Justia Contracts Opinion Summaries

Jared Peterka, a neighbor and tenant of John and Irene Janda, assumed the lease of their farmland in 2012. The lease was renewed every three years, and in 2019, a right of first refusal for Peterka to purchase the land was added. In October 2018, the Jandas established a living trust and conveyed the property into it, with their daughters as residuary beneficiaries. In June 2021, the Jandas and Peterka executed an option to purchase the property. Shortly after, guardianship proceedings were initiated, and the Jandas were found incapacitated. The guardians rescinded the option to purchase.Peterka filed a complaint for declaratory judgment to validate the option to purchase. The Defendants counterclaimed, arguing the option was the result of undue influence and that the Jandas lacked capacity. After a four-day bench trial, the District Court of Traill County found the option to purchase was facially valid and not a product of undue influence. However, it ruled the option was voidable under N.D.C.C. § 14-01-02 due to the Jandas' lack of capacity and dismissed Peterka’s complaint.The North Dakota Supreme Court reviewed the case. Peterka argued the district court erred in its findings on capacity. The Supreme Court clarified that the capacity to enter into a contract and the capacity under N.D.C.C. § 14-01-02 are distinct. The court found the district court did not misstate the law and its findings were supported by evidence. The Supreme Court affirmed the district court’s judgment, holding that the option to purchase was voidable under N.D.C.C. § 14-01-02 due to the Jandas being of unsound mind but not entirely without understanding. View "Peterka v. Janda" on Justia Law

Bonnie Campbell, a federal employee, and Michael Campbell, her ex-husband, entered into a divorce property settlement agreement in which Mr. Campbell waived his rights to Ms. Campbell's Thrift Savings Plan (TSP) account. Despite this agreement, Ms. Campbell did not remove Mr. Campbell as the beneficiary of her TSP account before her death. After her death, Mr. Campbell received the balance of the TSP account. The estate of Ms. Campbell (the Estate) sued Mr. Campbell for breach of contract to enforce the terms of the divorce settlement agreement.The Circuit Court for Montgomery County granted summary judgment in favor of the Estate on its breach of contract claim, awarding money damages. The court rejected Mr. Campbell's argument that the Federal Employees’ Retirement System Act of 1986 (FERSA) preempted the Estate's claim. The Appellate Court of Maryland reversed, holding that FERSA preempted the Estate's breach of contract claim.The Supreme Court of Maryland reviewed the case and held that FERSA does not preempt the Estate’s post-distribution breach of contract action. The court found that FERSA’s purposes, which include establishing a federal employee retirement plan and ensuring it is fully funded and financially sound, do not concern plan beneficiaries. The court also noted that FERSA’s provisions elevate the requirements of a qualifying state property settlement agreement over a deceased participant’s designated beneficiary, provided notice is given before payment. The court concluded that a post-distribution suit to enforce contractual obligations in a divorce property settlement agreement does not hinder any governmental interest in administrative convenience or avoiding double payment. The judgment of the Appellate Court was reversed, and the Circuit Court's judgment was affirmed. View "In re Isely" on Justia Law

Michael Jones purchased Series EE federal savings bonds during his marriage to Jeanine Jones, designating her as the pay-on-death beneficiary. Upon their divorce, their divorce settlement agreement (DSA) did not specifically address the savings bonds but included a provision that any marital asset not listed would belong to the party currently in possession. The DSA also required Michael to pay Jeanine $200,000 in installments. After Michael's death, Jeanine redeemed the savings bonds and filed a creditor’s claim against Michael’s Estate for the remaining $100,000 owed under the DSA. The Estate argued that the redemption of the savings bonds satisfied Michael’s financial obligations to Jeanine.The trial court agreed with the Estate, ruling that the savings bonds counted towards Michael’s $200,000 obligation under the DSA and dismissed Jeanine’s claim for reimbursement. Jeanine appealed, and the Appellate Division reversed the trial court’s decision. The appellate court held that the federal regulations governing U.S. savings bonds preempted state law, and Jeanine was the sole owner of the bonds at Michael’s death. Therefore, the value of the redeemed bonds should not be credited towards the Estate’s obligations under the DSA.The Supreme Court of New Jersey reviewed the case and held that preemption was not an issue because N.J.S.A. 3B:3-14 does not conflict with federal regulations governing U.S. savings bonds. The Court found that the DSA did not direct the disposition of the savings bonds, and thus, the bonds should not be credited against Michael’s $200,000 obligation. The Court affirmed the Appellate Division’s judgment as modified, ruling that the Estate must make the remaining payments to Jeanine as required by the DSA. View "In the Matter of the Estate of Jones" on Justia Law

