Justia Contracts Opinion Summaries

Petitioners, thirteen operators of charter schools in Baltimore County, filed breach of contract complaints against the Baltimore City Board of School Commissioners directly in the circuit court without first seeking review before the State Board of Education. Petitioners argued that the City Board breached contractual requirements by not providing information as to its commensurate funding calculations and by failing to provide the correct amount of commensurate funding for the 2015-16 school year. The circuit judge stayed proceedings in the circuit court pending the State Board’s administrative review of the parties’ dispute. The court of special appeals dismissed Petitioners' appeal, concluding that the stay order was not an appealable order. The Court of Appeals reversed, holding (1) under the unique circumstances of this case, the stay order was a final and appealable judgment; (2) the circuit court abused its discretion in staying the proceeding in order for the parties to seek administrative review before first allowing for discovery; and (3) the State Board retained primary jurisdiction as to the underlying commensurate funding issues in dispute, and after discovery before the circuit court is concluded, it will be appropriate for the circuit court to enter a more definite order staying proceedings for review of those issues before the State Board. View "Monarch Academy Baltimore Campus, Inc. v. Baltimore City Board of School Commissioners" on Justia Law

When Exelon Generation Acquisitions purchased Deere & Company’s wind energy business, it agreed to make earn-out payments to Deere if it reached certain milestones in the development of three wind farms that were underway at the time of the sale. Included in the sale was a binding power purchase agreement Deere secured from a local utility to purchase energy from the wind farm once it became operational. One of the three projects at issue in this appeal, the Blissfield Wind Project (in Lenawee County, Michigan) could not come to fruition because of civic opposition. Exelon managed to acquire another nascent wind farm from a different developer (Gratiot County, Michigan). Exelon managed to persuade the local utility to transfer the power purchase agreement there. The Gratiot County site was successful. Deere learned of Exelon’s success with the new site (and use of the power purchase agreement) and sue to recover the earn-out payment. Deere argued the earn-out payment obligation traveled from the Lenawee County farm to the Gratiot County farm. Exelon denied that it relocated the project, instead, it was prevented from developing the Blissfield farm by forces beyond its control. The Superior Court sided with Deere’s interpretation of the power purchase agreement, and ordered Exelon to pay the earn-out. The Delaware Supreme Court disagreed with this interpretation of the purchase agreement and reversed. View "Exelon Generation Acquisitions, LLC v. Deere & Company" on Justia Law

The application of Georgia law concerning a pollution exclusion contained in an insurance policy as excluding coverage for bodily injuries resulting from the ingestion of lead-based paint under the principle of lex loci contractus does not violate Maryland public policy.Appellants were exposed to lead-based paint at a property owned by the Salvation Army. Appellants sued Defendants, alleging lead-based paint related tort claims. Liberty Mutual Insurance Company issued comprehensive general liability insurance policies to the Salvation Army. The policies, which were purchased in Georgia, did not include lead-based paint exclusion provisions but did include pollution exclusion provisions. Appellants sought affirmation that Liberty Mutual was obligated to indemnify the Salvation Army and defend against Appellants’ claims. Liberty Mutual moved to dismiss the complaint, arguing that Maryland courts follow the doctrine of lex loci contracts in choosing the applicable law and that, under Georgia law, the insurance policy did not cover claims for lead-based paint poisoning. The Supreme Court held that application of Georgia law concerning the policy’s pollution exclusion under the principle of lex loci contracts does not violate Maryland public policy. View "Brownlee v. Liberty Mutual Fire Insurance Co." on Justia Law

California-American, a water utility, and Marina and Monterey, public water agencies, entered into contracts to collaborate on a water desalination project, stating that the prevailing party of “any action or proceeding in any way arising from [their a]greement” would be entitled to an award of attorney fees and costs. After learning that a member of Monterey’s board of directors had a conflict of interest, having been paid for consulting work to advocate on behalf of Marina, California-American sued to have the contracts declared void under Government Code section 1090. Monterey agreed that the contracts were void. Marina filed cross-claims seeking a declaration that the contracts were “valid and enforceable.” Years of litigation culminated in a holding declaring the agreements void. Marina challenged post-judgment orders that California-American and Monterey were entitled to costs as prevailing parties under Code of Civil Procedure sections 1032 and 1717 and granting them specific attorney fees awards. The court of appeal affirmed, rejecting Marina’s argument that they were not entitled to awards because the underlying contracts were declared void. The illegality exception to the rule of mutuality of remedies applies when the contract's subject matter is illegal but does not apply when the litigation involves the “invalidity” or “unenforceability” of an otherwise legal contract. View "California-American Water Co. v. Marina Coast Water District" on Justia Law

This case, which turned on the issue of when Plaintiff’s causes of action accrued, must be reversed and remanded for a new trial because genuine factual disputes over the statute of limitations should be resolved by the factfinder.Plaintiff, Defendant’s brother, entrusted Defendant, his sister, with blank checks signed in advance to be used to pay bills of Plaintiff and his adult children while he was out of the country. When he returned, Plaintiff learned that Defendant had written many checks to herself. When Plaintiff asked for all of his money back, Defendant told him it had been spent. Brother sued. At issue was when Plaintiff’s causes of action accrued. If they accrued when Plaintiff learned Defendant had written checks to herself, his claims were time-barred. But if they accrued when Plaintiff was told the money was gone, they were timely. The district court declined to instruct the jury on the statute of limitations, and the jury returned a substantial damage verdict on several of Plaintiff’s legal theories. The court of appeals reversed. The Supreme Court affirmed, holding that the district court erred in not instructing the jury on statute of limitations at all. View "Shams v. Hassan" on Justia Law

