Justia Contracts Opinion Summaries

In November 2008, the Anderson County, South Carolina Council (2008 Council) approved a $1.1 million Severance Agreement for county administrator Joey Preston (Preston). In January 2009, a new county council (2009 Council) was sworn in, and filed suit seeking to invalidate the Severance Agreement. The circuit court ruled that, despite tainted votes, the Severance Agreement was valid and also held: (1) public policy rendered neither the Severance Agreement nor the vote adopting it void; (2) Preston did not breach a fiduciary duty because he owed no duty to disclose Council members' personal conflicts of interest; (3) the County failed to prove its claims for fraud, constructive fraud, and negligent misrepresentation; (4) the 2008 Council's approval of the Severance Agreement was neither unreasonable or capricious nor a product of fraud and abuse of power; (5) the County's constructive trust claim no longer remained viable; (6) rescission was unavailable as a remedy; (7) the County had unclean hands; (8) adequate remedies at law barred the County from invoking the court's equitable jurisdiction; (9) the County breached the covenant not to sue in the Severance Agreement by bringing this lawsuit; and (10) the issue concerning the award of attorney's fees should be held in abeyance pending the final disposition and filing of a petition. Pertinent here, a panel of the Court of Appeals found the trial court erred in refusing to invalidate the 2008 Council's approval of the Severance Agreement based upon the absence of a quorum, and reversed. The South Carolina Supreme Court determined this judgment was made in error: the County lacked a quorum. The matter was remanded to the circuit court to determine the exact amount Preston had to refund the County. View "Anderson County v. Preston" on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment in favor of Barbara Needham in her capacity as the personal representative of the Estate of Charles Kelly Kluver (Estate) and denying the cross-motion for summary judgment filed by Karson Kluver and Genie Land Company (collectively, Kluver), holding that the district court did not err in granting summary judgment.The Estate filed a complaint for declaratory judgment and for dissolution of Genie against Kluver, alleging declaratory judgment, breach of contract, promissory estoppel, and judicial dissolution of corporation. The Estate filed a petition for partial summary judgment. The district court granted partial summary judgment in favor of the Estate in Counts I and II and denied Kluver's cross-motion for summary judgment in its entirety. The Supreme Court affirmed, holding that the district court did not err in granting partial summary judgment in favor of the Estate. View "Needham v. Kluver" on Justia Law

The Supreme Court reversed the order of the district court granting the motion of the Sandra L. Farber Trust (Farber) to enforce the parties' punitive settlement agreement and denying Karen Jarussi's cross-motion for enforcement, holding that the district court erred by concluding that the parties formed a legally binding settlement agreement.This dispute arose from the parties' disagreement on how their punitive settlement agreement should be interpreted. The parties filed opposing motions for enforcement, and the district court determined that the parties must comply with the agreement as interpreted by Farber. The Supreme Court reversed and remanded this matter for further proceedings, holding that the parties did not mutually assent to the scope of their proposed agreement. View "Jarussi v. Farber" on Justia Law

Antero Resources Company and South Jersey Gas Company entered into an eight-year contract for Antero to deliver natural gas from the Marcellus Shale formation to gas meters located on the Columbia Pipeline in West Virginia. The parties tied gas pricing to the Columbia Appalachia Index.During performance of the contract, the price of natural gas linked to the Index increased. South Jersey contested the higher prices, arguing that modifications to the Index materially changed the pricing methodology, and that the Index should be replaced with one that reflected the original agreement. Antero disagreed. South Jersey then sued Antero in New Jersey state court for failing to negotiate a replacement index, and began paying a lower price based on a different index. Antero then sued South Jersey in federal district court in Colorado, where its principal place of business was located, for breach of contract for its failure to pay the Index price. The lawsuits were consolidated in Colorado and the case proceeded to trial. The jury rejected South Jersey’s claims, finding South Jersey breached the contract and Antero was entitled to $60 million damages. South Jersey argued on appeal the district court erred in denying its motion for judgment in its favor as a matter of law, or, alternatively, that the court erred in instructing the jury. After review, the Tenth Circuit affirmed, finding a reasonable jury could find South Jersey breached its contract with Antero because the Index was not discontinued nor did it materially change. Furthermore, the Court found no defects in the jury instructions. View "Antero Resources Corp. v. South Jersey Resources Group" on Justia Law

Plaintiff filed suit against Wells Fargo in tort for negligent mortgage modification and other claims. The trial court sustained Wells Fargo's demurrer, partly because Wells Fargo did not owe plaintiff a duty in tort during contract negotiation.The Court of Appeal held that no tort duty exists during contract negotiations for mortgage modification. Therefore, the court affirmed the trial court's judgment, finding that the majority of other states are against it, and the most recent Restatement counsels against this extension because other bodies of law—breach of contract, negligent misrepresentation, promissory estoppel, fraud, and so forth—are better suited to handle contract negotiation issues. View "Sheen v. Wells Fargo Bank, N.A." on Justia Law

The Supreme Court reversed the judgment of the district court denying the petition filed by Petitioners, a same-sex married couple and a woman and her husband requesting that the court validate their agreement that the woman act as a gestational surrogate for the couple, holding that Utah Code 78B-15-802(2)(b), which precludes same-sex male couples from obtaining a valid gestational agreement, is unconstitutional.A married couple, both men, entered into an agreement with a woman and her husband to have the woman act as a gestational surrogate to carry a fertilized embryo that contained the genetic material of one of the couple. This type of gestational agreement is not enforceable in Utah unless it is validated by a tribunal, and a court may not validated the agreement if medical evidence is not presented showing that the "intended mother" is unable to bear a child or will suffer health consequences if she does. Petitioners filed a petition requesting that the district court validate their gestational agreement, but the court denied the petition because neither of the intended parents were women. The Supreme Court reversed, holding that the statute is unconstitutional and that the unconstitutional subsection should be severed. The Court then remanded this case for further proceedings. View "In re Gestational Agreement" on Justia Law

