Justia Contracts Opinion Summaries

Plaintiff entered into a verbal contract with Jerry Morrison for the construction of a log home on her property. Plaintiff entered into a second verbal contract with James Phillips to build the basement walls and a chimney with two fireplaces. Concerned about the number of apparent defects in the construction and excessive costs of the labor and materials, Plaintiff fired Morrison. Plaintiff later filed suit against Morrison and Phillips (together, Defendants), alleging fraud and misrepresentation, breach of contract, and negligence, among other claims. The jury returned a verdict in favor of Plaintiff only with respect to her negligence claim against Morrison. The jury further found that Plaintiff had failed to mitigate her damages and/or was comparatively negligent. The Supreme Court affirmed, holding that the trial court did not err in (1) limiting the time the parties had to present the case to the jury; (2) placing limitations on expert testimony; (3) granting judgment as a matter of law in favor of Phillips; (4) denying Plaintiff’s motion for judgment as a matter of law with respect to her negligence and breach of warranty claims against Morrison; (5) instructing the jury on comparative negligence; (6) instructing the jury on outrageous conduct; and (7) denying Plaintiff’s motion for a new trial. View "Sneberger v. Morrison" on Justia Law

Plaintiffs filed a complaint against 24 Hour Fitness USA, Inc. (24 Hour) stating causes of action for premises liability, general negligence, and loss of consortium. Plaintiffs Etelvina and Pedro Jimenez appealed the grant of summary judgment in favor of 24 Hour. Etelvina sustained a catastrophic injury while using a treadmill at a 24 Hour facility in Sacramento. Etelvina’s expert opined that she fell backwards off of a moving treadmill and sustained severe head injuries when she hit her head on the exposed steel foot of a leg exercise machine that 24 Hour placed approximately three feet ten inches behind the treadmill. 24 Hour filed an answer to the complaint generally denying the allegations and claiming several affirmative defenses, including the defense that plaintiffs’ claims were barred by a liability release. Plaintiffs asserted that 24 Hour was grossly negligent in setting up the treadmill in a manner that violated the manufacturer’s safety instructions. On appeal, plaintiff argued that the trial court erred in granting summary judgment in 24 Hour’s favor because: (1) the liability release was not enforceable against plaintiffs’ claim of gross negligence; (2) the release was obtained by fraud and misrepresentation; and (3) the release only encompasses reasonably foreseeable risks and Etelvina’s injury was not reasonably foreseeable at the time she signed the release. After review, the Court of Appeal agreed with plaintiff's first two contentions. Accordingly, the Court reversed and remanded for further proceedings. View "Jimenez v. 24 Hour Fitness USA, Inc." on Justia Law

In 2005, Plaintiffs purchased property from Seller, and Seller conveyed the property to Plaintiffs by deed. After the sale was finalized but before Plaintiffs were able to move into the property, Plaintiffs experienced significant flooding in the driveway, garage, and basement. The flooding and water-penetration issues persisted over the next several years. In 2010, Plaintiffs experienced extensive flooding of their property. Plaintiffs brought this action against Seller and entities involved in the sale (collectively, Defendants), alleging breach of contract, negligence, and fraud. The superior court granted Defendants’ motions for summary judgment. The Supreme Court affirmed in part and vacated in part, holding (1) the superior court correctly granted summary judgment on Plaintiffs’ contract and negligence claims; but (2) the merger and disclaimer clause contained in the purchase and sales agreement was not drawn with sufficient specificity to bar Plaintiffs’ claim for fraud. Remanded. View "McNulty v. Chip" on Justia Law

Plaintiff purchased a manufactured home from Defendant. The contract between Plaintiff and Defendant included an arbitration clause. Plaintiff later sued Defendant alleging fraud, negligence, breach of contract, and negligent misrepresentation. Defendant filed a motion to dismiss or to stay the court action and to compel arbitration. Plaintiff opposed arbitration, arguing that the arbitration agreement lacked mutuality and was unconscionable on multiple grounds. The trial court overruled Defendant’s motion. The Supreme Court reversed, holding (1) the agreement’s “anti-waiver clause” was unconscionable and invalid, but the anti-waiver provision could be severed; (2) Plaintiff’s remaining objections did not render the contract as a whole unconscionable; and (3) absent the anti-waiver clause, the contract was not unconscionable. View "Eaton v. CMH Homes, Inc." on Justia Law

