Justia Contracts Opinion Summaries

Dr. Tara Lynd, M.D. appealed the grant of summary judgment entered in favor of Marshall County Pediatrics, P.C. ("MCP"), in her action seeking a judgment declaring the proper valuation of her shares in MCP. In July 1978, John Packard, M.D. filed articles of incorporation forming MCP, a medical practice specializing in pediatrics in Guntersville, Alabama. At the same time, MCP adopted bylaws. Those bylaws reference a separate "stockholder agreement," but one was never executed. Over time, Dr. Packard hired other physicians to work with him in MCP. In 2005, Dr. Packard hired Dr. Lynd as a pediatrician to work for MCP. In 2013, Dr. Packard retired from practice, and he sold MCP to four other physicians who were then working for MCP: Dr. David Chupp, Dr. Don Jones, Dr. Sarah Rhodes, and Dr. Lynd. At the time of sale, each physician paid Dr. Packard $1,000, with the understanding that he or she would pay Dr. Packard the remaining amount due for his or her shares, with interest, over a period of several years. At the time the four physicians acquired MCP from Dr. Packard, they accepted the bylaws without alteration. They did not execute a stockholder agreement. In 2014, Dr. Lynd telephoned each of the other physicians to inform him or her that she would be leaving MCP. Dr. Rhodes testified in her affidavit that, upon Dr. Lynd's severance from MCP, the other three physicians did not dispute that Dr. Lynd was owed her portion of the receivables/production bonuses generated by MCP. A dispute formed over the valuation of her shares. The Alabama Supreme Court determined Dr. Lynd failed to demonstrate that she should receive the fair value of her stock in MCP, and that the trial court did not err in denying her motion for a summary judgment. View "Lynd v. Marshall County Pediatrics, P.C." on Justia Law

International Paper Company and three employees (Janet Pridgeon, Joni Harris, and Shawn Blenis) sought a writ of mandamus directing the Wilcox Circuit Court to rule upon a pending motion to dismiss a case against them for improper venue, based on an outbound forum-selection clause in a waste services agreement between International Paper and JRD Contracting & Land Clearing, Inc. ("JRD C & L"). After review, the Alabama Supreme Court determined the circuit court exceeded its discretion by failing to rule on, and instead "taking under advisement," the motion to dismiss the third-party complaint based on improper venue while allowing discovery on the merits to proceed and setting deadlines for summary-judgment motions and setting the trial date. Therefore, the Supreme Court issued the writ and directed the circuit court to issue an order addressing the merits of IPC's motion to dismiss based on improper venue. The Court expressed no opinion as to whether IPC's motion should or should not be granted; "[w]hile the writ [of mandamus] will issue to compel the exercise of discretion by a circuit judge, it will not issue to compel the exercise of discretion in a particular manner." View "Ex parte International Paper Company et al." on Justia Law

At issue was the function of a clause in a real property deed that “saves and excepts” one-half of “all royalties from the production of oil, gas and/or other minerals that may be produced from the above described premises which are now owned by Grantor” when the deed does not disclose that the grantor does not own all of the royalty interests and does not except any other royalty interests from the conveyance.The trial court held that the deeds did not create a Duhig problem - where the grantor owns less than he purports to convey - by construing the clause as reserving for the grantor one-half of all royalties “which [were then] owned by Grantor.” The court of appeals determined that the clause created a Duhig problem, interpreting the clause as reserving for the grantor one-half of all royalties produced from the “above described premises which [were then] owned by Grantor.” The Supreme Court affirmed as modified, holding (1) instead of reserving a one-half royalty interest for the grantors, the clause merely excepted that interest from the grant, and therefore, the deeds did not create a Duhig problem; and (2) each party with an interest in the tracts owned a one-quarter interest in the royalties produced. View "Perryman v. Spartan Texas Six Capital Partners, Ltd." on Justia Law