Jennifer and Jesse Smith divorced in 2017 after fifteen years of marriage. Jennifer, a stay-at-home mother, and Jesse, a construction superintendent, entered into a Marital Settlement Agreement requiring Jesse to pay Jennifer spousal support until January 1, 2025. The agreement included a "Review Term" stating that spousal support would be reviewed every two years. In 2018, Jesse unilaterally reduced the spousal support payments and later stopped paying altogether, leading Jennifer to file a breach of contract action.The magistrate judge dismissed Jesse's petition to modify the spousal support due to a non-merger clause, which kept the spousal support provision outside the court's jurisdiction. Jennifer then sought partial summary judgment in district court, arguing that the Review Term was too vague to be enforceable. The district court agreed, striking the Review Term but upholding the rest of the spousal support provision under the agreement's severability clause. The jury found Jesse in breach of the agreement and awarded Jennifer $76,514 in damages, plus attorney fees and costs.The Supreme Court of Idaho reviewed the case and affirmed the district court's judgment. The court held that the Review Term was unenforceable due to its vagueness, indefiniteness, and uncertainty. The court also upheld the district court's application of the severability clause, maintaining the enforceability of the remaining spousal support provision. Jennifer was awarded attorney fees and costs on appeal as the prevailing party. View "Smith v. Smith" on Justia Law

The case involves an ex-wife, Stephanie P. Shilling, attempting to enforce an agreement with her ex-husband, Ebon T. Shilling, regarding the sale of her interest in a property acquired during their marriage. The ex-husband offered to purchase the ex-wife's interest via email, and she accepted the offer. However, the Family Court found that the email exchanges did not result in an enforceable contract because the parties did not adequately manifest their intent to be bound and the exchanges did not contain all material contractual terms.The Family Court of the State of Delaware previously reviewed the case. The court found that there was no enforceable contract between the parties because the email exchanges lacked a meeting of the minds and did not include all material terms. Additionally, the court concluded that signing a formal written agreement was a condition precedent to the contract, and even if there was a contract, the ex-wife acquiesced in the ex-husband's repudiation by continuing to negotiate.The Supreme Court of the State of Delaware reviewed the case and disagreed with the Family Court's findings. The Supreme Court found that the email exchanges did form an enforceable contract as they contained a clear offer and acceptance, and the parties intended to be bound by the terms discussed in the emails. The court also determined that the signing of a formal written agreement was not a condition precedent to the contract. Furthermore, the Supreme Court found that the ex-wife did not acquiesce in the ex-husband's repudiation. Consequently, the Supreme Court reversed the Family Court's judgment and remanded the matter for further proceedings to determine appropriate relief in light of the enforceable contract. View "Shilling v. Shilling" on Justia Law

Christi and August Wohlt owned a company called Echo Systems, Inc., which dealt in cryptocurrencies. Upon dissolving their marriage, they agreed that August would retain all assets of the business, except for some personal electronics that Christi would keep. However, they both forgot that Echo Systems still owned some cryptocurrencies. The issue was whether this oversight made their agreement ambiguous regarding the ownership of these cryptocurrencies.The Delaware Circuit Court dissolved their marriage and incorporated their property settlement agreement. Later, August discovered the forgotten cryptocurrencies and informed Christi. Christi then filed a motion to address the omitted assets and requested the court to divide the cryptocurrencies and increase August’s child support obligation. August moved for partial summary judgment, arguing that the agreement unambiguously awarded him all of Echo Systems’ assets, including the cryptocurrencies. The trial court denied his motion, finding factual issues regarding the parties' knowledge of the cryptocurrencies. After an evidentiary hearing, the court awarded Christi half the value of the cryptocurrencies, concluding the agreement was ambiguous.The Indiana Court of Appeals reversed the trial court’s decision, holding that the property settlement agreement unambiguously awarded the cryptocurrencies to August. The court affirmed the trial court’s rulings on other issues, including attorney and expert fees.The Indiana Supreme Court reviewed the case and agreed with the Court of Appeals that the agreement unambiguously transferred all of Echo Systems’ assets, including the cryptocurrencies, to August. The court emphasized that the term “all” was not ambiguous and that the parties’ agreement intended to settle all their assets with finality. The court reversed the trial court’s denial of August’s motion for partial summary judgment and affirmed the Court of Appeals' decision on the remaining issues. View "Wohlt v. Wohlt" on Justia Law

Jason Bott and Suzanne Bott married in 2008 and have two minor children. In November 2022, Suzanne initiated a divorce action. They entered into a stipulated settlement agreement, and a judgment reflecting the terms was entered in June 2023. Jason was awarded all real estate, including the marital home and a rental property, and was required to pay Suzanne $425,000 in two installments. Shortly after the judgment, Jason asked Suzanne to alter the terms due to financial difficulties. They signed a handwritten document without their attorneys' knowledge, agreeing that Suzanne would retain the marital home and Jason would not have to make the cash payment. Suzanne later rescinded the agreement, moved out, and filed a motion for contempt against Jason for not making the first payment.The District Court of Cavalier County denied Jason's motion to amend the judgment under N.D.R.Civ.P. 60(b)(6), finding that the parties intended to cancel the agreement. The court ordered Jason to make the cash payments as originally stipulated. Jason appealed, arguing the agreement was a valid contract and Suzanne failed to prove its rescission.The North Dakota Supreme Court reviewed the case, focusing on whether the district court abused its discretion in denying Jason's motion. The court noted that Jason did not argue the original stipulation was the result of mistake, duress, menace, fraud, or undue influence, nor did he argue it was unconscionable. The court found that Jason did not demonstrate extraordinary circumstances justifying relief from the judgment. The court affirmed the district court's decision, concluding that Jason failed to show the court acted arbitrarily or unreasonably in denying his motion. View "Bott v. Bott" on Justia Law

