Justia Contracts Opinion Summaries

Appellants Icon Legacy Custom Modular Homes, LLC and Icon Legacy Transport, LLC challenged a series of trial court orders in favor of appellees Dagney Trevor, Merusi Builders, Inc., Osborne Construction, LLC, and Paul Osborne. This appeal arose from the sale and construction of a new modular home that suffered from significant deficiencies. Trevor purchased the modular home; Icon Legacy Custom Modular Homes, LLC (Icon Legacy) and Icon Legacy Transport, LLC (Icon Transport) manufactured and transported the home; Osborne Construction, LLC (Osborne Construction) and Paul Osborne (Osborne) were collectively the contractor involved in the assembly the home; Merusi Builders, Inc. (Merusi) was a subcontractor involved in the assembly of the home. Though not parties to this appeal, Vermont Modular Homes, Inc., David Curtis, and Blane Bovier were Icon’s Vermont-based “approved builders” and three of the defendants in the suit below. In 2015, Trevor purchased an Icon Legacy Custom Modular Home as a replacement to one she lost to fire. The home sustained significant water damage during a rainstorm when water entered the home before the roof installation was complete. Other structural defects emerged after Trevor moved into the home. Although Icon and Vermont Modular Homes repaired some of the damage, major defects relating to both the water damage and alleged improper construction remained in the home. Ultimately judgement was entered against Icon. Icon appealed, arguing multiple errors leading to the outcome against it. The Vermont Supreme Court reversed as to the trial court's thirty-percent upward adjustment of the lodestar damages calculation, and remanded for the trial court to strike that amount from Trevor's attorney fee award. The Court affirmed the trial court in all other respects. View "Trevor v. Icon Legacy Custom Modular Homes, LLC, et al." on Justia Law

The Fifth Circuit certified the following question of law to the Supreme Court of Texas: Is a lender entitled to equitable subrogation, where it failed to correct a curable constitutional defect in the loan documents under section 50 of the Texas Constitution?The court also held that a secondary lender is not entitled to contractual subrogation without a valid contract. In this case, without a signature, Freddie Mac has no ability to enforce the contract itself or its subrogation provision. Therefore, the court affirmed the district court's denial of Freddie Mac's contractual subrogation claim. View "Zepeda v. Federal Home Loan Mortgage Corp." on Justia Law

The defendants, exploration and production companies, contracted with landowners (plaintiffs) to drill for oil and gas on leased properties in Ohio’s Utica Shale Formation between 2010-2012. The agreements provide for royalty payments to the plaintiffs based on the gross proceeds received by the defendants from the sale of each well’s oil and gas production. The defendants sell the oil and gas extracted from the leased properties to “midstream” companies affiliated with the defendants. To calculate the price that an unaffiliated entity would have presumptively paid for the oil and gas, the defendants use the “netback method.” The plaintiffs claim the defendants underpaid their royalties because the netback method does not accurately approximate an arm’s-length transaction price, and improperly deducts post-production costs from the price. The district court granted class certification under FRCP 23(b)(3). The Sixth Circuit affirmed. While the plaintiffs have not met their burden of showing that common issues predominate with respect to a theory that the defendants sold oil and gas to midstream affiliates at below-market prices, the plaintiffs no longer pursued that theory at the class-certification stage. The plaintiffs satisfy the requirements of Rule 23(b)(3) with their liability theory based on the defendants’ deductions of post-production costs. View "Zehentbauer Family Land, LP v. Chesapeake Exploration, L.L.C." on Justia Law

After English filed suit against RK&K and CDM Smith for breach of contract and indemnification, the district court granted summary judgment to defendants. The Fourth Circuit vacated the district court's judgment, holding that the district court construed ambiguous contractual language and resolved factual disputes, which violated the established principles of summary judgment. Accordingly, the court remanded for further proceedings.On remand, the court noted that the factfinder will need to interpret the relevant aspects of the contract and to determine the effect of any breach by English on RK&K's liability. Furthermore, the factfinder will need to determine what CDM Smith’s contractual obligations were under the circumstances, whether CDM Smith satisfied those obligations, and if CDM Smith failed to meet its obligations, whether and to what extent English is entitled to damages. View "W. C. English, Inc. v. Rummel, Klepper & Kahl, LLP" on Justia Law

