Justia Contracts Opinion Summaries

Plaintiff-Appellant Larry Snyder and Company appealed a district court's grant of summary judgment to Defendant-Appellee Clark Miller, which did business as American Underground Utilities. Snyder and Miller entered into a subcontract agreement under which Miller would install utility trenches underneath what would become a parking lot for an apartment complex. Miller performed the work, but once the asphalt for the lot was installed, the trenches settled and the parking lot was damaged. Snyder requested that Miller repair the entire parking lot, but Miller refused, arguing that the subcontract only required it to repair areas of the lot that actually settled. Upon review by the Tenth Circuit, the court affirmed the district court's order that held that the subcontract unambiguously governed the extent of the repair required by Miller. Accordingly, the Court held that no genuine issue of material fact existed regarding Miller's liability for repair work that exceeded the requirements of the subcontract.

This case arose when Robert Morrison, Jr. pleaded guilty to, among other things, four counts of assault and battery on a public employee (the arresting police officer) and the officer consequently brought a civil suit against Morrison for his injuries. Morrison and Metropolitan Property and Casualty Insurance Company (Metropolitan) subsequently applied for direct appellate review on the issue of whether Metropolitan had a duty to defend and indemnify Morrisson in the civil suit. The court held that an exclusion in a liability policy for "intentional and criminal acts" applied where the insured intended to commit the conduct that caused injury and where the conduct was criminal. The court also held that a guilty plea did not negate an insurer's duty to defend, even where the duty to defend would be negated by a criminal conviction after trial, because a guilty plea was not given preclusive effect and was simply evidence that the insured's acts were intentional and criminal. The court further held that one of the consequences of such a breach of its duty to an insured by failing to provide a defense was that, in determining whether the insurer owed a duty to indemnify the insured for the default judgment, the insurer was bound by the factual allegations in the complaint as to liability. The court finally held that, because the judge based her conclusion that Metropolitan had no duty to indemnify in large part on Morrison's guilty pleas and because the judge determined that Metropolitan had no duty to indemnify without first determining whether it owed a duty to defend at the time of the default judgment, the court vacated the declaratory judgment and set aside the allowance of Metropolitan's motion for summary judgment as well as the denial of Morrison's motion for partial summary judgment. Accordingly, the court remanded for further proceedings.

One of the subsidiaries of Annett Holdings was a trucking company that employed Michael Vititoe as a driver. Vititoe was given a Comdata credit card to purchase fuel. Comdata had a written contract with Kum & Go that enabled the Kum & Go truck stop from which Vititoe purchased fuel to handle Comdata transactions. For four years, Vititoe used the Comdata credit card at the Kum & Go truck stop to obtain cash while reporting purchases of fuel. After the fraud was discovered, Vititoe was arrested and convicted of theft. Annett Holdings sued Kum & Go for negligence and breach of contract as an alleged third-party beneficiary of the contract between Kum & Go and Comdata. The district court granted summary judgment to Kum & Go, (1) finding the negligence claim was barred by the economic loss rule; and (2) rejecting the breach of contract claim on the ground that Annett was not an intended beneficiary of the contract. The Supreme Court affirmed, holding the district court did not err in granting summary judgment to Kum & Go on both claims.

This case stemmed from a dispute over the status of a negotiated settlement agreement pertaining to New York City's duty to provide mental health services to certain inmates in its jails. At issue was whether the terms of the agreement expired before plaintiffs filed a motion in Supreme Court seeking to extend the City's obligations. Applying the state's traditional principles of contract interpretation, the court held that plaintiffs sought relief prior to termination of the settlement agreement and their motion was therefore timely filed.

Barbara Roberts sued Steve Lanier and his firm Steve Lanier, PC, and Rodney Stallings and his firm Coggin & Stallings, LLC. In 2006, Ms. Roberts was arrested on murder charges and sent to the Cherokee County jail. She contacted Attorney Lanier, who then met with her and agreed to represent her in her criminal proceedings. The contract between them provided that Ms. Roberts would pay a "nonrefundable retainer" of $50,000. At that time, Ms. Roberts executed a power-of-attorney authorizing Mr. Lanier to withdraw the retainer from her bank accounts. Ms. Roberts testified at trial that she first learned that Mr. Lanier was not licensed to practice law in Alabama when she appeared for her first hearing at the district court. It was then that she was introduced to Mr. Stallings, who "associated" on her case. Seeing no need for two lawyers, she tried to terminate Mr. Lanier's representation. Mr. Stallings eventually managed Ms. Roberts' case, having all her mail sent to his office so that he could "oversee every aspect" of her personal life, including payment of all outstanding bills and expenses. Ms. Roberts alleged that instead of using her money for the purposes she intended, Mr. Stallings misappropriated approximately $100,000 of her funds. Ms. Roberts was eventually convicted of capital murder and sentenced to life without parole. She later learned that the "nonrefundable retainer" language in her contract with Mr. Lanier was unenforceable under Alabama law, and sued her former lawyers for legal malpractice. The circuit court granted summary judgment to the lawyers. Upon review, the Supreme Court reversed the circuit court's grant of summary judgment in favor of the lawyers only with respect to employment contract and the "nonrefundable retainer" and the misappropriation of Ms. Roberts' money for expenses while she awaited trial. The Court remanded the case for further proceedings.

Plaintiffs Michael Ashby and Randy O'Brien, inmates at the state department of correction, asserted professional malpractice complaints against attorney C. Bruce Davidson to The Bar Plan Mutual Insurance Company, Davidson's professional liability carrier. Bar Plan then intervened in consolidated actions for damages filed on behalf of plaintiffs against Davidson, asserting a cross-claim that it was not obligated to indemnify Davidson for the claims of plaintiffs because Davidson had failed to notify Bar Plan of any claims against him pursuant to Bar Plan's policy. The trial court granted summary judgment to Bar Plan. The Supreme Court held that Davidson's failure to comply with Bar Plan's policy was not dispositive because plaintiffs opposed summary judgment on grounds of waiver and estoppel. The Court then reversed summary judgment, holding that genuine issues of fact remained regarding whether Bar Plan's misrepresentation of valid coverage resulted in plaintiffs sustaining actual detriment. Remanded.