Justia Contracts Opinion Summaries

Buyers bought a commercial property from Seller. Buyers subsequently filed a complaint against Seller challenging the adequacy of Seller’s disclosures. The circuit court dismissed the action without prejudice to allow the parties to engage in mediation. Because of a dispute between the parties regarding mediation, the mortgage payments were briefly interrupted. Seller subsequently brought a foreclosure action against Buyers. Seller then held a nonjudicial public foreclosure auction at which she purchased the property by submitting the highest bid. After a trial on Buyers’ claims for nondisclosure and misrepresentation, the circuit court ordered judgment in favor of Seller. The court also ordered judgment in favor of Seller and against Buyers on Seller’s counterclaims for breach of the note and mortgage and ejectment. The intermediate court of appeals affirmed. The Supreme Court vacated the judgments of the lower courts, holding (1) Seller’s failure to disclose certain facts regarding the property’s sewer system was actionable under the nondisclosure and misrepresentation causes of action; and (2) Seller’s nonjudicial foreclosure of the property and ejectment of Buyers was wrongful. View "Santiago v. Tanaka" on Justia Law

VTB Bank, a Ukranian bank and company, brought this lawsuit against Development Max, LLC, a Delaware limited liability company, and Navitron Projects Corp., a Panamanian corporation and managing member of Development Max, alleging fraudulent transfer, constructive fraudulent transfer, and unjust enrichment. Development Max and Navitron filed a motion to dismiss on the grounds of forum non conveniens, among other theories. The Court granted the motion with respect to VTB’s claim against Navitron but denied the motion with respect to VTB’s claim against Development Max. On reconsideration, the Court granted, without prejudice, Development Max’s motion to dismiss on grounds of forum non conveniens, holding that Ukraine, as opposed to Delaware, was the proper forum in which to litigate this dispute. View "VTB Bank v. Navitron Projects Corp." on Justia Law

Five multi-employer fringe benefit funds of the Plumbers, Pipe Fitters & Mechanical Equipment Service, Local Union 392, sued to collect delinquent employee fringe benefit contributions from B&B, an Ohio commercial plumbing contractor. The Funds were established for the benefit of contractors’ employees who perform work under a collective bargaining agreement (CBA) negotiated between the Union and the Mechanical Contractors Association as agent for its member employers. During discovery, the Funds were unable to produce a copy of the CBA that was signed by B&B. B&B argued that the Funds had failed to produce proof that B&B’s principal independently signed the CBA, and that B&B had made 10 years of contributions on a voluntary basis. The Sixth Circuit reversed summary judgment in favor of B&B, concluding as a matter of law that B&B entered written agreements setting out its obligation to contribute as required by the Labor Management Relations Act 302(c)(5)(B) and is bound to pay delinquent contributions that are owed to the Funds in accordance with the terms of the CBA and the trust agreements. View "Bd. of Trs. Local 392 v. B&B Mech. Servs." on Justia Law

Plaintiff, individually and as surviving spouse of Arlie Walls, filed suit against Petrohawk alleging claims related to an oil and gas lease. The court concluded that Petrohawk's failure to pay royalties in a timely manner did not substantially defeat the purpose of the contract and therefore does not constitute a material breach of contract; plaintiff waived the breaches with respect to all of the assignments except the Petrohawk-Exxon assignment; the district court did not err in concluding that plaintiff unreasonably withheld consent to the assignment from Petrohawk to Exxon; the language of the lease does not support plaintiff's argument that the lease holds Petrohawk liable for breaches of previous assignees, specifically Alta; and plaintiff is not entitled to statutory penalties because she failed to make factual allegations of Petrohawk's willfulness or bad faith. Accordingly, the court affirmed the district court's judgment. View "Walls v. Petrohawk Properties, LP" on Justia Law

