Justia Contracts Opinion Summaries

Robert Nederlander, Sr. (“Robert”) controlled Nederlander of San Francisco Associates (“Nederlander”), a California general partnership. Carole Shorenstein Hays (“Carole”) and her family controlled CSH Theatres L.L.C. (“CSH”), a Delaware LLC. Nederlander and CSH each owned a fifty-percent membership interest in Shorenstein Hays-Nederlander Theatres LLC (“SHN”), a Delaware LLC that operated theaters in San Francisco under SHN’s Plan of Conversion and Operating Agreement of the Company (the “LLC Agreement”). In 2010, CSH Curran LLC, an entity that Carole co-managed, purchased the Curran Theatre in San Francisco (the “Curran”). SHN had been operating under a lease from the Curran’s then-owners, the Lurie Company, since the beginning of the partnership. Carole and her husband, Dr. Jeffrey Hays (“Jeff”) (collectively, the “Hayses”), did not extend that lease with SHN when it expired in 2014. Thereafter, the Hayses began staging productions at the Curran. In February 2014, CSH sued Nederlander in the Delaware Court of Chancery for a declaratory judgment that it had no legal obligation to renew the Curran lease. In September 2018, Nederlander sought a preliminary injunction against CSH and the Hayes to prevent them from staging two theatrical productions at the Curran (the “PI Action”). In the PI Action, Nederlander asserted four counts, but focused its injunction efforts on Count I, which asserted breach of contract claims (based upon the “provisions of Section 7.02 of the LLC Agreement or the contractual fiduciary duties owed to SHN and its members under the LLC Agreement) against all defendants in that action. The trial court denied that motion and shortly thereafter entered a partial final judgment as to Count I of Nederlander’s Complaint, pursuant to Court of Chancery Rule 54(b), to allow for an immediate appeal of the PI Decision. Nederlander argued on appeal that the trial court erred in the Declaratory Judgment Action by refusing to enforce Section 7.02(a) of the LLC Agreement against the Hayses. The Delaware Supreme Court agreed with Nederlander that the Court of Chancery misinterpreted Section 7.02(a) and that the Hayses could not stage competitive productions (not falling within Section 7.02(b)’s exceptions) at the Curran that violated its contractual duty to maximize SHN’s economic success. Accordingly, the Court reversed that aspect of the trial court’s decision. Because Nederlander did not challenge the court’s rulings in the Declaratory Judgment Action as to damages and other forms of relief, the Supreme Court declined to remand that action. Further, in view of the reversal of the trial court’s interpretation of Section 7.02(a) in the Declaratory Judgment Action, the Supreme Court ordered remand of the PI Action for further proceedings. The Court found no error with any other aspect of the trial court’s decisions. View "In Re: Shorenstein Hays-Nederlander Theatres LLC Appeals" on Justia Law

The Supreme Court affirmed the order of the circuit court dismissing this suit against Marty Indian School (MIS), a legal entity of the Yankton Sioux Tribe, for a lack of subject matter jurisdiction based on federal preemption, holding that the circuit court lacked subject matter jurisdiction to hear Plaintiff's claims against MIS.Plaintiff, the former high school principal at MIS, sued MIS and other involved parties after he was terminated. Plaintiff alleged claims for breach of contract, breach of settlement agreement, wrongful termination, libel, and slander, and requested punitive damages. The circuit court dismissed the complaint on the grounds of tribal sovereign immunity, immunity of tribal officials and employees, infringement of tribal sovereignty, and federal preemption. The Supreme Court affirmed the dismissal solely on a lack of subject matter jurisdiction based on federal preemption, holding that state court action in this dispute was preempted by federal law. View "Stathis v. Marty Indian School" on Justia Law

The Supreme Court affirmed the order of the superior court granting summary judgment in favor of Plaintiff as to Plaintiff's claim seeking injunctive relief for Defendants' alleged trespass and permanently enjoining Defendant and its officers, customers, and employees from parking in parking spaces owned by Plaintiff, holding that the hearing justice did not err in granting summary judgment on this claim.This case centered around a dispute over parking spaces in the Watch Hill section of Westerly. In an earlier case, Defendants sued Plaintiff regarding the parking spaces. Plaintiff later brought this action. After a hearing justice granted summary judgment on its injunctive relief claim, Defendants appealed, arguing that the trial justice erred by failing to order that the dispute be arbitrated and granting Plaintiff injunctive relief based on res judicata and collateral estoppel. The Supreme Court affirmed, holding (1) Defendants waived their right to arbitration of the injunctive relief claim; and (2) there existed identity of issues between the first action and the current dispute. View "JHRW, LLC v. Seaport Studios, Inc." on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirming the judgment of the circuit court granting summary judgment dismissing Rural Mutual Insurance Company's subrogation claims pursuant to a subrogation waiver, holding that the subrogation waiver was valid and enforceable.Rural Mutual brought this action against Lester Buildings, LLC, Phoenix Insurance Company, Van Wyks, Inc., and West Bend Mutual Insurance Company after a barn collapsed due to strong winds and Rural Mutual paid more than $650,000 to the barn owner, Jim Herman, Inc. (Herman). The circuit court concluded that the claims were barred pursuant to a subrogation waiver contained in Lester Buildings' contract with Herman, Rural Mutual's insured, and further concluded that Wis. Stat. 895.447 did not void that subrogation waiver. The Supreme Court affirmed, holding (1) section 895.447 did not void the subrogation waiver in the contract because the waiver did not limit or eliminate tort liability; and (2) the subrogation waiver was not an unenforceable exculpatory contract contrary to public policy. View "Rural Mutual Insurance Co. v. Lester Buildings, LLC" on Justia Law

