Justia Contracts Opinion Summaries

A tree fell on Kaitlyn and Joshua. Kaitlyn died. She was pregnant. Doctors delivered the baby, but he died an hour later. Joshua survived with serious injuries. A state jury found the Somerset Housing Authority liable and awarded $3,736,278. The Authority belonged to the Kentucky Housing Authorities Self-Insurance Fund, which provided a policy with Evanston. Evanston sought a declaratory judgment limiting its liability under the Fund’s policy to $1 million. Meanwhile, through mediation of the state court case, Evanston agreed to pay the “policy limits” in return for an agreement to dismiss the state court action and release the Authority from further liability. Evanston claimed that $1 million was the coverage cap; the defendants claimed it was $2 to $4 million. The district court determined that there was complete diversity and ruled for Evanston on the merits. The Sixth Circuit affirmed. The district court properly aligned the parties given their respective interests in the primary dispute at the time of filing, so that diversity jurisdiction was not destroyed. The policy obligates Evanston to provide a maximum of $1 million of coverage per “occurrence,” with an aggregate limit of $2 million for more than one occurrence. The contract defines “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” When one tree falls at one time, that is one occurrence and one accident. View "Evanston Insurance Co. v. Housing Authority of Somerset" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment to JRMC in this breach of contract suit and the district court's subsequent award of $64,931.81 to JRMC. The court held that the documents executed in connection with defendant's employment at JRMC should be considered separately: the Recruitment Agreement and the Employment Agreement; defendant's obligation to pay the remaining debt under a promissory note was not excused by his allegations of fraud or breach of the duty of good faith, as well as breach of contract and personal injury; the terms of the note control and the note provided that defendant agreed to pay all costs and expenses incurred by JRMC in connection with the collection and enforcement of the note; and the district court did not abuse its discretion with respect to the award of attorney's fees. View "Johnson Regional Medical Center v. Halterman" on Justia Law

Property owners who purchased through a foreclosure sale sued the bank that sold the house, alleging that they were mislead the bank’s deed of trust was the first deed of trust, when another remained on the property, and was not extinguished by the foreclosure sale. Wells Fargo assigned any claim against the title insurer it had to David and Lina Hovannisian (the property owners), and the Hovannisians sued First American Title Insurance Company, alleging breach of contract, negligent misrepresentation and breach of the implied covenant of good faith and fair dealing. First American moved for summary judgment, arguing its title insurance coverage had terminated, and no benefits were due. The motion was granted, and the Hovannisians appealed, arguing First American failed to establish that coverage did not continue under the title policy or there were no benefits due under the policy. They also contended triable issues of fact existed regarding their bad faith claim. The Court of Appeal affirmed, finding First American showed, based on the facts Wells Fargo and the Hovannisians presented before and after the underlying action was filed, that there was no potential for coverage under the policy. The Hovannisians did not learn about the first deed of trust until after they purchased the property at the foreclosure sale without warranty. Thus, the only potential claim they had against Wells Fargo was for the alleged misrepresentations for which there was no liability or loss under the policy. View "Hovannisian v. First American Title Ins. Co." on Justia Law

Daphne Automotive, LLC, and its employee, Robin Sanders appealed a circuit court order denying their motion to compel arbitration of the claims filed against them by Eastern Shore Neurology Clinic, Inc. ("Eastern Shore"), and Rassan Tarabein. Tarabein owned Eastern Shore and another company, Infotec, Inc. Tarabein hired his nephew, Mohamad Tarbin, as an employee of Infotec. As part of the nephew's compensation, Tarabein agreed to provide him with the use of a vehicle for as long as he was employed with Infotec. Accordingly, Tarabein purchased, through Eastern Shore, a vehicle from Daphne Automotive. Tarabein, the nephew, and the dealership agreed that the dealership would arrange for the vehicle to be titled in the nephew's name, but that Eastern Shore would be listed on the title as lienholder. In conjunction with the sale, the nephew signed the sales contract, which contained an arbitration clause. Tarabein executed only the documents to establish Eastern Shore as lienholder on the title for the vehicle. In January 2014, the Department of Revenue issued an original certificate of title for the vehicle that listed no lienholders to the nephew. A few months later, the nephew was terminated from his job with Infotec, and Tarabein attempted to take back the vehicle, but the nephew refused. According to Tarabein, the dealership never informed him that it had failed to list Eastern Shore as a lienholder on the application for the certificate of title. As a result, the nephew held title to the vehicle free and clear, and Eastern Shore held a reissued certificate of title for the same vehicle, listing it as lienholder. Eastern Short attempted to repossess the vehicle; the nephew avoided being arrested by producing the free-and-clear title to the vehicle. According to Tarabein, he became aware of the existence of the second certificate of title after the attempted arrest. Tarabein thereafter sued the dealership for a variety of claims; the dealer moved to compel arbitration. The Alabama Supreme Court concluded the dealership failed to meet its burden of proving the existence of a contract calling for arbitration: the sales contract was limited in its scope with respect to disputes arising to parties to the contract and the agreements, here, between the nephew and the dealership. Accordingly, the Court found the trial court did not err in denying the dealership’s motion to compel arbitration. View "Daphne Automotive, LLC v. Eastern Shore Neurology Clinic, Inc." on Justia Law

