Justia Contracts Opinion Summaries

WBCMT challenges the district court's adverse judgment in a breach of contract suit to recover on a guaranty of financing for a commercial project. The district court held that the term “Borrower” in the guaranty refers collectively to all of the numerous borrowing entities, not to each of them individually. The court concluded that the only reasonable, textually supportable interpretation of “Borrower” is that it refers to the collective entities or to each individual borrowing entity, as the context may require. “Borrower” is unambiguous as a matter of law in the Guaranty. Therefore, NNN Realty’s interpretation of “Borrower” as limited to all borrowing entities collectively creates various absurdities throughout the Guaranty—so much so that the interpretation cannot be considered a reasonable alternative interpretation of “Borrower.” Accordingly, the court reversed and rendered judgment for WBCMT. View "WBCMT 2007 C33 Office 9720 v. NNN Realty Advisors" on Justia Law

Champion Pro filed suit against Impact Sports and others, principally alleging that Impact Sports engaged in deceptive and unfair practices in violation of the North Carolina Unfair and Deceptive Practices Act (UDTPA), N.C. Gen. Stat. 75–1.1, by their recruitment of a football player, Robert Quinn. The court affirmed the district court's denial in part of Champion Pro's motion for sanctions based on the alleged spoliation of evidence and grant of Impact Sports motion for summary judgment on all claims. The court agreed with the district court that Champion Pro's allegations, even when assumed to be true, are insufficient to establish a violation of the UDTPA. Likewise, Champion Pro's civil conspiracy claim fails as a matter of law. Finally, Champion Pro's claim that the district court erred in failing to award sanctions in the form of an adverse jury instruction is moot. Accordingly, the court affirmed the judgment. View "Champion Pro Consulting Group v. Impact Sports Football" on Justia Law

VitaVet hired IDS to develop a software program that would increase the speed and efficiency of its online services. IDS delivered an unfinished version of the software and withheld the source code and technical specifications needed to finish it. The parties filed suit against each other and the trial court issued a preliminary injunction that ordered the software consultant to deliver the source code and technical specifications to the company. The court concluded that a preliminary injunction that alters the status quo does not constitute an impermissible final adjudication of the merits of the lawsuit. The court explained that such injunctions are reserved for “extreme cases” where the right to relief is “clearly established.” The court affirmed the issuance of the injunction because the trial court did not abuse it discretion in concluding that this is one of those “extreme cases” where VitaVet had a “clearly established” right to preliminary injunctive relief. In this case, VitaVet established that the contract gave all ownership of IDS's work product to VitaVet, going so far as to empower VitaVet to obtain copies of that product whenever it wanted. IDS's refusal to hand over the source code breached these contractual provisions and damaged VitaVet's business operations. View "Integrated Dynamic Solutions v. Vitavet Labs" on Justia Law

Wilson was an admissions representative, recruiting students to CEC’s culinary arts college. Wilson earned a bonus for each student that he recruited above a threshold who either completed a full course or a year of study. If a representative was terminated, he was entitled only to bonuses already earned, not including students “in the pipeline.” CEC reserved the right to “terminate or amend” the contract at any time, for any reason, in its sole discretion. The Education Department released regulations, to become effective in July 2011, prohibiting institutions participating in Title IV student financial aid programs from providing bonuses based on securing enrollment. CEC decided to pay bonuses that were earned as of February 28, 2011, depriving Wilson of bonuses that were in the pipeline. CEC raised the base salary by at least the total of 3% plus 75% of each representative’s previous two years’ bonuses. Wilson sued. The Seventh Circuit remanded, holding that Wilson must prove that CEC exercised its discretion in a manner contrary to the parties' reasonable expectations. On remand, the district court rejected an argument that cost savings, not compliance with the regulations, drove CEC’s decision. There were no cost savings to CEC. The Seventh Circuit affirmed. Even accepting Wilson’s characterization, the evidence is insufficient to allow a jury to reasonably conclude that CEC breached the implied covenant of good faith and fair dealing. View "Wilson v. Career Education Corp." on Justia Law

This was an appeal of a judgment denying a claim for contribution on equitable principles in an action by one co-guarantor against another co-guarantor. One of two independent grounds for the district court’s decision was not challenged on appeal, and we therefore affirm the judgment of the district court without addressing either ground. In his opening brief, plaintiff-appellant R. Gordon Schmidt did not state the basis for the trial court’s rulings, did not state the standard of review and, therefore, did not present any argument and authority showing how the court abused its discretion. Therefore, he waived those issues on appeal. More significantly, the district court based its ruling on two alternative grounds. Although Schmidt argued the Supreme Court should reweigh the equities as to the first ground addressed by the district court, he did not mention the second ground. "Where a lower court makes a ruling based on two alternative grounds and only one of those grounds is challenged on appeal, the appellate court must affirm on the uncontested basis." Therefore, the Supreme Court did not address the merits of either ground on appeal. The judgment of the district court was affirmed. View "Schmidt v. Huston" on Justia Law