Allstate Insurance Company petitioned for review of a court of appeals' judgment that reversed the dismissal of a breach of assignment claim brought by Medical Lien Management (MLM). The district court effectively construed MLM's Lien and Security Agreement with a motor vehicle accident victim (upon which the underlying complaint was premised), as failing to assign the victim's right to the proceeds of his personal injury lawsuit against Allstate's insured. The court of appeals found a valid assignment to MLM all rights to the future proceeds from the personal injury claim in an amount equal to the costs of medical services paid for by MLM, as well as a sufficient allegation in the complaint of an enforceable obligation by Allstate to pay the assigned sums to MLM. The Supreme Court reversed, finding that the court of appeals erred in finding the purported assignment in this case. View "Allstate Insurance Co. v. Medical Lien Management, Inc." on Justia Law

Jarrett Smith was injured when his vehicle collided with a truck owned by Modular Building Consultants of West Virginia, Inc. and operated by Billy Joe McLaughlin. Prior to the collision, McLaughlin had arrived at a job site to retrieve a Modular storage container being leased and utilized by Poerio, Inc. Smith filed suit against Modular, alleging negligence. Modular brought a third-party complaint against Poerio, seeking contribution and indemnification pursuant to the lease agreement. Before trial, Modular settled with Smith. Trial as to Modular’s third-party complaint proceeded. A jury found that Poerio did not breach the lease agreement but found that Poerio, Modular, and Smith were all comparatively negligent. The circuit court subsequently entered judgment in Poerio’s favor on its contribution claim. The Supreme Court affirmed, holding (1) the jury’s finding that Poerio was negligent was not inconsistent with its finding that Poerio did not breach the lease agreement; (2) the circuit court erred in ruling that Modular’s contribution claim was extinguished by its good faith settlement with Smith as a matter of law; but (3) the jury’s verdict was neither inconsistent nor impermissibly considered the comparative fault of Smith. View "Modular Building Consultants of W. Va., Inc. v. Poerio, Inc." on Justia Law

Husband and wife (who did not speak English) entered into a written one-year lease, took possession of the apartment, and tendered the security deposit and first month’s rent. Ten days into the lease, they received “an official 30 days notice” of eviction, stating that “[c]onstruction begins June 10,” and that they did not qualify for an unspecified “new program.” Several additional efforts to force the family to move followed; their tender of rent was refused. They purportedly sought legal advice and were told that the landlord could not unilaterally terminate the lease. They reported feeling discriminated against and harassed; they were confused, depressed, and anxious. Demolition began while the family was occupying the apartment. Husband allegedly told wife that he could not tolerate the situation any longer. The following day, he committed suicide in the apartment. Wife sought damages for intentional infliction of emotional distress, wrongful eviction, breach of contract; under the Wrongful Death Act; and under the survival statute. The trial court dismissed the wrongful death and related survival actions, finding that “wrongful death via suicide” is not cognizable in Illinois. The Illinois Supreme Court agreed. Despite an ostensible connection between severe emotional distress and suicide, suicide may result from a complex combination of factors. It is “rare” that suicide would not break the chain of causation and bar a wrongful death action, even where the plaintiff alleges the defendant inflicted severe emotional distress. Husband’s suicide was not a reasonably foreseeable result of defendant’s alleged conduct in breaking the lease and pressuring the family to vacate. View "Turcios v. DeBruler Co." on Justia Law

