Justia Contracts Opinion Summaries

The case involves Billings County and its commissioners, who appealed a district court's decision to grant a preliminary injunction preventing them from entering the property of Sandra Short, David Short, Donald Short, and Sarah Sarbacker. The dispute centers on the County's attempt to use eminent domain to construct a bridge over the Little Missouri River, known as the Little Missouri River Crossing (LMRC). The Shorts had previously settled a lawsuit with the County in 2021, where the County agreed not to pursue eminent domain for the LMRC project. Despite this, a newly elected Board of Commissioners decided to proceed with the project in 2023, leading the Shorts to file a new lawsuit.The United States District Court for the District of North Dakota granted a preliminary injunction in favor of the Shorts, finding that they were likely to succeed on their breach-of-contract claim based on the Settlement Agreement. The court refrained from deciding on the validity of the Settlement Agreement, leaving that issue for the state court to address. The district court also stayed its proceedings, pending the outcome of the state court case, and denied the County's motion to dismiss without prejudice.The United States Court of Appeals for the Eighth Circuit reviewed the case and vacated the preliminary injunction. The appellate court held that the County could not lawfully contract away its power of eminent domain, as it is an essential attribute of sovereignty. The court concluded that the Settlement Agreement was contrary to law and that the Shorts were not likely to succeed on their breach-of-contract claim. The case was remanded for further proceedings consistent with this opinion. View "Short v. Billings County" on Justia Law

Rick Holloway and John Hoskin entered into a Commercial Sales Agreement to purchase the UXU Resort Ranch from Hidden Creek Outfitters, LLC. The sale included a special use permit from the U.S.D.A. Forest Service, which required a bridge inspection and load test before transfer. Due to the inspection's delay, the parties postponed closing and placed $200,000 in escrow for bridge-related expenses. After inspections, Park County Title released the escrow funds to Hidden Creek without H&H's consent, despite unresolved bridge issues.The District Court of Park County found that Hidden Creek and H&H each breached the implied covenant of good faith and fair dealing, and Park County Title breached the escrow agreement by releasing funds without H&H's approval. However, the court determined H&H failed to prove actual damages with sufficient certainty, awarding only nominal damages. The court also denied attorney’s fees to all parties.The Supreme Court of Wyoming reviewed the case and affirmed the district court's findings. The court held that H&H did not prove actual damages because the inspections did not conclusively identify necessary or required repairs. The court also upheld the denial of attorney’s fees, finding no abuse of discretion, as both parties bore some fault in the litigation. The Supreme Court denied any attorney’s fees associated with the appeal. View "Holloway v. Hidden Creek Outfitters, LLC" on Justia Law

Docs of CT and Biotek Services entered into arbitration over a contract dispute in April 2018. The arbitrator found Docs of CT in default regarding liability, and a hearing was scheduled to determine damages. Docs of CT failed to provide required discovery, leading the arbitrator to prohibit them from presenting evidence at the damages hearing. Docs of CT's counsel withdrew, and no new counsel appeared. The arbitrator communicated directly with Docs of CT's representative, Dr. Sidana, who was not allowed to present evidence at the hearing. The arbitrator awarded Biotek over $1.7 million in damages and fees.Docs of CT moved to vacate the arbitration award in superior court, citing arbitrator partiality and misconduct, supported by emails between the arbitrator and Biotek's attorneys. The trial court denied the motion, finding no demonstrated misconduct or partiality. The Court of Appeals affirmed, noting that while the ex parte emails were improper, Docs of CT failed to show resulting prejudice.The Supreme Court of Georgia reviewed the case to determine the standard for assessing prejudice due to ex parte communications in arbitration. The court held that to vacate an arbitral award under OCGA § 9-9-13 (b), the party must show that the conduct in question affected or influenced the arbitration's outcome. Docs of CT did not demonstrate how the ex parte communications prejudiced the outcome, failing to provide evidence or arguments that the arbitrator's decisions would have been different without the ex parte communications. Consequently, the Supreme Court of Georgia affirmed the Court of Appeals' decision, upholding the arbitration award. View "DOCS OF CT, LLC v. BIOTEK SERVICES, LLC" on Justia Law

