Justia Contracts Opinion Summaries

The Supreme Court reversed the decision of the district court dismissing Appellants’ claim seeking damages for breach of contract, breach of warranty, and fraudulent misrepresentation after discovering hail damage to the roof of a real property they were under contract to purchase from Appellees. The district court dismissed the complaint with prejudice and without leave to amend, concluding that the damage was reasonably ascertainable by Appellants. In reversing, the Supreme court held that the district court erred when it granted Appellees’ motion to dismiss for failure to state a claim because Appellants alleged sufficient facts to state claims that were plausible on their face. View "Burklund v. Fuehrer" on Justia Law

The business-owners liability insurance policy in this case did not provide coverage for a negligent supervision claim arising out of an alleged employee’s intentional act of physically punching a customer in the face.The circuit court granted summary judgment in favor of the Insurer, concluding that there was no coverage under the policy for either the employee’s intentional act or the negligent supervision claim against the employer arising out of the employee’s intentional act. The court of appeals reversed. The Supreme Court reversed, holding that where the negligent supervision claim pled rested solely on the employee’s intentional and unlawful act without any separate bais for a negligence claim against the employer, no coverage existed. View "Talley v. Mustafa" on Justia Law

Government Code 1090, which prohibits conflicts of interest in the making of public contracts, applies to independent contractors. The Court of Appeal reversed the trial court's judgment for an LLC in an action alleging that the district breached a contract with the LLC. The district cross-complained to recover money paid under the alleged void contracts. The jury awarded millions in damages to the LLC. The court held that the trial court misinterpreted section 1090 when it instructed the jury that the LLC's contracts did not violate section 1090 on the theory that the statute did not apply to independent contractors, and erred in not instructing on the competitive bidding statutes. View "Strategic Concepts, LLC v. Beverly Hills Unified School District" on Justia Law

Yates Construction, LLC, and D.W. Caldwell, Inc., entered into a construction subcontract for the roof installation on a residential dormitory at Auburn University in Auburn, Alabama. When Caldwell completed both the repairs and the roof installation, it had yet to receive total payment for the structural repairs. The companies disputed the scope and expense of these repairs and quickly negotiated to an impasse. Thereafter, Caldwell filed a claim against Yates for causing delay and increased costs by failing to pay for work performed, which was in breach of the agreements between the parties. The parties proceeded to arbitration. Although the arbitration record was neither recorded nor transcribed, the parties conceded that the arbitrator considered arguments, reviewed evidence, and heard witness testimony over the course of three days. He then reopened the proceedings for additional documentation, before issuing his thirteen-page award. Within two weeks of the arbitrator’s decision to deny Yates’s motion for reconsideration, Caldwell requested that the circuit court confirm the award under Mississippi Code Section 11-15-125. Yates moved the trial court to alter, amend, or vacate the award under Mississippi Code Section 11-15-25. With the understanding that Yates would provide oral argument on its motion at the award confirmation hearing, Caldwell filed a request to limit the presentation of proof before the circuit court. Ultimately, the trial court reviewed fourteen exhibits and the testimony of one witness in making its decision. Based on this evidence, the court issued its order modifying the arbitrator’s award. Finding that the arbitrator had duplicated the labor costs for shingle installation in its award–once under the original subcontract and once under the oral agreement to repair the structural damage (referred to as the Repair Agreement)–it amended the award, reducing the total by $104,507. After its review, the Mississippi Supreme Court determined: (1) the miscalculations alleged in this matter were not evident from the award itself, nor were they apparent from the agreed-upon record; and (2) the judge erred when he allowed the parties to present witness testimony regarding the extent of any alleged miscalculations, rather than relying on the award and the arbitration record as the relevant law suggested. Finding error, the Court therefore reversed the circuit court’s decision and remanded this case to the circuit court with directions to confirm the arbitration award. Furthermore, because the subcontract between the parties provided that each contractor would be responsible for his own fees and costs, the Court declined to assess costs to one party over the other, and instead, enforced their bargained-for agreement. View "D. W. Caldwell, Inc. v. W.G. Yates & Sons Construction Company" on Justia Law

The Supreme Court reversed the decision of the court of appeals affirming the circuit court’s determination that real estate broker Mark McNally was entitled to a commission pursuant to a listing contract between the parties.Capital Cartage, Inc. argued before the Supreme Court that McNally was not entitled to a commission because the offer to purchase McNally procured contained substantial variances from the seller’s terms as set forth in the listing contract. The Supreme Court held (1) Kleven v. Cities Service Oil Co., 126 N.W.2d 64, is the law with regard to determining whether a substantial variance exists between a listing contract and an offer to purchase; (2) applying this standard, in the context of the sale of a business with real estate where the sale did not go through, McNally did not procure an offer to purchase “at the price and on substantially the terms set forth” in the listing contract; and (3) therefore, McNally was not entitled to a commission. View "McNally v. Capital Cartage, Inc." on Justia Law

