Justia Contracts Opinion Summaries

Moosehead Mountain Resort, Inc., and OFLC, Inc. (collectively Moosehead) filed a civil action against Carmen Rebozo Foundation, Inc., alleging breach of contract, unjust enrichment, and breach of good faith and fair dealing. The dispute arose from a promissory note for $6,350,000 executed by Moosehead and assigned to the Foundation, which allegedly misrepresented the amount due, impacting Moosehead's efforts to sell a ski resort.The Superior Court (Piscataquis County) denied Moosehead’s motion for summary judgment and the Foundation’s motion for relief under Maine Rule of Civil Procedure 56(f), ordering a judicial settlement conference. The parties reached a settlement, agreeing to dismiss the case with prejudice. However, no docket entries were filed within the court's deadline, leading to the case's dismissal with prejudice. Moosehead then filed a motion for reconsideration and to vacate the settlement agreement, which the court denied. The Foundation's motion to enforce the settlement agreement was granted.The Maine Supreme Judicial Court reviewed the case. It affirmed the denial of Moosehead’s motion for reconsideration, finding no abuse of discretion. However, it vacated the judgment enforcing the settlement agreement, concluding that the court lacked jurisdiction to enforce it after the case was dismissed with prejudice. The court noted that the parties failed to take necessary steps to preserve the court's jurisdiction over the settlement agreement before the dismissal. The case was remanded for an order dismissing the motion to enforce the settlement agreement for want of jurisdiction. View "Moosehead Mountain Resort, Inc. v. Carmen Rebozo Foundation, Inc." on Justia Law

AMTAX Holdings 227, LLC ("AMTAX") filed a lawsuit against CohnReznick LLP ("CohnReznick") in federal court, alleging breach of fiduciary duty, professional negligence, unjust enrichment, and fraud. The dispute arose from CohnReznick's calculation of a purchase price for a property under a right of first refusal agreement, which AMTAX claimed excluded exit taxes required by Section 42 of the Internal Revenue Code. AMTAX argued that this exclusion violated the agreement and federal law.The United States District Court for the Southern District of New York dismissed AMTAX's complaint for lack of subject matter jurisdiction. The court applied the Grable-Gunn test to determine whether the state-law claims presented a substantial federal issue that would warrant federal jurisdiction. The district court concluded that AMTAX's claims did not meet the criteria for federal question jurisdiction, as they did not necessarily raise a substantial federal issue and allowing federal jurisdiction would disrupt the federal-state balance.The United States Court of Appeals for the Second Circuit reviewed the district court's decision de novo. The appellate court agreed with the lower court's application of the Grable-Gunn test, finding that AMTAX's claims were primarily based on contract interpretation rather than federal tax law. The court held that the federal issue was not substantial enough to warrant federal jurisdiction and that exercising jurisdiction would disrupt the balance of state and federal judicial responsibilities. Consequently, the Second Circuit affirmed the district court's dismissal of the case for lack of subject matter jurisdiction. View "AMTAX Holdings 227, LLC v. CohnReznick LLP" on Justia Law

In 2005, Island Pointe, LLC contracted Complete Building Corporation (CBC) to construct a condominium project, Palmetto Pointe at Peas Island. CBC subcontracted Tri-County Roofing (TCR) for roofing and related work. In 2014-2015, Palmetto discovered construction defects and sued CBC, TCR, and others for negligence and breach of warranty. Palmetto received $6,800,000 in settlements, including $1,000,000 from CBC's insurer for a covenant-not-to-execute and $1,975,000 from four other defendants.The trial began in May 2019, and the jury found CBC and TCR liable for $6,500,000 in actual damages and $500,000 each in punitive damages. The trial court apportioned 5% liability to two other defendants, making CBC and TCR jointly and severally liable for the remaining 90% of actual damages. TCR sought setoff for the $1,000,000 payment and the settlements from the four other defendants. The trial court denied TCR's motion for setoff, except for partial amounts conceded by Palmetto.The South Carolina Supreme Court reviewed the case. It reversed the court of appeals' decision, holding that TCR is entitled to set off the full $1,000,000 paid by CBC's insurer. The court affirmed the lower court's decision regarding the settlements from Novus, Atlantic, H and A, and Cohen's, agreeing that the trial court reasonably allocated the settlement amounts. The case was remanded to the trial court for the calculation of the judgment against TCR. View "Palmetto Pointe v. Tri-County Roofing" on Justia Law