M.G. received health care coverage through Medi-Cal and was treated by Dameron Hospital Association (Dameron) after an automobile accident. Dameron required M.G. or her representative to sign a conditions of admissions (COA) form, which included an assignment of benefits (AOB) clause. This clause assigned to Dameron the right to direct payment of uninsured and underinsured motorist (UM) benefits from M.G.'s automobile insurance policy with Progressive Casualty Insurance Company (Progressive). Dameron sought payment from Progressive for M.G.'s treatment at rates higher than Medi-Cal would pay. Progressive settled a UM claim with M.G. but did not pay Dameron, leading Dameron to sue Progressive for damages, an injunction, and declaratory relief.The Superior Court of San Joaquin County sustained a demurrer to Dameron's complaint without leave to amend, citing collateral estoppel based on a prior decision in Dameron Hospital Assn. v. AAA Northern California, Nevada & Utah Ins. Exchange (Dameron v. AAA). The court found the COA forms to be contracts of adhesion and the AOBs unenforceable, as it was not within the reasonable expectations of patients that a hospital would collect payments for emergency care directly from their UM benefits.The California Court of Appeal, Third Appellate District, affirmed the trial court's decision. The appellate court held that the COAs were contracts of adhesion and that it was not within the reasonable expectations of Medi-Cal patients that their UM benefits would be assigned to the hospital for payment of medical bills at rates higher than Medi-Cal would pay. The court concluded that the AOBs were unenforceable and did not need to address arguments regarding collateral estoppel or the Knox-Keene Health Care Service Plan Act. The court also denied Progressive's motion to strike exhibits from Dameron's reply brief. View "Dameron Hospital Assn. v. Progressive Casualty Insurance Co." on Justia Law

Carroll Shelby Licensing, Inc. and Carroll Hall Shelby Trust filed a lawsuit against Denice Halicki and her associated entities, alleging that Halicki's copyright claims over the "Eleanor" Ford Mustangs were invalid. Halicki counterclaimed, asserting that Shelby's "GT-500CR" Mustangs infringed her copyright in Eleanor, a collection of Mustangs featured in four films. The dispute also involved claims of breach of a prior settlement agreement between the parties.The United States District Court for the Central District of California held that Eleanor was not entitled to character copyright protection and dismissed Halicki’s breach of contract claim based on the settlement agreement. The court also denied Shelby’s request for a declaration that the GT-500CR did not infringe any of Halicki’s rights.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s summary judgment that Eleanor was not entitled to character copyright protection. The Ninth Circuit applied the Towle test and concluded that Eleanor did not have conceptual qualities, consistent traits, or distinctive elements necessary for character copyright protection. The court also affirmed the district court’s judgment that Shelby did not violate the settlement agreement, which prohibited Shelby from copying only Eleanor’s distinctive hood and inset lights.However, the Ninth Circuit reversed the district court’s denial of declaratory relief and remanded the case for the purpose of issuing the appropriate declaration. The appellate court held that a declaration would clarify and settle the legal relations between Shelby and Halicki and provide Shelby relief from the uncertainty that led to the proceedings. View "CARROLL SHELBY LICENSING, INC. V. HALICKI" on Justia Law

