Justia Contracts Opinion Summaries

Plaintiff Earl Oldam raised chickens for O.K. Farms since 1995. In 2014, he and O.K. entered into the chicken-growing contract at issue in this case. The contract had a three-year duration, but O.K. retained the right to terminate the contract for certain specified reasons, including “[b]reach of any term or condition of this contract,” “[a]bandonment or neglect of a flock,” and “[f]ailure to care for or causing damage to [O.K.’s] equipment or property.” In 2016, Plaintiff discovered that one of his three chicken houses had flooded after an overnight rainstorm. Plaintiff contacted O.K. to inform them of the issue; some of the flock in the affected henhouse perished from the flood. Remaining chickens were collected by O.K. Plaintiff was paid for the work he had done in raising the surviving chickens to this point, reduced by various expenses such as the costs of catching and moving the chickens. Shortly thereafter, O.K. sent Plaintiff a letter providing him with a ninety-day notice of contract termination for breach of the terms of the contract. Plaintiff filed suit in state court, alleging that O.K. breached the contract by terminating the agreement without adequate cause. O.K. removed the action to federal court and filed a motion for summary judgment. The district court stated that it had looked at the undisputed material facts from the summary judgment pleadings and found “questions of fact galore” on all of the arguments raised by O.K. in its motion. “But,” the court continued, “all that doesn’t matter,” because Plaintiff “didn’t say come take away the chickens from the flooded henhouse. He said come take them all.” The court granted O.K.’s motion for summary judgment, reasoning that because there was “nothing in the evidentiary material showing [that the chickens in the other henhouses] were in danger at all, he abandoned them” by telling O.K. to come pick them all up. In reversing the district court’s judgment, the Tenth Circuit found plaintiff raised arguments that directly addressed the district court’s sua sponte reasoning and that he was not provided an opportunity to make at trial, and argued he was prejudiced by the district court’s entry of judgment on this basis without considering any of the contrary arguments he might have made given notice and a reasonable time to respond. The Court was persuaded that Plaintiff had shown prejudice from the trial court’s sua sponte summary judgment decision. View "Oldham v. O.K. Farms" on Justia Law

The First Circuit affirmed a judgment entered by the district court against Hylas Yachts, LLC and in favor of Plaintiffs in the amount of $663,774 plus interest and costs in this case alleging numerous defects in a brand-new yacht that Hylas custom built and sold to Plaintiffs. The court held (1) the trial court did not abuse its discretion in allowing Plaintiffs to offer their evidence of damages for the jury’s evaluation; (2) the district court was not required to dismiss the case or give an adverse-inference instruction concerning spoliation of evidence; (3) the district court did not err in dismissing Hylas’s indemnification claim against the boom supplier; (4) there was no error in the jury instructions; (5) the jury’s verdict was not inconsistent; and (6) Plaintiffs were not entitled as a matter of law to multiple damages and attorneys’ fees under Massachusetts state law. View "Sharp v. Hylas Yachts, LLC" on Justia Law

Mariam Bibi and Javed Raja married and later bought a home in Anchorage with loans from IndyMac Bank, F.S.B. (IndyMac). IndyMac’s loans were secured by deeds of trust on their home. The couple later received an additional loan of around $10,000 from Kevin Elfrink. Over the course of six years, the couple made irregular payments, increased the loan balance three times until it exceeded $25,000, and eventually defaulted. Elfrink initiated foreclosure proceedings and then bought the house at his own foreclosure sale by credit-bidding all money he asserted was due to him under the modified promissory note, satisfying the couple’s debt to him. Following the foreclosure, Elfrink filed a complaint against Bibi and Raja for forcible entry and detainer to remove them from the home. Bibi moved out of her home but filed a counterclaim for usury, quiet title and possession, and surplus proceeds from the foreclosure sale. Raja confessed judgment to his removal from the home. As the lawsuit proceeded, IndyMac initiated a foreclosure on its senior deed of trust and Elfrink bought the house for a second time at IndyMac’s foreclosure sale. The superior court ultimately denied Bibi’s usury claim, determining that Bibi had no standing, her claim was time barred, and in any event, the loan did not violate Alaska’s usury statute because the funding fee was not interest and the usury statute did not apply once the loan’s principal rose over $25,000. The superior court also denied Bibi’s claim for title, ruling that the foreclosure statutes gave Elfrink clear title. Bibi appealed. After review, the Alaska Supreme Court held that: (1) Bibi has standing; (2) it was error for the superior court to deny Bibi’s usury claim because the funding fee was disguised interest and violated the usury statute, which applied to at least the initial period of the loan’s life; and (3) the superior court correctly denied Bibi’s claim for title and possession of her prior home because IndyMac’s foreclosure extinguished her claim to the property. View "Bibi v. Elfrink" on Justia Law

