Justia Contracts Opinion Summaries

Plaintiffs filed a civil complaint against The Power Company, Inc. (“TPCI”) and TPCI’s president, Rick Rizzolo. Less than five years after Plaintiffs filed their action, they entered into a settlement agreement with TPCI and Rizzolo providing that Plaintiffs would receive $9 million upon the sale of Crazy Horse Too, which TPCI owned. More than five years after Plaintiffs filed their complaint, TPCI and Rizzolo filed two motions to dismiss Plaintiffs’ action under Nev. R. Civ. P. 41(e) for want of prosecution. The district court denied the motions. After the Crazy Horse Too sold at a foreclosure sale, Plaintiffs filed a third motion to reduce the settlement agreement to judgment. The district court granted the motion. TPCI and Rizzolo appealed. The Supreme Court affirmed, holding (1) Rule 41(e)’s provision requiring dismissal for want of prosecution does not apply to an action in which the parties enter into a binding settlement agreement before Rule 41(e)’s five-year deadline has expires, and therefore, the district court properly denied TPCI and Rizzolo’s motions to dismiss for want of prosecution; and (2) the district court did not err in reducing the parties’ settlement agreement to judgment. View "The Power Co., Inc. v. Henry" on Justia Law

Plaintiff retained Defendant, a law firm, to represent Plaintiff in an action against other parties. After Plaintiff settled the underlying suit, Plaintiff filed a breach of contract action against Defendant, alleging that Defendant breached its duty of undivided loyalty and failed to follow Plaintiff’s instructions in the underlying lawsuit. The trial court characterized the allegations against Defendant as sounding in legal malpractice and granted Defendant’s motion for summary judgment on the ground that Plaintiff’s claim was barred by the statute of limitations applicable to legal malpractice claims. At issue on appeal was whether Plaintiff’s cause of action was one for malpractice, to which a three-year statute of limitation applied, or contract, to which a six-year statute of limitations applied. The appellate court affirmed. The Supreme Court affirmed, holding that the trial court correctly characterized Plaintiff’s claim as sounding in legal malpractice. View "Meyers v. Livingston, Adler, Pulda, Meiklejohn & Kelly, P.C." on Justia Law

In 2003, a joint venture formed between llcs, TABFG and NT Prop, to trade securities. TABFG was responsible for trading and was comprised of three individual traders. NT Prop was to fund the venture, and included two limited liability corporations: NT Financial and Pfeil Commodities. The sole member of Pfeil Commodities was Richard Pfeil, the “money man.” NT Prop was managed by Pfeil’s attorney, and another. NT Prop provided $2 million start-up money and the traders earned profits of $3.4 million. Before forming TABFG, the traders were employees of SIG and were subject to restrictive covenants. The Agreement provided for payment of attorneys’ fees and costs necessary to escape the restriction. The traders sought a declaratory judgment. SIG responded by adding TABFG and NT Prop to the lawsuit, seeking disgorgement of profits. SIG obtained an injunction covering nine months after their departure from SIG, ending the joint venture. The parties failed to agree to a final accounting, but TABFG needed funds for a defense in the SIG lawsuit. Pfeil caused NT Prop to distribute $360,000 to TABFG, $533,023.69 to NT Financial, and $2,742,182.02 to Pfeil Commodities. TABFG sued, alleging that Pfeil, who was not an officer, director or manager of NT Prop, engineered a distribution of the bulk of the joint venture funds to himself and tortiously caused NT Prop to breach its obligations to TABFG under the Agreement. The district court judge agreed and awarded $957,659.68. The Seventh Circuit affirmed. View "TABFG, LLC v. Pfeil" on Justia Law

Jonathan Quinn and his family were residential tenants of Barker & Little, Inc., when Quinn’s daughter was diagnosed with lead poisoning, Quinn sued Barker & Little for the injuries his daughter sustained from the high concentrations of lead in the leased premises. Barker & Little tendered the claim to Farmers Insurance Exchange (Farmers) and Truck Insurance Exchange (Truck). Farmers declined to defend Barker & Little under the applicable insurance policies. After a trial, the circuit court rendered judgment for Quinn. Quinn then asserted standing to bring all claims against Farmers and Truck that otherwise could have been brought by Barker & Little. Farmers and Truck moved for summary judgment on the basis of exclusions in the applicable policies. The circuit court granted the motion, concluding that Farmers had no duty to defend or indemnify Barker & Little in the underlying action. The Supreme Court reversed, holding that genuine issues of material fact existed that precluded summary judgment in this case. View "Quinn v. Farmers Ins. Exch." on Justia Law

An underinsured motorist collided with a city bus driven by Plaintiff. Plaintiff received a net workers’ compensation award of $71,958. Plaintiff also received $25,000 from the tortfeasor’s insurer. Plaintiff carried an underinsured (UM) policy issued by American Family Mutual Insurance Company that provided coverage up to $50,000 per person. Plaintiff submitted a UM claim to American Family, which denied coverage. Plaintiff filed a breach of contract action against American Family, asserting that he was entitled, under the terms of the policy, to $25,000 - the difference between his UM policy limit of $50,000 and the $25,000 he received from the tortfeasor’s insurer. The trial court granted summary judgment for American Family, concluding that the workers’ compensation benefits Plaintiff received operated as a setoff against the policy limit, thus reducing American Family’s liability to zero. The Supreme Court reversed, holding (1) the policy language unambiguously provided for a setoff against the policy limit; but (2) because this particular set-off would reduce the policy limit below the statutory minimum, Plaintiff was entitled to recover the remaining $25,000 from American Family. View "Justice v. Am. Family Ins. Co." on Justia Law