FC Surety posted $150,000 bail to secure Ventura‘s release from custody in San Francisco. On September 15, 2014, when Ventura failed to appear, the court issued a bench warrant and declared the bond forfeited, stating FC‘s obligation to pay the bond would become absolute on April 10, 2015. On March 12, FC‘s agent discovered Ventura was in custody in Contra Costa County and tried to surrender the San Francisco warrant and have Ventura held. The Contra Costa County Sheriff found no active warrants, although the agent had verification from the San Francisco Sheriff. On April 3, the bail agent moved to vacate the forfeiture and exonerate the bond, arguing that failure to enter the warrant into the National Crime Information Center was an error that required exoneration of liability on the bond under Penal Code 980(b). The court denied the motion because the bench warrant remained outstanding. The agent then, unsuccessfully, orally requested to extend the time to secure Ventura‘s appearance. On August 19, the court issued summary judgment of bail forfeiture. The court of appeal reversed in favor of FC. FC‘s motion was timely and supported by good cause; under Penal Code 1305(c)(3) a court “shall vacate the forfeiture and exonerate the bail” if, outside the county where the case is located, the defendant is surrendered to custody by the bail or is arrested in the underlying case. View "P.eople v. Financial Casualty & Surety" on Justia Law

Under 42 U.S.C. 1485, the USDA's Rural Housing Service (RHS) makes loans for construction of affordable rental housing. From 1972-1982, each of 10 limited partnerships (with a common general partner, Olsen) entered into a 50-year loan agreement that stated that each borrower could pay off the loan and convert its properties to conventional housing after 15 or 20 years. The 1987 Emergency Low Income Housing Preservation Act, 42 U.S.C. 1472(c)), provided that before accepting prepayment, the USDA must attempt to enter into an agreement with the borrower. In 2002, Olsen was negotiating to sell to a nonprofit organization. He notified the RHS of “intent . . . to convert [some] units into conventional housing” and sought approval to pay off the mortgages. RHS responded with a checklist. Olsen did not proceed; the potential acquirer decided against purchasing the properties. In 2011, Olsen submitted more definite prepayment requests. RHS responded with an incentive offer concerning four properties, which Olsen accepted, remaining in the program. For three other properties, RHS informed Olsen that prepayment was not an option. Olsen purportedly believed that pursuing prepayment on any properties was futile. He did not submit additional applications. In 2013, the partnerships sued, alleging that the government, through the 1987 enactment or the 2011 correspondence, violated their prepayment rights. The Federal Circuit reversed the Claims Court's dismissal. The 2002 correspondence did not trigger the RHS’s duty to accept prepayment; RHS did not take any steps inconsistent with prepayment. The government did not breach its contractual obligation in 2002. Because the alleged breaches occurred no earlier than 2011, the contract claims are not barred by the six-year limitations period. The Claims Court implicitly premised the dismissal of takings claims on the same erroneous rationale. View "Airport Road Associates, Ltd. v. United States" on Justia Law