623 Partners, LLC obtained a judgment against R. Larry Hunter and Larry Hunter Development Co. (collectively Larry). In its effort to satisfy the judgment, 623 Partners alleged that properly originally owned by Hunter Development was fraudulently transferred to Larry Todd Hunter, Larry’s son. The district court concluded that the properly was fraudulently transferred in order to avoid subjecting the property to 623 Partners’ writ of attachment and that Todd was liable to 623 Partners for the proceeds he received from the sale of a parcel of the property. The Supreme Court affirmed. On remand, Todd argued that he was entitled to an offset from the judgment amount based on the value of the improvements that he made to the property and that the property was exempt from execution or forced sale because he had claimed it as his homestead. The district court rejected Todd’s assertions. The Supreme Court affirmed, holding that the district court did not err in determining that Todd was not entitled to an offset and correctly concluded that Todd did not qualify for a homestead exemption. View "623 Partners, LLC v. Hunter" on Justia Law

Fleet Owners Fund is a multi-employer “welfare benefit plan” under the Employee Retirement Security Act (ERISA), 29 U.S.C. 1001, and a “group health plan” under the Patient Protection and Affordable Care Act (ACA), 26 U.S.C. 5000A. Superior Dairy contracted with Fleet for employee medical insurance; the Participation Agreement incorporated by reference a 2002 Agreement. In a purported class action, Superior and its employee alleged that, before entering into the Agreement, it received assurances from Fleet Owners and plan trustees, that the plan would comply in all respects with federal law, including ERISA and the ACA. Plaintiffs claim that, notwithstanding the ACA’s statutory requirement that all group health plans eliminate per-participant and per-beneficiary pecuniary caps for both annual and lifetime benefits, the plan maintains such restrictions and that Superior purchased supplemental health insurance benefits to fully cover its employees. Fleet argued that the plan is exempt from such requirements as a “grandfathered” plan. The district court dismissed the seven-count complaint. The Sixth Circuit affirmed, concluding that plaintiffs lacked standing to bring claims under ERISA and ACA, having failed to allege concrete injury, and did not allege specific false statements. View "Soehnlen v. Fleet Owners Insurance Fund" on Justia Law

RiverStone had collective bargaining agreements (CBAs) with the union, requiring RiverStone to contribute a specified dollar amount to specified welfare and pension funds “for each hour for which an employee receives wages under the terms of this Agreement.” RiverStone’s employees voted to decertify the union. RiverStone stopped contributing to the funds, which filed suit under 29 U.S.C. 1145, the Multiemployer Pension Plan Amendments Act of 1980, seeking payment of the contributions that would have been due under the last CBA until its 2015 expiration. The Seventh Circuit affirmed summary judgment in favor of the funds. The CBA made the company’s obligations to the fund survive decertification, and a union is not the only party with standing to enforce an employer’s obligation to contribute to an employee welfare plan. Once multiemployer plans promise benefits to employees, they must pay even if the contributions they expected do not materialize, so “if some employers do not pay, others must make up the difference.” Nothing in the Employee Retirement Income Security Act (ERISA) makes the obligation to contribute depend on the existence of a valid CBA. The CBA became unenforceable by the union when the union was decertified, but the agreement did not cease to exist until its term ended. View "Midwest Operating Engineers Welfare Fund v. Cleveland Quarry" on Justia Law

Prior to his death, Timothy Trefren owned Trefren Construction and operated it as a sole proprietorship. Trefren Construction filed a complaint against V&R Construction, LLC and Cocca Development, Ltd. (collectively, Defendants) for breach of contract. Defendants filed a motion to dismiss, asserting that all corporations associated with the name Trefren Construction were inactive or had been dissolved. Thereafter, Trefren filed a motion for substitution of party seeking to substitute the Estate of Timothy Trefren in the stead of Trefren. The district court denied the motion for substitution of party and dismissed the complaint for lack of subject matter jurisdiction because the named plaintiff was not the real party in interest. The court then made an additional ruling that Defendants were entitled to judgment as a matter of law because the parties’ contracts were voidable. The Supreme Court reversed, holding (1) the real party in interest requirement is not jurisdictional, and therefore, dismissal of Trefren Construction’s complaint was not mandated; (2) the district court abused its discretion when it denied Trefren Construction’s motion to substitute the Estate as the real party in interest; and (3) the district court’s summary judgment ruling was procedurally infirm and unsupported by a showing of undisputed facts. View "Trefren Construction Co. v. V&R Construction, LLC" on Justia Law

Plaintiffs were affiliated commercial entities that sought to enforce the auction sale of a syndicated loan against Bank. When Bank accepted Plaintiffs’ bid and then refused to transfer the loan, Plaintiffs brought this action alleging breach of contract and breach of the implied covenant of good faith and fair dealing. In response, Defendant argued that it had no obligation to transfer the loan because the parties never executed a written sales agreement and Plaintiffs failed to submit a timely cash deposit. Supreme Court granted Plaintiffs’ motion for summary judgment on the breach of contract cause of action. The Appellate Division reversed. The Court of Appeals reversed, holding that Plaintiffs established their entitlement to summary judgment because the prerequisites of executing a written sales agreement and submitting a timely cash deposit were not conditions precedent to formation of the parties’ contract and did not render their agreement unenforceable. View "Stonehill Capital Mgt., LLC v. Bank of the West" on Justia Law