Justia Contracts Opinion Summaries

In 2007, Plaintiff Chris Snopek proposed working on the concept of a multi-use sports complex to be built on land in Madison. The parties collaborated over the designs and plans for the complex, and entered into a letter of intent. The letter of intent expired, but Snopek alleged that the parties continued to move forward with the project. Years later, Snopek contacted D1 TN, a Tennessee company, with regard to working on the project. Snopek introduced D1 TN to St. Dominic. In late 2011, D1 TN published its collaboration with D1 TN in the building of the facility in Madison, with no mention of Snopek (or his companies, Joshua Properties, LLC and Performance Sports Academy, LLC). Snopek filed suit against St. Dominic, D1 TN, alleging breach of fiduciary duties, misappropriation of trade secrets, tortious interference with prospective advantage, unfair competition, civil conspiracy and usurpation of business opportunity. On interlocutory appeal to the Supreme Court, Snopek argued the trial court erred in dismissing D1 TN for lack of personal jurisdiction. Finding that personal jurisdiction existed over D1 TN, the Supreme Court reversed the trial court’s order. View "Joshua Properties, LLC v. D1 Sports Holdings, LLC" on Justia Law

Following the bankruptcy of BioBased Technologies, LLC, certain members of BioBased (Appellants) brought an action against other members, the members’ lawyers, and the managers of the corporation for fraud, breach of duty to disclose company information, conversion of membership interest, civil conspiracy, and breach of contract. The circuit court granted summary judgment on some claims, dismissed some claims, and found that the remainder of the claims were barred by collateral estoppel and res judicata. The Supreme Court reversed, holding (1) the circuit court erred in granting summary judgment on Appellants’ claims for fraud, breach of duty to disclose company information, and conversion of membership interest claims based on Appellants’ lack of standing, as Appellants had standing to assert their claims; (2) the circuit court erred in granting summary judgment on Appellants’ fraud claim against certain defendants on the basis that Appellants “failed to meet proof with proof” to show that the defendants made false representations of fact; (3) the circuit court erred in dismissing claims for lack of subject-matter jurisdiction; and (4) the circuit court erred in concluding that the bankruptcy proceeding had res judicata or collateral estoppel effect on Appellants’ state-law claims. Remanded. View "Muccio v. Hunt" on Justia Law

IMCC loaned Harbins $60 million to buy Georgia land to construct a shopping center. In addition to a mortgage, IMCC obtained a guaranty from Chivas, providing that if IMCC “forecloses … the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price.” Harbins defaulted; IMCC foreclosed in a nonjudicial proceeding, involving a public auction conducted by the sheriff after public notice. IMCC successfully bid $7 million and filed a petition to confirm the auction. Unless such a petition is granted, a mortgagee who obtains property in a nonjudicial foreclosure cannot obtain a deficiency judgment if the property is worth less than the mortgage balance owed. A Georgia court denied confirmation. Chivas refused to honor the guaranty. A district court in Chicago awarded IMCC $17 million. The Seventh Circuit affirmed, noting that the Georgia statute “is odd by modern standards,” but does not prevent a suit against a guarantor. The agreement guaranteed IMCC the difference between what it paid for the land and the unpaid balance of the loan, even if the land is worth more than what IMCC paid for it. The agreement is lawful under Georgia and Illinois law. View "Inland Mortg. Capital Corp v. Chivas Retail Partners, LLC" on Justia Law

In 1971 Milwaukee County provided its employees with health insurance under an ordinance that stated that the “county shall participate in the payment of monthly premiums” and extended coverage to retirees. In 1993, the ordinance was amended to provide that “[t]he County shall pay the full monthly cost of providing such [health insurance] coverage to retired members” as “part of an employee’s vested benefit contract.” Upon her 1991 retirement, Hussey had paid no co‐payments or deductibles for her health care. Her benefit plan booklet explained that with 15 years of service: “the retiree may participate in the health plan in which he/she is currently enrolled on the same basis as … the active employee group. The County will make the full premium contribution.” Until 2012, the plan coordinated benefits so that expenditures not covered by Medicare were paid in full by the County. In 2012 the County increased deductibles, co‐payments, and co‐insurance charges and modified coordination of benefits so that retirees over age 65 would pay the same deductibles, co‐payments, and co‐insurance charges as active employees. Hussey filed a purported class action, alleging that the failure to provide cost‐free health insurance to retirees constituted an unconstitutional taking of property. The Seventh Circuit agreed with the district court that the County only promised retirees the ability to participate in the same health insurance plan as active employees on a “premium‐free” basis.View "Hussey v. Milwaukee County" on Justia Law

Morrison-Maierle, Inc. (MMI) was hired by two counties to provide engineering services and supervision on a road improvement contract. The counties retained JEM Contracting, Inc. (JEM) to provide the construction services on the project. JEM filed suit against MMI alleging detrimental reliance and fraudulent inducement for promises MMI allegedly made during the job that JEM would be paid for unanticipated costs incurred during pulverization of the old road. The district court granted summary judgment for MMI, concluding that JEM could not prove it had been harmed by MMI’s alleged representations. The Supreme Court affirmed, holding that the district court did not err by (1) concluding that JEM was required to continue performance pending approval of a change order under a certain contract provision, as the provision was not void as against public policy; and (2) granting summary judgment to MMI on the ground that JEM failed to show it was harmed by the representations made by MMI. View "JEM Contracting, Inc. v. Morrison-Maierle, Inc." on Justia Law

