Justia Contracts Opinion Summaries

Jesse Craig appealed a judgment awarding TJ Haugrud $120,000 plus interest on Haugrud's breach of contract claim against Craig, dismissing Craig's counterclaims against Haugrud, and sanctioning Craig's attorney $5,000. Haugrud and Craig formed Acquisition, LLC, for the purpose of developing, owning and managing real estate, and each were 50 percent owners of the limited liability company. In October 2016, Haugrud and Craig entered into a written agreement for Craig to purchase Haugrud's interest in the company for $130,000 payable in two installments. Craig paid $10,000 by November 1, 2016 for the first installment, but did not pay the $120,000 second installment which was due by December 1, 2016. Haugrud sued Craig for breach of contract seeking the unpaid installment of $120,000. Craig filed a counterclaim against Haugrud alleging actual fraud, constructive fraud, deceit, unintentional misrepresentation, and civil conspiracy in connection with the parties' business dealings, including transactions between their respective business entities that were not made parties to the lawsuit. The district court granted summary judgment on Haugrud's breach of contract claim because Craig "conceded" he failed to make the second installment payment required by the contract. The court also dismissed Craig's counterclaims for failure to state claims upon which relief can be granted because Craig "treats [Haugrud] as an individual with respect of his sole interest" in the limited liability companies, Craig "made no allegation to pierce the corporate veil," and Craig "treats his own interest" in the limited liability companies "as giving rise to personal claims" which belong to the separate entities. The court further found Craig's "attempt to make [Haugrud] responsible as a shareholder of a corporation, the obligations of the corporation, is not grounded in law" and awarded Haugrud $5,000 in attorney fees as a sanction assessed against Craig's counsel. After review, the North Dakota Supreme Court affirmed the district court's grant of summary judgment on Haugrud's breach of contract claim. The Court reversed dismissal of Craig's counterclaims on the pleadings and the sanction, and remanded for further proceedings. View "Haugrud v. Craig" on Justia Law

Plaintiffs filed suit against Allstate after the insurance company denied their homeowner's insurance claim. The Eighth Circuit affirmed the district court's grant of Allstate's motion for judgment as a matter of law. In regard to the breach of contract claim, the court held that plaintiffs failed to present sufficient evidence of the home's value and the personal property's value before or after the fire. Furthermore, a bankruptcy filing was insufficient to establish value. In this case, plaintiffs could have submitted an estimate of the personal property's value immediately before the fire, but they did not. Values on their proof-of-loss list were estimates of original purchase prices and it did not account for deterioration, obsolescence, or other depreciation as required by the policy and under Missouri law. Because plaintiff's vexatious refusal claim was derivative of their breach of contract claim, the court affirmed as to that claim. View "Aziz v. Allstate Insurance Co." on Justia Law

The Supreme Court reversed the judgment of the trial court in favor of Defendant on Plaintiff’s complaint and Defendant’s counterclaim for damages and declaratory judgment. This case stemmed from a purchase agreement entered into by the parties in which Plaintiff was to provide various equipment and services to Defendant for a telecommunications switch room. The Supreme Court held (1) the trial court incorrectly concluded that Plaintiff breached the purchase agreement by filing a petition for bankruptcy protection under chapter 11 of the United States Bankruptcy Code; and (2) the trial court erred in determining that Defendant was within its rights to terminate the purchase agreement upon Plaintiff’s initiation of bankruptcy proceedings. View "CCT Communications, Inc. v. Zone Telecom, Inc." on Justia Law

At issue was whether the City of Fairmont, which entered into a lease purchase agreement for equipment with Comvest, Ltd., may assert claims and defenses against Blue Ridge Bank - to whom Comvest assigned its interest in the lease purchase agreement, including its right to the City’s monthly payments - based on Comvest’s conversion of funds designated for the purchase of the equipment. The Supreme Court held (1) the Bank took its assignment subject to the City’s claims and defenses arising from Comvest’s breach of the lease purchase agreement; and (2) therefore, the City may assert claims and defenses against the Bank based on Comvest’s conversion. View "Blue Ridge Bank, Inc. v. City of Fairmont" on Justia Law

McMillin Management Services, L.P. and Imperial Valley Residential Valley Residential Builders, L.P. (collectively "McMillin") filed suit against numerous insurance companies, including respondents Lexington Insurance Company (Lexington) and Financial Pacific Insurance Company (Financial Pacific). McMillin alleged that it had acted as a developer and general contractor of a residential development project in Brawley and hired various subcontractors to help construct the Project. As relevant here, McMillin alleged that Lexington and Financial Pacific breached their respective duties to defend McMillin in a construction defect action (underlying action) brought by homeowners within the Project. McMillin alleged that Lexington and Financial Pacific each owed a duty to defend McMillin in the underlying action pursuant to various comprehensive general liability (CGL) insurance policies issued to the subcontractors that named McMillin as an additional insured. The trial court granted Lexington's motion for summary judgment, reasoning, that there was no possibility for coverage for McMillin as an additional insured under the policies "[b]ecause there were no homeowners in existence until after the subcontractors' work was complete[ ] . . . ." On appeal, McMillin contended that the fact that the homeowners did not own homes in the Project at the time the subcontractors completed their work did not establish that its liability did not arise out of the subcontractors' ongoing operations. The trial court granted Financial Pacific's motion for summary judgment, finding McMillin did not establish homeowners in the underlying action had sought potentially covered damages arising out of the subcontractors' drywall installation. The Court of Appeal reversed as to Lexington, and affirmed as to Financial Pacific. View "McMillin Management Services v. Financial Pacific Ins. Co." on Justia Law