Jimmy Nation, Oliver McCollum, James Pickle, James Nation, Micah Nation, and Benjamin Chemeel II (collectively referred to as "the defendants") appealed the circuit court's denial of their motion to compel arbitration of a breach-of-contract claim filed against them by the Lydmar Revocable Trust ("Lydmar"). Lydmar owned a 75% membership interest in Aldwych, LLC. In 2008, Lydmar and the defendants entered into an agreement pursuant to which Lydmar agreed to sell its membership interest in Aldwych, LLC, to the defendants. The defendants paid Lydmar a portion of the agreed price at the time the agreement was executed and simultaneously executed two promissory notes for the balance of the purchase price. By 2014, Lydmar sued defendants for breach of contract for failing to make the required payments. At the request of the parties, the circuit court delayed setting the matter for a bench trial until they had an opportunity to resolve the case without a trial. The parties' attempts failed. Thereafter, defendants filed a motion to compel arbitration of Lydmar's breach-of-contract claim. Lydmar did not file a response to the defendants' motion to compel arbitration. After review, the Alabama Supreme Court reversed, finding defendants submitted evidence showing that Lydmar signed a contract agreeing that all disputes between them related to the defendants' purchase of Lydmar's membership interest in Aldwych would be settled in arbitration and that the contract evidenced a transaction affecting interstate commerce. Lydmar did not refute that evidence, nor did it establish that the defendants waived their right to rely on those arbitration provisions. Therefore, the circuit court erred by returning the case to its active docket and effectively denying the defendants' motion to compel arbitration. View "Nation et al. v. Lydmar Revocable Trust" on Justia Law

Vallejo filed a petition for bankruptcy relief in 2008. Under its existing labor agreement with the Vallejo Police Officers Association (VPOA), the city paid the full premium cost for retirees and employees of any medical plan offered through the California Public Employees’ Retirement System (CalPERS or PERS) and paid the full premium for other city retirees, so it was subject to the Public Employees’ Medical and Hospital Care Act, Gov. Code, 22750. PEMHCA establishes a minimum level of employer contribution toward medical premiums. The city sought approval from the bankruptcy court to reject its labor agreements. While the motion was pending, VPOA and the city reached an agreement and the city voluntarily dismissed its motion to reject as to the VPOA. Under the 2009 Agreement, health insurance benefits were reduced. After months of negotiations toward a superseding agreement, the city declared an impasse in 2013. VPOA filed suit, alleging that the city was not bargaining in good faith, in violation of the Meyers-Milias-Brown Act, Gov. Code, 3500. The court of appeal affirmed the denial of the petition. VPOA did not show its members had a vested right to a full premium; substantial evidence supported findings that the city did not engage in surface bargaining or rush to declare an impasse. View "Vallejo Police Officers Association v. City of Vallejo" on Justia Law

