Justia Contracts Opinion Summaries

Gary Birdsall was stopped in traffic on the Bay Bridge when his van was rear-ended by Barton Helfet, resulting in serious injuries to Gary and a loss of consortium claim by his wife, Pamela. The Birdsalls’ attorney sent Helfet’s insurer a settlement demand for the $100,000 policy limit, specifying acceptance required delivery of a standard bodily injury release to be executed by both Gary and Pamela, a settlement check, and proof of policy limits by a set deadline. The insurer responded before the deadline with a letter accepting the offer, a release (which mistakenly listed Pamela as a releasee rather than a releasor), the check, and proof of policy limits. A corrected release was sent after the deadline. The Birdsalls’ attorney rejected the settlement, citing the release’s error and the late correction, and returned the check.The Birdsalls filed suit in the San Francisco County Superior Court. Helfet’s answer included affirmative defenses of settlement and comparative fault for Gary’s failure to wear a seat belt. The Birdsalls moved for summary adjudication on the settlement defense, which the law and motion judge granted. At trial, the assigned judge excluded evidence and jury instructions regarding Gary’s seat belt use. The jury found Helfet negligent, awarded substantial damages to both plaintiffs, and judgment was entered. Helfet’s post-trial motions were denied, and he appealed.The California Court of Appeal, First Appellate District, Division Two, reviewed the case. It held that summary adjudication of the settlement defense was improper because there was a triable issue of material fact regarding mutual consent to the settlement. The court also found error in excluding seat belt evidence and instructions, holding that such evidence is admissible and, under the circumstances, expert testimony was not required. The judgment and amended judgment were reversed, with instructions for a new trial and denial of summary adjudication. View "Birdsall v. Helfet" on Justia Law

After the collapse of a federally chartered credit union in Ohio in 2010, the National Credit Union Administration Board (the Board) was appointed as liquidating agent. The Board sued Eddy Zai, his wife Tina Zai, and related entities to recover tens of millions of dollars allegedly owed to the credit union. The parties settled, with the Zais agreeing to transfer a promissory note to the Board, which would collect $22 million and then transfer the note to Tina Zai. Years later, Tina Zai alleged that the Board breached the settlement by failing to timely transfer the note after collecting the agreed sum. She, along with Stretford, Ltd., filed suit against the Board for breach of contract and unjust enrichment.The United States District Court for the Northern District of Ohio dismissed the case for lack of subject-matter jurisdiction, without reaching the merits of Zai’s claims. The district court reasoned that the Federal Credit Union Act’s jurisdiction-stripping provision barred the court from hearing the case, as Zai had not exhausted administrative remedies with the Board.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed whether the district court had jurisdiction. The Sixth Circuit held that the Federal Credit Union Act’s jurisdiction-stripping and administrative-exhaustion provisions apply only to claims that arise before the Board’s claims-processing deadline. Because Zai’s claim for breach of the settlement agreement arose years after the deadline, she was not required to exhaust administrative remedies, and the jurisdictional bar did not apply. The Sixth Circuit vacated the district court’s dismissal and remanded the case for further proceedings. View "Zai v. National Credit Union Administration Board" on Justia Law

Adriana Ramirez and her family were involved in litigation with third parties, including Harvey Miller and Stockdale Villa Mobile Home Park, where Ramirez was a property manager. After settling employment and unlawful detainer claims, Ramirez alleged that opposing counsel, attorney Sandra McCormack and her law firm, interfered with the settlement by, among other things, disputing the mailing address for settlement checks and failing to ensure the dismissal and sealing of the unlawful detainer action as required by the settlement. Ramirez claimed these actions caused her significant damages and brought several tort and contract-related claims against McCormack and other attorneys involved.The Superior Court of Los Angeles County denied McCormack’s special motion to strike under California’s anti-SLAPP statute. The trial court relied on precedents involving non-attorney defendants and found that the alleged conduct did not constitute protected petitioning activity under the statute. The court did not address the applicability of Thayer v. Kabateck Brown Kellner LLP, which specifically addressed claims against attorneys for litigation-related conduct.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case and reversed the trial court’s order. The appellate court held that McCormack’s actions as opposing counsel—such as negotiating settlements, communicating with other attorneys, and advising clients—were protected petitioning activities under the anti-SLAPP statute. The court found that Ramirez’s claims arose from McCormack’s representation of her clients in litigation, fitting squarely within the statute’s protections as articulated in Thayer. Furthermore, Ramirez failed to present evidence of minimal merit for her claims on appeal, effectively forfeiting the issue. The appellate court remanded the case for the trial court to grant the anti-SLAPP motion and determine the fees and costs Ramirez must pay. View "Ramirez v. McCormack" on Justia Law

