Justia Contracts Opinion Summaries

At issue in this case was the meaning and application of the stockholders’ agreement between Babcock Power Inc. and its former executive, Eric Balles. Babcock terminated Balles’ employment after discovering that he was engaged in an extramarital affair with a female subordinate. Concluding that Balles had been terminated “for cause” under the terms of his stockholders’ agreement with the company, the company’s board of directors “repurchased” Balles’ stock at a minimal price, withheld subsequent dividends, and refused to pay Balles any severance. Balles sought declaratory relief seeking that the stock be returned to him along with the withheld dividends. Balles prevailed at a jury-waived trial on his claim for declaratory relief but was unsuccessful in his request to receive severance pay. The Supreme Judicial Court affirmed, holding (1) the trial judge properly reviewed the board’s decision on a de novo basis; (2) the judge did not err in determining that Balles’ conduct did not constitute “cause” as defined in the stockholders’ agreement; and (3) Balles was not precluded from seeking relief pursuant to the terms of the stockholders’ agreement. View "Balles v. Babcock Power Inc." on Justia Law

This appeal arose out of a dispute over a construction contract between Golden Nugget and Yates. On appeal, Yates challenged the dismissal of its claim for a statutory lien under the Louisiana Private Works Act (LPWA), La. Stat. Ann. 9:4822, which grants general contractors a privilege to secure payment for their work. However, the LPWA requires that the contractor must preserve their lien by filing a statement of claim or privilege in a timely manner. In this case, although Yates did not file a lien statement within the time required by statute, the court found that because Golden Nugget never filed a notice of substantial completion, Yates's lien statement was timely filed. Accordingly, the court reversed and remanded. View "Golden Nugget Lake Charles v. W. G. Yates & Son" on Justia Law

Timothy Bevel appeals from an order granting a motion to compel arbitration. In March 2015, Bevel financed the purchase of a used Bennington brand boat and a Yamaha brand boat motor from Guntersville Boat Mart, Inc., and he rented a boat slip on Lake Guntersville to dock the boat. The sale and boat-slip rental were documented by a one-page bill of sale, which contained an arbitration provision. According to Bevel, the boat was seized several months after the transaction for allegedly defaulting on payments on the boat and boat-slip rental. Bevel disputed that he owed those payments. The matter was submitted to arbitration. The Supreme Court found, however, that the arbitration provision at issue here did not become part of the contract between the parties, and, thus, it could not be enforced against Bevel. Accordingly, the Court reversed the trial court's order compelling arbitration, and the case remanded the case for further proceedings. View "Bevel v. Marine Group, LLC" on Justia Law

In this case the trial court entered judgment terminating a bottom lease based on jury findings that the lease failed to produce in paying quantities over a specified period of time. The court of appeals reversed and remanded for a new trial, concluding (1) the rule against perpetuities did not invalidate the top lease, and (2) the trial court erred in charging the jury on the production-in-paying-quantities question. The Supreme Court affirmed, holding that the court of appeals correctly remanded for a new trial where (1) the top lease did not violate the rule against perpetuities; and (2) the trial court erred in charging the jury on cessation of production in paying quantities. View "BP America Production Co. v. Laddex, Ltd." on Justia Law

Landlord leased commercial real estate to Tenant, a third party. The lease agreement provided on option to purchase with a condition precedent. At the time Tenant assigned this purchase option to Assignees, Tenant had fully performed all obligations under the lease. When Assignees attempted to exercise the purchase option, Landlord denied the attempt, arguing that because of certain rental underpayments, which were later paid in full, Tenant had failed to satisfy the condition precedent. Assignees filed a complaint seeking specific performance of the purchase option. Landlord later moved for specific performance of the terms and provisions of the purchase option. The district court sustained Landlord’s motion, and Assignees purchased the property. The district court then entered judgment in Assignees’ favor and awarded equitable monetary relief for lost rentals. Landlord appealed. The Supreme Court affirmed as modified, holding (1) Landlord was judicially estopped from asserting the condition precedent in avoidance of equitable monetary relief; and (2) Landlord was entitled to offset the monetary award with the interest on the unpaid purchase price. View "O'Connor v. Kearny Junction, LLC" on Justia Law