Mainali filed suit against Covington for breach of contract, breach of the duty of good faith and fair dealing, fraud, and violations of the Texas Insurance Code and Texas Deceptive Trade Practices Act. The Fifth Circuit affirmed the district court's grant of summary judgment for Covington on all of Mainali's claims. The court rejected Mainali's contention that the appraisal award was incomplete because it excluded damage to items covered by the policy where Mainali cited nothing in the record to show that these items were not included. The court also held that Covington did not violate the Prompt Payment of Claims Act where Covington was not trying to avoid payment of the claim; it was invoking a contractually agreed to mechanism for assessing the amount it owed. View "Mainali Corp. v. Covington Specialty Insurance Co." on Justia Law

The Supreme Court reversed the circuit court’s determination that a confidential settlement agreement entered into between the City of Sioux Falls and several contractors that built the Denny Sanford Premier Center in Sioux Falls was not open to public inspection under S.D. Codified Laws 1-27. A reporter for the Argus Leader sought a copy of the agreement. After the City denied the request the Argus Leader commenced this action seeing an order compelling the City to provide a copy. The circuit court entered judgment for the City. The Supreme Court reversed, holding that the settlement contract at issue did not meet the requirements under section 1-27-1.5(20), and therefore, it is a public record open to inspection. View "Argus Leader Media v. Hogstad" on Justia Law

Doug Miller and his son signed a broad noncompetition agreement when Doug sold his fuel-additives business, E.T., in 2011. Doug sold his other company, Petroleum Solutions, to Kuhns about a year later. E.T.’s new owners sued the Millers for breaching the noncompete by providing assistance to Kuhns as he learned the Petroleum Solutions business. The Millers claimed the noncompete was overbroad and unenforceable and that their assistance to Kuhns came at a time when Petroleum Solutions was E.T.’s distributor, not its competitor. When E.T. severed its relationship with Petroleum Solutions in 2012, Doug told Kuhns that the noncompetition agreement prevented further help and ceased assisting him. On summary judgment, the district judge held that the noncompetition agreement was enforceable but the Millers did not breach it. The Seventh Circuit affirmed, agreeing that the contract was not overbroad, but that the Millers did not breach it. A company’s distributor is not its competitor, so the Millers’ assistance to Kuhns in 2012 was "fair game." The contract, read reasonably, did not require Doug to break his preexisting lease with Kuhns. View "E.T. Products, LLC v. D.E. Miller Holdings, Inc." on Justia Law

The issue this case presented for the Idaho Supreme Court’s review centered on a judgment dismissing claims against an attorney and a law firm that he later joined based upon an opinion letter issued by the attorney in his capacity as corporate counsel regarding the legality of a stock redemption agreement. The Appellant challenged the grant of summary judgment to the Respondents (attorney and law firm) and the amount of attorney fees awarded to them. After review, the Supreme Court affirmed the judgment dismissing the claims and the awards of attorney fees, and awarded attorney fees on appeal. View "Taylor v. Riley" on Justia Law

Giasson and RCO were working together to secure a contract to make airline seats for a jet manufacturer. According to Giasson, RCO cut it out of the deal. Giasson sued RCO for breach of contract. During discovery, in anticipation of settlement talks, Giasson submitted interrogatories to RCO requesting pricing and sales information for the seats RCO would be selling. RCO responded, indicating that some answers were “speculative and subject to change.” The parties settled the dispute in 2010; the district court entered a consent order of dismissal. RCO agreed to pay Giasson a running royalty for 10 years. In 2014, Giasson became aware that RCO was charging higher gross sales prices for two types of seats than the fixed prices the parties agreed to. Giasson inferred that RCO misrepresented seat pricing information during settlement talks. Giasson brought filed a new lawsuit. Claims of breach of contract, specific performance, and silent fraud were immediately dismissed. After discovery, the court dismissed Giasson’s claim of fraud in the inducement, noting that RCO never represented the future prices of aircraft seats would remain static. The Sixth Circuit affirmed. Relief under FRCP 60(d)(1), the “savings clause,” is “available only to prevent a grave miscarriage of justice.” Giasson’s allegations do not satisfy that demanding standard. View "Giasson Aerospace Science Inc. v. RCO Engineering Inc." on Justia Law