Justia Contracts Opinion Summaries

Rainbow Cinemas, LLC ("Rainbow"), Ambarish Keshani, and Harshit Thakker (collectively, "the defendants") appealed a circuit court order denying their motion to compel arbitration of a contract dispute with Consolidated Construction Company of Alabama ("CCC"). In the contract at issue here, CCC agreed to provide specified services in constructing a movie theater for Rainbow. The parties signed the American Institute of Architects "Document A101-2007 -- Standard Form of Agreement Between Owner and Contractor where the basis of payment is a Stipulated Sum" ("the agreement"). The agreement incorporated by reference American Institute of Architects "Document A201-2007 -- General Conditions of the Contract for Construction" ("the general conditions"). In 2016, after having already initiated the arbitration process, CCC sued the defendants. Among other things, CCC alleged that the defendants had fraudulently induced it into entering into the contract. Specifically, CCC alleged that the defendants knew that the contract required an initial decision maker and that the defendants also "knew they had not contracted for [initial-decision-maker] services from the [initial decision maker]." CCC alleged that the defendants "failed to inform CCC ... that Rainbow had not contracted with [architect Hay] Buchanan to act as [the initial decision maker]." The Alabama Supreme Court reversed and remanded, finding that the contract incorporated the AAA's Construction Industry Arbitration Rules, which state that "[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement." Although the question whether an arbitration provision may be used to compel arbitration between a signatory and a nonsignatory is a threshold question of arbitrability usually decided by the court, here that question was delegated to the arbitrator. The arbitrator, not the court, had to decide that threshold issue. View "Rainbow Cinemas, LLC v. Consolidated Construction Company of Alabama" on Justia Law

Rochester-Mobile, LLC, and Salzman-Mobile, LLC ("Rochester-Salzman"), appealed a judgment entered against them in a declaratory-judgment action relating to the validity of a 25-year sublease between Rochester-Salzman and Southern Family Markets of Mobile South University BLVD, LLC ("SFM"), and C&S Wholesale Grocers, Inc. ("C&S"). The trial court concluded that because the sublease was not recorded pursuant to section 35-4-6, Ala. Code 1975, the sublease was void for the remainder of the term extending beyond 20 years. After review, the Alabama Supreme Court held that the sublease in this case was not void under the provisions of section 35-4-6. Accordingly, the trial court erred in entering a judgment on the pleadings in favor of SFM and C&S and against Rochester-Salzman. Given this holding, the Court pretermitted discussion of the issue whether the sublease contained separate agreements that are independently enforceable, regardless of the validity of the sublease. View "Rochester-Mobile, LLC v. C&S Wholesale Grocers, Inc." on Justia Law

This case arose from an allegedly forged home-equity loan. Plaintiff sued the lenders, bringing several claims, including statutory fraud and violations of the Texas Finance Code and Texas Deceptive Trade Practices Act. The trial court granted summary judgment for the lenders without stating its reasons. The court of appeals affirmed. The Supreme Court affirmed in part and reversed and remanded in part, holding that the court of appeals (1) properly affirmed summary judgment on Plaintiff’s constitutional forfeiture claim; and (2) erred in holding that Plaintiff’s remaining claims were barred on statute of limitations and waiver grounds. View "Kyle v. Strasburger" on Justia Law

The dispute arose from a contingency fee agreement (agreement) for legal services. Attorneys filed suit against Client seeking a judgment that would include an ownership interest in a business partially formed by Client as compensation for unpaid attorney fees. A jury found that Attorneys were not entitled to an ownership interest under the terms of the agreement. The trial court granted Attorneys’ motion for a new trial, concluding that the agreement unambiguously provided for the recovery of an ownership interest as attorney fees. The Supreme Court conditionally granted Client’s petition for writ of mandamus, directing the trial court to vacate its new trial orders and render a final judgment consistent with this opinion, holding that the agreement unambiguously did not permit Attorneys to recovery from the ownership interest in the business. View "In re Dean Davenport" on Justia Law

This action stemmed from a “without cause” termination of Plaintiff’s five-year employment contract at the end of his third contract year. Plaintiff brought claims against his former employer, its chief executive officer, and its professional services company for, inter alia, breach of contract and tortious interference with contract. The trial court granted summary judgment for Defendants. The court of appeals reversed the trial court’s dismissal of the claims for breach of contract and tortious interference. The Supreme Court reversed the judgment of the court of appeals and reinstated the trial court’s judgment in favor of Defendants, holding (1) the employer was entitled to summary judgment on the breach of contract claim where the employer was not required to prove the reasons it terminated Plaintiff’s employment contract “without cause” an the relevant provisions of the contract were not ambiguous; (2) Defendants were entitled to summary judgment on the tortious interference claim where Plaintiff presented no evidence of willful or intentional interference; and (3) the employer’s professional services company was entitled to Plaintiff’s tortious interference claim where it conclusively established its justification defense to the claim. View "Community Health Systems Professional Services Corp. v. Hansen" on Justia Law

