Justia Contracts Opinion Summaries

The Supreme Court affirmed the judgment of the superior court dismissing Plaintiff's breach of contract case against Defendant, her homeowner's insurance carrier, after a hearing justice granted Defendant's motion for summary judgment, holding that summary judgment was properly granted in this case.Plaintiff, who had a homeowner's insurance policy purchased from Defendant, sought coverage for damage done to her residence when her water heater leaked and flooded her basement. When Defendant declined coverage Plaintiff filed a complaint claiming breach of contract. Defendant field a motion for summary judgment, arguing that Plaintiff's breach of contract claim failed as a matter of law because, under the unambiguous language of the policy, the flooding caused by the defective water heater was not a loss covered by the policy. The hearing justice granted the motion for summary judgment. The Supreme Court affirmed, holding that the damage caused by Plaintiff's malfunctioning water heater was clearly not one of the hazards articulated in the policy language. View "Nelson v. Allstate Insurance Co." on Justia Law

After defending the general contractor in two construction defect actions, general liability insurer St. Paul Mercury Insurance Company (St. Paul) sought reimbursement of defense costs under an equitable subrogation theory against six subcontractors (defendants) that had worked on the underlying construction projects and whose contracts required them to defend the general contractor in suits involving allegations related to their work. After a bench trial, the court denied St. Paul’s claim. Relying on Patent Scaffolding Co. v. William Simpson Constr. Co., 256 Cal.App.2d 506, 514 (1967), the trial court concluded St. Paul had not demonstrated it was fair to shift all of the defense costs to defendants because their failure to defend the general contractor had not caused the homeowners to bring the construction defect actions. St. Paul argued this conclusion misconstrued the law governing equitable subrogation and therefore constitutes an abuse of discretion. To this, the Court of Appeal agreed: (1) a cause of action based on equitable subrogation allowed an insurer to step into the shoes of its insured and recover only what the insured would be entitled to recover from the defendants; and (2) the appropriate inquiry should have been whether defendants’ failure to defend the general contractor caused St. Paul to incur the defense costs, not whether that failure caused the underlying lawsuits. Judgment was reversed and the matter remanded to the trial court to grant judgment in St. Paul's favor and for a determination of defense costs each defendant owed. View "Pulte Home Corp. v. CBR Electric, Inc." on Justia Law

Hughes bought a ticket from Southwest to fly to Chicago. Just before the flight was to board, Southwest canceled it. Hughes, who chose an alternate flight through Omaha, claims that the cancellation was because Southwest ran out of de-icer and that no other airlines had a similar problem. He claims he incurred additional costs for lodging and similar expenses. The Seventh Circuit affirmed the dismissal of his breach of contract claim. There was no breach; the contract allows the airline to cancel and either reschedule the passenger or refund the fare. There is no implied duty to avoid cancellation. View "Brian Hughes v. Southwest Airlines Co." on Justia Law

Plaintiff Signature Leasing, LLC requested a declaratory judgment regarding a contract containing an arbitration clause which Plaintiff alleged that Defendants Buyer's Group, LLC and Williams & Williams Marketing Services, Inc. had fraudulently induced Plaintiff to sign. Defendants filed motions to dismiss and motions to compel arbitration which the district court granted. The Court of Civil Appeals reversed and remanded to the district court. The underlying question presented for the Oklahoma Supreme Court's review was whether the district court or the arbitrator determined challenges of fraudulent inducement to the entirety of a contract which contains an arbitration clause under the Oklahoma Uniform Arbitration Act (OUAA). The Court determined the arbitrator makes that determination, and affirmed the judgment of the district court compelling the matter to arbitration. View "Signature Leasing, LLC v. Buyer's Group, LLC" on Justia Law

Cook sold variable annuities on behalf of Ohio National, under a contract between Ohio National and a broker-dealer, Triad. Ohio National paid commissions on the previously sold annuities to Triad, which in turn paid commissions to Cook pursuant to a separate agreement between Cook and Triad. After Ohio National terminated its agreement with Triad, Ohio National refused to pay further commissions on annuities sold during the term of the agreement. Cook sued Ohio National for breach of its agreement with Triad. Triad is not a party to the suit. Cook claimed that as a “third-party beneficiary” to the agreement between Ohio National and Triad, he had standing to bring suit. The district court found that, under Ohio law, Cook not an “intended” third-party beneficiary and could not maintain an alternative claim of unjust enrichment against Ohio National. The Sixth Circuit affirmed the dismissal of the suit. The plain language of the Selling Agreement makes it clear that plaintiff is not an intended third-party beneficiary under the Agreement. The Agreement unambiguously directs Ohio National to pay commissions to Triad; Cook is precluded from bringing an unjust enrichment claim against Ohio National. View "Cook v. Ohio National Life Insurance Co." on Justia Law