The Texas Public Utility Regulatory Act grants the Texas Public Utility Commission (the PUC) exclusive jurisdiction to resolve issues underlying a customer’s claim that a PUC-regulated utility breached a contract by failing timely to provide electricity.Chaparral Energy LLC filed a breach of contract action against Oncor Electric Delivery Company, LLC, a PUC-regulated utility. A jury found in favor of Chaparral. While Oncor’s appeal was pending, the Fort Worth Court of Appeals issued its decision in Oncor Electric Delivery Co. v. Giovanni Homes Corp., 438 S.W.3d 644 (Tex.App. 2014), which held that the PUC had exclusive jurisdiction over Giovanni Homes’s breach of contract claim against Oncor. Oncor then moved to dismiss Chaparral’s claim for want of jurisdiction. The court of appeals affirmed. The Supreme Court reversed and rendered judgment dismissing the case for want of jurisdiction, holding (1) Chaparral was required to exhaust its administrative remedies before the PUC before seeking relief in district court; (2) the inadequate-remedy exception to the exhaustion-of-remedies requirement does not apply in this case; and (3) requiring Chaparral to exhaust administrative remedies does not deprive it of its constitutional rights to a jury trial and to open courts. View "Oncor Electric Delivery Co. LLC v. Chaparral Energy, LLC" on Justia Law

The Supreme Court reversed the judgment of the court of appeals reversing the circuit court’s entry of a declaratory judgment in favor of Big Sandy Company, LP, interpreting a pipeline easement agreement (the Agreement) in Big Sandy’s favor.In 2003, Big Sandy entered into the Agreement with Kentucky West Virginia Gas Company, LLC (KWVA), the predecessor in interest of EQT Gathering, LLC and EQT Production Company (collectively, EQT). EQT filed suit against Big Sandy requesting declaratory relief regarding the interpretation and scope of the Agreement. The trial court concluded that Big Sandy’s interpretation prevailed. The court of appeals reversed, holding that Big Sandy’s interpretation would be absurd and render much of the Agreement meaningless. The Supreme court reversed, holding that the trial court properly interpreted the Agreement. View "Big Sandy Co., L.P. v. EQT Gathering, LLC" on Justia Law

Dr. Susan Kegerise sought reinstatement as superintendent of the Susquehanna Township School District, as well as back pay and benefits. In January 2010, Kegerise was appointed superintendent. In 2013, the District’s Board of Directors extended Kegerise’s contract for a three-year term after agreeing, at Kegerise’s request, to include a resignation provision in her employment contract. Kegerise alleged this resignation clause was necessary to protect her interests in light of several Board members’ inappropriate behavior. Kegerise further alleged that, this clause notwithstanding, and in an effort to force her resignation, several Board members persisted in hostile actions including, inter alia, physical intimidation and verbal abuse, even after the contract was executed. In 2014, Kegerise informed the Board that she was receiving medical care and would be unable to return to work until April 21, 2014. While Kegerise was on medical leave, the Board received several letters from Kegerise’s counsel asserting that Kegerise had been constructively discharged. The Board responded by affirming that Kegerise remained the Superintendent of Schools, and that “[h]er time away from the District since that day has been recorded as sick leave derived from Dr. Kegerise’s pre-existing sick leave accumulation.” On April 17, 2014, Kegerise filed a complaint at the United States District Court, alleging, inter alia, that the Board had constructively discharged her. Kegerise asserted that, “although no formal termination has taken place, [she] cannot perform the job duties of Superintendent,” due to the Board’s behavior toward her. Kegerise sought damages in excess of six million dollars, including compensatory and economic damages “for loss of contractual salary and other emoluments of employment” and consequential damages for “damage to professional reputation and loss of future salary as an educational administrator.” The trial court held an evidentiary hearing to determine whether Kegerise had intended to resign when she filed her federal complaint, after which, it ordered the Board to reinstate Kegerise to her position with back pay and benefits. The Board appealed to the Commonwealth Court; the Commonwealth Court affirmed the trial court’s grant of mandamus. The Pennsylvania Supreme Court, however, found Kegerise did not demonstrate to a clear legal right to reinstatement. Accordingly, the orders reinstating her as superintendent with back pay and benefits was reversed. View "Kegerise v. Delgrande, et al," on Justia Law

