Justia Contracts Opinion Summaries

Plaintiffs Michael Hirsch, Robyn Hirsch, and Hirsch, LLP, claimed that they lost money invested in securities that were part of a "Ponzi" scheme. In 2002, plaintiffs' accountant, EisnerAmper LLP, referred them to Marc Scudillo, a financial advisor employed by Amper Financial Services, LLC (AFS), for investment planning. Scudillo also served as a representative for Securities America, Inc. (SAI), a separate corporation that served as a broker-dealer handling securities transactions. Plaintiffs hired Scudillo and invested in a portfolio with a conservative investment strategy. Their relationship was not reduced to a written contract. On Scudillo's recommendation, plaintiffs purchased securitized notes from Medical Provider Financial Corporation (Med Cap) totaling $550,000. Plaintiffs signed two applications with SAI for the purchase of the Med Cap notes. Each SAI application contained an arbitration clause requiring disputes to be arbitrated by the Financial Industry Regulatory Authority (FINRA). The issue before the Supreme Court in this appeal was whether it was proper to compel arbitration between a non-signatory and a signatory to a contract containing an arbitration clause on the basis that the parties and claims were sufficiently intertwined to warrant application of equitable estoppel. The Supreme Court held that although traditional contract principles may in certain cases warrant compelling arbitration absent an arbitration clause, the relationship of the parties in this case and the claims in dispute here, viewed alone, was insufficient to warrant application of equitable estoppel to compel arbitration. View "Hirsch v. Amper Financial Services, LLC" on Justia Law

Residential filed suit against Terrace alleging breach of contract when Terrace refused to repurchase loans Residential purchased from Terrace. The court rejected, under Minnesota law, Terrace's argument that the contract provisions at issue were mere conditions precedent; Terrace identified no ambiguity in the language of the contract which would permit the court to look beyond its plain language; even if it were entitled to do so, Terrace presented no support for its claim that litigation conduct was a more revealing source of the contracting parties' intent than the language of the contract itself; the on-demand repurchase provision did not make the contract unenforceable for lack of consideration; the demand repurchase provision does not make the contract unconscionable; Residential did not act in bad faith; Terrace's waiver and prior breach arguments were rejected, as well as Terrace's arguments regarding other specified loans; and the district court did not abuse its discretion in awarding damages to Residential or in its calculation of Residential's attorneys' fees and costs. Accordingly, the court affirmed the judgment. View "Residential Funding Co. v. Terrace Mortgage Co." on Justia Law

In 2004, Sellers entered into a real estate purchase contract with Buyers. A portion of the purchase price was to be financed through a third-party purchase money mortgage by Bank. Another portion of the purchase price was to be provided through seller financing, known as vendor purchase money mortgage. Sellers executed a warranty deed conveying the property to Buyers. Buyers executed a deed of trust naming Bank as beneficiary and a trust deed evidencing Seller financing. Bank's trust deed was subsequently assigned to Wells Fargo Bank. After closing, Buyers defaulted on their obligations to both Bank and Sellers. In 2005, Wells Fargo foreclosed on the property. The property was then ultimately conveyed to Defendant. In 2009, Sellers assigned their interest in the outstanding Sellers trust deed to Plaintiff. Plaintiff recorded a notice of default, stating that it had elected to sell the property to satisfy the amount owing. The district court granted summary judgment for Defendant, concluding that Defendant had taken the property as a bona fide purchaser. The Supreme Court affirmed, holding that Plaintiff, as vendor purchase money mortgagee, may have a superior claim of right, but its claim was barred by the doctrine of laches. View "Insight Assets, Inc. v. Farias" on Justia Law

Whitney Schwan died in an automobile accident after Travis Turner, the driver, lost control of the vehicle. Whitney's parents sued Travis's estate and his parents (the Turners). The Turners had a homeowners policy with State Farm Fire and Casualty Company (State Farm). State Farm filed an action seeking a declaration that it owed no duty to defend or indemnify the Turners under the homeowners policy. Meanwhile, a mediation concluded with a settlement that included assignment of all of the Turners' rights and claims under the homeowners' policy to the Schwans, and the Schwans replaced the Turners in the declaratory action. The district court granted summary judgment to the Schwans on its counterclaim that State Farm had breached its duty to defend the Turners by not retaining separate counsel for the Turners in the underlying action. The Supreme Court reversed, holding that the district court erred by concluding that State Farm had breached its duty to defend under the policy, as State Farm did ensure a full defense was provided to the Turners even though its decisions regarding counsel did not include hiring additional counsel. View "State Farm Fire & Cas. Co. v. Schwan" on Justia Law

