Justia Contracts Opinion Summaries

Three matters consolidated for review resulted from separate automobile accidents between either an Allstate or a GEICO insured with Underinsured-Motorist (UIM) coverage and allegedly underinsured tortfeasors. In each case, it was undisputed that the applicable insurance policy contained a "consent-to-settle" clause requiring the provision of notice to, and the consent of, the affected insurer prior to the insured's settlement of any claims against the alleged underinsured tortfeasors and/or a release of the tortfeasors' liability. After review of the specific facts of each case, the Alabama Supreme Court concluded that because the insurers, in following the express directives of the Court, were deprived of their contractual rights as well as the benefit of the procedures set forth in the controlling case law, the insurers demonstrated a clear legal right to their requested relief. In case no. 1150511 and 1151266, the Court directed the applicable circuit court to vacate its respective orders purporting both to "enforce" the pro tanto settlement agreements against the insurer's consent and to dismiss the tortfeasors. In case no. 1150269, the Court dismissed the petition. View "Ex parte GEICO Indemnity Company." on Justia Law

The Warrens owned and operated a Harley-Davidson motorcycle dealership in Salinas for approximately 38 years. Intending to retire, the Warrens contacted a potential buyer, Dabney, who owned a Harley-Davidson dealership in Riverside. The Warrens’ corporation and Dabney executed various agreements, including a master “Asset Purchase Agreement” that incorporated a Guaranty signed by Dabney, under which he “agree[d] . . . to guarantee . . . the collection and receipt of all amounts” required under section 2 of the Agreement, under the promissory note(s), and under the lease. The Agreement allowed Dabney to assign his rights and obligations as buyer to a corporation that he controlled, with the assignment to relieve Dabney of all obligations under the Agreement. Dabney assigned his rights under the Agreement to Monterey Motorcycles, Inc., which defaulted on its obligations under the Agreement. The dealership was sold to a third party. The Warrens sued and won a judgment of $2,746,318 against Dabney. The court of appeal reversed, agreeing that the Guaranty did not apply to a covenant not to compete agreement and two consulting agreements. View "G & W Warren's, Inc. v. Dabney" on Justia Law

The Ninth Circuit reversed the dismissal of a putative class action seeking refunds of baggage fees based on preemption by the Airline Deregulation Act, 49 U.S.C. 1301 et seq. Plaintiff filed suit, alleging various breach of contract claims, seeking a refund of a $15 baggage claim fee, because her bag did not arrive on time and was consequently delivered to her the next day. American Airlines v. Wolens is controlling as to plaintiff's breach of contract claim. In this case, because plaintiff's claim was for breach of contract of a voluntarily assumed contractual undertaking, and she pleaded breach of contract, the claim was not preempted by the Airline Deregulation Act as construed by Wolens. View "Hickcox-Huffman v. US Airways" on Justia Law

Plaintiff appealed from an order of the Appellate Division affirming Supreme Court’s dismissal of Plaintiff’s complaint for failure to state a cause of action for fraudulent inducement against Chipotle Mexican Grill and its chief executive officer. As grounds for its decision, the Appellate Division concluded that Plaintiff’s damages were speculative and the facts alleged did not support an inference of calculable damages. The dissent concluded that the case should proceed to discovery to allow Plaintiff to accumulate evidence of a pecuniary loss because the pleading must be construed liberally and damages need not be proven during the pleading stage. The Court of Appeals affirmed, holding that Plaintiff failed to plead a cause of action for fraudulent inducement because he did not allege any out-of-pocket loss and otherwise plead a recoverable harm. View "Connaughton v Chipotle Mexican Grill, Inc." on Justia Law

