Justia Contracts Opinion Summaries

The Los Angeles Memorial Coliseum Commission and Los Angeles Memorial Coliseum Association alleged that defendants, who promoted and staged music events at the Coliseum and related venues, paid an employee of the Commission for services related to those music events and that such payments were inappropriate and not disclosed to plaintiffs. The trial court dismissed. The court of appeal reversed in part, finding that the plaintiffs adequately stated causes of action under the conflicts of interest prohibition in Government Code section 1090, conspiracy to defraud, violation of the Unfair Competition Law (UCL), and accounting. The court upheld dismissal of claims of violation of the False Claims Act, fraud, and negligence. View "Los Angeles Mem'l Coliseum Comm'n v. Insomniac, Inc." on Justia Law

The School District entered into a construction contract with Amoroso. Pursuant to Public Contract Code 22300, Amoroso elected to have the retention held in an escrow account in the form of securities. The escrow agreement stated that “District shall have the right to draw upon the securities and/or withdraw amounts from the Escrow Account in event of default by Contractor as determined solely by District.” The District gave written notice of material breach on March 30, 2011, based on Amoroso’s failure to complete, timely or at all, any of the three project phases and requested that Amoroso cure by April 4. Amoroso contested the assertions of material breach by letter dated April 1. The District sent notice of termination on April 18 and filed suit. On April 28, the parties entered into an “Exit and Demobilization Agreement,” “in lieu of any final termination or statement of default under the Contract.” The District sent a letter requesting withdrawal of $3.5 million from the escrow account, attaching its attorney’s memorandum as to why withdrawal was permissible. Amoroso unsuccessfully sought an injunction. The court of appeal affirmed, rejecting Amoroso’s claim that a public project owner must await judicial resolution of the underlying contract dispute before it can withdraw retention funds. View "Pittsburg Unified Sch. Dist. v. S.J. Amoroso Constr. Co., Inc." on Justia Law

Cobra was a prequalified vendor of information technology goods and services to the city. In 1999-2000, Cobra submitted invoices based on invoices submitted by its subcontractor, Monarch. Monarch had not performed the work, but was a sham corporation run by Armstrong, then-manager of information technology for a city agency. The city paid the invoices. After uncovering another scheme involving Armstrong and a different vendor, the city received complaints that Cobra had not paid subcontractors for work for which the city had paid Cobra. Cobra did not submit to an audit request. The City Attorney had represented Cobra on matters including city contracts while in private practice. Although he had personally been screened from matters related to Cobra, the court ordered the city to retain independent counsel, but stayed proceedings pending appeal. The California Supreme Court affirmed the disqualification. A jury returned verdicts against Cobra and rejected all counterclaims. The court of appeal held that Cobra waived appeal of its motion to preclude the city from using evidence procured with the participation of the City Attorney; reversed as to intentional misrepresentation, negligent misrepresentation, and violation of the false claims acts; and remanded for a new trial limited to those claims. View "City & Cnty, of San Francisco v. Cobra Solutions, Inc." on Justia Law

Columbus Cheer Company ("CCC") entered into a rental contract for the use of school facilities. Subsequently, CCC was informed that Columbus Municipal School District ("CMSD") would not honor the contract with CCC. CCC filed a complaint against CMSD. The complaint read in part: "[p]laintiff Columbus Cheer Company is a profit corporation licensed to due [sic] business in the state of Mississippi . . . ." The prayer sought judgment for plaintiff (CCC). Defendants filed their motion to dismiss or for summary judgment, asserting that CCC was an administratively dissolved corporation; therefore, CCC could not have entered into a valid contract with CMSD, and CCC did not possess the requisite legal status to initiate suit. The trial court entered an order granting Defendants' motion for summary judgment. CCC appealed, and the issues on appeal were: (1) whether a dissolved corporation could pursue a legal action; and if not, (2) could the corporation's shareholders pursue the same action in their own name? The Supreme Court answered both questions "no."View "Columbus Cheer Company v. City of Columbus" on Justia Law