The Court of Appeal reversed the trial court's grant of summary judgment in an action seeking to recover funds that plaintiff claimed had been taken by her then-investment advisor. Plaintiff alleged that the funds came from her investment account at her investment advisory firm which the advisor then used to repay a loan which an entity he controlled had obtained several years earlier from the Ryman-Carroll Foundation. The court held that plaintiff made a sufficient prima facie showing to support her claim for recovery. In this case, plaintiff has sufficiently placed material facts—the extent of Ryman's knowledge and of its good faith—in issue. Therefore, the matter required trial rather than summary disposition. View "Welborne v. Ryman-Carroll Foundation" on Justia Law

The Court of Appeal reversed the trial court's grant of summary judgment in an action seeking to recover funds that plaintiff claimed had been taken by her then-investment advisor. Plaintiff alleged that the funds came from her investment account at her investment advisory firm which the advisor then used to repay a loan which an entity he controlled had obtained several years earlier from the Ryman-Carroll Foundation. The court held that plaintiff made a sufficient prima facie showing to support her claim for recovery. In this case, plaintiff has sufficiently placed material facts—the extent of Ryman's knowledge and of its good faith—in issue. Therefore, the matter required trial rather than summary disposition. View "Welborne v. Ryman-Carroll Foundation" on Justia Law

The City of Idaho Falls (“Idaho Falls”) appealed an order dismissing its breach of contract and waste claims against H-K Contractors, Inc. (“H-K”). In 2005, H-K entered into a written contract requiring it to convey a parcel of property to Idaho Falls. The contract required that H-K initially grant Idaho Falls a storm drainage easement “over and across” the parcel. H-K was also required to convey fee title to the parcel at a future date, in no event later than March 1, 2010. H-K failed to convey the property to Idaho Falls as required. In 2016, Idaho Falls sent a letter to H-K requesting conveyance of title. H-K responded by refusing to convey title to the property, claiming that in 2009 a city official had orally informed H-K that Idaho Falls was no longer interested in the property. Based on that alleged representation, H-K decided to invest in the property to make it profitable. Idaho Falls filed a complaint against H-K for breach of contract and waste. H-K moved to dismiss the complaint based on the limitation found in Idaho Code section 5-216, alleging Idaho Falls’ claims were time barred because they were not brought within the five-year statute of limitations governing contract actions. Idaho Falls countered that the statute of limitations did not apply to it as a subdivision of the State of Idaho. On January 3, 2017, the district court dismissed Idaho Falls’ complaint as time barred. Idaho Falls timely appealed, claiming the district court erred in enforcing the five-year limitation set forth in section 5-216. The Idaho Supreme Court vacated the district court's judgment, finding it erred when it determined the term “state” in Idaho Code section 5- 216 did not include Idaho’s municipalities. Because Idaho Falls was the “state,” the district court erred when it found its contract claims against H-K were not “for the benefit of the state.” View "City of Idaho Falls v. H-K Contractors" on Justia Law

Scott and Anne Davison appealed the grant of summary judgment in favor of DeBest Plumbing (DeBest). In 2012, the Davisons hired Gould Custom Builders, Inc. (Gould) to perform an extensive remodel of their vacation home in Idaho. Gould hired DeBest as the plumbing subcontractor. A bathtub installed by DeBest developed a leak that caused significant damage before it was noticed and repaired. The Davisons sought damages based upon the contract between Gould and DeBest and for negligence. The district court granted DeBest’s motion for summary judgment on the contract claims because the Davisons were not in privity of contract with DeBest. Later, the district court granted summary judgment in favor of DeBest on the negligence claim, finding that the Davisons had failed to comply with the requirements of the Notice and Opportunity to Repair Act (NORA), Idaho Code sections 6-2501–2504. On appeal, the Davisons argued they satisfied the requirements of NORA because DeBest received actual notice of the claim and sent a representative to inspect the damage. Finding that the Davidsons satisfied the requirements of NORA when they gave DeBest actual notice, and DeBest had an opportunity to inspect the defect, the Idaho Supreme Court determined the district court erred in granting DeBest's motion for summary judgment on the Davidsons' negligence claim. The Supreme Court reversed as to negligence, but affirmed the district court in all other respects. View "Davison v. DeBest Plumbing" on Justia Law