Ewing Construction Co., Inc., appeals from a judgment denying its N.D.R.Civ.P. 60(b) motion to vacate a $951,191.62 default judgment entered in favor of Key Energy Services, LLC. Ewing began serving as the designer of and general contractor for Key's construction of the P3 Service Center project in Williston. Ewing voluntarily canceled its North Dakota contractor license in October 2014. In January 2015, Key sued Ewing and 22 others to invalidate construction liens filed against its property and claiming Ewing failed to pay numerous subcontractors for their work on the project in violation of its contractual obligations. After Ewing failed to answer the complaint, Key moved in June 2016 for a default judgment against Ewing. The district court granted the motion and entered default judgment against Ewing, awarding Key $951,191.62. The default judgment was entered on June 24, 2016, and Key served notice of entry of judgment on June 27, 2016. On May 12, 2017, after attempts were made to enforce the default judgment in Texas, Ewing brought a N.D.R.Civ.P. 60(b) motion to vacate the default judgment "because of insufficient service of process, and excusable neglect." Key responded by filing a corrected return of service which the district court accepted and considered. The corrected return of service was notarized and identified the documents served. On July 28, 2017, the court denied the N.D.R.Civ.P. 60(b) motion, concluding service of process was sufficient, the motion was untimely, and Ewing failed to establish excusable neglect. Because the district court did not err in ruling service of process was proper and did not abuse its discretion in denying the motion to vacate, the North Dakota Supreme Court affirmed. View "Key Energy Services, LLC v. Ewing Construction Co., Inc., et. al." on Justia Law

Claims brought against the manufacturer of a component part of an improvement to real property fell under an exception to the ten-year statute of repose because the improvement was “machinery installed upon real property.” See Minn. Stat. 541.051.Appellant manufactured the motor in a home’s heat-recovery ventilator. Sixteen years after the ventilator was installed, a fire started in the ventilator, causing property damage to the home. Respondent, the insurer of the homeowners, brought this subrogation action against Appellant. The district court granted summary judgment for Appellant, concluding that the ten-year statute of response for improvements to real property barred every claim except the claim alleging a post-sale duty to warn, which claim it dismissed upon summary judgment. The court of appeals reversed. The Supreme Court affirmed in part and reversed and remanded in part, holding (1) under the plain language of section 541.051, the ventilator containing Appellant’s motor was “machinery installed upon real property,” and therefore, the court of appeals properly reinstated Respondent’s breach of warranty, negligence, and product liability claims; and (2) Appellant did not have a duty to warn consumers of its product’s alleged defect after the time of sale. View "Great Northern Insurance Co. v. Honeywell International, Inc." on Justia Law

The Second Circuit held that the district court erred in its interpretation of the contracts under the court's prior precedent and therefore, the court vacated the original judgment and remanded to the district court for reconsideration of the contracts employing standard principles of contract interpretation. The appeal stemmed from a dispute between Century and Global over the extent to which Global was obligated to reinsure Century pursuant to certain reinsurance certificates. The court held that the district court's determination that the contract was unambiguous was premised on an erroneous interpretation of New York state law. The court explained that the district court should construe each reinsurance policy solely in light of its language and, to the extent helpful, specific context. View "Global Reinsurance Corporation of America v. Century Indemnity Co." on Justia Law

Steven Kelly and Spirit Energy LLC (collectively "Spirit") appealed a district court order holding them in contempt for failing to return leased vehicles to Kettle Butte Trucking ("KBT"). KBT sued Spirit, alleging Spirit failed to pay numerous lease payments for trucks they leased from KBT. Spirit challenged the district court's underlying order that was alleged to have been violated. Spirit also argued the court did not have jurisdiction to hold it in contempt. When a contempt order is appealed, challenges to the underlying order will not be considered unless the underlying order is also appealed. When a court has issued an allegedly erroneous order, the party to whom the order was issued must obey it as long as it remains in force or until it is reversed on appeal, and the failure to obey the order is punishable as a contempt of court. Finding no reversible error, the North Dakota Supreme Court affirmed the district court's order holding Spirit in contempt. View "Kettle Butte Trucking, LLC v. Kelly" on Justia Law

Charles Erwin appeals from an amended judgment entered in favor of Alerus Financial, N.A., for $5,265,653.09. Starting in 2012 Alerus made a series of loans totaling more than $15 million to Diverse Energy Systems, LLC. The loan agreement specified "Events of Default," including the failure to pay the indebtedness, the insolvency of the borrower or guarantor or the commencement of bankruptcy proceedings. Erwin was Diverse's chief executive officer, and he signed multiple personal guaranties, promising to be personally responsible for payment of up to $4 million of Diverse's debt owed to Alerus. In September 2015 Diverse filed for bankruptcy. In May 2016 Alerus sued Erwin for breach of contract and unjust enrichment, alleging Diverse was in default under the loan agreement and Erwin failed to make payment on the amount due under the guaranties. Alerus alleged Diverse's indebtedness exceeded $12 million and under the guaranties Erwin was liable for at least $4 million in principal and interest. On September 6, 2016, Erwin filed an answer to Alerus' complaint. Alerus moved for summary judgment, arguing Diverse defaulted on its loan obligations and Erwin breached the guaranty contracts by failing to pay the amounts due under the guaranties. Alerus also filed an affidavit in support of its motion from an Alerus employee, which it claimed showed the total outstanding principal and interest on the loans to Diverse. Erwin argued on appeal to the North Dakota Supreme Court the district court abused its discretion by failing to rule on his motion to amend his answer and entering judgment without allowing him to conduct discovery on Alerus' damage claims. Finding no reversible error, the Supreme Court affirmed the amended judgment. View "Alerus Financial, N.A. v. Erwin" on Justia Law