The Georgia Department of Corrections (GDOC) entered into a construction contract with Lewis Walker Roofing (Walker Roofing) to re-roof several buildings at Valdosta State Prison. The Contract contained two “no assignment” clauses, and as a prerequisite to contracting with GDOC, Walker Roofing was required to obtain payment and performance bonds. It obtained such payment and performance bonds from Developers Surety and Indemnity Company. Walker Roofing did not complete its work within the time frame required by the Contract, and GDOC declared Walker Roofing in default. Developers Surety did not notify GDOC within 25 days of receipt of GDOC's notice of default regarding whether it would remedy the default or perform the contract. However, approximately three months after the declaration of default, Developers Surety gave GDOC the option of entering into a contract with another company for the completion of the work. GDOC then contracted with that company to finish the project. Under the payment and performance bonds and prior to Walker Roofing's default, Developers Surety had provided financial assistance to Walker Roofing. Developers Surety filed suit against GDOC for breach of contract and for a declaratory judgment that it had no obligation under the payment and performance bond it issued to Walker Roofing on behalf of GDOC. GDOC filed a counterclaim for breach of contract. The parties filed cross-motions for summary judgment, and the trial court determined that Developers Surety's claims were not barred by sovereign immunity and that GDOC had breached the construction contract as a matter of law. It concluded that GDOC waived its sovereign immunity by entering into the contract with Walker Roofing, and that the doctrine of equitable subrogation gave Developers Surety the ability to file suit against GDOC once it incurred liability and paid the obligations of its principal under the bond. Consequently, the trial court granted summary judgment to Developers Surety and denied it to GDOC; in the same order, the trial court entered judgment in favor of Developers Surety in the amount equal to the "financial assistance" Developers Surety provided to Walker Roofing. The Supreme Court granted certiorari to the Court of Appeals to consider whether the State’s sovereign immunity was waived for the claim Developers Surety made on its contract with the State. The Supreme Court found that immunity was indeed waived in this instance, and accordingly, it affirmed the judgment of the Court of Appeals. View "Georgia Dept. of Corrections v. Developers Surety & Indemnity Co." on Justia Law

The prior owner of the 300-acre STEW Farm in Pickaway County contracted with Watershed Management for construction of waterways and received a subsidy from the Natural Resources Conservation Service (NRCS), a USDA agency, 7 U.S.C. 6962. Kohli, an employee of the Pickaway County Soil and Water Conservation District supervised by NRCS, designed the waterways, and, after certified that they were designed and constructed properly. NRCS also certified the waterways, which allowed the owner to receive the federal reimbursement. The owner failed to pay Watershed, claiming that there was a ridge at the edge of the grass waterways that prevented proper draining. In 2009, Watershed sued for breach of contract; the owner counterclaimed for breach of contract and breach of warranty. A state court granted summary judgment against the owner for failure to prove damages. The new owner then filed a federal suit. The district court dismissed, reasoning, as to NRCS, that STEW Farm had not identified a separate source of federal substantive law and failed to establish a waiver of sovereign immunity because there are no “clear guidelines” which show that the NRCS actions were not committed to agency discretion. As to Watershed, the court concluded that there was no federal cause of action nor did the state claims implicate significant federal issues. As to PCSWCD, STEW Farm alleged only state-law claims that did not implicate significant federal issues. As to PCSWCD and Kohli, the claims were time barred under Ohio’s two-year statute of limitations. The Seventh Circuit affirmed.View "Stew Farm, Ltd. v. Natural Res. Conservation Serv." on Justia Law

The respondents, two developers and an architectural firm, Stevens & Wilkinson of South Carolina, Inc. (S&W), entered into a Memorandum of Understanding (MOU) with the City of Columbia as part of a larger project team to develop a publicly-funded hotel for the Columbia Metropolitan Convention Center. The City eventually abandoned its plan under the MOU, and the respondents brought suit on several causes of action including breach of contract and equitable relief. The City moved for summary judgment arguing the MOU was not a contract and therefore the contract claims failed. The circuit court agreed and, rejecting the equitable claims as well, granted summary judgment in favor of the City. The respondents appealed and the court of appeals affirmed in part and reversed in part. The Supreme Court reversed. Because the MOU was comprised of agreements to execute further agreements, there was no meeting of the minds on numerous material terms which had not yet been defined. Accordingly, the court of appeals was reversed with respect to that portion of the court's judgment; the Supreme Court held the MOU was unenforceable as a matter of law. The Supreme Court agreed with the circuit court and reinstated its judgment in favor of the City. View "Stevens & Wilkinson of South Carolina, Inc. v. City of Columbia" on Justia Law