Bruce Johnson and Caroline Settino were engaged to be married, with Johnson giving Settino a $70,000 diamond engagement ring and two wedding bands. Johnson also paid for various expenses, including part of Settino's dental implant surgery. However, Johnson ended the engagement after discovering messages on Settino's phone that led him to believe she was unfaithful, although the trial judge found no evidence of an affair. Settino kept the engagement ring and wedding bands, and Johnson did not pay for the second part of Settino's dental procedure.Johnson sued to recover the engagement ring and wedding bands, and Settino counterclaimed for the cost of the dental procedure. The Superior Court judge ruled in favor of Settino, allowing her to keep the engagement ring and one wedding band, and awarded her damages for the dental procedure, including prejudgment interest from the date of Johnson's complaint. The judge found Johnson at fault for ending the engagement based on his mistaken belief of infidelity.The Appeals Court reversed the decision, ruling that Johnson was not at fault and should recover the engagement ring and wedding band. The court also found that prejudgment interest should be calculated from the date of Settino's counterclaim, not Johnson's complaint. The Supreme Judicial Court of Massachusetts granted further appellate review.The Supreme Judicial Court of Massachusetts held that the concept of fault should not determine the return of engagement rings. The court adopted a no-fault approach, requiring the return of the engagement ring and wedding bands to the donor if the marriage does not occur, regardless of fault. The court also affirmed the need to recalculate prejudgment interest from the date of Settino's counterclaim. The judgment was reversed in part and remanded for recalculation of prejudgment interest. View "Johnson v. Settino" on Justia Law

Bijan Boutiques, LLC (Bijan) appealed a summary judgment in favor of Rosamari Isong. Bijan sought to void the property distribution in the marital dissolution judgment between Isong and her former husband, Richard Milam Akubiro, under the Uniform Voidable Transactions Act (UVTA). Bijan argued that the judgment was fraudulent as it awarded Isong the couple’s only U.S. property, making it difficult to enforce a judgment Bijan had against Akubiro without incurring significant expenses to pursue foreign assets.The Superior Court of San Bernardino County ruled that Bijan’s complaint was barred by Family Code section 916, subdivision (a)(2), which protects property received in a marital dissolution from being liable for a spouse’s debt unless the debt was assigned to the receiving spouse. The court found that the marital dissolution judgment was not a product of a negotiated settlement but was adjudicated by the court, thus not subject to the UVTA.The California Court of Appeal, Fourth Appellate District, Division Three, affirmed the lower court’s decision. The appellate court held that Family Code section 916 precludes Bijan from enforcing its judgment against the property awarded to Isong. The court distinguished this case from Mejia v. Reed, which allowed UVTA claims against marital settlement agreements, noting that the dissolution judgment here was court-adjudicated, not a private agreement. The court also rejected Bijan’s arguments that the judgment was obtained by fraud and that the Chino property should not have been subject to division, affirming that the property was presumed to be community property under Family Code section 2581.The appellate court concluded that Bijan could not satisfy its judgment against Akubiro by executing on the property awarded to Isong and affirmed the summary judgment in favor of Isong. View "Bijan Boutiques v. Isong" on Justia Law

Dr. Earl Bostick Sr. and Josie Bostick married in 1970, and Dr. Bostick developed two successful dental practices in South Carolina. In 2009, he sold one practice and continued with the other until the couple separated in 2017, after which he sold the remaining practice for $569,000. The sales contract indicated that $424,140 of this amount was for goodwill and a non-compete agreement. The couple agreed to an equal division of the marital estate but disputed whether the goodwill was personal (nonmarital) or enterprise (marital) property.The Family Court granted the divorce and ruled that the goodwill in Dr. Bostick's practice was personal, thus not subject to division. The court based its decision on the evidence that the goodwill was tied to Dr. Bostick's personal reputation and professional skills. Josie Bostick appealed, and the Court of Appeals reversed the Family Court's decision, determining that the goodwill should be considered enterprise goodwill and thus marital property.The South Carolina Supreme Court reviewed the case and reversed the Court of Appeals' decision, reinstating the Family Court's ruling. The Supreme Court found that the goodwill was indeed personal, as it was closely tied to Dr. Bostick's reputation, community involvement, and professional skills. The Court emphasized that Josie Bostick did not present evidence to prove the goodwill was enterprise in nature. The presence of a non-compete agreement further supported the conclusion that the goodwill was personal. Consequently, the value of the goodwill was excluded from the marital estate, and the Family Court's judgment was reinstated. View "Bostick v. Bostick" on Justia Law