Justia Contracts Opinion Summaries

Bio‐Systems produced biodegradation products that use bacteria to break down waste. Customers often required certificates of analysis, so Bio‐Systems counted the bacteria in a product before its sale. Betco purchased Bio‐Systems, after visiting Bio‐Systems’s sites, speaking with personnel, and examining financial information. Betco paid Peacock $5 million and placed $500,000 in escrow, to be released two years after closing if Belco had not identified any problems. Peacock continued to run the plant. Betco instructed him to focus on sales and profits. Betco knew before closing that the bacteria yields were inconsistent at the plant; it learned within a year of closing that some products were being shipped with below‐specification bacteria counts. Betco nonetheless released the escrow early in exchange for a discount. Betco subsequently discovered that certificates of analysis were being falsified. Betco sued Peacock. The court dismissed negligent misrepresentation and breach of contract claims as time‐barred by the Agreement, and found that Betco failed to prove violation of the duty of good faith and hadn’t shown any cognizable injury from the alleged violation. The Seventh Circuit affirmed rejection of all of Betco’s claims. When Betco purchased Bio‐Systems, it expected profitability and not to face claims for shipping products with intentionally falsified certificates; it received that. Betco did not expect that it was purchasing flawless processes. Under Wisconsin law, the inquiry is not whether Betco paid the appropriate price but whether Betco received the benefits that it expected. View "Betco Corp., Ltd. v. Peacock" on Justia Law

The Maintenance Group, Inc. petitioned the Alabama Supreme Court for a writ of mandamus to direct the Madison Circuit Court to enter an order dismissing the claims against it based on lack of personal jurisdiction. This case arises from the sale of an aircraft. The purchaser alleged tortious conduct related to the sale of the aircraft negotiated and consummated outside Alabama by nonresident parties, including Maintenance. The only contact with Alabama being post-purchase travel into and out of Alabama. The Supreme Court concluded that, based on the evidence before the trial court, the purchaser did not establish a sufficient nexus between Maintenance's purposeful activity within Alabama and the claims made in its action sufficient to subject Maintenance to personal jurisdiction in an Alabama court. Accordingly, Maintenance has shown a clear legal right to the dismissal of the complaint on the ground that the trial court lacked personal jurisdiction over it. View "Ex parte The Maintenance Group, Inc." on Justia Law

Kansas distinguishes between legal malpractice claims: some sound in contract, others sound in tort. Plaintiff Cory Sylvia sued his former attorneys, James Wisler and David Trevino, for legal malpractice allegedly sounding in tort and breach of contract arising from their representation of Sylvia in a suit for wrongful termination against Goodyear Tire & Rubber Co. (“Goodyear”), his former employer. Later, Sylvia amended his complaint to add as a defendant Xpressions, L.C. (“Xpressions”), a limited liability company formerly known as the Wisler Law Office, L.C. Sylvia’s initial complaint characterized his claims as sounding both in tort and in contract. Specifically, he faulted: (1) both individual defendants for failing to include in, or to later amend, his complaint to aver a workers’ compensation retaliation claim; and (2) solely Wisler for voluntarily dismissing Sylvia’s case on the erroneous belief that all claims could be refiled, causing one of his claims to become barred by the statute of limitations. For each of these claims, Sylvia advanced both tort and contract theories of liability. This case presented a difficult question of Kansas law for the Tenth Circuit's review: when do legal malpractice claims involving a failure to act sound in tort rather than contract? After review, the Tenth Circuit reversed in part and vacated in part the district court’s judgment dismissing Sylvia’s tort-based legal malpractice claims. However, regarding the district court’s grant of summary judgment for the defendants on the breach of contract claims, the Court affirmed. View "Sylvia v. Wisler" on Justia Law