The dispute arose when a property owner, after selling his San Diego County home and purchasing property in Trinity County, sought to transfer the base year value of his former property to his new one. In 2009, he sued the Trinity County Board of Supervisors to compel such a transfer under California law. The parties settled in 2012, agreeing that if the County later adopted an ordinance or if a change in law required it, the owner would be entitled to retroactively transfer the base year value. In 2020, after the passage of Proposition 19, which expanded the ability to transfer base year values between counties, the owner requested the transfer from the county assessor, who denied the request.The Superior Court of Trinity County held a bench trial and found in favor of the property owner on his breach of contract claims, ordering the County to specifically perform the settlement agreement and awarding damages. The court rejected the County’s arguments that the agreement was limited to intra-county transfers and that the Board lacked authority to bind the assessor. The court also found that the new law triggered the County’s obligations under the agreement.On appeal, the California Court of Appeal, Third Appellate District, concluded that the Board of Supervisors did not have the authority to direct the county assessor in setting or transferring base year values, as this is a duty assigned by law to the assessor, an elected official independent of the Board’s control. The court held that the 2012 settlement agreement was void and unenforceable because it exceeded the Board’s legal authority. As a result, the judgment on the breach of contract claims was reversed, while the remainder of the judgment was affirmed. The County was awarded its costs on appeal. View "Sceper v. County of Trinity" on Justia Law

A medical device distributor sued a former employee, alleging that he breached a non-compete agreement, his duty of loyalty, and misappropriated trade secrets after joining a competitor. The employee responded with counterclaims and third-party claims. During the litigation, the employee filed for Chapter 7 bankruptcy, which stayed the district court proceedings. In the bankruptcy case, the distributor filed a proof of claim for damages, which the employee did not contest. The bankruptcy court allowed the claim, and the distributor received a partial distribution from the bankruptcy estate. The employee also waived his right to discharge, leaving him potentially liable for the remaining balance.After the bankruptcy case closed, the United States District Court for the District of Vermont lifted the stay. The distributor sought summary judgment for the balance of its allowed claim, arguing that the bankruptcy court’s allowance of its claim should have preclusive effect. Initially, the district court denied this request, finding that using claim preclusion offensively would be unfair. Upon reconsideration, however, the district court reversed itself and granted summary judgment to the distributor for the remaining balance, holding that claim preclusion applied.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court’s grant of summary judgment de novo. The Second Circuit held that, even if claim preclusion could sometimes be used offensively, it could not be applied in this case because it would be unfair to the employee, who had less incentive to contest the claim in bankruptcy. The court vacated the district court’s judgment in favor of the distributor and remanded the case for further proceedings. The main holding is that claim preclusion cannot be used offensively to secure a judgment for the balance of an allowed bankruptcy claim under these circumstances. View "Thermal Surgical, LLC v. Brown" on Justia Law

The dispute centers on a commercial property in Jackson, Mississippi, owned by Retro Metro, LLC. In 2011, the Jackson City Council authorized the mayor to negotiate and execute a lease with Retro Metro for office space in the former Metro Center Mall, with specific limitations on square footage, annual rent, and lease term. The City and Retro Metro executed a written lease in April 2011, and the City occupied the property. Over the years, the lease was the subject of multiple lawsuits between the parties, with the City previously admitting in court filings that it had entered into the lease. In 2023, after the City Council authorized the mayor to terminate the lease and vacate the premises, Retro Metro and its partners filed suit in federal court, alleging breach of contract and other claims.The United States District Court for the Southern District of Mississippi granted summary judgment for the City, finding that the lease was unenforceable under Mississippi’s “minutes rule,” which requires that public board contracts be sufficiently detailed in the board’s official meeting minutes. The court also dismissed all claims against the individual defendants. Retro Metro appealed, challenging only the summary judgment on its breach of contract claim.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo and affirmed the district court’s judgment. The Fifth Circuit held that the lease did not satisfy the minutes rule because the City Council’s minutes did not contain enough detail to establish the parties’ obligations and liabilities without resorting to other evidence. The court further held that judicial estoppel could not override the minutes rule under Mississippi law, and that the City’s failure to raise the minutes rule earlier did not constitute waiver, as the burden to show a valid contract rested with Retro Metro. The district court’s judgment was affirmed. View "Retro Metro v. City of Jackson" on Justia Law

Caterpillar Financial Services Corporation and Venequip Machinery Sales Corporation Miami entered into an inventory loan agreement governed by Tennessee law, under which Venequip Miami could borrow funds by executing promissory notes. Venequip Miami executed six such notes, totaling approximately $4.77 million. The agreement specified that default would occur if Venequip Miami failed to repay principal or interest when due, or if there was a material adverse change in its financial condition. After a related affiliate defaulted on a separate loan in Curaçao, Caterpillar Financial declared an event of default under the inventory loan agreement, accelerated the debt, and demanded repayment. Venequip Miami did not repay, and Caterpillar Financial alleged that the outstanding amount exceeded $10 million.Caterpillar Financial filed a breach of contract suit in the United States District Court for the Southern District of Florida. Venequip Miami moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), arguing that Caterpillar Financial failed to specify which provision of the inventory loan agreement was breached. The district court agreed, finding the complaint insufficient because it did not identify the specific provision breached among several possible events of default, and dismissed the case with prejudice. Caterpillar Financial’s subsequent motion to amend the judgment and file an amended complaint was denied.The United States Court of Appeals for the Eleventh Circuit reviewed the dismissal de novo. The court held that under federal pleading standards, a breach of contract plaintiff is not required to identify the specific contractual provision breached, but must plausibly allege nonperformance. The court found that Caterpillar Financial’s complaint sufficiently alleged the existence of a contract, nonperformance by Venequip Miami, and resulting damages. The Eleventh Circuit reversed the district court’s judgment and remanded the case for further proceedings. View "Caterpillar Financial Services Corp. v. Venequip Machinery Sales Corp." on Justia Law

