Justia Contracts Opinion Summaries

Mass. Gen. Laws ch. 156C, 60(b) provides the exclusive remedy for dissenting members of a limited liability company that has voted to merge, so long as the merger is undertaken in accordance with Mass. Gen. Laws ch. 156C, 59-63.In this case, a member of a limited liability company (LLC) conducted a merger in breach of his fiduciary and contractual duties. The judge granted equitable relief. At issue was whether distribution of dissenting members’ interest in the LLC is the exclusive remedy of minority shareholders who objected to the merger and whether the judge erred in declining to rescind the merger. The Supreme Court held (1) where, as here, a merger was not conducted in compliance with Mass. Gen. Laws ch. 156C, 63, the remedy provided by Mass. Gen. Laws ch. 156C, 60(b) providing for distribution of dissenting members’ interest is not exclusive; (2) the trial judge did not abuse his discretion in fashioning an equitable remedy in this case, as rescission of the merger would be complicated and inequitable; and (3) the portion of the trial judge’s decision that increased Plaintiff’s interest in the merged LLC to five percent is remanded because there was no basis in the record for that figure. View "Allison v. Eriksson" on Justia Law

At issue here was cross-claims arising out of a bail bondsman’s attempt to seize a bailed man who had failed to appear for a court hearing.Rodriguez, the bailed man, left New Jersey to return to his home in Puerto Rico in violation of the bail agreement. When Rodriguez missed a court date in New Jersey, the bail bond was declared forfeited. Agents acting for Speedy Bail Bonds seized Rodriguez in Puerto Rico. Rodriguez filed suit against Speedy seeking damages for his seizure and detention. Rodriguez’s mother as co-plaintiff claimed mental anguish. Speedy counterclaimed for breach of the bail agreement. The jury returned a verdict in favor of Speedy. The First Circuit affirmed the damages award on the counterclaim but remanded the case to the district court for further proceedings on the question of whether the jury instructions as to the tort claims accurately reflected Puerto Rico law because the question of Puerto Rico law and out-of-state bounty hunters had not been briefed. View "Rodriguez-Tirado v. Speedy Bail Bonds" on Justia Law

The common law governs provisions of an antenuptial agreement that do not fall within the safe harbor of Minn. Stat. 519.11(1), and the multifactor Kinney test is the common-law test applicable to antenuptial agreements. See In re Estate of Kinney, 733 N.W.2d 118 (Minn. 2007).Wife petitioned for dissolution and moved to set aside the antenuptial agreement she signed just before her marriage. The district court invalidated the agreement, concluding that it was procedurally unfair because Wife did not have an adequate opportunity to meet with legal counsel of her own choice and that it was substantively unfair and the time it was made and executed. The court of appeals affirmed on different grounds, concluding (1) to the extent the district court relied on Minn. Stat. 519.11 for evaluating procedural fairness, the court erred; (2) agreements that purport to distribute marital property, such as the agreement in this case, must be evaluated under the common law; and (3) the agreement was procedurally unfair. The Supreme Court affirmed after applying the Kinney factors to the entire agreement, holding that this agreement did not satisfy the common law test for procedurally fairness, and therefore, the agreement was invalid and unenforceable. View "Kremer v. Kremer" on Justia Law