Richard Edward Paul died intestate on October 3, 2022, leaving behind four daughters: Richann L. Ray, Dawn M. Paul Charron, Shelbi L. Paul, and Danita J. Paul. Richann was appointed as the Personal Representative of the Estate with the consent of her sisters. The Estate's significant asset was a cabin in Lincoln, Montana. The heirs could not agree on the disposition of the cabin, leading to conflict. Shelbi filed a motion for a temporary restraining order, alleging that Richann intended to sell the cabin contrary to their parents' wishes. The District Court denied the motion and ordered mediation for any disputed issues.The heirs continued to discuss the cabin's disposition, and Shelbi filed a motion to enforce a settlement agreement based on email communications, which the District Court denied, finding no valid settlement agreement. The heirs proceeded to mediation, resulting in a General Release and Mediated Settlement Agreement, which outlined a procedure for selling the cabin to one or more heirs within 30 days of an appraisal. The cabin was appraised at $234,000, but none of the heirs submitted a bid within the 30-day period. Richann listed the cabin for sale and later filed a motion to approve its sale for $106,100, considering the estimated repair costs. Shelbi opposed the motion, arguing the cabin was not fairly marketed.The Montana Eighth Judicial District Court approved the sale, finding the Agreement resolved all issues and the sale price was reasonable and in the best interest of the Estate. Shelbi filed motions to reconsider, which the District Court denied. Shelbi appealed the order approving the sale.The Montana Supreme Court affirmed the District Court's decision, concluding that the Agreement did not address the situation where no heir qualified to purchase the cabin within the specified time. The Court found that Richann, as Personal Representative, had the statutory authority to sell the cabin and that the sale was reasonable and in the best interest of the Estate. View "In re Estate of Paul" on Justia Law

Honeywell International, a Delaware corporation, and OPTO Electronics, a Japanese company, are competitors in the barcode-scanning equipment market. In May 2019, Honeywell sued OPTO for patent infringement, alleging that OPTO's barcode products infringed on seven of Honeywell's patents. The parties settled in January 2020 with a patent-licensing agreement, allowing OPTO to use Honeywell's patents in exchange for royalty payments. In March 2021, Honeywell audited OPTO and claimed that OPTO had underreported its revenues, leading to a dispute over the definition of "2D Barcode Products." Honeywell then sued OPTO for breach of contract in September 2021, alleging unpaid royalties.The United States District Court for the Western District of North Carolina handled the case. A jury found that OPTO's laser-scanning barcode readers were "2D Barcode Products" but awarded Honeywell only $859,741. The district court also rejected OPTO's counterclaim of patent misuse, concluding that Honeywell had not engaged in such conduct. Both parties filed post-trial motions, which the district court denied. Honeywell sought attorney's fees, and OPTO moved to set aside the jury verdict, but both requests were denied.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court determined that it could not reach the merits because the United States Court of Appeals for the Federal Circuit has exclusive appellate jurisdiction over the appeal due to the patent-related counterclaim asserted by OPTO. The Fourth Circuit dismissed the appeal, allowing the parallel appeal pending in the Federal Circuit to proceed. The main holding was that the Federal Circuit has exclusive jurisdiction over appeals involving patent claims and counterclaims, even if the primary dispute is over a contract. View "Honeywell International, Inc. v. OPTO Electronics Co., Ltd." on Justia Law

Vanessa Turner (formerly Vanessa Colley) and John S. Colley, III were divorced in 2012, with a marital dissolution agreement (MDA) and a permanent parenting plan incorporated into the final decree. Post-divorce, John filed a petition to terminate his transitional alimony obligation, alleging Vanessa was cohabiting with her fiancé. Vanessa defended the alimony award, and after extensive litigation, John nonsuited his petition before it was adjudicated on the merits.The Circuit Court for Davidson County awarded Vanessa $16,500 in attorney fees, finding it reasonably necessary for her to defend the alimony award. John appealed, and the Court of Appeals reversed, holding that neither party was a "prevailing party" under the MDA or Tennessee Code Annotated section 36-5-103(c) because the petition was nonsuited before a decision on the merits.The Supreme Court of Tennessee reviewed the case and held that Vanessa was the prevailing party under both the MDA and section 36-5-103(c). The Court reasoned that the MDA's language entitled Vanessa to attorney fees as the prevailing party because she successfully defended the alimony award, achieving her objective of maintaining the status quo. The Court also held that under section 36-5-103(c), a party defending against a petition to alter or modify an alimony award can be considered a prevailing party even if the petition is nonsuited before a decision on the merits.The Supreme Court reversed the Court of Appeals' decision, affirmed the trial court's award of attorney fees to Vanessa, and awarded her attorney fees on appeal. The case was remanded to the trial court to determine the amount of reasonable attorney fees for the appeals. View "Colley v. Colley" on Justia Law

Matthew Moriarty, the defendant, appealed a Superior Court order dismissing his amended counterclaim against Evoqua Water Technologies LLC and Neptune-Benson, LLC. Moriarty's counterclaim sought declaratory relief and tort damages, alleging violations of a non-compete agreement he signed in 2010 while employed by Neptune-Benson, Inc. (NBI). Evoqua acquired Neptune-Benson in 2016 and hired Moriarty in 2017. The plaintiffs sued Moriarty in 2018 for breaching the 2010 agreement, among other claims, and obtained a preliminary injunction in 2019 to enforce the agreement.The Superior Court dismissed Moriarty's counterclaim, citing the litigation privilege for statements made during judicial proceedings. Moriarty's counterclaim included claims for emotional distress, declaratory judgments, constructive discharge, misrepresentation, and interference with business relations, based on alleged false testimony by an Evoqua executive during the preliminary injunction hearing.The Rhode Island Supreme Court reviewed the case and affirmed the Superior Court's dismissal. The Court held that the litigation privilege protected the executive's testimony, barring Moriarty's claims for emotional distress, misrepresentation, and interference with business relations. The Court also found Moriarty's declaratory judgment claim moot, as the non-compete agreement had expired in 2020, and his constructive discharge claim failed to state a valid cause of action. The Court concluded that Moriarty did not demonstrate that his working conditions were so intolerable that a reasonable person would feel compelled to resign. Thus, the dismissal of Moriarty's amended counterclaim was upheld. View "Evoqua Water Technologies LLC v. Moriarty" on Justia Law

