Justia Contracts Opinion Summaries

In 1971, the City of Quincy, as trustee of the Adams Temple and School Fund (Adams Fund), sought a decree authorizing it to execute a proposed fifty-year lease of a building and parking lot of the Adams Academy that it had negotiated with the Quincy Historical Society (Society). In 1972, a single justice of the Supreme Judicial Court decreed that the City was authorized to execute the proposed lease. In 2014, the successor trustee of the Adams Fund (Plaintiff) filed a complaint seeking rescission of the lease and money damages, arguing that the City violated its fiduciary duty to the Woodward School for Girls, Inc., the sole income beneficiary of the Adams Fund, by executing the lease. Defendants, the City and the Society, moved for summary judgment, arguing that they were entitled to judgment under res judicata. The single justice allowed Defendants’ motion. Plaintiff appealed, contending that he should not be precluded by res judicata from obtaining relief because neither he nor the Woodward School was a party to the 1972 equity proceeding. The Supreme Judicial Court affirmed, holding that Plaintiff was precluded by res judicata from prevailing on his challenge to the execution of the lease. View "DeGiacomo v. City of Quincy" on Justia Law

Terrill Graf, bought his fiancee a van for her 50th birthday. Celebrating the birthday and new purchase, Graf drank liquor and then gathered four friends in the van. Plaintiff Wendy Peden was one of those friends. She says that she expected Graf only to show off the van and to photograph the group. But Graf drove away with his friends in the van, crashing it, and causing serious injuries to Peden. She obtained $240,000 in insurance benefits. But Peden claimed more under her insurance policy for underinsured-motorist benefits. The insurer (State Farm) initially denied the claim, but ultimately paid her an additional $350,000, the maximum amount that she could receive under the underinsured-motorist coverage. Peden sued State Farm under Colorado’s common law and statutory law, claiming an unreasonable denial or delay in paying benefits. The issue this case presented for the Tenth Circuit’s review was whether a reasonable fact-finder could conclude that State Farm unreasonably denied or delayed payment of benefits. The district court answered “no.” But the Tenth Circuit disagreed after careful consideration of the facts of this case, and reversed the grant of summary judgment to State Farm. The denial of Peden’s motion for partial summary judgment was vacated, and the entire matter remanded for further proceedings. View "Peden v. State Farm Mutual Auto Ins Co" on Justia Law

If a patient who receives emergency medical services is an enrollee in a health care service plan, the plan is required to reimburse the emergency service provider for essential emergency medical services and care. Plans are statutorily permitted to delegate this financial responsibility to their contracting medical providers. Here the defendants - health care service plans - delegated their emergency services financial responsibility to their contractor medical providers, three individual practice associations (“IPAs”). The IPAs failed to reimburse the plaintiff noncontracting service providers for the emergency care that they provided to enrollees of the defendant health plans. When the IPAs went out of business, the plaintiff providers brought actions seeking reimbursement from the defendants. The Supreme Court held (1) a health care service plan may be liable to noncontracting emergency service providers for negligently delegating its financial responsibility to an IPA or other contracting medical provider group that it knew or should have known would not be able to pay for emergency service and care provided to the health plan’s enrollees; and (2) a health care service plan has a narrow continuing common law tort duty to protect noncontracting emergency service providers once it makes an initial delegation of its financial responsibility. View "Centinela Freeman Emergency Medical Associates v. Health Net of California" on Justia Law

This litigation arose out of the construction of the home of Randie Lawson and Deanna Lawson (together, Respondents). G & G Builders, Inc. (Petitioner) filed suit asserting that it was owed $303,686 under the parties’ construction agreement. Respondents asserted a counterclaim for breach of contract. Petitioner then filed a motion to dismiss Respondents’ counterclaim and to compel arbitration. The circuit court denied the motion, concluding that the arbitration provisions in the construction agreement were not binding on Randie because they were set forth in a document that was never provided to him, nor were they binding on Deanna, who was a non-signatory to the agreement. The Supreme Court affirmed, holding that the circuit court did not err in concluding that there was no agreement between the parties to arbitrate their dispute. View "G & G Builders, Inc. v. Lawson" on Justia Law

This case related to circumstances surrounding a data entry error that resulted in a significant sum of money being deposited into the wrong bank account. Grizzly Security Armored Express (Grizzly Security) filed suit against Bancard Services (Bancard) and B&B Lounge and Leland Ruzicka (collectively, Ruzicka). The district court concluded that the claim against Ruzicka was time-barred under the pertinent statute of limitations and that the claims against Bancard failed for various reasons. The court further awarded attorney’s fees to Bancard. The Supreme Court affirmed, holding that the district court (1) did not err in granting summary judgment in favor of Ruzicka; (2) did not err in granting summary judgment in favor of Bancard; and (3) did not err in awarding attorney’s fees to Bancard under the terms of a contract between the parties. View "Grizzly Security Armored Express, Inc. v. Bancard Services, Inc." on Justia Law

This lawsuit involved a loan agreement between Lender and Borrowers. The agreement gave Lender an option to purchase the collateral for the loan - the famous ex-Presidential Yacht Sequoia. A valuation of the Sequoia for purposes of securing the loan was established via fraud on the part of Borrowers. The claims and counterclaims arising out of the loan agreement were eventually resolved by a settlement entered as a court order. The only issue remaining for the Court of Chancery was to oversee the computation of the amount due Borrowers from Lender should Lender elect to acquire the Sequoia. Lender agreed to a minimum option price of zero dollars. The Court of Chancery found the option price to be zero dollars. View "The Sequoia Presidential Yacht Group LLC v. FE Partners LLC" on Justia Law