CBL Data Recovery Technologies, Inc. (CBL) appealed an order denying its motion to set aside a default judgment entered in favor of Airs Aromatics, LLC (Airs). Airs sued CBL for breach of contract in 2011. The operative complaint alleged that Airs "suffered damages in an amount to be proven at trial, but estimated to exceed $25,000.00." The prayer likewise requested "damages in an amount to be proven." There was no other allegation in the complaint as to the amount of damages sought. CBL filed an answer and engaged in discovery. The parties participated in a settlement conference in which Airs demanded $5 million to settle all claims. In August 2012, the parties stipulated to withdraw CBL's answer and allow Airs to obtain a default. A month later, Airs filed a Request for Court Judgment seeking over $3 million in damages. It also filed a document entitled, "Evidence of Damages" supporting the requested amount. The court held a default prove-up hearing and, in November 2012, entered default judgment against CBL in the amount of $3,016,802.90. Years passed. CBL filed a motion in April 2017 to set aside the default judgment. Citing Code of Civil Procedure sections 580(a) and 585(c), CBL argued the court could not enter a judgment awarding damages greater than that specifically demanded in the complaint. It argued the default judgment was void and requested that it be vacated pursuant to section 473(d). Airs opposed the motion, arguing the default judgment was merely voidable, not void. In addition, Airs argued the court could exercise discretion to deny CBL's motion on equitable grounds. The court held a hearing and denied CBL's motion, finding CBL had adequate notice of the damages sought by Airs. CBL argued to the Court of Appeal the default judgment was void. The Court of Appeal agreed, concluding the default judgment had to be vacated. View "Airs Aromatics v. CBL Data Recovery Technologies" on Justia Law

The U.S. District Court for the District of Colorado certified a question of Colorado law to the Colorado Supreme Court regarding the statute of limitations applicable to section 10-3-1116, C.R.S. (2017), which governed claims for unreasonable delay or denial of insurance benefits. Specifically, the question centered on whether a claim brought pursuant to Colorado Revised Statutes section 10-3-1116 was subject to the one-year statute of limitations found in Colorado Revised Statutes section 13-80-103(1)(d) and applicable to “[a]ll actions for any penalty or forfeiture of any penal statutes.” The Supreme Court held the one-year statute of limitations found in section 13-80-103(1)(d), C.R.S. (2017), did not apply to an action brought under section 10-3-1116(1) because section 10-3-1116(1) was not an “action[] for any penalty or forfeiture of any penal statute[]” within the meaning of section 13-80-103(1)(d). Therefore, the Court answered the certified question in the negative. View "Rooftop Restoration, Inc. v. Am. Family Mut. Ins. Co." on Justia Law

In 2009, a fire started in an apartment building owned by respondents Guillermo and Evelia Barriga and insured by petitioner American Family Mutual Insurance Company (“American Family”). American Family made various payments to the and on behalf of the Barrigas, totaling $209,816.43. However, after a substantial amount of repair work had been completed, the contractor revised its estimate for the cost of the repairs. The revised estimate was higher than American Family’s initial estimate, primarily because of the need for additional repairs and asbestos remediation. In response, American Family initiated a third-party appraisal process outlined in the insurance policy intended to provide an impartial assessment of the needed repair costs. The appraiser fixed the award at $322,141.79. American Family then paid that award, less the $209,816.43 that had been previously paid to the Barrigas, resulting in a payment of $122,325.36. American Family also made an additional payment of $5435.44 for emergency board-up services. The Barrigas sued American Family for breach of contract, common law bad-faith breach of insurance contract, and unreasonable delay and denial of insurance benefits under section 10-3-1116(1), C.R.S. (2017). The jury found for the Barrigas on all claims, awarding damages, as relevant here, of $9270 for breach of contract and $136,930.80 for benefits unreasonably delayed or denied. The issue raised on appeal for the Colorado Supreme Court's review centered on whether an award of damages under section 10-3-1116(1), C.R.S. (2017), had to be reduced by an insurance benefit unreasonably delayed but ultimately recovered by an insured outside of a lawsuit. The Court held that an award under section 10-3-1116(1) must not be reduced by an amount unreasonably delayed but eventually paid by an insurer because the plain text of the statute provided no basis for such a reduction. The Court also concluded that a general rule against double recovery for a single harm did not prohibit a litigant from recovering under claims for both a violation of section 10-3- 1116(1) and breach of contract. View "Am. Family Mut. Ins. Co. v. Barriga" on Justia Law