Because the plain language of the exculpatory clauses at issue in this case did not limit the homeowner’s association’s liability, and the association, as an entity distinct from internal boards acting as its agents, could not benefit from exculpatory clauses protecting those agents, the Colorado Supreme Court concluded the petitioners could bring their claims against the association. Petitioners Mac McShane and Cynthia Calvin had hoped to build a multistory home overlooking the Roaring Fork Valley. After belatedly discovering their design for that home exceeded county height regulations, they ended up with something less: a one-story home and an attached “pod.” Making the required changes proved costly, and they sued the homeowners association which allegedly improperly approved the architectural plans, then later allegedly improperly denied approval of revised plans. View "McShane v. Stirling Ranch Property Owners Association, Inc." on Justia Law

Bartush-Schnitzius Foods Co., a food-product manufacturer, entered into an agreement with Cimco Refrigeration, Inc., a refrigeration contractor, to install a new refrigeration system. When disputes arose over the refrigeration system and payments owed, Cimco sued to recover the balance owed on the contract. The jury found that both parties failed to comply with the terms of the agreement. The trial court, however, rendered judgment solely for Bartush. The court of appeals reversed and remanded for entry of judgment that Bartush take nothing and Cimco recover damages. The Supreme Court reversed, holding that both the trial court and the court of appeals failed to render judgment in accordance with the jury’s verdict. Remanded. View "Bartush-Schnitzius Foods Co. v. Cimco Refrigeration, Inc." on Justia Law

After BP America Production turned of the well valve to a gas well, Red Deer Resources, LLC, the top-lease holder, filed suit, asking the trial court to declare that BP’s lease had terminated. The jury found that the well was incapable of production in paying quantities the day after BP closed the valve and eight days after the last gas was sold or used. Based on these findings, the trial court declared that BP’s lease had lapsed and terminated, thus terminating BP’s lease in its secondary term. The court of appeals affirmed. The Supreme Court reversed the judgment of the court of appeals and rendered a take-nothing judgment in favor of BP, holding that because Red Deer never obtained a finding that the well was incapable of production in paying quantities on the material date under the plain language of the lease, BP’s lease remained valid. View "BP America Production Co. v. Red Deer Resources, LLC" on Justia Law

American Semiconductor, Inc. sued to recover damages arising out of Zilog, Inc., contracting with Sage Silicon Solutions, LLC, to perform engineering services for it, where that entity was formed by, and the services were provided by, employees of American Semiconductor, Inc. American Semiconductor, Inc., obtained a jury verdict awarding damages against the engineers and the entity they had formed, but it did not recover against Zilog, Inc. American Semiconductor, Inc., appealed, challenging the dismissal of one of its claims against Zilog, Inc., and seeking a new trial on damages against the engineers and their entity. The Supreme Court found no reversible error and affirmed the district court judgment. View "American Semiconductor v. Sage Silicon Solutions" on Justia Law

The faulty, inadequate, or defective work exclusion did not apply to the loss in this case. At issue in this appeal was the dismissal of Plaintiff’s action seeking to recover under an insurance policy for the loss of her house caused when a renter, who had an option to purchase the house, demolished it. The district court held that coverage for such loss was excluded under the policy. The Supreme Court vacated the judgment of the district court and remanded this case for further proceedings. View "Fisher v. Garrison Property & Casualty Ins" on Justia Law

The court affirmed the dismissal of Meridian's breach of contract suit against defendants, holding that the claim was time-barred under Virginia's five-year statute of limitations for contract actions because the parties acknowledged that more than five years passed between when the alleged injury accrued and Meridian's complaint. The court concluded that it may reach defendants' affirmative defense in reviewing the district court's dismissal of the action, because all facts necessary to decide whether defendants' defense applies appeared on the face of the complaint. The court rejected Meridian's claim that the six-year statute of limitations for contract suits brought against the United States should apply in this case, determining that defendants were private corporations, not government instrumentalities. In the alternative, the claim would still fail because the document at issue, a memorandum of understanding (MOU), was generally an unenforceable agreement to agree under Virginia law. Although some of the MOU's provisions may have been binding on the parties, Meridian has not demonstrated that defendants breached any of them. View "Meridian Investments, Inc. v. Federal Home Loan Mortgage" on Justia Law