If a plaintiff sues both public employees and their employer, section 101.106(e) of the Texas Tort Claims Act requires that the employees be immediately dismissed upon the employer’s motion, and this statutory right to dismissal accrues when the motion is filed and is not impaired by later amendments to the pleadings or motion. Respondent sued a government unit and some of its employees. The Attorney General moved to dismiss all but the tort claims against the employer, arguing that Respondent's contract claim against the employer, a state agency, was barred by sovereign immunity and that the tort claims against the employees were required to be dismissed under section 101.106(e). Thereafter, Respondent amended his petition to drop his tort claims against the employer, leaving the employees as the only tort defendants. The amended petition’s only claim against the employer was for breach of contract. The trial court dismissed Respondent's contract claim against the employer but denied dismissal of his tort claims against the employees. On appeal, the Supreme Court rendered judgment dismissing Respondent's state-law tort claims against the employees, holding that, following Respondent's amended petition, Defendants remained entitled to dismissal of the tort claims asserted against the employees in Respondent's original petition, as requested in Defendants’ original motion to dismiss. View "University of Texas Health Science Center at Houston v. Rios" on Justia Law

In 2002, Toulon applied for Continental’s long-term care insurance policy. Continental provided a Long-Term Care Insurance Personal Worksheet to help Toulon determine whether the policy would work for her, given her financial circumstances. The Worksheet discussed Continental’s right to increase premiums and how such increases had previously been applied. Toulon did not fill out the Worksheet but signed and submitted it with her application. Toulon’s Policy stated that although Continental could not cancel the Policy if each premium was paid on time, Continental could change the premium rates. There was a rider, stating that premiums would not be increased during the first 10 years after the coverage date. In September 2013, Continental raised Toulon’s premiums by 76.5%. Toulon sued, on behalf of herself and a purported class. The Seventh Circuit affirmed dismissal, agreeing that Toulon failed to state claims for fraudulent misrepresentation because she did not identify a false statement or for fraudulent omission because Continental did not owe Toulon a duty to disclose. The court also properly dismissed Toulon’s claim under the Illinois Consumer Fraud and Deceptive Practices Act (ICFA) because she did not identify a deceptive practice, a material omission, or an unfair practice. The unjust enrichment claim failed because claims of fraud and statutory violation, upon which Toulon's unjust enrichment claim was based, were legally insufficient and an express contract governed the parties’ relationship. View "Toulon v. Continental Casualty Co." on Justia Law

SGA Pharm Lab supplied ADM Alliance Nutrition with a product used to make medicated animal feed. The parties ended their relationship by signing a termination agreement. ADM later came to believe that SGA had made false representations concerning the potency of the product while SGA was supplying it to ADM. ADM brought breach of contract and fraud claims against SGA and its president. The district court concluded that ADM had released the claims. The Seventh Circuit affirmed The termination agreement stated ADM released SGA and its officers from any and all claims, whether known or unknown, so by its terms the release includes claims for breach of contract and fraud. The agreement also stated that it superseded all prior understandings and that no representations were made to induce the other party to enter into the agreement other than those it contained. The agreement was between sophisticated commercial parties View "ADM Alliance Nutrition, Inc. v. SGA Pharm Lab, Inc." on Justia Law

The notice and repair process set forth in Fla. Stat. 558 is a “suit” within the meaning of the commercial general liability policy issued in this case by Crum & Forster Speciality Insurance Company (C&F) to Altman Contractors, Inc.According to the policy, C&F had a duty to defend Altman in any “suit” arising from the construction of a condominium. Altman claimed that this duty to defend was invoked when the property owner served it with several notices under chapter 558 cumulatively claiming over 800 construction defects in the project. Altman filed a declaratory judgment action seeking a declaration that C&F owed a duty to defend and to indemnify it under the policy. The federal district court granted summary judgment for C&F, concluding that nothing about the chapter 558 process satisfied the definition of “civil proceeding.” Altman appealed, and the United States Circuit Court of Appeals for the Eleventh Circuit certified the legal issue to the Supreme Court. The Supreme Court answered the certified question in the affirmative because the chapter 558 presuit process is an “alternative dispute resolution proceeding” as included in the policy’s definition of “suit.” View "Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Co." on Justia Law

The Court of Appeals answered a question certified to it by the United States Court of Appeals in the negative, answering that under New York law generally, and particularly in light of the New York Court of Appeals’ decision in Excess Insurance Co. Ltd. v. Factor Mutual Insurance Co., 3 NY3d 577 (N.Y. 2004), there is neither a rule of construction nor a presumption that a per occurrence liability limitation in a reinsurance contract caps all obligations of the reinsurer, such as payments made to reimburse the reinsured’s defense costs. The court held definitively that Excess did not supersede the “standard rules of contract interpretation” otherwise applicable to facultative reinsurance contracts. Therefore, New York law does not impose either a rule or a presumption that a limitation on liability clause necessarily caps all obligations owed by a reinsurer, such as defense costs, without regard for the specific language employed therein. View "Global Reinsurance Corp. of America v. Century Indemnity Co." on Justia Law