Petitioners, former shareholders of Kay Company and Kay Co., LLC, appealed orders entered by the circuit court in which summary judgment was granted to Respondent, Petitioners’ former legal counsel, in connection with claims Petitioners filed against Respondent. Petitioners challenged the circuit court’s (1) ruling that a settlement reached by all but one of Petitioners with the IRS prevented them from establishing causation and damages on any of their claims, (2) finding that there were no factual issues in need of resolution, and (3) ruling that the lack of settlement with the IRS precluded Jennie Graham, executrix of the estate of James Graham, prevented her from asserting claims against Respondent. The Supreme Court held that the circuit court (1) erred in reasoning that the settlement with the IRS prohibited Petitioners from going forward on all of their claims; (2) erred in ruling that the lack of a settlement with the IRS precluded Graham from asserting any claims against Respondent; and (3) did not err in its rulings with regard to detrimental reliance and joint venture. The Supreme Court remanded this matter to the circuit court to permit Petitioners to proceed on their claims of legal malpractice, negligent misrepresentation, and fraud. View "Kay v. McGuireWoods, LLP" on Justia Law

An attorney represented a Native corporation in litigation nearly three decades ago. The corporation disputed the attorney’s claim for fees, and in 1995, after the attorney’s death, the superior court entered judgment on an arbitration award of nearly $800,000 to the attorney’s law firm, then represented by the attorney’s son. The corporation paid eight installments on the judgment, but eventually stopped paying, citing financial difficulties. The law firm sought a writ of execution for the unpaid balance, and the writ was granted. The corporation appealed but under threat of the writ paid $643,760 while the appeal was pending. In a 2013 opinion the Alaska Supreme Court held the writ invalid and required the firm to repay the $643,760. The corporation was never repaid. The original law firm moved its assets to a new firm and sought a stay of execution, averring that the original firm now lacked the funds necessary for repayment. The corporation sued the original firm, the successor firm, and the son for breach of contract, fraudulent conveyance, conspiracy to fraudulently convey assets, violations of the Unfair Trade Practices Act (UTPA), unjust enrichment, and punitive damages. The firm counterclaimed, seeking recovery in quantum meruit for attorney’s fees it claimed were still owing for its original representation. The superior court granted summary judgment for the corporation on the law firm’s quantum meruit claim and, following trial, found that the son and both law firms fraudulently conveyed assets and were liable for treble damages under the UTPA. The son and the law firms appealed, arguing the trial court erred by: (1) holding that the quantum meruit claim was barred by res judicata; (2) holding the defendants liable for fraudulent conveyance; (3) awarding damages under the UTPA; and (4) making mistakes in the form of judgment and award of costs. The Alaska Supreme Court found no reversible error with one exception. The Court remanded for reconsideration of whether all three defendants are liable for prejudgment interest from the same date. View "Merdes & Merdes, P.C. v. Leisnoi, Inc." on Justia Law

This case arose out of Richard Gomez’s breach of a real estate agreement for the sale and purchase of residential real estate from Todd Phillips in his capacity as Trustee of Trust “A” of the Elliott Family Trust. Phillips appeals a district court’s denial of Phillips’s request to recover actual damages. After a bench trial, the district court held that Phillips’s claim for breach of contract had been fully satisfied by Phillips’s retention of the non-refundable earnest money as liquidated damages as provided by the agreement. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "Phillips v. Gomez" on Justia Law

For almost 40 years, Honeywell (or its predecessors) operated a manufacturing plant in Fostoria, Ohio. Many union workers, including Watkins and Ulicny, spent most of their working years at the plant. They retired at a time when Honeywell promised in a collective-bargaining agreement that it would pay for their health insurance. When the final agreement expired in 2011, Honeywell did not renew it. It sold the plant and, later, stopped paying for its retirees’ healthcare. Those retirees filed suit. The district court found that Honeywell’s promise to pay for healthcare ended when the agreement expired and dismissed the suit. The Sixth Circuit affirmed. The agreement promises healthcare “for the duration of this Agreement,” and “this promise means exactly that: Honeywell’s obligation to pay for its Fostoria retirees’ healthcare ended when the agreement expired.” View "Watkins v. Honeywell International, Inc." on Justia Law

The Supreme Court reversed the judgment of the district court granted summary judgment for New West Health Services (New West) in this action brought by Plaintiff and the class she represented alleging breach of contract, violation of made-whole rights, and unfair claims settlement practices. At issue in this appeal was the district court’s grant to New West leave to amend its answer to include the affirmative defense of ERISA preemption. The district court subsequently allowed Plaintiff to amended her complaint to include ERISA claims. Ultimately, the district court concluded that ERISA preemption required dismissal of Plaintiff’s state law and ERISA claims and entered summary judgment for New West. The Supreme Court reversed, holding that, under the extraordinary circumstances of this case, the district court abused its discretion by granting New West leave to amend its answer to assert ERISA preemption. View "Rolan v. New West Health Services" on Justia Law