In spring 2020, Czigany Beck, a full-time student at Manhattan College, paid tuition and a comprehensive fee for the semester. Due to the COVID-19 pandemic, the college transitioned to remote learning in March 2020, and Beck received only 46% of her education in person. Beck filed a class action lawsuit against Manhattan College, claiming breach of implied contract and unjust enrichment for not refunding a portion of her tuition and fees.The United States District Court for the Southern District of New York dismissed Beck's claims. The court found that the college's statements were not specific enough to constitute a promise for in-person classes or access to on-campus facilities. The court also ruled that the comprehensive fee was nonrefundable based on the college's terms, and thus Beck's unjust enrichment claim for fees was barred. The court granted summary judgment to Manhattan College on Beck's remaining unjust enrichment claim for tuition, concluding that the college's switch to online instruction was reasonable given the pandemic.Beck appealed to the United States Court of Appeals for the Second Circuit, arguing that the district court's judgment should be reversed based on the decision in Rynasko v. New York University. Manhattan College countered with decisions from the New York Supreme Court's Appellate Division, which supported affirming the district court's judgment. The Second Circuit identified a split between federal and state courts on New York contract-law principles and certified the question to the New York Court of Appeals: whether New York law requires a specific promise to provide exclusively in-person learning to form an implied contract between a university and its students regarding tuition payments. The Second Circuit reserved decision on Beck's appeal pending the New York Court of Appeals' response. View "Beck v. Manhattan College" on Justia Law

Myranda De la Cruz tripped on a pothole in a parking lot at a Mission Hills shopping center, which was managed by Triwell Properties. De la Cruz sued Mission Hills Shopping Center LLC and Triwell Properties (collectively referred to as Mission) for her injuries. Mission moved for summary judgment based on a contract between Mission and De la Cruz’s employer, a tenant in the shopping center. The contract contained an exculpatory clause relieving Mission from liability for negligent or wrongful acts. However, De la Cruz had not signed this contract.The Superior Court of Los Angeles County granted Mission’s motion for summary judgment, accepting the argument that the exculpatory clause in the contract applied to De la Cruz. The court did not address why De la Cruz, who was not a party to the contract, would be bound by its terms.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. The court held that the trial court erred in granting summary judgment because Mission failed to establish a legal basis for binding De la Cruz to a contract she had not signed. The court emphasized that contracts require mutual assent, and it was Mission’s burden to demonstrate why De la Cruz was bound by the contract. The appellate court exercised its discretion to consider De la Cruz’s argument, despite it not being raised in the trial court, due to the foundational nature of the legal error.The Court of Appeal reversed the judgment and remanded the case, instructing the trial court to enter a new order denying Mission’s summary judgment motion. The appellate court also awarded costs to De la Cruz. View "De la Cruz v. Mission Hills Shopping Center LLC" on Justia Law

A Delaware limited partnership, acting as the Members’ Representative for former members of a company, engaged in a merger agreement with a Delaware limited liability company. The merger agreement included specific notice requirements for indemnification claims, which required the acquiring company to provide written notice with reasonable detail and all available material written evidence of the claim. The agreement also stated that failure to comply with these requirements would result in forfeiture of the right to recover from the indemnity escrow fund.The Court of Chancery dismissed the Members’ Representative’s complaint, which sought a declaration that the acquiring company’s claim notice was invalid for failing to meet the contractual requirements. The court held that the notice was valid under the escrow agreement and dismissed the complaint, reasoning that the notice provided sufficient detail and was timely.On appeal, the Delaware Supreme Court reversed the Court of Chancery’s decision. The Supreme Court held that the merger agreement and escrow agreement should be read together as an integrated contractual scheme. The court found that the final sentence of the notice provision in the merger agreement created a condition precedent, requiring compliance with the notice requirements to avoid forfeiture of the right to recover from the indemnity escrow fund. The court determined that it was reasonably conceivable that the acquiring company failed to comply with the notice requirements, particularly the requirement to include all available material written evidence.The Supreme Court remanded the case to the Court of Chancery for further proceedings to determine whether the acquiring company’s noncompliance with the notice requirements could be excused. The court instructed the lower court to consider whether the notice requirements were a material part of the agreed exchange and whether excusing the noncompliance would result in a disproportionate forfeiture. View "Thompson Street Capital Partners IV, L.P. v. Sonova United States Hearing Instruments, LLC" on Justia Law