Cornhusker Casualty Company appealed a district court’s summary-judgment ruling, arguing that the district court incorrectly concluded that Cornhusker was estopped from asserting noncoverage as a defense to the claims of Shari and Steve Skaj. The Skajs cross-appealed the district court’s sua sponte entry of summary judgment against them on their counterclaim for attorneys’ fees. Vincent Rosty filed a cross-appeal too, alleging that the district court erred in granting summary judgment to Cornhusker on some of his tort-based counterclaims. R&R Roofing, Inc. was a Wyoming construction company primarily operated by Randy Rosty and Steven Rosty. R&R purchased a Cornhusker commercial liability policy listing “R&R” and “Randy Rosty” as the named insureds. Vincent, who was an R&R employee at that time, did not appear as a named insured under the Policy. Vincent drove R&R’s dump truck to the Skaj home to deliver roofing supplies. The truck was accidentally knocked into second gear, rolled forward toward Ms. Skaj as she approached, and pinned her against a parked motor home, injuring her. A laboratory test performed later that day detected the presence of marijuana and methamphetamines in Vincent’s bloodstream. The Skajs ultimately sued R&R, Steven, and Vincent, asserting several negligence claims. Counsel retained by Cornhusker to defend against the Skajs’ lawsuit sought and received an extension of “the answer deadline for all defendants.” Communication related to that request indicated that defense counsel at that point “d[id] not know if [she would] be representing all of the defendants.” Defense counsel filed an answer to the Skajs’ complaint on behalf of Steven and R&R only, noting, “I do not represent Vincent Rosty.” In filing its answer, Cornhusker did not attempt to advise Vincent of its decision at that time not to represent him. An entry of default against Vincent issued, and the non-defaulting defendants were dismissed from the litigation. The Skajs sought to recover a judgment as to Vincent. Cornhusker hired separate representation for Vincent who opposed the default-judgment proceedings. The state court issued a default-judgment order assessing a total in damages and costs of $897,344.24 against Vincent. One week after the default-judgment hearing, Cornhusker sent Vincent a letter purporting for the first time to deny coverage on grounds that Vincent was not a named insured to the R&R policy. Cornhusker repeated this ground in its declaratory judgment action in federal district court. Vincent responded by counterclaiming against Cornhusker, asserting various contract and tort theories. The Skajs filed their own counterclaim, seeking a declaration “that Cornhusker [was] required to pay the judgment in the underlying action." All parties filed motions for summary judgment, but the court announced that there would be no trial. It declared that Cornhusker was estopped from denying coverage to Vincent because Cornhusker had represented that it would provide a defense, never reserved its rights, and did not advise Vincent of its decision to deny coverage until more than sixteen months after the entry of default. Cornhusker appealed the district court's judgment. But finding no reversible error, the Tenth Circuit affirmed the court's judgment. View "Cornhusker Casualty Co. v. Skaj" on Justia Law

Coppage Construction Company, Inc. filed a third-party complaint raising a number of contract, tort, and statutory claims against Sanitation District No. 1 (SD1), a public sewer utility serving three Northern Kentucky counties. SD1 moved to dismiss the third-party complaint on the grounds that it was entitled to sovereign immunity. The circuit court converted the motion to dismiss into a motion for summary judgment and granted the motion, concluding that SD1 was entitled to sovereign immunity because SD1’s “parent” entities - the three counties - were immune entities, and SD1 performed a function integral to state government. The Court of Appeals affirmed, describing SD1 as an “arm” of the three counties. The Supreme Court reversed the Court of Appeals and vacated the summary judgment order of the circuit court, holding that SD1 was not entitled to sovereign immunity because it was not created by the state or a county and does not carry out a function integral to state government. View "Coppage Constr. Co., Inc. v. Sanitation Dist. No. 1" on Justia Law

Plaintiff, a crew member aboard a supply vessel that was mud-roped to the Deepwater Horizon and was off-loading drilling mud on the night of the 2010 blowout, filed suit claiming that he sustained physical injuries when the explosion rocked the vessel and threw him against a bulkhead. On appeal, BP challenged the district court's judgment in favor of plaintiff where the district court, over BP's objection, enforced a putative settlement agreement against BP in plaintiff's favor. The court held that the parties formed a binding settlement agreement; the district court correctly excused plaintiff’s failure to sign the release document where BP's refusal to send plaintiff the release excused that failure; but the district court should have held an evidentiary hearing to determine whether plaintiff fraudulently induced BP into entering the settlement agreement. Therefore, the court affirmed the district court’s order in part, but vacated the judgment and remanded for further proceedings. View "Young v. BP" on Justia Law