Brian Thomas sued Corbyn Restaurant Development Corp and its employees for personal injuries sustained during an altercation. The parties settled the lawsuit for $475,000, with the payment to be made to Thomas's attorney's client trust account. However, an unknown third party impersonated Thomas's counsel and sent fraudulent wire instructions to the defendants' counsel, who then wired the settlement funds to the imposter's account. When the fraud was discovered, Thomas requested the settlement money, but the defendants refused to pay again.The Superior Court of San Diego County reviewed the case and granted Thomas's application to enforce the settlement agreement. The court applied federal case law, which shifts the risk of loss to the party in the best position to prevent the fraud. The court found that the defendants were in the best position to prevent the fraud and that Thomas bore no comparative fault. Consequently, the court entered judgment in favor of Thomas for $475,000.The Court of Appeal, Fourth Appellate District, Division One, State of California, reviewed the case. The appellate court affirmed the lower court's judgment, agreeing that the defendants were in the best position to prevent the fraud. The court noted several red flags that should have alerted the defendants to the fraudulent scheme, including conflicting payment instructions, inoperable phone numbers, and spoofed email addresses. The appellate court held that the risk of loss from the imposter's fraudulent diversion of the wire transfer should be borne by the party in the best position to prevent the fraud, which in this case was the defendants. View "Thomas v. Corbyn Restaurant Development Corp." on Justia Law

The plaintiff, Joshua Naranjo, filed a class action lawsuit against Doctors Medical Center of Modesto, Inc., alleging violations of the unfair competition law (UCL) and the Consumers Legal Remedies Act (CLRA) due to the hospital's practice of charging an undisclosed "Evaluation and Management Services Fee" (EMS Fee) to emergency room patients. Naranjo claimed that the fee was charged without prior notification or agreement, making it an unfair, deceptive, and unlawful practice.The Superior Court of Stanislaus County sustained the hospital's demurrer to each cause of action in Naranjo's first amended complaint (FAC) without leave to amend and entered a judgment of dismissal. Naranjo appealed, and the Court of Appeal initially reversed the judgment, finding that Naranjo had stated valid causes of action under the UCL and CLRA and for declaratory relief. The court also directed the trial court to consider any future motion by Naranjo to amend his FAC to state a breach of contract cause of action.The California Supreme Court granted review and subsequently transferred the case back to the Court of Appeal, directing it to reconsider the matter in light of its ruling in Capito v. San Jose Healthcare System, LP. In Capito, the Supreme Court held that hospitals do not have a duty under the UCL or CLRA to disclose EMS fees to emergency room patients prior to treatment beyond what is required by the statutory and regulatory scheme.Upon reconsideration, the Court of Appeal concluded that Naranjo's claims are barred to the extent they are based on an alleged duty to disclose EMS fees prior to treatment. However, the court found that Naranjo had stated a valid contract-based cause of action for declaratory relief and should be allowed to amend his FAC to state causes of action for breach of contract and violations of the UCL and CLRA, subject to specific parameters. The judgment of dismissal was reversed, and the case was remanded for further proceedings. View "Naranjo v. Doctors Medical Center of Modesto, Inc." on Justia Law

Portfolio Recovery Associates, LLC, a debt purchaser, filed suits against three consumers, Jeannie Duvall, Allease Riddle, and Lorrena Terry, to collect past-due credit card debts. The consumers counterclaimed, alleging that Portfolio's debt-collection practices violated Alaska's Unfair Trade Practices and Consumer Protection Act (UTPA). The superior courts ruled in favor of the consumers on Portfolio's debt-collection claims, finding insufficient admissible evidence to prove Portfolio's ownership of the debts or the amounts owed. The courts also ruled in favor of the consumers on some of their UTPA counterclaims, awarding statutory damages and attorney's fees.In Duvall's case, the superior court granted summary judgment on her UTPA counterclaim that Portfolio sought unauthorized fees and charges, finding Portfolio failed to produce the original credit card agreement. The court excluded a late-disclosed witness and certain documents as inadmissible hearsay. Portfolio's contract claim failed due to lack of evidence. The court awarded Duvall partial attorney's fees under the UTPA and Rule 82.In Riddle's case, the superior court granted summary judgment on her UTPA counterclaim, finding Portfolio lacked standing to sue without proving ownership of the debt. The court awarded Riddle statutory damages and partial attorney's fees, reducing the award due to excessive litigation by both parties.In Terry's case, the superior court ruled in her favor on Portfolio's contract claim and her UTPA counterclaims after a bench trial. The court found Portfolio's conduct unfair and deceptive, awarding Terry statutory damages and full attorney's fees.The Alaska Supreme Court affirmed the superior courts' rulings on the merits and statutory damages. It found no abuse of discretion in the evidentiary rulings or the exclusion of the late-disclosed witness. The court affirmed the attorney's fees award in Duvall, remanded the fees award in Riddle for reconsideration, and remanded the fees award in Terry for a minor correction. View "Portfolio Recovery Associates, LLC v. Duvall" on Justia Law

