Justia Contracts Opinion Summaries

Roxco, Ltd., was hired as the general contractor for several public-construction projects for the State of Mississippi, including four building projects at the University of Mississippi, Jackson State University, and Alcorn State University. State law requires that a certain percentage of the cost of construction be retained to ensure completion. However, Mississippi Code Section 31-5-15 (Rev. 2010) allows the contractor to access that retainage by depositing with the State other acceptable security. Pursuant to Section 31-5-15, Roxco substituted securities valued at $1,055,000, deposited in a safekeeping account at Trustmark National Bank. Upon being notified of Roxco's default, the State instructed Trustmark to transfer the funds from the treasury bills into the state treasury account. By letter, Roxco directed Trustmark not to transfer the funds from the treasury bills to the State's account. Notwithstanding Roxco's letter, Trustmark deposited the funds into the State's account. Roxco filed suit against Trustmark for breach of contract and conversion. Trustmark argued that Section 31-5-15 permitted the release of the funds in the safekeeping account. A jury found in favor of Roxco and awarded $3,720,000 in damages. Aggrieved, Trustmark appealed. Finding that the trial court should have granted the motion for judgment notwithstanding the verdict, the Supreme Court reversed and remanded for further proceedings.

After Hurricane Katrina hit the Mississippi Gulf Coast in August 2005, W. C. Fore entered into a contract with Harrison County, Mississippi, to remove the large amount of debris that was left behind. The Mississippi State Tax Commission (MSTC) then assessed a fee of $1.00 per ton of debris removed. Fore appealed the assessment to the MSTC Board of Review, claiming that the fee did not apply to emergency waste removal. The Board of Review upheld the assessment. Fore appealed the Board of Review’s decision to the MSTC Full Commission, which also affirmed the assessment. Fore then appealed to the Harrison County Chancery Court, First Judicial District. The chancery court upheld the assessment, and Fore appealed to the Supreme Court. Finding that the MSTC's and chancery court's findings were supported by substantial evidence and that there was no misapprehension of the law, the Supreme Court affirmed.

Noble Energy and other lessees sued in the Court of Federal Claims, alleging that application of the Coastal Zone Management Act, 16 U.S.C. 1451-1464, suspension requests constituted a material breach of their lease agreements to drill for, develop, and produce oil and natural gas on submerged lands off the coast of California. The Court of Federal Claims agreed; on appeal the Federal Circuit affirmed. One year after the Federal Circuit's decision in the breach-of-contract litigation, the Minerals Management Service (MMS), sent a letter to Noble ordering it to plug and abandon Well 320-2 permanently. The district court ruled that the common law doctrine of discharge did not relieve Noble of the regulatory obligation to plug its well permanently, an obligation that the lease did not itself create. Resolution of the dispute depended on what the plugging regulations meant. The court held that it was up to MMS's successor to interpret its regulation in the first instance and to determine whether they apply in situations like Noble's. If they do, the agency must explain why. Therefore, the court vacated the judgment and sent the case back to the district court with instructions to vacate Interior's order and to remand to the Secretary for further proceedings.

In 2009 the fire protection district adopted an ordinance requiring commercial buildings and multi-family residences to have fire alarms equipped with wireless radio technology to send alarm signals directly to the district's central monitoring board. The ordinance provided that the district would contract with one private alarm company to provide and service signaling equipment, displacing several private fire alarm companies that have competed for these customers. The alarm companies sued on claims under the U.S. Constitution, federal antitrust law, and state law. The district court granted summary judgment for the alarm companies on the basis of state law and enjoined the district from implementing the ordinance. The Seventh Circuit affirmed in part, holding that the district has statutory authority to require that commercial and multi-family buildings connect directly to its monitoring board through wireless radio technology. The district does not, however, have authority to displace the entire private market by requiring all customers to buy services and equipment from itself or just one private company.