Bremer Bank, the Public Service Commission ("PSC"), Auto-Owners Insurance Company, and Curt Amundson appealed a judgment in a grain warehouse insolvency proceeding involving Grand Forks Bean Company after the district court appointed the PSC as trustee for the sale of dry edible beans from Grand Forks Bean's warehouse, denied Bremer's motion to intervene in the insolvency proceeding, and ordered distribution of the proceeds of the sale of the beans to growers determined to be noncredit-sale receiptholders. We conclude the district court did not err in construing applicable statutory provisions for insolvency proceedings and in applying those provisions. The PSC initially issued a trustee's report concluding all nine bean growers were noncredit-sale receiptholders entitled to participate in the trust fund proceeds and recommending payment of $652,747.92 to those receiptholders based on a December 2014 insolvency date and a market price of $23 per hundredweight on that date. The court ruled eight of the bean growers were noncredit-sale receiptholders entitled to participate in the insolvency trust fund proceeds. The court concluded one grower, Amundson, had a credit-sale contract with Grand Forks Bean under N.D.C.C. 60-04-01(2) and was not entitled to participate in the trust fund proceeds. The court also determined the date of Grand Forks Bean's insolvency under N.D.C.C. 60-04-02 was October 15, 2013, and the market price for beans on that date was $38 per hundredweight. The court determined three growers were entitled to a different price per hundredweight for their beans because they had cash claims with Grand Forks Bean for an agreed price. The court further concluded the PSC was entitled to its costs and expenses under N.D.C.C. sections 60-04-03.1, 60-04-09, and 60-04-10. The court ordered disbursement of the trust fund proceeds and thereafter issued an order denying Auto-Owner's motion for post-hearing relief. The district court denied without prejudice Bremer's motion to intervene to litigate the priority of its security interest, but allowed Bremer to participate in the proceeding "to the full extent provided to any other receiptholder/claimant." Amundson argued the district court erred in concluding he had a credit-sale contract with Grand Forks Bean because the definition of a credit-sale contract in N.D.C.C. 60-02-19.1 controls and required signatures by both the grower and the warehouseman to be a credit-sale contract. Finding no reversible error in the trial court's judgment, the North Dakota Supreme Court affirmed. View "Public Service Commission v. Grand Forks Bean Company, Inc." on Justia Law

Because the warranty of workmanship and habitability is imputed into every residential construction contract, it is a term of the contract, and therefore, the successful party on a claim for breach of the warranty qualifies for an attorney-fee award under a controlling contractual fee provision or, barring that, Ariz. Rev. Stat. 12-341.01.Defendants contracted with Plaintiff to build a basement at their home. Defendants refused to pay to the full contract amount after the work was completed, and Plaintiff sued for the unpaid contract amount. Defendants counterclaimed for breach of the implied warranty of workmanship and habitability. The jury found in Defendants’ favor on their claim for breach of the implied warranty. The trial court awarded Defendants attorney fees pursuant to a contractual fee provision and section 12-341.01. The Supreme Court affirmed the trial court’s judgment, holding that the implied warranty was a term of the contract, and as the successful party in the claim to enforce the warranty, Defendants were entitled to their reasonable attorney fees. View "Sirrah Enterprises, LLC v. Wunderlich" on Justia Law

Bank of America filed suit against the Hanna Parties for breach of contract after they failed to pay a loan. The jury found that the Hanna Parties did not breach the contract and the district court entered judgment for them. On remand, the Hanna Parties advanced defenses of fraudulent inducement and fraudulent failure to disclose. The Eighth Circuit affirmed the district court's grant of the Bank's motion for summary judgment on those defenses because JB Hanna could not have reasonably relied on the Bank's allegedly fraudulent representations. In this case, the district court correctly rejected the defenses of fraudulent inducement and fraudulent failure to disclose as a matter of law. Furthermore, because there was insufficient evidence to support the fraud defenses, the setoff defense also failed. View "Bank of America v. JB Hanna, LLC" on Justia Law

Nan Stevenson purchased a fifth wheel trailer at the Billings, Montana location of Big Sky RV, Inc., a Montana corporation with its principal office registered in Bozeman, Gallatin County, Montana. Stevenson provided a down payment and financed the remainder of the purchase price through Ally Bank. Ally later initiated this complaint against Stevenson in Chouteau County, claiming that Stevenson had defaulted on her payment obligations under the loan agreement. Steven filed a third-party complaint against Big Sky, alleging damages for breach of contract, violation of the implied covenant of good faith and fair dealing, negligence, and violations of the Montana Consumer Protection Act (MCPA). Big Sky filed a motion for judgment on the pleadings and for change of venue, arguing that, under Mont. Code Ann. 30-14-133(1), venue was improper in Chouteau County and that the district court lacked subject matter jurisdiction over the MCPA claim. The district court denied the motion. The Supreme Court affirmed, holding that the district court did not err in determining that it had subject matter jurisdiction and that venue was proper in Chouteau County. View "Ally Financial, Inc. v. Stevenson" on Justia Law