Orozco opened Pauly’s Famous Franks N Fries at San Jose's "The Plant" shopping center. Before signing a 10-year lease, he asked the leasing manager whether restaurants with competing concepts or products were being considered for the remaining space. The manager told him no, even as she was negotiating with Al’s Beef, a national franchise selling hot beef sandwiches, hot dogs, and french fries. Orozco signed the lease without knowledge that the Plant had leased space to Al’s and personally guaranteed rent payments. The lease, which Orozco did not fully read, contained statement that the landlord had not made any promises about products offered by other tenants or future tenants. Pauly’s had a successful debut, with steadily increasing revenue. Approximately six months after Pauly’s opened, Al’s opened two doors down. Pauly’s business declined and, within six months of the debut of Al’s, Pauly’s closed. A jury found intentional misrepresentation and concealment and awarded compensatory damages, primarily for Pauly’s lost profits. The court ruled that Orozco was not entitled to rescission of the guaranty. The court of appeal affirmed in part. Substantial evidence supports the finding of intentional misrepresentation and the award of lost profits. Orozco was entitled to rescission of the guaranty. Because Orozco prevailed in obtaining rescission of the guaranty, he is entitled to attorney’s fees under the lease. View "Orozco v. WPV San Jose, LLC" on Justia Law

In 2013, Blooming Terrace No. 1 (“Blooming Terrace”) obtained an $11 million loan from KH Blake Street, LLC (“KH Blake Street”), a special purpose entity organized by Kresher Holdings, LLC. The loan was secured by a deed of trust and memorialized by promissory note. Blooming Terrace paid a $220,000 origination fee upon execution of that note. The note specified that interest would accrue on the outstanding principal at a rate of 11% per annum. In the event of default, the note provided for a higher default interest rate of 21% per annum. The note required monthly interest payments in the amount of 8% per annum throughout the term of the loan, though these periodic payments did not apply to reduce the principal balance of the loan. In the event of any late monthly payment, a 5% late fee was applicable to the overdue amount. The note was to mature in 2014. However, KH Blake Street reserved the right to accelerate Blooming Terrace’s full loan repayment obligation upon an event of default. Prior to paying down any portion of the principal, Blooming Terrace defaulted on its monthly payment obligation. The parties entered into a forbearance agreement; at that time, the parties stipulated that the accrued charges due and owing to KH Blake Street under the original loan agreement were $778,583.33. In exchange for KH Blake Street’s agreement not to pursue collection of that sum, or any other remedies, Blooming Terrace agreed to pay a $110,000 fee. Payment of this new fee did not substitute for any other charges that continued to accrue during the forbearance period, including, but not necessarily limited to, default interest and late fees. Instead, a condition of the forbearance was Blooming Terrace’s compliance with all of the original loan terms. The Colorado Supreme Court granted certiorari to clarify the proper method for determining the effective rate of interest charged on a nonconsumer loan to ascertain whether that rate was usurious under Colorado law: the effective interest rate should be calculated by determining the total per annum rate of interest that a borrower is subjected to during a given extension of credit. Here, where a forbearance agreement was entered into after an event of default, all charges that accrued during the period of forbearance must be totaled and then annualized using only that timeframe as the annualization period. Such includable interest must then be combined with any interest that continued to accrue pursuant to the original loan terms to determine the effective rate of interest subject to the 45% ceiling set by Colorado’s usury statute, section 5-12-103, C.R.S. (2018). View "Blooming Terrace No. 1, LLC v. KH Blake Street, LLC" on Justia Law

