Justia Contracts Opinion Summaries

Plaintiffs Delbert Soseeah, Maxine Soseeah and John Borrego filed this action against defendants Sentry Insurance, Dairyland Insurance Company, Peak Property and Casualty Insurance Company, and Viking Insurance Company of Wisconsin (collectively Sentry) claiming, in part, that Sentry failed to timely and properly notify them and other Sentry automobile insurance policyholders of the impact of two New Mexico Supreme Court decisions regarding the availability of uninsured and underinsured motorist coverage under their respective policies. The complaint alleged that Delbert Soseeah, after being injured in a motor vehicle accident, made a claim for UM/UIM benefits under two policies of automobile insurance issued by Sentry to Mrs. Soseeah. According to the complaint, Mrs. Soseeah “never executed a valid waiver of UM/UIM coverage under the” two policies and, consequently, Mr. Soseeah “demanded that . . . Sentry reform” the two policies “to provide stacked uninsured/underinsured motorist coverage limits equal to the limits of the liability coverage on each of the vehicles covered by the” policies pursuant to the two New Mexico Supreme Court decisions. Sentry purportedly refused to reform the policies and rejected Mr. Soseeah’s claim for UM/UIM benefits. The complaint alleged that Sentry, by doing so, violated New Mexico’s Unfair Practices Act (UPA), violated a portion of New Mexico’s Insurance Code known as the Trade Practices and Frauds Act (TPFA), breached the implied covenant of good faith and fair dealing, and breached the terms of the two policies. The district court granted plaintiffs’ motion for class certification. Sentry subsequently sought and was granted permission to appeal the district court’s class certification ruling. Because plaintiffs failed to establish that all members of the general certified class suffered the common injury required by Rule of Civil Procedure 23(a)(2), the Tenth Circuit concluded that the district court abused its discretion in certifying the general class. Because the district court’s certification ruling did not expressly address the Rule 23 factors as they applied to each of the identified subclasses, the Court did not have enough information to determine whether the district court abused its discretion in certifying two subclasses. Consequently, the Court directed the district court on remand to address these issues. View "Soseeah v. Sentry Insurance" on Justia Law

Mind & Motion Utah Investments, LLC entered into a real estate purchase contract (REPC) with Celtic Bank to buy a piece of property the Bank had acquired from a developer through foreclosure. The prior owner and received approval to construct condominium units on the land but had not recorded the plats for the first phase of development. Mind & Motion agreed to purchase the property, but the REPC required the Bank to record the plats by a certain date and allowed Mind & Motion discretion to extend the recording deadline as necessary to allow the Bank enough time to record. Under the REPC, if Mind & Motion extended the deadline, the deadline to complete the transaction would be automatically extended. Mind & Motion extended the recording deadline once but refused to extend it a second time. Mind & Motion subsequently sued Celtic Bank for breach of contract. The district court granted summary judgment for Mind & Motion, concluding that the recording provision was unambiguously a covenant, not a condition. Celtic Bank appealed, arguing that the recording provision was unambiguously a condition. The Supreme Court affirmed, holding that the recording provision was a covenant, not a condition, and there was no latent ambiguity in the REPC. View "Mind & Motion v. Celtic Bank" on Justia Law

In 2006, CPM Virginia, LLC entered into an agreement with MJM Golf, LLC for the sale of a golf course. In 2013, CPM filed suit against MJM claiming that MJM failed to pay in full the purchase price by the date identified in the promissory note. MJM counterclaimed, alleging that CPM had violated the warranty provisions of the agreement. The trial court concluded that CPM breached the warranty requirements in the contract by failing to place eighteen inches of topsoil on top of fly ash on the property, thus entitling MJM to disregard the promissory note. The trial court canceled the note and awarded MJM $694,357 in damages. The Supreme Court reversed, holding that the warranty provisions in the agreement did not require CPM to cover the fly ash with eighteen inches of topsoil, and therefore, the trial court erred as a matter of law in finding a breach of contract and awarding damages to MJM as a result. Remanded. View "CPM Virginia, LLC v. MJM Golf, LLC" on Justia Law

In 1992, Plaintiff was convicted of a felony drug offense. In 2006, Plaintiff applied to the Fairfax County School Board for a teaching position and disclosed her prior conviction on her application. The Board subsequently hired Plaintiff as a special education teacher. In 2012, the school system’s Assistant Superintendent for Human Resources determined that, pursuant to Va. Code 22.1-296.1(A), Plaintiff’s 2006 hiring had been in error because her conviction made her ineligible for employment by the Board. The Board subsequently filed a complaint seeking a declaratory judgment that section 22.1-296.1(A) made Plaintiff ineligible for hire. The circuit court entered an order declaring that the Board lacked authority to hire Plaintiff under section 22.1-296.1(A). The Supreme Court affirmed, holding that the Board lacked authority to make the contract, and therefore, the contract was void ab initio. View "Butler v. Fairfax County School Board" on Justia Law

David Zerfas swerved to avoid a deer carcass in his lane of travel and lost control of his vehicle. Zerfas died after his vehicle was hit by oncoming traffic. Zerfas’s wife, Stacey, sought uninsured motorist benefits with their automobile insurance company, AMCO Insurance Company, alleging that an unidentified driver left the deer carcass in the lane of travel, which caused Zerfas to lose control of his vehicle. AMCO denied Stacey’s claim on the grounds that Stacey would not legally be entitled to recover damages from the unidentified driver. Stacey subsequently brought a breach of contract action against AMCO. The circuit court granted summary judgment in favor of AMCO, concluding that the unidentified driver did not have a legal duty to Zerfas to remove the carcass or warn of its existence. The Supreme Court affirmed, holding that no common law or statutory duty existed between the unidentified driver and Zerfas, and therefore, the circuit court did not err in granting AMCO summary judgment. View "Zerfas v. AMCO Ins. Co." on Justia Law

