Justia Contracts Opinion Summaries

The Court of Appeals correctly applied the principles of Cincinnati Insurance Co. v. Motorist Mutual Insurance Co., 306 S.W.3d 69 (Ky. 2010), to hold that a contractor’s faulty workmanship on the basement and foundation of an existing structure, which resulted in extensive damage to the entire building, was not an accident triggering coverage as an occurrence under the contractor’s commercial general liability (CGL) insurance policy.The policy provided that the insurer (Insurer) would pay for property damage if it resulted from an “occurrence.” The trial court ruled that Plaintiff could recover from Insurer under the policy for the damage to the structure above the basement level because the damage was an unexpected and unintended consequence of the contractor’s faulty work on the basement. The court of appeals reversed, ruling that none of the structural damage qualified as an accident triggering coverage as an occurrence under Insurer’s CGL policy. The Supreme Court affirmed, holding that the trial court failed to focus on the proper elements from Cincinnati. View "Martin/Elias Properties, LLC v. Acuity, a Mutual Insurance Co." on Justia Law

Plaintiff Rae Weiler sought a declaration that defendants Marcus & Millichap Real Estate Investment Services, Inc., et al., had to either: (1) pay plaintiff’s share of the costs in the previously ordered arbitration; or (2) waive their contractual right to arbitrate the underlying claims and allow them to be tried in the superior court. Plaintiff and her husband allegedly lost more than $2 million at the hands of defendants. She sued for breach of fiduciary duty, negligence and elder abuse claims. After being ordered to arbitration and pursuing her claims in that forum for years, plaintiff asserted she could no longer afford to arbitrate. According to plaintiff, if she had to remain in arbitration and pay half of the arbitration costs (upwards of $100,000) she would be unable to pursue her claims at all. Plaintiff initially sought relief from the arbitrators (pursuant to Roldan v. Callahan & Blaine 219 Cal.App.4th 87 (2013)); they ruled it was outside their jurisdiction, and directed her to the superior court. So, plaintiff filed this declaratory relief action in the superior court, again seeking relief under Roldan. The Court of Appeal concluded, based primarily on Roldan, plaintiff may be entitled to the relief she seeks. However, the superior court granted summary judgment to defendants on the grounds the arbitration provisions were valid and enforceable, and that plaintiff’s claimed inability to pay the anticipated arbitration costs was irrelevant. This, the Court found, was error: “Though the law has great respect for the enforcement of valid arbitration provisions, in some situations those interests must cede to an even greater, unwavering interest on which our country was founded - justice for all.” Consistent with Roldan, and federal and California arbitration statutes, a party’s fundamental right to a forum she or he can afford may outweigh another party’s contractual right to arbitrate. In this case, the Court found triable issues of material fact regarding plaintiff’s present ability to pay her agreed share of the anticipated costs to complete the arbitration. The trial court therefore erred in granting defendants’ motion for summary judgment. View "Weiler v. Marcus & Millichap Real Estate Investment Services" on Justia Law

R.E.E. & C. Capital Management Services, Inc. (buyer) appealed a trial court order granting People’s United Bank’s motion to compel buyer to complete the purchase of a foreclosed commercial property. Buyer raised three arguments: (1) it was not a party to the foreclosure sale, and the court therefore lacked jurisdiction to compel it to purchase the property; (2) the trial court erred in declining to apply the statutory remedy; and, (3) the trial court erred in ordering specific performance because an adequate remedy at law exists. After review, the Vermont Supreme Court determined a high bidder’s successful bid in a judicial sale, and the court’s subsequent confirmation of the foreclosure sale pursuant to 12 V.S.A. 4954(a), renders a buyer a limited party such that the court is authorized to issue orders directing the buyer’s action relative to the property’s purchase. The Court found 12 V.S.A. 4954 (e) did not limit the Bank’s remedies: “the legal right to an agreement’s completion does not arise exclusively from Vermont’s foreclosure statutes.” However, the Supreme Court found that while specific performance was a permissible remedy in some instances, the trial court did not engage in the analysis of whether this case was one of those instances. Therefore, the trial court’s order of specific performance was an abuse of its discretion, leading the Supreme Court to reverse and remand this case for the trial court to perform that analysis. View "People's United Bank, NA v. Alana Provencale, Inc., et al." on Justia Law

R.E.E. & C. Capital Management Services, Inc. (buyer) appealed a trial court order granting People’s United Bank’s motion to compel buyer to complete the purchase of a foreclosed commercial property. Buyer raised three arguments: (1) it was not a party to the foreclosure sale, and the court therefore lacked jurisdiction to compel it to purchase the property; (2) the trial court erred in declining to apply the statutory remedy; and, (3) the trial court erred in ordering specific performance because an adequate remedy at law exists. After review, the Vermont Supreme Court determined a high bidder’s successful bid in a judicial sale, and the court’s subsequent confirmation of the foreclosure sale pursuant to 12 V.S.A. 4954(a), renders a buyer a limited party such that the court is authorized to issue orders directing the buyer’s action relative to the property’s purchase. The Court found 12 V.S.A. 4954 (e) did not limit the Bank’s remedies: “the legal right to an agreement’s completion does not arise exclusively from Vermont’s foreclosure statutes.” However, the Supreme Court found that while specific performance was a permissible remedy in some instances, the trial court did not engage in the analysis of whether this case was one of those instances. Therefore, the trial court’s order of specific performance was an abuse of its discretion, leading the Supreme Court to reverse and remand this case for the trial court to perform that analysis. View "People's United Bank, NA v. Alana Provencale, Inc., et al." on Justia Law

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