After Plaintiff was rear-ended by an underinsured motorist (UM), Plaintiff requested her $100,000 UM policy limits from State Farm. Plaintiff indicated that her damages were estimated to be $3.5 million because she suffered from reflex sympathetic dystrophy syndrome. State Farm responded that Plaintiff must schedule a compulsory medical examination (CME) pursuant to the terms of the policy. Plaintiff refused to attend a CME and instead filed suit against State Farm. The trial court entered judgment against State Farm for the UM policy limits. The court of appeal affirmed, holding (1) Plaintiff breached the contract when she failed to attend the CME; but (2) State Farm must plead and prove prejudice to avoid liability based on noncompliance with the CME clause, and State Farm failed to meet its burden in this case. The Supreme Court approved of the court of appeal’s decision, holding (1) the forfeiture of benefits under a UM policy will not automatically result upon an insured’s breach of a CME provision unless the insurer pleads and proves actual prejudice as an element of its affirmative defense; and (2) the undisputed facts demonstrate that State Farm was not prejudiced in this case. View "State Farm Mut. Auto. Ins. Co. v. Curran" on Justia Law

Truck Insurance Exchange (TIE) issued an apartment-owners insurance policy to appellant Jeanne Estates Apartments (JEA) that became effective in 1998. In 2006, Farmers Insurance Exchange (FIE) renewed the policy and continued to provide coverage. In 2008 and 2010, JEA became involved in three underlying lawsuits, which involved several appellants. JEA submitted claims for coverage to TIE/FIE in regard to those cases. TIE/FIE filed a complaint requesting that the circuit court declare that they owed no coverage to any person for any of the alleged misconduct which formed the basis of the claims in the underlying lawsuits and that they had no duty to provide a defense to any person or entity who was a defendant in the underlying lawsuits. The circuit court granted summary judgment in favor of TIE/FIE. The Supreme Court affirmed, holding that the apartment-liability contract issued by TIE/FIE did not provide an insured coverage for the type of harm alleged by the plaintiffs in the underlying suit. View "Kolbek v. Truck Ins. Exch." on Justia Law

Bilt Rite Construction and Landscaping, LLC (Bilt Rite) opened a credit account with Larson Lumber Company (Larson) in 2003. Bilt Rite did not make the required payments, and as of 2006, when Bilt Rite had ceased operations, it owed approximately $14,000. That same year, Bilt Rite transferred real property it had purchased to Anita Bartz, who had loaned Rankin or Bilt Rite $45,000. In 2007, Casey Rankin, a partner in Bilt Rite, signed a contract agreeing to pay Larson Bilt Rite’s debt. In 2009 and 2010, Larson Lumber Company (Larson) filed suit against Bilt Rite, Rankin, and Bartz, among others. The district court entered judgment in favor of Larson, holding (1) Rankin and Bilt Rite breached a written contract with Larson; and (2) the transfer of the real property from Bilt Rite to Bartz was fraudulent. The Supreme Court affirmed in part and reversed in part, holding that the district court (1) did not err by denying summary judgment to Defendants; (2) did not err by holding that Rankin and Bilt Rite were jointly and severally liable to Larson; (3) erred by holding that the Bartz loan was made to Rankin personally; and (4) erred by holding that the transfer of the real property to Bartz was a fraudulent transfer. View "Larson Lumber Co. v. Bilt Rite Constr. & Landscaping LLC" on Justia Law

Petitioners entered into a written agreement with Bastian Homes and Lion Enterprises, Inc. (collectively, “Bastian Homes”) for the construction of a new home. The agreement contained an arbitration clause. After a water leak allegedly substantially damaged major portions of the partially-constructed home, Petitioners sued Bastian Homes. Bastian Homes filed a motion to dismiss the complaint, arguing that the arbitration clause in the construction contract required the matter to be submitted to arbitration. Petitioners opposed the motion to dismiss, contending that the arbitration clause in this case was not bargained for and was therefore invalid. The circuit court granted the motion to dismiss. The Supreme Court affirmed in part and reversed in part, holding (1) because the construction contract was properly formed and supported by sufficient consideration, there was no requirement that the arbitration clause be independently “bargained for”; and (2) because the circuit court decided the arbitration clause not unconscionable without the issue being fairly argued by the parties and without any factual development, this issue needed to be remanded for further development of the record. View "Kirby v. Lion Enters., Inc." on Justia Law

On July 28, 2012, Michael Becker was injured when a Ford truck driven by his son, Phillip Becker, struck a light pole. Michael and his wife filed suit against Ford Motor Company. On August 26, 2013, Ford filed an answer claiming that the accident was caused by a person other than Ford. On October 1, 2013, the Beckers filed a motion to join Phillip as a party to whom fault could be apportioned and a motion to file an amended complaint. At issue before the Supreme Court was whether, after a defendant asserts a comparative fault claim against a non-party tortfeasor who was known to the plaintiff when the original suit was filed, Tenn. Code Ann. 20-1-119 permits the plaintiff to amend its complaint to assert a claim directly against the tortfeasor named by the defendant. The Court held (1) application of section 20-1-119 is not restricted to tortfeasors who were unknown to the plaintiff when its original complaint was filed; and (2) therefore, the statute permits a plaintiff to file an amended complaint against the tortfeasor named by the defendant within ninety days after the filing of the answer in which the defendant first asserts a comparative fault claim against the tortfeasor. View "Becker v. Ford Motor Co." on Justia Law