Justia Contracts Opinion Summaries

Festival Fund guaranteed a loan made to an affiliate in connection with the purchase of a retail property. After default on the loan and a nonjudicial foreclosure, Clover sought to enforce the guaranty. The trial court concluded that the guaranty was unenforceable and found that Festival Fund was protected by antideficiency laws. The court concluded, however, that evidence does not support a conclusion that Festival Fund was a principal obligor on the loan. The court concluded, instead, that Festival Fund itself structured the transaction and determined that its affiliate—a separate legal entity—would take out the loan and take title to the property. Therefore, the trial court erred in applying a sham guaranty defense and entering judgment for Festival Fund. View "LSREF2 Clover Property 4 v. Festival Retail Fund 1" on Justia Law

A holdover franchisee is a franchisee who receives the benefits of an expired franchise agreement but fails to make payments to the franchisor per the agreement. Donut Holdings, Inc. (DHI) was the Nebraska parent corporation of LaMar’s Donuts International, Inc. (LaMar’s). LaMar’s was a franchise company with nine franchisees, including one in Springfield Missouri that was purchased by Risberg Stores, LLC, a Missouri entity, in 2002. At the time of the purchase, the store was operating under the terms of a 1994 franchise agreement entered into by Risberg Store’s predecessor. DHI filed a claim against Risberg Stores for royalty and marketing fees accruing after June 2009. Risberg Stores argued that it did not owe DHI fees because the parties’ written agreement ended in 2004. The district court ruled in favor of Risberg Stores, concluding that the franchise agreement ended in June 2009 and that DHI was not entitled to any payments thereafter. The Supreme Court affirmed, holding (1) DHI, the franchisor, did not have a breach of contract claim against Risberg Stores, the holdover franchisee; and (2) therefore, DHI was not entitled to fees under the contract. View "Donut Holdings, Inc. v. Risberg" on Justia Law

Defendant, a convicted fraudster, is subject to a $10 million restitution order. Harbor America, which had contracted with defendant and his fraudulently run businesses, is subject to a writ of garnishment for that debt. However, Harbor America asserts that it no longer holds defendant's property as it has terminated the contracts under which it owed him regular payments. Harbor America alleges it was entitled to terminate the contracts based on defendant's fraud and did so by obtaining a judgment in a Texas state court declaring its right to terminate. The court held that the state court ruling is not binding because the government was not allowed to participate in the proceeding; considering the question of termination in the first instance, Harbor America has lawfully terminated one of the contracts but may or may not have been entitled to terminate the other; and thus the court remanded for further fact finding. View "United States v. Mire" on Justia Law

Plaintiff, who suffers from epilepsy, was fired from his cardiology practice after a series of stress-related seizures. Plaintiff filed suit against HCA, alleging claims arising out of his alleged wrongful termination. The district court ordered arbitration of his claims based on equitable estoppel. In this case, the viability of plaintiff's claim depends on reference to the Physician Employment Agreement. The court concluded that, as the district court correctly recognized, an at-will employment relationship may exist even if the parties have entered into an employment contract, such as the Agreement. The court concluded that HCA’s liability depends on the Agreement and the district court did not abuse its discretion in applying direct benefits estoppel to Hays’s tortious interference claim. In making an Erie guess, the court held that the Texas Supreme Court would recognize intertwined claims estoppel and that plaintiff's remaining claims are subject to arbitration under that theory. Accordingly, the court affirmed the judgment. View "Hays v. HCA Holdings, Inc." on Justia Law

This lawsuit centered around the termination of the employment of Dr. Sonia Hernandez by Avera Queen of Peace Hospital (Avera). Hernandez brought suit against Avera and multiple persons associated with the hospital for, inter alia, defamation and breach of contract. The circuit court dismissed several of Hernandez’s causes of action and, during the ensuing jury trial, entered judgment as a matter of law dismissing the defamation action. At the conclusion of the trial, the jury returned a verdict in favor of Avera on the breach of contract claim. The Supreme Court affirmed, holding that the circuit court did not err (1) when it dismissed several of Hernandez’s claims against Avera and the additional parties, and (2) when it dismissed Hernandez’s defamation claim during trial. View "Hernandez v. Avera Queen of Peace Hosp." on Justia Law

In this appeal, the issue presented for the Supreme Court's review was whether a contractor could maintain an action under the Contractor and Subcontractor Payment Act (CASPA) against a property owner’s agents. Beginning in 2005, Appellant Scungio Borst & Associates (SBA) entered into a series of written and oral construction contracts with Appellee 410 Shurs Lane Developers, LLC (410 SLD), which 410 SLD’s part-owner and president, Appellee Robert DeBolt, executed on 410 SLD’s behalf. Therein, SBA agreed to improve real property owned by 410 SLD in connection with the development of a condominium complex, and did so until November 2006, when SBA’s contracts were terminated with approximately $1.5 million in outstanding payments due. SBA requested payment, but 410 SLD, again through DeBolt, refused. Accordingly, SBA sued 410 SLD; its alleged successor corporation, Appellee Kenworth II, LLC; and DeBolt in his personal capacity. SBA asserted, among other claims, violations of CASPA. After careful review, the Supreme Court held that a contractor could not maintain an action under CASPA, and, accordingly, affirmed the order of the Superior Court. View "Scungio Borst & Assoc. v. 410 Shurs Lane Developers, LLC" on Justia Law