Homeowners sued Builder for failing to construct their home in a good and workmanlike manner. Builder’s commercial general liability insurer (Insurer) refused to defend Builder in the suit. Judgment was granted in favor of Homeowners after a trial, and Builder assigned the majority of its claims against Insurer to Homeowners. Homeowners subsequently sought to recover the judgment from Insurer under the applicable policy. The trial court entered judgment in favor of Homeowners. The court of appeals affirmed. The Supreme Court reversed and, in the interests of justice, remanded the case to the trial court for a new trial, holding (1) the judgment against Builder was not binding on Insurer in this suit because it was not the product of a fully adversarial proceeding; but (2) this insurance litigation may serve to determine Insurer’s liability, although the parties in the case focused on other issues during the trial. View "Great American Insurance Co. v. Hamel" on Justia Law

In order for there to be a “collapse” under a homeowner's insurance policy, there must have been a “falling down or collapsing of a part of a building,”Wanda Thiele, the daughter of Hiram Campbell, moved into Campbell’s residence following his death. After she discovered terminate infestation, Thiele contacted Kentucky Growers Insurance Company, which had issued a homeowner’s insurance policy to Campbell, to make a claim under the policy provision covering collapse. Insurer denied Thiele’s claim because no collapse had occurred. Thiele then filed a declaration of rights claim. The trial court issued a judgment in Thiele’s favor. The court of appeals reversed. The Supreme Court affirmed, holding that, under the definition set forth in Niagara Fire Insurance Co. v. Curtsinger, 361 S.W.2d, 762 (Ky. Ct. App. 1962), in order for there to be a “collapse,” there must have been a “falling down or collapsing of a part of a building,” which did not happen in this case. View "Thiele v. Kentucky Growers Insurance Co." on Justia Law

Buyers and Sellers entered into a contract for deed of property. The contract for deed indicated that Buyers were purchasing the home “as is” and that neither party made any representations or warranties except those made in the contract for deed. Within a year after moving into the home, Buyers discovered major defects on the property. Buyers brought suit against Sellers alleging fraud and failure to disclose defects. The circuit court granted summary judgment for Sellers. The Supreme Court reversed and remanded, holding (1) the circuit court erred when it applied the parol evidence rule to exclude Buyers’ extrinsic evidence and when it granted summary judgment on Buyers’ fraud claims; and (2) the circuit court erred when it granted summary judgment on their claim that Sellers violated S.D. Codified Laws 43-4-38. View "Oxton v. Rudland" on Justia Law

In 2002, Lone Moose Meadows, LLC (LMM) and Boyne USA, Inc. (Boyne) entered into an agreement wherein LMM would construct a ski lift and pay Boyne to operate it. The agreement stated that LMM shall be required to make depreciation payments for operating expenses. In 2008, Boyne filed suit for breach of contract based on LMM’s failure to make depreciation payments. In response, LMM argued that it was not obligated to make depreciation payments until Boyne owned the lift. The district court granted summary judgment in favor of Boyne. LMM appealed but also paid $634,328 to Boyne, satisfying the judgment. While the appeal was pending, LMM filed an action alleging that Boyne had engaged in wrongful collection efforts with respect to the first judgment. Boyne counterclaimed for breach of contract, asserting that LMM now owed depreciation expenses for the 2009-10, 2010-11, and 2011-12 ski seasons. LMM later voluntarily dismissed the wrongful collection claim. The district court granted summary judgment for Boyne on the counterclaim. The Supreme Court affirmed, holding that the district court properly allowed Boyne to pursue successive claims for breach of contract, and LMM’s argument that Boyne’s claims were barred by claim preclusion was unavailing. View "Lone Moose Meadows, LLC v. Boyne USA, Inc." on Justia Law

Under the circumstances of this case, it was unconscionable to require an employee to pay half the estimated arbitration costs up front in order to access the arbitral forum, and therefore, the requirement was unenforceable.Plaintiff signed and submitted an employment contract that contained an arbitration provision. Plaintiff, however, never did work for Defendant. Plaintiff filed a complaint alleging that Defendant refused to hire her in retaliation for her filing a sexual harassment complaint. Defendant filed a motion to compel arbitration. Plaintiff opposed the motion to compel, arguing, inter alia, that the arbitration agreement was unconscionable because it required her to pay for the arbitration costs in a civil rights matter. The circuit court ultimately granted Defendant’s motion to compel arbitration. The court found it would be unconscionable for Plaintiff to pay half the arbitration estimate to access the arbitral forum but nonetheless concluded that the arbitration clause could be enforced by requiring Defendant to pay for all arbitration fees and costs. The Supreme Court vacated the circuit court’s order, holding that the circuit court (1) correctly concluded that the parties entered into a valid arbitration agreement; but (2) improperly reformed the arbitration agreement instead of invalidating the entire agreement. View "Gabriel v. Island Pacific Academy, Inc." on Justia Law