This dispute arose out of a complicated bankruptcy proceeding. On appeal, Lender challenged the district court's judgment which, in relevant part, disallowed Lender's claim for a contractual prepayment consideration. Applying Colorado law, a lender was not entitled to a prepayment penalty when the lender chooses to accelerate the note. Absent a clear contractual provision to the contrary or evidence of the borrower's bad faith in defaulting to avoid a penalty, a lender's decision to accelerate acts as a waiver of a prepayment penalty. In this instance, the plain language of the contract plainly provided that no Prepayment Consideration was owed unless there was an actual prepayment, whether voluntary or involuntary. Accordingly, the acceleration of the Note due to GCMM's default by nonpayment under Article 4 did not trigger the obligation to pay the Prepayment Consideration under Article 6. View "Bank of New York Mellon v. GC Merchandise Mart, L.L.C., et al." on Justia Law

THI of New Mexico at Hobbs Center, LLC and THI of New Mexico, LLC (collectively THI) operate a nursing home in Hobbs, New Mexico. When Lillie Mae Patton's husband was admitted into the home, he entered into an arbitration agreement that required the parties to arbitrate any dispute arising out of his care at the home except claims relating to guardianship proceedings, collection or eviction actions by THI, or disputes of less than $2,500. After Mr. Patton died, Mrs. Patton sued THI for negligence and misrepresentation. THI then filed a complaint to compel arbitration of the claims. The district court initially ruled that the arbitration agreement was not unconscionable and ordered arbitration. Under New Mexico law a compulsory-arbitration provision in a contract may be unconscionable, and therefore unenforceable, if it applies only, or primarily, to claims that just one party to the contract is likely to bring. The question before the Tenth Circuit was whether the Federal Arbitration Act (FAA) preempted the state law for contracts governed by the FAA. The Court held that New Mexico law was preempted in this case and the arbitration clause should have been enforced. View "THI of New Mexico at Hobbs v. Patton" on Justia Law

Plaintiff Robert Bonnet is a petroleum landman who conducted business through Bobby Bonnet Land Services. In 2008, Plaintiffs entered into a written contract with the Energy and Minerals Department of the Ute Indian Tribe of the Uintah and Ouray Reservation to serve collectively as an independent contractor and consultant. When the Tribe terminated this contract in 2009, Plaintiffs sued various companies and individuals (but not the Tribe) in federal court, alleging these defendants caused the Tribe to terminate this contract prematurely. Plaintiffs served the Tribe with a non-party subpoena duces tecum requesting documents relevant to their suit. The Tribe moved to quash the subpoena based on the doctrine of tribal sovereign immunity. The district court denied the Tribe's motion, but modified the subpoena to limit or strike requests it deemed overbroad. The Tribe appealed. The issue before the Tenth Circuit was whether a subpoena duces tecum served on a non-party Tribe seeking documents relevant to a civil suit in federal court is itself a "suit" against the Tribe triggering tribal sovereign immunity. Pursuant to the collateral order doctrine, the Court concluded, yes, it is a "suit" against the Tribe. Therefore the Court reversed the district court's denial of the Tribe's motion to quash based on tribal immunity. View "Bonnet v. Ute Indian Tribe" on Justia Law

In 1983 Bitler leased gas stations to Marathon. The Environmental Protection Agency adopted new regulations so that that underground petroleum tanks and pipes at the gas stations had to be removed, upgraded, or replaced, 40 C.F.R. 280.21(a). In 1992 the parties amended the leases to make Marathon “fully responsible for removing” the tanks and pipes, filling holes created by the removal, complying with all environmental laws, “leav[ing] the Premises in a condition reasonably useful for future commercial use,” and “replac[ing] any asphalt, concrete, or other surface, including landscaping.” Marathon agreed to return the Premises “as nearly as possible in the same condition as it was in prior to such remediation work,” and to be responsible “for any and all liability, losses, damages, costs and expenses,” and to continue paying rent. The properties can be restored as gas stations with above‐ground storage tanks, and may be suitable for other commercial outlets. After completion of the work Bitler sued Marathon, alleging breach of contract and “waste.” The Seventh Circuit vacated to waste regarding Michigan properties, with directions to double those damages. The court affirmed dismissal of some of the contract claims. It would not conform to the reasonable expectations of the parties to limit liability for waste or other misconduct by a tenant simply because a lease had to be extended for an indefinite period to allow a response to unforeseen changes. View "Bitler Inv. Venture II v. Marathon Petroleum Co. LP" on Justia Law

Plaintiffs filed a putative collective action under the Fair Labor Standards Act, seeking backpay for time spent donning and doffing pieces of protective gear required by the employer because of hazards at its steel plants. The employer argued that the time, otherwise compensable under the Act, is noncompensable under its collective bargaining agreement with plaintiffs’ union. Under 29 U.S.C. 203(o), parties may collectively bargain over whether “time spent in changing clothes ... at the beginning or end of each workday” must be compensated. The district court granted the employer partial summary judgment. The Seventh Circuit and Supreme Court affirmed, concluding that the protective gear constitutes “clothes,” even if integral and indispensable to the work. Whether one exchanges street clothes for work clothes or simply layers one over the other may be a matter of purely personal choice, and section 203(o) should not be read to allow workers to opt into or out of its coverage at random or at will when another reading is textually permissible. Although safety glasses, earplugs, and a respirator do not fit the interpretation of “clothes,” the relevant question is whether the period at issue can, on the whole, be fairly characterized as “time spent in changing clothes or washing.” In this case, time spent donning and doffing safety glasses and earplugs was minimal. View "Sandifer v. United States Steel Corp." on Justia Law