Sand Specialties & Aggregates, LLC, and Lampkin Construction Company entered into a contract under which Sand Specialties was to sell certain sand mining equipment to Lampkin Construction. The equipment was delivered, but the full contract price was never paid. Sand Specialities filed suit against Lampkin Construction for replevin and damages. After a trial, the judge entered a directed verdict in favor of Sand Specialities as to ownership of the equipment, and the jury awarded Sand Specialities damages. Lampkin Construction appealed, arguing that the trial court misinterpreted the terms of the sales contract, and that the trial court made several prejudicial errors, including allowing the jury to consider evidence of damages for missing equipment. Finding no reversible errors, the Supreme Court affirmed the judgment against Lampkin. View "Lampkin Construction Co., Inc. v. Sand Specialties & Aggregates, LLC" on Justia Law

Cincinnati Insurance issued a liability policy to Painters, which allowed the insured to add an “additional insured” by oral agreement, if that agreement preceded the occurrence and “a certificate of insurance ... has been issued.” No permission from Cincinnati is required, if the insureds have a relationship consistent with the policy. Painters was hired to paint Vita’s premises and orally agreed to add Vita as an additional insurer. Painters’ worker fell, before there was any written confirmation of the oral agreement, and remains in a coma. In a suit by the insurer, seeking a declaration that Vita was not covered based on a certificate issued to Vita the day after the accident, the court granted summary judgment in favor of Cincinnati. The Seventh Circuit reversed. Summary judgment was premature. The policy is ambiguous. A certificate could be regarded a prerequisite to coverage of the additional insured, but also could be intended merely to memorialize the oral agreement. The policy could also mean that the oral agreement must be memorialized in writing before the insured can file a claim. Oral agreements are valid contracts and the policy is explicit that an oral agreement is sufficient to add an insured. The certificate is not a contract, but “a matter of information only” that “confers no rights upon the certificate holder.” View "Cincinnati Ins. Co. v. Vita Food Prods, Inc." on Justia Law

James Armour’s employment contract with AM General LLC entitled him to payment of a long-term incentive plan (LTIP). When Armour retired, he was to receive a lump sum LTIP payment, but instead he started receiving quarterly installment payments in the form of checks. AM General attempted to make the final installment payment with a subordinate promissory note. Armour rejected the Note and requested full payment. Thereafter, AM General filed a complaint seeking a declaratory judgment that it had not breached the LTIP portion of its agreement with Armour. Armour counterclaimed, asserting that AM General breached the employment agreement by failing to pay Armour the full LTIP payment when it was due and claiming that, by attempting to pay the remaining portion of the LTIP payment with a promissory note, AM General breached the duty of good faith and fair dealing. The trial court entered summary judgment in favor of Armour. The Court of Appeals reversed, finding a genuine issue of material fact with regard to how “payment” could be made under the LTIP provision of the agreement. The Supreme Court granted transfer and affirmed the grant of summary judgment, holding that AM General breached its employment agreement with Armour because the Note did not constitute payment under the employment agreement. View "AM General LLC v. Armour" on Justia Law

In 2000, plaintiff accepted the Gray law firm’s offer of employment as an associate attorney, including a provision requiring both parties to submit all disputes relating to the employment relationship to binding arbitration. In 2005, Gray merged into DLA Piper. In 2006, plaintiff signed a “Confidential Resignation Agreement and General Release of Claims.” DLA agreed to continue to provide insurance and other benefits until August 2006, when his employment would officially terminate. The Termination Agreement is silent concerning dispute resolution. Plaintiff later sued, alleging: breach of the implied covenant of good faith and fair dealing; breach of contract; promissory fraud; and constructive fraud, arguing that the firm had “undervalued” his benefits by computing them based on “artificially reduced salary figures.” DLA sought to compel arbitration. Plaintiff asserted the Termination Agreement constituted a novation, extinguishing the arbitration provision, and that even if the provision had survived, claims involving the benefit plan were not subject to arbitration. The court compelled arbitration. In 2013, the arbitrator determined DLA had breached the Termination Agreement and plaintiff had suffered emotional distress, and awarded $41,000 in contract damages plus interest, $45,000 in emotional distress damages, and $7,535.67 in costs. The court of appeal affirmed confirmation of the award. View "Jenks v. DLA Piper Rudnick Gray Cary" on Justia Law

Petitioner was terminated from her position as the Clerk-Treasurer of the Town of Hurlock two and one-half years after she entered into a written employment agreement with the Mayor-elect. Under the employment agreement, Petitioner was to serve a four-year term. Petitioner brought this action against Respondent, the Town, alleging breach of contract and seeking damages and other relief. The circuit court dismissed the complaint, concluding that the four-year term of employment in the agreement was inconsistent with the Town Charter and therefore ineffective. The Court of Special Appeals affirmed. The Court of Appeals affirmed, holding (1) the language of the Town Charter means that an official like the Clerk-Treasurer is an at-will employee; and (2) the Mayor and Council of Hurlock lacked authority under the Town Charter to enter into an agreement conferring a fixed term of employment in this case. View "Clough v. Mayor & Council of Hurlock" on Justia Law