Stamatios Kousisis and Alpha Painting and Construction Co. were awarded two contracts by the Pennsylvania Department of Transportation (PennDOT) for painting projects in Philadelphia. Federal regulations required subcontracting a portion of the contract to a disadvantaged business enterprise. Kousisis falsely represented that Alpha would obtain paint supplies from Markias, Inc., a prequalified disadvantaged business. However, Markias functioned only as a pass-through entity, funneling checks and invoices to and from Alpha’s actual suppliers, violating the requirement that disadvantaged businesses perform a commercially useful function. Despite this, Alpha completed the projects to PennDOT’s satisfaction and earned over $20 million in gross profit.The Government charged Alpha and Kousisis with wire fraud and conspiracy to commit wire fraud, based on the fraudulent-inducement theory. After a jury convicted them, they moved for acquittal, arguing that PennDOT received the full economic benefit of its bargain, so the Government could not prove they schemed to defraud PennDOT of money or property. The United States Court of Appeals for the Third Circuit rejected this argument, affirming the convictions and deepening the division over the validity of a federal fraud conviction when the defendant did not seek to cause the victim net pecuniary loss.The Supreme Court of the United States held that a defendant who induces a victim to enter into a transaction under materially false pretenses may be convicted of federal fraud even if the defendant did not seek to cause the victim economic loss. The Court explained that the text of the wire fraud statute does not mention economic loss and that the common law did not establish a general rule requiring economic loss in all fraud cases. The Court affirmed the Third Circuit’s decision, concluding that the fraudulent-inducement theory is consistent with both the text of the statute and the Court’s precedent. View "Kousisis v. United States" on Justia Law

Daniel Jones signed a blank application for a homeowner’s insurance policy, trusting his agent, J. Kim Hatcher Insurance Agencies, Inc. (Hatcher), to complete it accurately. Jones relied on Hatcher’s assurance based on their prior dealings and the commission Hatcher would earn. After Hurricane Florence destroyed Jones’s home, his insurer refused to cover the losses, citing material misrepresentations in the application. Jones discovered that Hatcher had omitted the existence of a pond and understated the property size.Jones sued Hatcher for negligence and gross negligence, among other claims. Hatcher moved to dismiss the ordinary negligence claim under Rule 12(b)(6), arguing contributory negligence. The trial court granted Hatcher’s motion, but the Court of Appeals reversed, finding that dismissal was not warranted as the complaint did not necessarily defeat Jones’s claim for ordinary negligence. The Court of Appeals also affirmed the dismissal of Jones’s claim for punitive damages.The Supreme Court of North Carolina reviewed the case. It agreed with the Court of Appeals that Jones’s complaint did not show contributory negligence as a matter of law, as the factual circumstances could support that Jones acted with ordinary prudence in trusting Hatcher. The court also found that Jones’s complaint sufficiently alleged a claim for punitive damages based on Hatcher’s willful and wanton conduct, giving Hatcher adequate notice of the claims. Therefore, the Supreme Court affirmed the Court of Appeals’ decision on the contributory negligence issue and reversed its decision on the punitive damages issue. View "Jones v. J. Kim Hatcher Ins. Agencies, Inc" on Justia Law