In 2003, Zubin Mehta and Gregory Shalov formed Finger Lakes Capital Partners as an investment vehicle to own several operating companies. Mehta and Shalov contacted Lyrical Partners L.P. to participate in their venture. The parties signed a term sheet covering their overall relationship, as well as topics relating to two specific investments. On the advice of counsel, Finger Lakes held each of its portfolio companies as separate limited liability companies with separate operating agreements. Over the course of a decade, the companies did not perform as expected. Finger Lakes asked Lyrical for additional capital. The parties agreed to allow Lyrical to “clawback” its investment money as added protection for its continued investment in the enterprise. Only one investment performed well and generated a substantial return when it was sold. The others failed or incurred substantial losses. The parties disagreed about how the proceeds from the one profitable investment should have been distributed under the network of agreements governing their business relationship. The Court of Chancery held that the proceeds should have been distributed first in accordance with the operating agreement governing the investment in the profitable portfolio company; the term sheet and clawback agreement would then be applied to reallocate the distribution under their terms. Finger Lakes argued on appeal that the profitable investment entity’s operating agreement superseded the overarching term sheet and clawback agreement; even if the clawback agreement was not superseded, the Court of Chancery applied it incorrectly; Lyrical could not recover its unpaid management fees through a setoff or recoupment; and, the Court of Chancery improperly limited Finger Lakes’ indemnification to expenses incurred until Finger Lakes was awarded a partial judgment on the pleadings, instead of awarding indemnification for all expenses related to these proceedings. With one exception, the Supreme Court affirmed the Court of Chancery’s judgment with respect to that court's interpretation of the operating agreements. The Supreme Court found, however, that the Court of Chancery erred when it held that Lyrical could use setoff or recoupment to recover time-barred management fees. Further, Lyrical could not assert its time-barred claims by way of recoupment because the defensive claims did not arise from the same transaction as Finger Lakes’ claims. View "Finger Lakes Capital Partners, LLC v. Honeoye Lake Acquisition, LLC" on Justia Law

Robert Perry was issued a Citibank MasterCard account in 1998. The terms and conditions of the Citibank Card Agreement governing Perry’s account included an arbitration agreement. In 2010, Citibank filed a debt collection action against Perry seek to recover the balance owed on Perry’s account. In 2015, Perry filed an answer to Citibank’s complaint and a class counterclaim alleging that Citibank had violated the West Virginia Consumer Credit and Protection Act. Thereafter, Citibank filed a motion asking the court to compel arbitration of the parties’ claims. The circuit court concluded that Citibank had implicitly waived its right to arbitration by filing suit in circuit court and waiting nearly five years before seeking to invoke its contractual right to arbitrate. Citibank appealed. The Supreme Court reversed, holding that Citibank did not waive its right to compel arbitration in this matter. Remanded. View "Citibank, N.A. v. Perry" on Justia Law

Braxton Lumber Company filed suit against Lloyd’s Inc. seeking payment on a promissory note. Braxton Lumber did not file suit within six years of the due date on the promissory note owed to it. The circuit court dismissed the lawsuit, concluding, in part, that the statute of limitations expired on Braxton Lumber’s claims. Braxton Lumber appealed, arguing that its suit was not time-barred because tolling provisions in two West Virginia statutes extended the time in which it could have filed suit. The Supreme Court affirmed, holding that neither of the tolling provisions relied upon by Braxton Lumber tolled the six-year statute of limitations on its lawsuit. View "Braxton Lumber Co. v. Lloyd's Inc." on Justia Law

Insured Kourtni Martin suffered serious injuries from an automobile collision in Oklahoma City with Nicholas Gray. At the time of the collision, Insured had UM coverage with Goodville Mutual Casualty Company. The policy was purchased by her parents while they lived in Kansas. She was, however, a listed/rated driver in the policy. Before the collision, Martin's parents notified the Kansas agent that she was moving to Oklahoma to live with her grandmother and that her vehicle would be garaged in Oklahoma. After the collision, the claim was reported to the agent in Kansas who then transmitted the claim to Insurer which was located principally in Pennsylvania. The claim was adjusted out of Pennsylvania. Martin was unable to locate Gray. Her attempts to serve Gray, or his insurer, in Oklahoma and Texas failed. Martin filed this lawsuit against Gray alleging negligence (later adding breach of contract and bad faith against her Insurer). After service by publication, Gray answered asserting a general denial. Martin sought compensation from the Insurer pursuant to her UM policy and negotiations began between Insured and Insurer regarding medical bills and projected future medical bills substantially in excess of $100,000. Insurer offered $27,000 for medical expenses under the "Kansas No Fault Benefits" and $10,000 in UM coverage. The trial court, after reviewing the policy at issue here, applied Kansas law to this case and dismissed Martin's bad faith claim against the Insurer (with prejudice). After review, however, the Oklahoma Supreme Court concluded the trial court erred in applying Kansas law, finding that the actions by Insurer related to the bad-faith claim appear to have occurred primarily in Oklahoma and Pennsylvania: (1) any injury from the alleged bad faith occurred in Oklahoma where Insured is located; (2) the alleged conduct causing injury from bad faith occurred in Oklahoma or Pennsylvania, where the claim was handled; (3) the domicile of Insurer and Insured are Pennsylvania and Oklahoma, respectively, and (4) the place where the relationship between the parties occurred had yet to be determined. However, because the trial court did not apply the "most significant relationship test," there was no evaluation of these factors according to their relative importance. Despite the parties' voluntary settlement of this case, the Supreme Court nevertheless remanded this case for the trial court to make findings with respect to the "most significant relationship test," and then to dismiss. View "Martin v. Gray" on Justia Law