The Supreme Court affirmed the district court’s ruling that Plaintiff, a municipal employee, had forfeited her merit protection status through contract, estoppel, and waiver without reaching the merits of Plaintiff’s claims because she failed to carry her burden of challenging all of the district court’s rulings, each of which was an independent basis for summary judgment.On appeal, Plaintiff argued that Supreme Court precedent allowing a contract in conflict with a statute to survive, provided it does not violate public policy, does not extend to contracts involving government employees. The Supreme Court held that, although it was possible that Plaintiff was correct, Plaintiff was not entitled to relief because she failed to challenge the district court’s ruling that she was equitably estopped from claiming merit status. View "Howick v. Salt Lake City Corp." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the trial court’s ruling that TRO-X, LP was entitled to a back-in percentage of the working interest in five mineral leases under which Anadarko Petroleum was lessee.TRO-X sued Anadarko, asserting claims for breach of contract and trespass to try title and seeking a declaratory judgment that the leases were top leases and therefore subject to TRO-X’s back-in interest. The trial court concluded that the leases were top leases, in which TRO-X retained a back-in interest, rather than new leases, which washed out TRO-X’s interest. In reversing, the court of appeals concluded that the leases were not top leases. The Supreme Court agreed, holding that the leases at issue were not top leases subject to TRO-X’s back-in interest. View "TRO-X, L.P. v. Anadarko Petroleum Corp." on Justia Law

After months of negotiations, the parties in this case signed versions of two transaction agreements: a limited liability company agreement, and a contribution and assignment agreement. However, a serious question existed as to whether the parties intended to be bound by these signed documents. And whether there exists a valid, binding contract implicated the other main issue raised on appeal—namely, whether the Delaware Supreme Court could exercise jurisdiction over the defendant. If at least one of these transaction documents was a valid, independently enforceable contract, then the Supreme Court had jurisdiction via a forum selection clause favoring Delaware. If neither document was independently enforceable, and if earlier agreements did not provide another means of exercising jurisdiction over the defendant, then Delaware courts lacked personal jurisdiction over the defendant, and the plaintiffs’ claims for breach of contract, unjust enrichment, and other causes of action against the defendant were properly dismissed. The Court of Chancery determined that neither transaction document was enforceable, and dismissed the case for lack of personal jurisdiction, even after finding one of the parties in contempt of its status quo order. In this case, the Supreme Court found evidence within the four corners of the documents and other powerful, contemporaneous evidence, including the execution of the agreements, that suggested the parties intended to be bound. "But we acknowledge that there is also evidence that cuts the other way. Given that this is a question of fact, we remand to the Court of Chancery to make such a finding." If either document is enforceable, then the forum selection provisions were also enforceable. The Court of Chancery erred in finding that its jurisdiction to enforce the previously issued contempt order depended on the enforceability of the transaction documents. It had jurisdiction to enforce its order regardless of the transaction documents’ enforceability. View "Eagle Force Holdings, LLC, et al. v. Campbell" on Justia Law

The award of summary judgment in favor of the general contractor against the subcontractor in this case based on a pay-if-paid clause was improper because the pay-if-paid clause did not apply to the issues in this case.Pay-if-paid clauses make the project owner’s payment of the general contractor a condition precedent of the general contractor’s obligation to pay the subcontractor. Thus, the pay-if-paid clause can relieve the general contractor of liability to the subcontractor even where the subcontractor has fully performed its part of the subcontract. Here, Subcontractor sued General Contractor for breach of contract relating to a construction project. The circuit court granted summary judgment to General Contractor, concluding that, under Virginia law, a pay-if-paid provision in the subcontract applied to the damages sought. The Supreme Court reversed and remanded the case, holding (1) the pay-if-paid clause did not necessarily apply to the costs at issue in this case; and (2) the other provision relied upon by the circuit court did not create a condition precedent for payment of subcontractors. View "Young Electrical Contractors, Inc. v. Dustin Construction, Inc." on Justia Law