The Supreme Court affirmed in part, reversed in part, and remanded the circuit court’s entry of summary judgment in favor of AutoTrac Inc. on Varner Beals’s tort claim of deceit and Beals’s contract claims of fraud and undue influence. The court held (1) AutoTrac was entitled to summary judgment on Beals’s fraud claim because Beals failed to assert specific facts supporting his conclusory allegation that AutoTrac failed to disclose a debt; (2) summary judgment was appropriate on Beals’s claim because Beals’s conclusory allegations were not supported by specific, factual assertions, and Beals’s own deposition testimony defeated his claim; and (3) the circuit court erred by granting summary judgment on Beals’s claim of undue influence because the factual assertions raised by Beals’s raised a genuine dispute of material fact as to whether Defendant took advantage of Beals’s “weakness of mind.” View "Beals v. Autotrac, Inc." on Justia Law

The Pennsylvania Supreme Court granted allowance of appeal in this case to determine when the statute of limitations begins to run on an uninsured motorist (UM) claim under an insurance policy. Specifically, the issue reduced to whether the statute of limitations begins to run on an insured’s ability to initiate a court action to enforce a UM claim in a policy containing an arbitration agreement. The Superior Court held that, for the purpose of UM and underinsured motorist (UIM) claims, the statute of limitations begins to run when a claimant injured in an automobile accident first learns that the other driver is uninsured or underinsured. However, the Supreme Court determined this conclusion was not adequately grounded in the pertinent statutory text, prevailing statute of limitations doctrine, or significant public policy concerns. Accordingly, the Court held that statute of limitations principles attending contract claims apply, and that the running of the statute was commenced upon an alleged breach of a contractual duty, which in this case would be occasioned by the insurer’s denial of coverage or refusal to arbitrate. The Court therefore reversed the Superior Court’s order to the contrary. View "Erie Insurance Exchange v. Bristol" on Justia Law

Laboratory Specialists International, Inc. (LSI) filed a complaint in Orange County Superior Court alleging causes of action against Shimadzu Scientific Instruments, Inc. (Shimadzu) for breach of contract, conversion, breach of the implied covenant of good faith and fair dealing, intentional interference with contractual relations, and intentional and negligent interference with prospective economic relations. LSI appealed when the trial court dismissed its lawsuit against Shimadzu under the forum selection clause in the parties’ contract. LSI contended Shimadzu erred by requesting a dismissal in its demurrer dismissal based on the forum selection clause, rather than by a separate motion, and that the trial court erred by granting Shimadzu leave to recast its request for dismissal in a separate motion. In the alternative, LSI argued the court erred by: (1) dismissing LSI’s tort claims, which LSI argued did not arise out of or “pertain[]” to the parties’ contract; (2) finding the forum selection clause mandated Maryland as the proper fourm, rather than conducting an analysis under discretionary forum non conveniens factors; and (3) dismissing rather than staying LSI’s lawsuit. As we explain, these contentions are without merit, and we therefore affirm the court’s dismissal order. View "Laboratory Specialists International v. Shimadzu Scientific etc." on Justia Law

The Supreme Court declined to grant mandamus relief to the Regional Convention and Sports Complex Authority, which sought a writ to compel the circuit court to stay arbitration of the Authority’s claims in its petition for a declaratory judgment and to reinstate the cause on the circuit court’s docket.The Authority, which leased a training facility to the St. Louis Rams, LLC, filed a three-count petition for declaratory judgment against the Rams seeking to void provisions in the lease. The Rams filed a motion to compel arbitration, asserting that the Authority’s claims fell within the scope of the lease’s arbitration provisions. The circuit court sustained the Rams’ motion to compel arbitration. In this original action, the Supreme Court held that the parties’ intent to arbitrate disputes involving the lease was clear and that any doubt as to arbitrability must be resolved in favor of the application of the arbitration clause. View "State ex rel. Regional Convention & Sports Complex Authority v. Honorable Michael D. Burton" on Justia Law