After Dow was found liable for breaching a contract it entered with Gulf, Dow appealed the district court's failure to enter judgment on the issue of contract ambiguity and the district court's denial of Dow's motion for judgment as a matter of law on damages.The Fifth Circuit held that the district court should have granted Dow's motion for partial summary judgment on the issue of ambiguity because the contract was not ambiguous. However, the district court's error in denying Dow's motion for partial summary judgment and the district court's jury instruction on ambiguity was harmless. The court did not address whether there was evidence of a contract breach because the court instead resolved the appeal on the basis that Gulf failed to support its claim of lost profits by any probative evidence. Accordingly, the court reversed the district court's denial of Dow's motion for judgment as a matter of law on damages and rendered judgment in favor of Dow. View "Gulf Engineering Co., LLC v. The Dow Chemical Co." on Justia Law

The Supreme Court reversed the judgment of the court of appeals concluding that B.E.B. Properties reserved the right to receive future rental payments for leased land underneath a cell tower when it conveyed the property, holding that the deed did not contain such a reservation.B.E.B. Properties leased a portion of commercial property it owned to a cellular telephone company, and a cellular tower was erected on the site. B.E.B. subsequently sold the property to Keith Baker and Joseph Cyvas. Thereafter, two of the general partners in B.E.B. sold their interests in the partnership to Bruce and Sheila Bird, who believed this transaction included the assignment of the right to receive rental payments for the tower. When LRC Realty, Inc. acquired the property it sought a declaratory judgment that it was entitled to the annual rental payments. The trial court granted summary judgment for LRC Realty. The court of appeals reversed, concluding that the Birds were entitled to rental payments based on the language contained in the deed transferring the property from B.E.B. to Baker and Cyvas. The Supreme Court reversed, holding (1) absent a reservation in the deed conveying the property, the right to receive rents runs with the land; and (2) the deed here did not create such a reservation. View "LRC Realty, Inc. v. B.E.B. Properties" on Justia Law

Plaintiff Henry Sanchez filed a class action seeking relief based on the Retail Installment Sales Act, N.J.S.A. 17:16C-1 to -61 (RISA). He contended the “initiation fee” charged in defendant Fitness Factory’s gym membership contract, among other provisions, violated RISA. The trial court dismissed Sanchez’s complaint, finding that RISA did not apply to the contract because it was a contract for services. The Appellate Division affirmed. While acknowledging that RISA applied to some services contracts, the Appellate Division found that RISA applied only to contracts that contained a financing arrangement. The New Jersey Supreme Court determined that by its own terms, RISA applied to services contracts. Further, in the statute as written, there was no requirement that a contract include a financing arrangement to be covered by RISA. Judgment was reversed and the matter remanded for further proceedings. View "Sanchez v. Fitness Factory Edgewater, LLC" on Justia Law

The First Circuit reversed the order of the district court denying arbitration in this negligence case, holding that an arbitration clause in a residency agreement between an assisted living facility and its resident remained in effect and bound Plaintiffs to arbitrate their claims.Plaintiffs, Joan McKenna and her daughter, Kara Biller, brought this lawsuit against Defendant, McKenna's former assisted live-in facility, alleging several claims for Defendant's alleged failure to administer thyroid medication to McKenna while she was a resident. Defendant sought to have the case sent to arbitration, relying on an arbitration clause in McKenna's residency agreement. The district court denied the motion to compel arbitration, concluding that the arbitration agreement had expired. The First Circuit reversed, holding (1) to successfully argue that the arbitration agreement terminated and no longer governed their claims, Plaintiffs had to mount an independent challenge to the arbitration agreement itself, which they failed to do; (2) Plaintiffs' other arguments backing their reasons to affirm the denial of the motion to compel arbitration were unavailing; and (3) therefore, the Federal Arbitration Act required the district court to send this case to arbitration. View "Biller v. S-H OPCO Greenwich Bay Manor" on Justia Law

After a conflict of interest between an attorney and a long-time client arose during settlement negotiations, the attorney filed a confidential motion with the superior court criticizing his client. The client discharged the attorney and hired new counsel. But the attorney continued to control the settlement funds and disbursed himself his fee, even though the amount was disputed by the client. The court found that the attorney’s actions had violated the rules of professional conduct and ordered forfeiture of most of his attorney’s fees. Finding no reversible error in that decision, the Alaska Supreme Court affirmed the superior court. View "Kenneth P. Jacobus, P.C. v. Kalenka" on Justia Law