Justia Contracts Opinion Summaries

Plaintiff filed a legal malpractice action against two attorneys and a law firm (Respondents) alleging that their negligence resulted in failed collateral in securing a promissory note, particularly a defective deed on certain property. Plaintiff then sued a holding company and two individuals to recover the remaining balance due under the note. In the collection action, the circuit court entered a stipulated settlement that extinguished the parties' obligations under the note. In the malpractice action, the circuit court awarded summary judgment to Respondents, concluding that Plaintiff had failed to prove he sustained damages as a result of Respondents' alleged professional negligence because the stipulated settlement extinguished the defective deed upon which Plaintiff based his claim for damages. After the circuit court entered a subsequent nunc pro tunc order in the collection action omitting the language extinguishing the parties' obligations under the note, Plaintiff sought relief from the summary judgment ruling in the legal malpractice action. The circuit court denied relief. The Supreme Court affirmed, holding (1) Plaintiff failed to prove Respondents' alleged professional negligence caused him to sustain any purported damages; and (2) based on the law of judicial estoppel, the circuit court correctly ruled that Plaintiff was not entitled to relief from its earlier summary judgment ruling. View "Burnworth v. George" on Justia Law

Sha'Kayla St. Mary and Veronica Damon became romantically involved and decided to have a child together. The couple subsequently drafted a co-parenting agreement. Using Damon's egg and an anonymous donor's sperm, St. Mary gave birth to a child through in vitro fertilization. After their relationship ended, the parties disputed who had custodial rights over the child. The district court (1) concluded that St. Mary was a mere surrogate and therefore not a parent entitled to any custodial rights; and (2) refused to uphold the parties' co-parenting agreement. The Supreme Court reversed, holding (1) the district court erred in determining that St. Mary was a surrogate lacking any legal rights to parent the child without holding an evidentiary hearing on that issue; and (2) the parties' co-parenting agreement was not void as unlawful or against public policy, and therefore, the district court abused its discretion in deeming the agreement unenforceable. View " St. Mary v. Damon" on Justia Law

Respondent purchased a luxury motor home manufactured by Appellant and took possession of the motor home despite noticing problems with the motor home during inspection. The motor home subsequently experienced significant electrical problems, and Respondent attempted to revoke her acceptance of the motor home from Appellant. Appellant rejected the revocation. Respondent filed suit against Appellant, asserting causes of action for revocation of acceptance under the Uniform Commercial Code, breach of contract, and breach of warranty. The district court found in favor of Respondent and awarded her damages that included the purchase price of the motor home. The Supreme Court affirmed the judgment but reversed the award of attorney fees, holding (1) Respondent was entitled to revoke acceptance of the motor home where privity existed between Respondent and Appellant because Appellant interjected himself into the sales process and had direct dealings with Respondent to ensure completion of the transaction; and (2) the district court did not err in awarding incidental and consequential damages but abused its discretion in awarding attorney fees. View " Newmar Corp. v. McCrary" on Justia Law

Appellant was in the business of extending high-risk loans to customers with poor credit ratings and operated primarily in Louisiana. Appellees, who resided in Arkansas, obtained four loans from Appellant at its location in Louisiana. After Appellees failed to make payments on the loans, Appellant filed in an Arkansas circuit court a notice of default and intention to sell Appellees' home. Appellees asserted the defenses of usury, unconscionability, esoppel, unclean hands, predatory lending practices, and a violation of the Arkansas Deceptive Trade Practices Act. The circuit court found that the loans constituted predatory lending by a foreign corporation not authorized to do business in Arkansas and that the contract between the parties was unconscionable and could not be given full faith and credit. The Supreme Court affirmed, holding (1) the circuit court's findings of unconscionability and predatory lending practices were not clearly erroneous; and (2) court did not err in refusing to enforce the mortgage, as to do so would contravene the public policy of the State of Arkansas. View "Gulfco of La. Inc. v. Brantley" on Justia Law

Defendant Ricardo Maldonado owned a business purchasing homes from financially distressed owners, negotiating with lenders, and repairing and selling the homes. Anthony D'Agostino saw an advertisement for Maldonado's company and contacted Maldonado in 2008, at which time the estimated fair market value of plaintiffs' property was $480,000. The parties verbally agreed that plaintiffs would pay Maldonado, and he would repair the property and bring the mortgage current using rental payments. The documents Maldonado prepared and plaintiffs signed created a trust naming Maldonado the sole trustee. An option allowed plaintiffs to recover title by paying Maldonado $400,000 within one year. In March 2008, plaintiffs executed a quitclaim deed transferring full interest in the property to Maldonado. The deed stated that Maldonado paid $360,000 for the interest, though he actually paid nothing. Over the following months, Maldonado spent his own money on mortgage payments, outstanding taxes, and repairs. Anthony D'Agostino later offered $40,000 to regain title. Maldonado declined, informing plaintiffs they could repurchase the property for $400,000. Plaintiffs filed a complaint, alleging a violation of the CFA. The trial court found that plaintiffs had sustained their burden with respect to the CFA violation since the transaction was based on misleading documents that gave rise to an "unconscionable commercial practice." The trial court voided the conveyance to Maldonado, restored title to plaintiffs, awarded treble damages and attorneys' fees. The parties appealed, and the Appellate Division remanded only for a recalculation of plaintiffs' damages. After its review, the Supreme Court concluded that the trial court correctly found Maldonado's execution of the transactions at issue gave rise to an unconscionable commercial practice, and that that the trial court did not abuse its discretion in its calculation and subsequent awarding of damages. View "D'Agostino v. Maldonado" on Justia Law