Talisker Finance, LLC and its affiliates defaulted on a $150 million loan secured by real property, which they had borrowed to develop parcels in Utah. After several loan modifications and assignments, the lenders—Wells Fargo Bank, N.A. and Midtown Acquisitions L.P.—foreclosed on the collateral and purchased it at two sheriff’s sales, where they were the only bidders. The sale proceeds did not satisfy the debt, and the lenders continued to pursue the deficiency. Later, Talisker discovered information suggesting that the lenders, in coordination with a court-appointed receiver, may have taken actions to depress the sale price, including deterring potential bidders and bundling properties in a way that made them less attractive.Talisker filed suit in the Third District Court, Summit County, seeking equitable relief from the deficiency judgments, alleging that the lenders’ conduct during the foreclosure process violated Utah Rule of Civil Procedure 69B(d) and constituted fraud or grossly inequitable conduct. The lenders moved to dismiss, arguing that Talisker had broadly waived any rights or defenses related to the foreclosure process in the loan documents. The district court accepted Talisker’s factual allegations as true for purposes of the motion but concluded that the waivers were enforceable and covered the rights Talisker sought to assert, including those under Rule 69B(d). The court found no unlawful irregularity in the sales and dismissed the complaint.On direct appeal, the Supreme Court of the State of Utah affirmed the district court’s dismissal. The court held that Talisker’s broad and explicit waivers in the loan documents encompassed all rights and defenses related to the foreclosure sales, including the right to challenge the method of sale or seek equitable relief based on alleged unfairness or irregularities. The court concluded that, regardless of the alleged conduct, Talisker had contractually relinquished any basis for relief. View "TALISKER PARTNERSHIP v. MIDTOWN ACQUISITIONS" on Justia Law

In this case, the appellant hired the appellee, an attorney, in 2017 to represent her in a federal disability discrimination lawsuit against her former employer. The federal district court granted summary judgment to the employer on some claims and dismissed the remaining claim at the appellant’s request in May 2019, closing the case. Over three years later, in June 2022, the appellant filed a lawsuit in the Superior Court of the District of Columbia, alleging legal malpractice and breach of contract, claiming that the attorney’s deficient representation caused her to lose her federal case.The appellee moved to dismiss the complaint, arguing that the claims were barred by the three-year statute of limitations. The Superior Court initially denied the motion, suggesting that COVID-19 tolling orders might have paused the limitations period. However, after the appellant filed an amended complaint and the appellee renewed the motion to dismiss—which the appellant did not oppose—the court reconsidered and dismissed the complaint as untimely. The court found that the COVID-19 tolling orders did not apply because the limitations period did not expire during the relevant emergency period, and that the claims were time-barred under any possible accrual date. The appellant’s motion for reconsideration, based on excusable neglect due to personal issues, was denied.On appeal, the District of Columbia Court of Appeals affirmed the Superior Court’s judgment. The court held that the appellant’s claims were untimely under the applicable statute of limitations, that neither the COVID-19 tolling orders nor claims of excusable neglect, non compos mentis status, or the discovery rule justified tolling the limitations period, and that no extraordinary circumstances warranted relief under Rule 60(b)(1). The judgment of dismissal was affirmed. View "Baskin v. Pitre" on Justia Law

A company specializing in supply chain services, CAM, entered into negotiations with Rockwall, a corrugated packaging manufacturer, to provide warehousing services in Louisiana. The parties discussed terms, exchanged draft contracts, and CAM ultimately leased warehouse space for three years in anticipation of a long-term arrangement. However, neither party ever executed a written contract, and CAM began providing services and invoicing Rockwall monthly. Rockwall paid these invoices for over two years, but later terminated the relationship, citing changes in its business needs.CAM filed suit in the United States District Court for the Western District of Louisiana, alleging breach of contract and detrimental reliance. The district court found that while the parties had an oral agreement for warehousing services, there was no binding contract for a fixed three-year term because both parties intended to be bound only by a written, executed agreement. The court also held that CAM’s detrimental reliance claim failed, as it was unreasonable for CAM to rely on the existence of a three-year contract term when no such term was ever agreed upon, either orally or in writing. The district court granted summary judgment in favor of Rockwall and dismissed CAM’s claims.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s decision. The Fifth Circuit held that under Louisiana Civil Code article 1947, when parties contemplate a written contract, there is a presumption that they do not intend to be bound until the contract is executed in that form. The court found that this presumption was not rebutted by the parties’ conduct, including Rockwall’s payment of monthly invoices. The court also concluded that CAM failed to establish the elements of detrimental reliance, as there was no promise or representation by Rockwall of a fixed contract term. The summary judgment in favor of Rockwall was affirmed. View "CAM Logistics v. Pratt Industries" on Justia Law