In April 2003, the City of Columbia entered into a Memorandum of Understanding (MOU) with Stevens & Wilkinson of South Carolina, Inc. (S&W) and several other parties, to develop a publicly-funded hotel adjacent to the Columbia Metropolitan Convention Center. As architect, S&W was to complete sufficient preliminary design work to determine a guaranteed maximum price for the project, which would be used by the City to obtain municipal bond funding to cover the cost of the hotel. Pursuant to the MOU, the construction company was to pay S&W directly. On June 26, 2003, the City received a letter stating S&W would complete its preliminary design on July 10, 2003, and would then stop working until the bond financing for the hotel was finalized. Realizing this could delay the start of construction, S&W offered to continue working the remaining ninety days until the anticipated bond closing date of October 13, 2003, but required assurance it would be compensated for the work it performed during this time frame. It provided an estimate requiring $650,000 and $75,000 per week after that. On July 30, the City approved "$650,000 for interim architectural design services for a period of 90 days prior to bond closing." The bond closing did not occur as scheduled, but S&W nevertheless continued to work. S&W submitted an invoice to the City for $697,084.79 for work that took place from July 10 to December 15, 2003. By letter dated December 17, 2003, S&W informed the construction company that the City had voted that day "to advance [$705,000.000] to the design team for design services and expenses. Because under the MOU the construction company was to pay S&W, not the City, the construction company agreed to reimburse the City for the funds paid to S&W after the bond closing. The City paid S&W's invoice. S&W continued to work on the project, but in March 2004, the City abandoned its plans under the MOU and ended its relationship with S&W. S&W received no further compensation and sued the City for breach of contract under the MOU and the July 2003 agreement. The City argued there was no separate agreement and the payment of interim fees was merely an advance on fees under the MOU and furthermore, the MOU provided that S&W was to be paid by the construction company, not the City. The trial court granted partial summary judgment in favor of S&W, finding a contract existed between it and the City. On certiorari, the City conceded a contract exists, but argued the contract terms have been satisfied. The Supreme Court found the City's arguments were unpreserved and affirmed as modified. View "Stevens & Wilkinson of South Carolina, Inc. v. City of Columbia" on Justia Law

The Eastern Municipal Water District (EMWD) hired general contractor S.J. and Burkhardt, Inc. (SJB) for a public works construction project in 2006. Safeco Insurance Company (Safeco) executed performance and payment bonds for the project. Plaintiff Golden State Boring & Pipe Jacking, Inc. (GSB) was a subcontractor for the project, completing its work by September 2006, but it did not receive payment. In March 2008, SJB sent a voluntary default letter to Safeco. In July 2008, GSB sued SJB, EMWD, and Safeco for the unpaid amounts under the contract, separately seeking payment from Safeco under its payment bond. EMWD filed a cross-complaint to interplead retained sums. Safeco made a motion for summary judgment on the cause of action for payment under the bond on the ground that GSB’s claim was untimely. The trial court granted the motion, finding that there had been three cessations of labor that triggered GSB’s duty to file a stop notice in order to secure payment under Safeco's payment bond. At a subsequent court trial on the contract claims, GSB was awarded judgment against SJB, and Safeco was awarded judgment on the interpleader action. GSB appealed the summary judgment ruling, arguing: (1) the trial court erroneously overruled its objections to evidentiary matters presented in support of Safeco’s summary judgment; and (2) the court erred in finding the action was untimely. Finding no reversible error, the Court of Appeal affirmed. View "Golden State v. Eastern Municipal Water Dist." on Justia Law

In 1983, Central entered into a contract with the U.S. Bureau of Reclamation for an appropriation of water from the New Melones Reservoir in California’s San Joaquin Valley. Upon enactment of the Central Valley Project Improvement Act (CVPIA) in 1992, Reclamation made statements indicating that it would not be able to meet the quantity commitments in its contracts because of other demands for the water. In 1993, Central sued for breach of contract. After holding that breaches had occurred in certain years, the Federal Circuit reversed and remanded for determination of damages. The district court, on remand, awarded Central $149,950.00 in cost of cover damages, but denied any expectancy damages. The Federal Circuit reversed and remanded. The trial court erred by not properly considering the effect of Reclamation’s announced breaches on the amount of water that Central may have expected to need to meet demand. This caused the trial court to discount Central’s arguments regarding what would have happened in the non-breach world. View "Stockton E. Water Dist. v. United States" on Justia Law