LimoLiner Inc. contracted with Dattco, Inc. to repair a luxury motor coach that LimoLiner owned. LimoLiner later filed this action in Massachusetts state court alleging breach of contract, misrepresentation, negligence, replevin, and violation of 940 C.M.R. 5.05, a Massachusetts regulation. Dattco removed the case to federal district court. The magistrate judge found that Dattco breached the repair contract by failing to do all of the work that LimoLiner had requested. The judge also ruled for Dattco on all of LimoLiner’s other claims, awarding LimoLiner a total of $25,123 in damages. LimoLiner appealed, arguing, among other things, that the magistrate judge erred in ruling that Dattco may not be held liable under 940 C.M.R. 5.05 for certain actions and omissions that occurred on the job. The First Circuit certified a question concerning 940 C.M.R.’s intended scope to the Supreme Judicial Court of Massachusetts and thus did not decide the merits of LimoLiner’s regulatory claims. The Court otherwise affirmed, holding that the magistrate judge did not err in concluding that Dattco did not breach the parties’ oral contract to make the repairs in a timely manner and owed damages only for the loss of use of the vehicle for one limited period of time. View "Limoliner, Inc. v. Dattco, Inc." on Justia Law

In the first appeal, the Supreme Court upheld the Court of Chancery’s finding that SIGA Technologies, Inc. in bad faith breached its contractual obligation to negotiate a license agreement consistent with the parties’ license agreement term sheet, known throughout this litigation as the “LATS.” The Supreme Court also held that where parties have agreed to negotiate in good faith, and would have reached an agreement but for the defendant’s bad faith conduct during the negotiations, the plaintiff could recover contract expectation damages, so long as the plaintiff can prove damages with reasonable certainty. Because the Court of Chancery ruled out expectation damages in its first decision, the case was remanded for consideration of damages to SIGA ("SIGA I”). On remand, the Court of Chancery reevaluated the evidence, and held that PharmAthene, Inc. met its burden of proving with reasonable certainty expectation damages and awarded PharmAthene $113 million. The parties once again appealed to the Supreme Court. SIGA raised two claims of error in this appeal: (1) the Court of Chancery was not free to reconsider its prior holding that lump-sum expectation damages were too speculative; and (2) if reconsideration was permitted, the expectation damages awarded following remand were too speculative. After careful consideration of SIGA’s arguments, the Supreme Court found that the law of the case doctrine did not preclude the Court of Chancery from reconsidering its earlier determination that lump-sum expectation damages were too speculative. The Court also found that the court did not abuse its discretion when it awarded PharmAthene lump-sum expectation damages, and its factual findings supporting its new damages determination were not clearly erroneous. Accordingly, the Court affirmed the judgment of the Court of Chancery. View "SIGA Technologies, Inc. v. PharmAthene" on Justia Law

In January 2010, Kory Clark received a telephone call around 3 a.m. from his brother asking for assistance with his pickup, which was stuck in a snowdrift. According to Clark's deposition, after the brothers were unable to pull the pickup out of the snowdrift, he drove to their grandfather's nearby farm to get a tractor to pull it out. Clark stated that after proceeding a short way down the road, the tractor broke down and he was unable to get over to the shoulder of the road or restart it. He then walked back to the farm to get his pickup and pick up his brother, who took him home and said he would take care of the tractor. Before the tractor was removed from the road, Rita Fred collided with it while driving to work. Fred sued Clark and his grandfather to recover for her injuries. At the time of the accident, Clark's grandfather had a farm liability policy with Farmers Union Mutual Insurance. Farmers Union defended the grandfather in the action brought by Fred, but declined to defend Clark, claiming he was not insured under the policy. Clark sought a declaratory judgment that Farmers Union had a duty to defend or indemnify him. He also sought damages for bad-faith refusal to defend. QBE Americas, Inc., joined as the third-party claims administrator for Farmers Union. Both Farmers Union and QBE moved for summary judgment, which the district court granted. Clark appealed, arguing the district court erred in granting summary judgment and holding he was not entitled to coverage under a farm liability policy. He also argued the district court should not have dismissed his claim for breach of duty to defend. Because the Supreme Court concluded the district court correctly held Clark failed to present evidence sufficient to raise genuine issues of material fact in regard to his claims, it affirmed the judgment. View "Clark v. Farmers Union Mutual Ins." on Justia Law