Traill Rural Water District ("TRWD") appealed a judgment that granted damages for overdue rent to Daniel and Marlene Motter ("the Motters"). In 2006 Melba Motter, through her estate's conservator Alerus Financial, leased approximately forty acres of land in rural Steele County to TRWD at $250 per acre for ninety-nine years. Attorneys for both Melba's estate and TRWD negotiated the leases. In January 2011 Daniel Motter, grandson of Melba, and Daniel's wife Marlene acquired title to the land, including the leases. Daniel received offers from TRWD to renegotiate the leases during the period from 2006 to 2011, when he farmed the land but did not own it. Daniel reviewed the TRWD leases in 2014 and claimed back rent of $10,000 per year for the full forty acres from 2011 through 2014. TRWD offered $4,500 compared to Motter's initial calculation of $31,300. The district court acknowledged the mathematical error and adjusted to $51,500 for the five years from 2011 to 2015. The parties' different interpretations led to this lawsuit. The North Dakota Supreme Court concluded the district court did not err in denying reformation of two leases on the Motters' land and did not abuse its discretion in granting a new trial. View "Motter v. Traill Rural Water District" on Justia Law

General Motors provides sales incentives to dealers who sell cars to GM employees, retirees, and their family members at a discounted rate. The dealer must collect a signed agreement from the purchaser that establishes his eligibility for the program. In 2014, GM audited one of its Ohio dealers, Sims, and discovered transactions in which Sims had failed to collect the agreement from purchasers within the timeline set by GM in a 2012 dealership bulletin. GM debited Sims’ account $47,493.28 for improper incentive payments. Sims is located near a large GM plant in Lordstown, and the Purchase Program accounts for 80% to 90% of its sales. Sims filed suit alleging breach of contract and violations of the Ohio Dealer Act. The district court granted GM summary judgment. The Sixth Circuit affirmed. The parties’ dealership arrangement permitted the debit and a timely filed Consumer Dealer Agreement constitutes “material documentation” under Section 4517.59(A)(20)(a) of the Ohio Dealer Act. View "Sims Buick-GMC Truck, Inc. v. General Motors, LLC" on Justia Law

Keith Candee appealed the grant of summary judgment to his parents, Lyla and Douglas Candee, awarding them an $884,508.83 deficiency judgment following foreclosure of properties in California and North Dakota. Keith and his parents executed a settlement agreement and mutual release of claims in 2013 relating to earlier disputes between the parties about the management of their family assets. Under the settlement agreement, Keith agreed to pay $2.2 million to Lyla and Douglas. The $2.2 million settlement amount was secured by real property in California and North Dakota. A deed of trust in favor of Lyla and Douglas secured the California property, and a mortgage secured the property in North Dakota. The deed of trust securing the California property included a power of sale provision allowing Lyla and Douglas to foreclose the property in a nonjudicial manner via a trustee's sale. After Keith failed to make payments under the settlement agreement, Lyla and Douglas foreclosed the California property. They proceeded with a nonjudicial foreclosure and in January 2014 purchased the property at a trustee's sale for a credit bid of $200,000. Lyla and Douglas foreclosed the North Dakota property and purchased the property for $975,000 at a July 2015 sheriff's sale. In September 2015, Lyla and Douglas sued Keith in North Dakota for a deficiency judgment for the difference between the amount Keith owed under the settlement agreement and the amount Lyla and Douglas obtained through foreclosure of the properties. Keith argued a deficiency judgment was not available under the agreement because California law applied and a deficiency judgment was prohibited under California law. The district court concluded California law applied only to the California property and granted summary judgment to Lyla and Douglas. The court entered an $884,508.83 deficiency judgment against Keith. On appeal, Keith maintained the California anti-deficiency statutes applied to the settlement agreement, and those statutes barred a deficiency judgment in this case. The North Dakota Supreme Court reversed and remanded, concluding California law barred a deficiency judgment in this case as a matter of law. View "Candee v. Candee" on Justia Law