In this insurance coverage dispute, Liberty Mutual, OES's insurer, denied OES's claim for reimbursement of funds OES spent defending against, and ultimately settling, the underlying tort suit. On appeal, Liberty Mutual claimed that the district court erred by permitting OES and Anadarko to equitably reform their master services contract (MSC), and that the district court interpreted the OES-Liberty Mutual policy erroneously by concluding that the policy obligated Liberty Mutual to reimburse OES for all of the attorney's fees OES incurred in connection with the tort suit, rather than a pro-rata portion of those fees. The court affirmed as to the MSC issue. In this case, OES and Anadarko met the higher clear-and-convincing evidence burden of establishing mutual error in the contract's creation. However, the court concluded that the insurance policy only obligated Liberty Mutual to pay a pro-rata share of the attorney's fees, and modified the attorney's fees award, determining that the policy entitled OES to attorney's fees totaling $168,695.96. View "Richard v. Anadarko Petroleum" on Justia Law

This appeal arose from a lawsuit brought by a contractor, Michael Kelly against his former client, Pamela Wagner, alleging nonpayment of amounts due to him for the performance of construction work. The district court found in favor of Kelly and awarded him a total judgment of $13,762.54 ($4,694.64 of damages and $9,067.90 of prejudgment interest). On appeal, Wagner argued that the district court erred in finding that Kelly was owed for the construction work. She further argued that the district court erred in awarding prejudgment interest to Kelly. Finding no reversible error, the Supreme Court affirmed. View "Kelly v. Wagner" on Justia Law

In 2008, Kinzel, then CEO of Cedar Fair, borrowed $8,000,000 from Merrill Lynch to finance his exercise of the company’s stock options and to pay estimated taxes that would be due immediately upon exercise. Kinzel pledged the shares that he would acquire as collateral and entered into an agreement that allowed Merrill Lynch, “in its sole discretion and without prior notice,” to “liquidate” the collateral upon any of twelve events, including “if the value of the . . . collateral is in the sole judgment of [Merrill Lynch] insufficient.” The market value of the company dropped from the exercise price of $23.19 per share in April 2008 to $6.99 per share in March 2009. Having set a $7.00-per-share “trigger” to liquidate, Merrill Lynch began selling Kinzel’s shares, without advance notice to Kinzel and without first making demand upon Kinzel for repayment. Kinzel appealed the district court’s denial of leave to file an amended complaint to reassert a breach-of-contract claim that had been dismissed, and final judgment in favor of Merrill Lynch on a breach-of-good-faith claim. The Sixth Circuit affirmed, finding that Kinzel could not state a claim for breach of contract and that Merrill Lynch exercised its discretion within the “contemplated range” of “judgment based upon sincerity, honesty, fair dealing and good faith.” View "Kinzel v. Bank of America" on Justia Law

Beecher Osborne filed a lawsuit against Allegheny Wood Products, Inc. and Heartwood Forestland Fund, IV, Limited Partnership. The parties entered into a pre-trial settlement agreement containing (1) a consent judgment in which the defendants agreed to a $1 million judgment against them, (2) a covenant not to execute in which Osborne promised not to collect the judgment from the defendants, and (3) an assignment from the defendants to Osborne of all claims they may have had against Penn-America Insurance Company for failing to provide them a defense in the lawsuit. Osborne subsequently dismissed his lawsuit against Allegheny and Heartwood and filed a new lawsuit against Penn-America on his assigned claims to collect the consent judgment. The circuit court granted summary judgment in favor of Osborne and ordered Penn-America to pay Osborne the consent judgment. The Supreme Court reversed, holding (1) the consent judgment was not binding on Penn-America because it was not a party to the underlying lawsuit; and (2) under the facts of this case, the assignment by Allegheny and Heartwood to Osborne of any claims they may have had against Penn-America was void. Remanded with direction to enter summary judgment for Penn-America and to dismiss Penn-America from Osborne’s lawsuit with prejudice. View "Penn-America Insurance Co. v. Osborne" on Justia Law

Lord & Taylor filed suit against White Flint, alleging breach of contract. Lord & Taylor operated a retail department store at the White Flint Shopping Center until White Flint closed the Mall and began demolition for a mixed use development. Lord & Taylor objected to the redevelopment, arguing that the clear terms of the parties' agreement required White Flint to maintain the Mall, and that the proposed mixed-use alternative would negatively affect its business. A jury found White Flint in breach of contract and awarded Lord & Taylor $31 million in damages. Both parties appealed. The court rejected White Flint's challenge to the damages award, concluding that the district court did not abuse its discretion by instructing the jury not to consider the potentially positive economic effects of the planned redevelopment in assessing damages for lost profits. Furthermore, the district court properly admitted a store executive's construction cost estimate as lay testimony. Finally, the court concluded that the district court committed no legal error or other abuse of discretion in applying long-established Maryland law to reject Lord & Taylor's claim to separate damages for the taking of property rights. Accordingly, the court affirmed the judgment. View "Lord & Taylor v. White Flint, L.P." on Justia Law