Mark Juelich and Steven Thoemke, former employees of Toyota-Lift of Minnesota, Inc. (TLM), claimed that TLM failed to pay them commissions they earned under their employment agreements with TLM. Juelich and Thoemke sought penalties under Minn. Stat. 181.14. The district court determined that TLM owed additional commissions to Juelich and Thoemke totaling $104,000 and that TLM was entitled to recover $815,000 from American Warehouse Systems, LLC (AWS) due to AWS’s breach of an asset purchase agreement entered into by AWS and TLM and its unjust retention of customer payments owed to TLM. The district court denied the request of Juelich and Thoemke for penalties under section 181.14, reasoning that the $814,000 judgment owed to TLM from AWS offset the unpaid commissions owed to Juelich and Thoemke. The court of appeals reversed, concluding that TLM was liable for statutory penalties under section 181.14. The Supreme Court affirmed, holding that when a court determines whether an employer is liable to an employee for the statutory penalty for nonpayment of wages under section 181.14, the court may not consider offsetting liabilities owed by the employee to the employer. View "Toyota-Lift of Minnesota, Inc. v. American Warehouse Sys., LLC" on Justia Law

After plaintiff sold a Mark Rothko painting to David Martinez through L&M Arts, she filed suit alleging that she was fraudulently induced into selling the painting with assurances of secrecy and that the eventual public re-sale of the painting constituted a breach of a confidentiality provision in her agreement with the original buyer. The court concluded that plaintiff failed to show that a genuine dispute of material fact exists regarding each element of Texas fraudulent inducement; L&M was entitled to judgment as a matter of law on plaintiff's breach-of-contract claim where the confidentiality clause did not require secrecy as to the fact of the 2007 sale, and the jury therefore did not hear evidence from which it could reasonably have found that L&M breached the Agreement; and even if a reasonable jury could have found that L&M breached the agreement, L&M would nevertheless be entitled to judgment as a matter of law because the jury’s damages award rested on a legally non-viable measure of damages. The court affirmed the district court’s grant of summary judgment for L&M on plaintiff's fraudulent inducement claim; affirmed the district court's judgment as a matter of law for the Martinez defendants on plaintiff's breach-of-contract claim; reversed the denial of judgment as a matter of law for L&M on plaintiff's breach-of-contract claim; and affirmed the denial of plaintiff's motion for attorney's fees under Texas Civil Practice & Remedies Code 38.001(8). The court remanded for further proceedings. View "Hoffman v. Martinez" on Justia Law

CommScope Credit Union (Plaintiff), a state-chartered credit union, hired Butler & Burke, LLP (Defendant), a certified public accounting firm, to conduct annual independent audits of its financial statements. Plaintiff later filed a complaint alleging breach of contract, negligence, breach of fiduciary duty, and professional malpractice. Defendant pleaded seven affirmative defenses, including contributory negligence and in pari delicto. The trial court subsequently granted Defendant’s motion to dismiss and for judgment on the pleadings. The court of appeals reversed, concluding (1) the specific allegations in Plaintiff’s complaint were sufficient to state a claim for breach of fiduciary duty, and (2) Defendant’s affirmative defenses would not entitle Defendant to dismissal at this stage. The Supreme Court affirmed in part and reversed and remanded in part, holding (1) Plaintiff’s allegations did not establish that Defendant owed it a fiduciary duty in fact, and therefore, the trial court correctly dismissed Plaintiff’s breach of fiduciary duty claim; and (2) the members of the Court are equally divided on whether the facts alleged in the complaint established the defenses of contributory negligence and in pari delicto, and therefore, the court of appeals’ decision on this issue is left undisturbed. View "CommScope Credit Union v. Butler & Burke, LLP" on Justia Law

In 1985, South Alabama Sewer Service, Inc. ("SASS"), and Lake View Developers, Ltd. ("Lake View"), entered into an agreement where SASS would construct a sewer line from its waste-treatment facility to a new planned subdivision and golf course ("Lake View Estates). In 1989, Lake View filed for bankruptcy. The development and golf course, excluding lots that had already been sold, were placed in receivership. 1991, SASS and Lakeview Realty entered into a new sewer agreement. In July 2003, Baldwin County Sewer Service, LLC ("BCSS"), purchased from SASS the sewer lines and sewer facilities servicing Lake View Estates. In 2004, BCSS purchased all the stock of SASS. Subsequent to BCSS's purchase of SASS and its facilities in Baldwin County, all monthly sewer fees related to Lake View Estates had been billed by and paid to BCSS. Sometime following its acquisition of SASS's sewer system, BCSS enacted a rate increase affecting customers in Lake View Estates. In 2014, multiple homeowner associations whose members were property owners in Lake View Estates, sued BCSS, generally asserting that BCSS had violated the sewer-service-rate provision of the 1991 agreement. The associations lost at trial on grounds that they lacked standing to sue to enforce the 1991 agreement. The Supreme Court disagreed, reversed and remanded for further proceedings. View "The Gardens at Glenlakes Property Owners Association, Inc., et al. v. Baldwin County Sewer Service, LLC" on Justia Law