Robert was admitted to a nursing home multiple times. During his final stay, he fell out of bed, sustained a head injury, and later died. His estate sued in state court, alleging negligence, negligence per se, violations of Kentucky’s Residents’ Rights Act, KRS 216.515(26), corporate negligence, medical negligence, wrongful death, and loss of consortium. The nursing home sought to enforce an arbitration agreement in federal court. The district court held that no valid agreement covering the final visit existed. An Agreement dated January 5, 2015 displays a mark of some kind in the “Signature of Resident” block, but it is difficult to read. Bramer’s estate alleges that this scrawl is a forgery; Robert's widow stated in an affidavit that neither she nor Robert signed that form. On an Agreement dated January 26, 2015, the widow signed in the “Signature of Resident” block. The Alternative Dispute Resolution Agreements are identical, bind successors and assigns, and require arbitration of a wide range of disputes. They purport to remain in effect through discharge and subsequent readmission. Although signing the Agreement was not a condition of admission, it was presented as part of the admissions packet. The estate presented evidence that the staff implied that signing the Agreement was required. The Sixth Circuit affirmed. By requesting a second agreement on January 26, the nursing home effectively abandoned the first agreement. Lacking Robert’s consent, there was no valid agreement to arbitrate. View "GGNSC Louisville Hillcreek v. Estate of Bramer" on Justia Law

After JetMidwest filed suit against JMG for breaching a loan agreement, the district court granted summary judgment to JetMidwest but denied its motion for reimbursement of its attorneys' fees under the agreement.As a preliminary matter, the Eighth Circuit held that a Hong Kong limited company is equivalent to a U.S. corporation under 28 U.S.C. 1332. Therefore, the district court properly exercised subject matter jurisdiction under section 1332 and the court had appellate jurisdiction under 28 U.S.C. 1291. On the merits, the court disagreed with the district court's interpretation of the agreement, holding that the use of the sweeping language "all costs and expenses" reflects the parties' intent that JMG would pay Jet Midwest's attorneys' fees and other costs for enforcing as well as preparing the agreement. Accordingly, the court reversed and remanded for consideration of an appropriate award. View "Jet Midwest International Co., Ltd. v. Jet Midwest Group, LLC" on Justia Law

The First Circuit affirmed the arbitrator's decision in favor of RMS Lifeline, Inc. in this dispute between RMS and Dialysis Access Center (DAC) and the district court's refusal to vacate that decision, holding that the district court was correct in denying DAC's challenge and confirming the award.In this multi-year arbitration-fueled litigation the arbitrator ultimately entered a decision for RMS, awarding it almost $2 million. The district court confirmed the award and dismissed DAC's complaint to vacate and/or modify the arbitration award. The First Circuit affirmed, holding that vacatur of the arbitration award was not warranted and that the district court properly confirmed the award. View "Dialysis Access Center, LLC v. RMS Lifeline, Inc." on Justia Law

Sierra Development, LLC (Sierra), a real estate development company in which both Eddie Wilcher and his son were involved, borrowed approximately $5 million from The Mortgage Exchange (MEX), the predecessor in interest of plaintiff Troubled Asset Solutions, LLC (TAS). Wilcher and his son signed a promissory note for the loan as members of Sierra; Wilcher, his son, and his son’s wife also signed the promissory note as “individual guaran- tor(s).” The promissory note stated that it was secured by a trust deed on Sierra Heights, the property owned by Sierra that was to be developed with the loan proceeds, and also by “[a]dditional security” that was “required on this loan.” The promissory note identified as that “additional security” three other properties owned personally by Wilcher, one of which was described as “15 (+/-) acres including residence, Tax Lot 700, Klamath County, Oregon valued at $450,000.” The same three individuals that signed the promissory note also executed the critical document in this case: a deed of trust identifying more than a dozen separate parcels of land as collateral for the loan. The dispute in this case arose because, although the trust deed identified the collateral as including the properties owned personally by Wilcher and contained legal descriptions of those properties, the only name that appeared in the space labeled “GRANTOR” on the first page of the trust deed was Sierra. Wilcher, individually, was not identified as a “grantor” in the trust deed. After the loan went into default, TAS initiated foreclosure proceedings against one of the properties owned personally by Wilcher. The issue presented for the Oregon Supreme Court's review centered on the proper legal standard for the reformation of the contract to include a term that all parties had intended, but that one of the parties, by mistake, had failed to include in the written agreement. The trial court reformed the contract to include the term, finding that the mistake “was easily missed,” and that the “evidence is clear that all parties intended” the term to be included. The Court of Appeals reversed, concluding that reformation was permissible only if the party seeking the remedy demonstrates that it was not “grossly negligent,” and holding that the facts in this case did not meet that standard. The Supreme Court concluded the trial court did not err in reforming the contract to express the parties’ agreement. Accordingly, the Supreme Court reversed in part the decision of the Court of Appeals and remanded for further proceedings. View "Troubled Asset Solutions v. Wilcher" on Justia Law