice and breach of written contracts for legal services, alleging that the lawyers' advice constituted malpractice. The defendants moved to dismiss both claims, arguing they were barred by a four-year statute of limitation under OCGA § 9-3-25.The trial court dismissed the legal-malpractice claims but denied the motion to dismiss the breach-of-contract claims. Later, it granted summary judgment for a subset of defendants, ruling that the breach-of-contract claims were also barred by the four-year statute of limitation. The Court of Appeals affirmed the dismissal of the legal-malpractice claims and concluded that the breach-of-contract claims were duplicative and should be dismissed as well.The Supreme Court of Georgia reviewed the case to determine which statute of limitation applies to breach-of-contract-for-legal-services claims and whether the Court of Appeals erred in dismissing these claims as duplicative. The Supreme Court concluded that such claims could be governed by either a six-year statute of limitation under OCGA § 9-3-24 or a four-year statute under OCGA § 9-3-25, depending on whether the breach arose directly from a written contract. The Court also held that the Court of Appeals erred in dismissing the breach-of-contract claims as duplicative without applying the proper motion-to-dismiss standard.The Supreme Court vacated the Court of Appeals' judgment and remanded the case for further proceedings consistent with its opinion, emphasizing that plaintiffs can pursue alternative theories of relief based on the same conduct. View "TITSHAW v. GEER" on Justia Law

The case involves a dispute between two companies, Plaintiff Fuel Automation Station, LLC, and Defendant Energera Inc., both of which operate in the fuel industry and hold patents related to automated fuel delivery equipment. The conflict arose after Defendant, despite agreeing not to sue Plaintiff for patent infringement, initiated lawsuits against Plaintiff’s affiliated entity and subcontractor for using Plaintiff’s equipment, alleging infringement of a Canadian patent (the 567 Patent).The United States District Court for the District of Colorado initially reviewed the case. The court found that the covenant not to sue included the relevant parties but was ambiguous regarding whether it covered the 567 Patent. The court applied ordinary rules of contract construction and the patent exhaustion doctrine, which led to the conclusion that the covenant did protect downstream users of Plaintiff’s equipment. The district court granted partial summary judgment in favor of Plaintiff on this basis. However, it found genuine issues of material fact regarding whether the 567 Patent was included in the Patent Rights defined in the agreement, leading to a jury trial. The jury determined that the Patent Rights did cover the 567 Patent and that Defendant had breached the covenant not to sue.The United States Court of Appeals for the Tenth Circuit reviewed the case. The appellate court affirmed the district court’s rulings. It held that the covenant not to sue did indeed extend to downstream users under the patent exhaustion doctrine, meaning Defendant could not sue Plaintiff’s customers for using the equipment. Additionally, the appellate court agreed with the district court and the jury that the Patent Rights included the 567 Patent, thus supporting the finding that Defendant breached the covenant by suing Plaintiff’s affiliated entity and subcontractor. The appellate court affirmed the district court’s judgment in favor of Plaintiff. View "Fuel Automation Station v. Energera" on Justia Law