The Supreme Court reversed the decision of the court of appeals affirming the trial court's judgment granting Plaintiff's motion to certify a class action, holding that when a class-certification case originates with a single named plaintiff and that plaintiff is not subject to an arbitration agreement that was entered into by unnamed putative class members, the defendant need not raise a specific argument referring or relating to arbitration in the defendant's answer.Plaintiff filed a class-action complaint against Defendant, his former employer. When Plaintiff moved to certify the case as a class action Defendant opposed the motion, asserting the defense of arbitration. The trial court granted the motion, concluding that Defendant waived any right of arbitration. The appellate court affirmed, determining that Defendant's failure to assert the arbitration defense in his answer or to seek to enforce the right to arbitration prior to its opposition to the certification was inconsistent with its right to assert the defense. The Supreme Court reversed, holding (1) because arbitration was not available as a defense at the time Defendant submitted its answer, Defendant could not waive a right to assert arbitration at that time; and (2) Defendant had no duty to raise an argument that Plaintiff failed to satisfy Civ.R. 23(A)'s typicality and adequacy requirements. View "Gembarski v. PartsSource, Inc." on Justia Law

The Supreme Court affirmed the order of the Public Service Commission denying PacifiCorp's application for approval of an agreement between PacifiCorp and Monticello Wind Farm, LLC (MWF) for the purchase of wind energy, holding that the Commission was not obligated to approve the agreement under the circumstances of this case.Under Utah and federal law, PacifiCorp and MWF could set the terms for their agreement in one of two ways by either fixing pricing based on PacifiCorp's avoided costs, which would make the contract one negotiated within the Commission's framework, or negotiating their own pricing terms and contractually limiting the scope of the Commission's review. The Commission reviewed the pricing to ensure consistency with PacifiCorp's avoided costs, but the pricing was based on a methodology the Commission had discontinued. The Commission concluded the pricing could not be deemed consistent with PacifiCorp's avoided costs and denied the application. On appeal, MWF asserted that the parties opted out of the Commission's framework, and therefore, the Commission was obligated to approve the agreement. The Supreme Court disagreed, holding that this was an agreement the Commission could reject if it obligated PacifiCorp to purchase energy at a price higher than its avoided costs. View "Monticello Wind Farm, LLC v. Public Service Commission of Utah" on Justia Law

At the motion-to-dismiss stage, dismissal on statute-of-limitations grounds is permissible only if a plaintiff's claims are conclusively time-barred on the face of the complaint. The DC Circuit reversed the district court's determination that Capitol Services' lawsuit was barred by the statute of limitations because Capitol Services was on "inquiry notice" of defendant's alleged interference with its contract long before the limitations period expired.The record was inconclusive as to whether Capitol Services had knowledge of Vesta's role prior to August 28, 2014, three years before this suit against Vesta was filed. Therefore, when during that intervening period Capitol Services had inquiry notice of Vesta's potential role was an open factual question that could not be resolved at this time in the proceedings. Finally, Vesta's collateral estoppel claim failed because critical elements of collateral estoppel have not been established. View "Capitol Services Management v. Vesta Corp." on Justia Law

The Fifth Circuit certified the following question to the Supreme Court of Mississippi: Is the waiver of subrogation between the school district and Sullivan Enterprises limited to damages to the Work or does it also apply to damages to non-Work property? View "Liberty Mutual Fire Insurance Co. v. Fowlkes Plumbing, LLC" on Justia Law

Integrated Technologies, Inc. (ITI) appealed the grant of summary judgment in favor of Crum & Forster Specialty Insurance Company (Crum). ITI alleged Crum breached its duty to defend ITI against a suit brought by the GOAD Company. The court granted summary judgment to Crum, finding no claim in the GOAD complaint that was potentially covered by the policy’s Errors & Omissions (E&O) Liability Coverage Part. ITI argued on appeal that the trial court misread the allegations in the GOAD complaint and interpreted the policy coverage too narrowly. Finding no reversible error, the Vermont Supreme Court affirmed. View "Integrated Technologies, Inc. v. Crum & Forster Specialty Insurance Company" on Justia Law

R&W appealed a judgment entered after R&W allegedly defaulted in making payments to Osteroid Parties under a settlement agreement. The Court of Appeal held that the trial court erred in entering the stipulated judgment because the additional $700,000 was an unenforceable penalty under Civil Code section 1671. However, the court held that the trial court's factual determinations regarding R&W's breach of the agreement were supported by substantial evidence. Accordingly, the court reversed in part and remanded with directions to reduce the judgment, with further adjustments, plus interest. The court noted that its decision to publish was to remind practitioners whose clients settle a dispute involving payments over time how to incentivize prompt payment properly, and what may happen if done incorrectly. View "Red & White Distribution v. Osteroid Enterprises" on Justia Law