Douglas Schoninger was interested in launching a professional rugby league in the United States. Toward that end, he formed PRO Rugby and approached the United States of America Rugby Football Union (“USAR”), the national governing body for rugby in the United States. PRO Rugby and USAR entered into the Sanction Agreement, which authorized PRO Rugby to establish a professional rugby league in the United States. At issue before the Colorado Supreme Court in this appeal was whether a nonsignatory to an arbitration agreement could be required to arbitrate under that agreement by virtue of the fact that it was a purported agent of a signatory to the agreement. Specifically, the Court was asked to decide whether the district court erred when it entered an order requiring petitioner Rugby International Marketing (“RIM”), a nonsignatory to a Professional Rugby Sanction Agreement (the “Sanction Agreement”), to arbitrate pursuant to an arbitration provision in that Agreement that covered the parties and their agents. The court found that because RIM was an agent for USAR, a signatory of the Sanction Agreement, RIM fell “squarely within the broad language of the arbitration provision.” The Supreme Court found that the weight of authority nationally established that, subject to a number of recognized exceptions, only parties to an agreement containing an arbitration provision could compel or be subject to arbitration. Here, because RIM was not a party to the Sanction Agreement and because respondents PRO Rugby and Schoninger had not established any of the recognized exceptions applied, the Supreme Court concluded the district court erred in determining that RIM was subject to arbitration under the Sanction Agreement. View "In re N.A. Rugby Union v. U.S. Rugby Football Union" on Justia Law

The Eighth Circuit affirmed the district court's dismissal of plaintiff's Missouri state-law claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and fraudulent misrepresentation against St. Louis University. Plaintiff's claims stemmed from his unsuccessful attempts to receive a Ph.D from the university in mechanical and aerospace engineering in four years.The court held that the educational malpractice doctrine barred all of plaintiff's claims. In this case, all of the statements plaintiff relied on in the student catalog and handbook were aspirational in nature. The court also held that the district court did not abuse its discretion by denying plaintiff leave to amend his complaint when he did not submit a proposed amendment or include anything in his motion to indicate what an amended complaint would contain. View "Soueidan v. St. Louis University" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the trial court insofar as it rendered judgment in Defendant's favor on counts alleging fraudulent transfer under the Connecticut Uniform Fraudulent Transfer Act (CUFTA), Conn. Gen. Stat. 52-552a through 52-552l, and unjust enrichment, holding that the trial court erred in rejecting Plaintiff's CUFTA claim but did not err in rejecting Plaintiff's unjust enrichment claim.Defendant Stephen McGee used a power of attorney granted to him by his elderly mother, Helen McGee, to transfer to himself funds from Helen's checking account. As a consequence of the transfers, Helen had insufficient assets to pay her debt to Plaintiff Geriatrics, Inc. Plaintiff brought this action, and the trial court rendered judgment in Defendant's favor on Plaintiff's CUFTA and unjust enrichment claims. The Supreme Court reversed in part, holding (1) in rejecting the CUFTA claim the trial court improperly failed to consider and apply agency principles; and (2) in light of the unrequited evidence, the trial court did not abuse its discretion in rejecting Plaintiff's unjust enrichment claim. View "Geriatrics, Inc. v. McGee" on Justia Law

Starting in February of 2014, Philip McGimpsey (“McGimpsey”) and his wife Jolene leased a home from D&L Ventures, Inc. D&L was a Nevada corporation owned by David Asher and his wife Georgina. The residential property McGimpsey leased from D&L was located in Eagle, Idaho. D&L obtained the Property in a 2013 foreclosure sale and received a trustee’s deed, which excluded any warranties. A dispute arose out of a breach of contract claim between the McGimpsey and D&L, who entered into a combined lease/Buy-Sell Agreement for the property. On discovering that D&L was an unregistered Nevada corporation conducting business in Ada County, McGimpsey failed to close on the purchase of the home in 2017, because he believed D&L to be in violation of Idaho Code section 30-21-502(a). After the closing date passed, D&L informed McGimpsey that the contractual provisions terminated upon his failure to close and reminded McGimpsey he had to vacate the property, pursuant to the Buy-Sell Agreement. About a month later, D&L registered with the Idaho Secretary of State as a Nevada corporation and filed all of its tax returns and paid its other obligations. McGimpsey subsequently filed a complaint against D&L, and the corporation counterclaimed against McGimpsey and third-party defendants. D&L moved for summary judgment that was granted in part and denied in part. The district court ultimately concluded that D&L had the legal ability to convey the property via warranty deed and that McGimpsey breached the Buy-Sell Agreement by failing to close and failing to show that his breach was excused by D&L’s alleged inability to convey marketable title. McGimpsey and third-party defendants timely appealed and their appeals were consolidated. The Idaho Supreme Court affirmed the district court’s award of summary judgment to D&L because Idaho Code section 30- 21-502 did not impair the validity of contracts; therefore, D&L had the legal ability to convey the property via warranty deed. View "McGimpsey v. D&L Ventures" on Justia Law