Plaintiff, who carried health insurance through New West Health Services (New West), was injured in an automobile accident resulting in medical expenses totaling approximately $120,000. The tortfeasor's insurer paid approximately $100,000 of Plaintiff's medical bills. Plaintiff later filed a complaint against New West alleging individual and class claims, asserting that New West failed to pay approximately $100,000 of her medical expenses because the third party liability carrier had paid the majority of the bills. The district court certified the class complaint. The Supreme Court affirmed, holding that the district court did not abuse its discretion by adopting the class definition proposed by Plaintiff and denying New West's motion to modify the class definition. View "Rolan v. New West Health Servs." on Justia Law

Leonard Landa was the sole managing member of a Montana limited liability corporation. Landa carried commercial general liability insurance through Assurance. After a former employee of Landa's filed a complaint alleging that Landa had committed various torts by inducing him to work for Landa under allegedly false pretenses, Landa tendered defense of the former employee's claim to Assurance. Assurance refused to defend Landa, stating that the complaint's allegations were not covered under Landa's policy. Landa filed a complaint seeking declaratory relief establishing that Assurance had a duty to defend and indemnify Landa and alleging violations of Montana's Unfair Trade Practices Act (UTPA), negligence, and other causes of action. The district court granted summary judgment for Assurance, finding that the complaint's allegations were not covered under Landa's policy and that Assurance was not liable under the UTPA because the denial of coverage was grounded on a legal conclusion. The Supreme Court affirmed, holding that Assurance correctly declined to provide a defense where the former employee's complaint did not allege an "occurrence" and, as a result, did not trigger a duty to defend under the policy. View "Landa v. Assurance Co. of Am." on Justia Law

Novus appealed the district court's refusal to enforce a non-compete clause against a franchisee as part of a preliminary injunction which prohibited the franchisee from using Novus's marks and products in his automotive glass repair business. The court concluded that it lacked appellate jurisdiction over Novus's claim that the district court erred in dismissing defendant's company for lack of personal jurisdiction, and dismissed that part of the appeal. The court also concluded that it did not have appellate jurisdiction over Novus's appeal of the district court's order granting defendant an additional sixty days to file and answer and, therefore, dismissed this part of the appeal. Further, the court concluded that the district court did not abuse its discretion when it determined that Novus failed to show irreparable harm under the particular facts involved in this case. Accordingly, the court affirmed the district court's preliminary injunction order. View "Novus Franchising, Inc. v. Dawson" on Justia Law

At the heart of this case was a dispute between developer, Birchwood Land Company, Inc., and contractor, Ormond Bushey & Sons, Inc. over a construction contract.  The developer sued for breach of contract, claiming mainly that the contractor had removed excavated sand from the construction site without permission.  The contractor counterclaimed for amounts due under the contract. The court found that the contractor breached the contract and granted the developer damages for the lost sand. The unpaid balance owed on the contract was offset by the damages. On appeal, the contractor argued that the court erred in denying its request for interest penalties and attorney's fees as the substantially prevailing party. The developer argued that the court erred in limiting damages for the sand removal, denying its request for punitive damages, granting prejudgment interest on contractor's net recovery, and denying its claim for slander of title. Upon review, the Supreme Court concluded the evidence in the record supported the trial court's judgment in this case and affirmed the outcome. View "Birchwood Land Company, Inc. v. Ormond Bushey & Sons, Inc." on Justia Law

Defendant constructed a home that it sold to its initial purchaser. The initial purchaser, in turn, sold the home to Plaintiffs. Plaintiffs later learned the home's hillside retaining wall and home site had been constructed in a dangerously defective manner. Plaintiffs requested that Defendant cover the cost of repair, but Defendant claimed it was no longer responsible for any construction defects. Plaintiffs then filed an action against Defendant to force Defendant to cover the cost of repair. The trial court dismissed all of the claims, concluding, among other things, that Plaintiffs' negligence claims were barred by Arizona's economic loss doctrine. The court of appeals remanded for resolution of Plaintiffs' various negligence claims, concluding that, because Plaintiffs had no contract with Defendant, the economic loss doctrine did not bar their tort claims. The Supreme Court affirmed, holding that the economic loss doctrine did not bar Plaintiffs' negligence claims to recover damages resulting from the construction defects. Remanded. View "Sullivan v. Pulte Home Corp." on Justia Law

Decedent's ex-wife, Ann, filed a claim against Decedent's estate for compensation for nursing and convalescent services she provided to Decedent before his death. Before Decedent died, he forgave a loan he made to Ann. The trustee of Decedent's trust denied Ann's claim, asserting that the loan forgiveness constituted payment for Ann's services. Ann subsequently filed a petition for allowance of claim, alleging breach of contract and unjust enrichment and seeking payment from Decedent's trust. The trial court ordered that the trust pay Ann $183,538 for services rendered, concluding that Ann was entitled to compensation. The Supreme Court (1) affirmed the trial court's conclusion that the loan forgiveness was not compensation for the services Ann provided to Decedent and that Ann was entitled to compensation for the services she provided to Decedent; but (2) concluded that the trial court erred in calculating the amount of Ann's award. Remanded with instructions to recalculate the award. View "In re Nelson Living Trust" on Justia Law