In this appeal the Supreme Court was asked to determine whether the parties' indemnity agreement clearly and unequivocally indemnified the Snohomish County Public Transportation Benefit Area Corporation (doing business as Community Transit) for losses resulting from its own negligence. Upon review, the Court concluded that the language of the agreement, and in particular language providing that indemnity would not be triggered if losses resulted from the sole negligence of Community Transit, clearly and unequivocally evidenced the parties' intent that the indemnitor, FirstGroup America, Inc. (doing business as First Transit) indemnify Community Transit for losses that resulted from Community Transit's own negligence. The Court reversed the Court of Appeals' decision to the contrary and remanded the case to the trial court for further proceedings.

The Industrial Commission and Slawson Exploration Company appealed a district court judgment that reversed the Commission's assessment of a risk penalty against Gadeco, LLC. The issue in this case arose from a challenge to the validity of an invitation to participate in the cost of drilling a well which resulted in the Commission's assessment of a 200 percent risk penalty. Because the Supreme Court was unable to discern the basis for the Commission's decision, the Court reversed the judgment and remanded the case back to the Commission for the preparation of findings that explain the reasons for its decision.

The Department petitioned for review of a decision of the Authority that adopted a new standard to determine when a negotiated contract provision was an "appropriate arrangement" under 5 U.S.C. 7106(b)(3) and an agency head's disapproval thereof would therefore be set aside. Because the Department failed to move for reconsideration objecting to the Authority's use of the abrogation standard to review the agency head's disapproval of the negotiated agreement, the court dismissed the Department's petition for lack of subject matter jurisdiction pursuant to section 7123(c).

The City of Dillon entered an agreement with the McNeills allowing them to connect to a water main for their domestic water supply. Later, the City granted permission to the McNeills to activate an existing water service to their property. The Conners bought the McNeills' subdivided lot, and the City billed and collected for the water that was furnished to the Conners. The water main subsequently froze solid, leaving the Conners without water service for weeks. The Conners sued the City for breach of contract and negligence. The district court entered summary judgment for the City, concluding (1) there was no implied contract between the Conners and the City, and therefore, the Conners' water use was unlawful; and (2) the negligence claim was barred by City Ordinance 13.04.150, which provides that the City is not liable for claims from interruption of water service resulting from shutting off the water in its mains. The Supreme Court reversed, holding (1) the City had a legal obligation to provide water to the Conners under an implied contract; and (2) section 13.04.150 did not bar the Conners' claims because the City did not decide to shut off the water service.

Plaintiffs-Appellants Randolph Farber, Scott Becker, and Critter Clinic (Farber) alleged that the Manager of the Defendant-Respondent State Insurance Fund (SIF or "the Fund") failed to comply with I.C. 72-915, which provides the means by which the SIF Manager may distribute a dividend to policyholders. The district court determined that the gravamen of Farber's claim implicated the statute and held that the three-year statute of limitation provided by I.C. 5-218(1) barred all claims that accrued prior to July 21, 2003. Farber timely appealed. Upon review, the Supreme Court held that the five-year statute of limitation in I.C. 5-216 applied to Farber's claim. Therefore, the Court reversed the trial court's decision and remanded the case for further proceedings.

James Whealon was employed by the Anaconda School District pursuant to a series of employment contracts. Upon retirement, Whealon filed a formal grievance, asserting that, under the terms of his contract, he was entitled to payment of his health insurance premiums by the District until he reached the age of sixty-five. The District denied his claim. The County Superintendent granted summary judgment to the District, holding that the language of the contract was unambiguous and that Whealon was not entitled to the claimed benefits beyond the date of his retirement. The State Superintendent of Public Instruction reversed and remanded for an evidentiary hearing, holding that the language of the contract was ambiguous. The district court reversed and reinstated the County Superintendent's ruling. The Supreme Court affirmed the district court, holding (1) the district court did not err in holding that a county superintendent has authority to grant summary judgment; and (2) the district court did not err in reinstating summary judgment in favor of the district where the language of the agreement was unambiguous and the District was entitled to judgment.