This case stemmed from the Deepwater Horizon drilling platform oil spill. On appeal, BP challenged the district court's decision upholding the Claims Administrator's interpretation of the settlement agreement between it and the class of parties injured in the oil spill and the district court's dismissal of its action for breach of contract against the Administrator and denial of its motion for a preliminary injunction. The court concluded that the balance of equities favored a tailored stay where those who experienced actual injury traceable to loss from the Deepwater Horizon accident continued to receive recovery but those who did not receive their payments until this case was fully heard and decided through the judicial process weighed in favor of BP. Accordingly, the court reversed the denial of the preliminary injunction and instructed the district court to expeditiously craft a narrowly-tailored injunction that allowed the time necessary for deliberate reconsideration of significant issues on remand. The court affirmed the district court's dismissal of BP's suit against the Claim Administrator. View "In Re: Deepwater Horizon" on Justia Law

Terry Willis purchased a tract of property with funds that were apparently the proceeds from illegal drug sales. After Willis failed to make a payment, David Ferterrer contributed approximately half of the late payment. Willis was later sentenced to life imprisonment for drug-related crimes, which left him unable to pay for the property as the contract for deed contemplated. The parties agreed that Ferterrer would be responsible for completing the payments to purchase the property. Ferterrer also removed funds from Willis's checking account to prevent federal authorities from seizing those funds. Armed with a notarized agreement allegedly from Willis to sell the property to Ferterrer (the Deed), Ferterrer obtained a loan to purchase the property. Willis subsequently filed an action challenging Ferterrer's ownership of the property, also alleging that Ferterrer had converted the funds from Willis's bank account. The district court affirmed the validity of the Deed and concluded that Fertterer had not converted any funds belonging to Willis. The Supreme Court affirmed, holding (1) substantial evidence supported the district court's findings of fact; and (2) the district court properly determined that Willis failed to prove that Fertterer had converted funds from Willis's bank account. View "Willis v. Fertterer" on Justia Law

The 19th-century steamship S.S. Central America, the “Ship of Gold,” sank in the Atlantic Ocean in 1857, taking many tons of gold with her. The wreckage was discovered more than 130 years later by explorers led by Thompson, in one of the most significant finds in maritime history. Thompson is a fugitive from the law. Those who assisted Thompson in locating the wreckage signed non-disclosure agreements in exchange for a percentage of the net recovery, but none have received payment. In their suit, Thompson’s business entities asserted a two-year statute of limitations for actions in salvage and three counterclaims. The district court rejected the time-bar argument and granted summary judgment against all counterclaims. While an interlocutory appeal was pending, the district court granted prejudgment attachment and an injunction against one of the entities and Thompson, forbidding them from divesting certain assets. The Sixth Circuit agreed that the time bar does not apply, affirmed summary judgment against the counterclaims for failure to raise an issue of fact material to the disposition of the case, and upheld the injunction. View "Williamson v. Recovery Ltd. P'ship" on Justia Law

State Farm Fire and Casualty Company appealed an adverse judgment entered on a jury verdict in in favor of homeowner and policyholder Shawn Brechbill on his claim of "abnormal" bad-faith failure to investigate an insurance claim. "A bad-faith-refusal-to-investigate claim cannot survive where the trial court has expressly found as a matter of law that the insurer had a reasonably legitimate or arguable reason for refusing to pay the claim at the time the claim was denied. Because State Farm repeatedly reviewed and reevaluated its own investigative facts as well as those provided by Brechbill, it is not liable for a tortious failure to investigate." The Supreme Court reversed the trial court's judgment and remanded the case for further proceedings. View "State Farm Fire and Casualty Company v. Brechbill " on Justia Law

Respondents in this case included Kaiser Foundation Health and Kaiser Foundation Hospitals (collectively, Kaiser). Michael Siopes, a public school teacher, enrolled in a Kaiser health plan offered through the Hawaii Employer-Union Health Benefits Trust Fund (EUTF). Michael was later diagnosed with cancer by a Kaiser medical professional. Michael and his wife, Lacey, subsequently consulted a medical team at Duke University Medical Center. The Duke team determined that Kaiser's diagnosis was erroneous and recommended a different treatment plan. Michael received treatment at Duke that was ultimately successful. Kaiser denied Michael's request for coverage. Michael and Lacey sued Kaiser for, among other things, breach of contract and medical malpractice. Kaiser filed a motion to compel arbitration, arguing that a group agreement entered into Kaiser and the EUTF was applicable to Michael when he signed the enrollment form. The group agreement contained an arbitration provision. The circuit court granted the motion to compel arbitration. The Supreme Court vacated the circuit court's orders, holding (1) the arbitration provision was unenforceable based on the lack of an underlying agreement between Kaiser and Michael to arbitrate; and (2) accordingly, Lacey was also not bound to arbitrate her claims in this case. View "Siopes v. Kaiser Found. Health Plan, Inc." on Justia Law