CMI filed suit against Bancorp, alleging breach of contract after Bancorp refused to cure or repurchase eleven loans. The district court granted summary judgment for CMI on eight of the eleven loans. Determining that Residential Funding Co. v. Terrace Mortg. Co. controls the court's analysis, the court held that the parties’ agreement granted the buyer sole discretion to determine whether a loan was defective and required the seller to repurchase if the buyer made such a determination, and the court should not inquire further by reviewing the validity of that determination. Even if CMI erroneously exercised its sole and exclusive discretion, Bancorp has presented no evidence that CMI exercised its discretion under the agreement in a manner intended to sabotage or evade the spirit of the agreement or to deny Bancorp the expected benefit of its bargain. Accordingly, the court concluded that the district court did not err in granting summary judgment on the Brown, Hansen, Maggio, and Perez loans. The court also concluded that the district court properly awarded CMI the repurchase price for the Brown and Bennett loans, as calculated using the formula set forth in the agreement. Finally, the court concluded that the district court did not err in granting summary judgment on the Curtis, Maggio, and Villares loans and rejected Bancorp's argument that there is a genuine issue of material fact regarding which party's negligent underwriting caused the loans to be defective. Accordingly, the court affirmed the judgment. View "CitiMortgage v. Chicago Bancorp." on Justia Law

Federal Insurance Company appealed a circuit court order denying its motion to compel arbitration of the breach-of-contract claim asserted against it by Kert Reedstrom. In 2008, Reedstrom entered into a written employment agreement with Marshall-Jackson Mental Health Board, Inc., d/b/a Mountain Lakes Behavioral Healthcare ("MLBHC"), to begin serving as its executive director in Guntersville. During the course of Reedstrom's employment with MLBHC, MLBHC held an executive-liability, entity-liability, and employment-practices-liability policy issued by Federal Insurance that generally protected certain MLBHC officers and employees described as "insureds" in the policy from loss for actions committed in the course of their employment with MLBHC. It was undisputed that Reedstrom was an "insured" covered by the Federal Insurance policy. The Federal Insurance policy contained an arbitration provision. A separate endorsement to the Federal Insurance policy further highlighted the arbitration provision and explained that its effect was that any disagreement related to coverage would be resolved by arbitration and not in a court of law. In July 2010, MLBHC terminated Reedstrom's employment and, in December 2010, Reedstrom sued MLBHC alleging that his termination constituted a breach of his employment contract. MLBHC asserted various counterclaims against Reedstrom based on his alleged misconduct while serving as executive director. Thereafter, Reedstrom gave Federal Insurance notice of the claims asserted against him and requested coverage under the terms of the Federal Insurance policy. Federal Insurance ultimately denied his claim and refused to provide him with counsel to defend against MLBHC's claims. A jury returned a verdict awarding Reedstrom $150,000 on his claim against MLBHC and awarding MLBHC $60,000 on its claims against Reedstrom. Consistent with its previous denial of his request for coverage, Federal Insurance refused Reedstrom's request to satisfy the judgment entered against him. Reedstrom sued Federal Insurance, asserting one claim of breach of contract and seeking $72,000 in damages ($60,000 for the judgment entered against him and $12,000 for the attorney fees he incurred in defending those claims). The Supreme Court reversed and remanded, finding that the trial court did not articulate its rationale for denying the motion to compel arbitration. The denial was apparently based on the court's resolving at least one of the arbitrability issues raised by Reedstrom in his favor and against Federal Insurance. However, because the subject arbitration provision delegated to the arbitrators the authority to resolve such issues, the trial court erred by considering the waiver and nonsignatory issues raised by Reedstrom instead of granting the motion to compel arbitration and allowing the arbitrators to resolve those issues. View "Federal Insurance Company v. Reedstrom" on Justia Law

This case arose out of a payment dispute between Coast, a contractor, and United, Coast's subcontractor. On appeal, United challenged the trial court's finding in favor of Coast, arguing that the trial court erred in finding that Coast was not liable for extra payments, as well as for failing to assess penalties and attorney’s fees against Coast for its delay in forwarding the retention payments. The court held that, pursuant to Civil Code section 8814, subdivision (c), a contractor is entitled to withhold a retention payment only when there is a good faith dispute regarding whether the subcontractor is entitled to the full amount of the retention payment. Accordingly, the court reversed the judgment of the trial court as to this issue. On remand, the trial court is directed, pursuant to section 8818, to award United penalties. Consequently, the court reversed the award of attorney fees as to the retention payments and remanded the issue. The court need not reach the merits of the breach of contract claims because United has failed to show that the trial court erred in its determination that United failed to prove damages. Accordingly, the court affirmed in part, reversed in part, and remanded. View "United Riggers & Erectors v. Coast Iron & Steel" on Justia Law