Justia Contracts Opinion Summaries

The Stockmans entered into an extension of their mineral lease with Chesapeake Louisiana, L.P. and received a $240,000 bonus. In May 2008, the Stockmans entered into a mineral lease with Petrohawk Properties, L.P. for a $1.45 million bonus. Petrohawk then dishonored the draft and executed a second mineral lease with the Stockmans, paying them a $1.7 million bonus. Chesapeake sued the Stockmans for breach of contract, and the parties settled at trial. The Stockmans then sued Petrohawk for fraud in obtaining the first mineral lease, and Chespeake sued Petrohawk for intentional interference with its contract with the Stockmans. The district court (1) found that Petrohawk procured the first mineral lease by fraud and rescinded the lease, (2) dismissed Chesapeake's tort claim, and (3) dismissed Petrohawk's claim for a return of its bonus money. The Fifth Circuit Court of Appeals affirmed, holding (1) Petrohawk obtained the first lease by fraud, and the district court did not err in rescinding the lease, awarding attorney's fees to the Stockmans; (2) the district court did not err in dismissing Petrohawk's counterclaim for the return of the lease bonus; and (3) the district court correctly dismissed Chespeake's intentional interference with a contract claim.

South Carolina Farm Bureau Mutual Insurance Co. (Farm Bureau) brought a declaratory judgment action to determine whether Henry Kennedy was entitled to underinsured motorist (UIM) coverage for an accident. The trial court found Kennedy was entitled to UIM coverage under the terms of the policy because Kennedy was "upon" and thus "occupying" the insured vehicle at the time of the accident. The Court of Appeals reversed. The Supreme Court granted Kennedy's petition for a writ of certiorari to review the appellate court's decision. Initially, the Supreme Court concluded that the trial court's finding of actual physical contact was supported by the evidence. The trial court found Kennedy had left the engine running on his employer's vehicle; that he was in physical contact with the covered vehicle (with his hand on the truck) when the other vehicle careened towards him, forcing him to relinquish his contact in order to attempt to avoid injury; that Kennedy was "upon" and "occupying" the vehicle at the time of the accident; and he was entitled to UIM coverage under the Farm Bureau policy. Moreover, a second, resultant physical contact was established when Kennedy was pinned against the insured vehicle. The Supreme Court concluded that a requirement that an insured remain in physical contact with the insured vehicle in the face of imminent danger was unreasonable and unconscionable. Consequently, the Court reversed the decision of the Court of Appeals.

This case arose from a dispute regarding the sewer system serving Sunnyside Industrial Park, LLC. Sunnyside Park Utilities (SPU) provides water and sewer services to the industrial park and Doyle Beck and Kirk Woolf are, respectively, the Secretary and President of SPU. Printcraft Press, Inc. (Printcraft) is a printing business that occupies a building in the industrial park. In 2004, Printcraft entered a ten-year lease for property in the industrial park. The dispute in this case centered on the failure of Beck, Woolf, and SPU to disclose limitations on the sewage system, including the amount of sewage the system could handle and its lack of suitability to dispose of some chemicals used in the printing business. After Printcraft started using the sewage system, SPU disconnected Printcraft from the system in December 2006. Printcraft sued SPU, Beck, and Woolf (collectively, defendants) for breach of contract, fraudulent nondisclosure, and fraud. At trial, the jury found that the defendants owed Printcraft a duty to disclose the limitations of the system and failed to do so. The trial court denied the defendants' motion for judgment notwithstanding the verdict (JNOV) and entered judgment in favor of Printcraft. Defendants timely appealed and Printcraft cross-appealed. However, in 2009, SPU filed a renewed motion for relief from judgment under Idaho Rule of Civil Procedure 60(b), asserting newly discovered evidence regarding whether Printcraft's damages claim was affected by its subsequent connection to the Idaho Falls city sewer system. The district court found that the newly discovered evidence satisfied the requirements of I.R.C.P. 60(b) and granted a new trial on the issue of damages. On appeal, the defendants argued that they had no duty to disclose, that any failure to disclose did not lead Printcraft to believe any fact that was false, that the refusal to give SPU's requested jury instructions was improper, and that the district court erred in denying their motion for JNOV because there was not sufficient evidence to support the jury's determination of damages. In turn, Printcraft's cross-appeal argued that the district court erred in limiting the potential bases for defendants' duty to disclose, that Printcraft's breach of contract claim was improperly dismissed, that the subsequent Rule 60(b) motion was improperly granted, that the issue of punitive damages should have been submitted to the jury, and that the judge erred in denying Printcraft's request for attorney fees. Upon review, the Supreme Court reversed the district court's grant of SPU's motion under 60(b)(2). The Court affirmed the denial of defendants' motion for JNOV as to the existence and breach of a duty to disclose and as to the amount of damages. The Court found that the district court did not abuse its discretion in excluding the jury instructions. And the Court affirmed the district court's decision to deny Printcraft's request to put the question of punitive damages to the jury.

Plaintiff, Pervasive Software Inc., a Delaware corporation having its principal office in Austin, Texas, sued Defendant, Lexware GmbH & Co. Kg, a corporation organized under the laws of the Federal Republic of Germany, for damages and injunctive relief on the basis of breach of contract, quantum meruit, unjust enrichment, and conversion in a Texas state court. Lexware removed the case to the federal district court, and that court, in response to Lexware's motion, dismissed the case for lack of personal jurisdiction over Lexware. Pervasive appealed. The Fifth Circuit Court of Appeals affirmed, concluding that Pervasive had failed to establish a prima facie case that Lexware minimum contacts with Texas to support the exercise of either specific or general personal jurisdiction over Lexware.

Appellant was injured in a car accident. The other car in the accident was owned by Amanda Salgado, a superintendent of a church (the Church), and driven by Michael Meyer, a member of the Church. The accident occurred while Meyer and other Church members were taking a lunch break from cleaning and repairing Church property. Appellant sued the Church, Salgado, and Meyer in state court. The Church's insurer (Insurer) then sought a declaratory judgment in federal court resolving whether its insurance policy covered Appellant's accident. The district court held that Insurer had no duty to defend the Church and Salgado. The Fifth Circuit Court of Appeals vacated the district court's judgment, holding that the district court (1) erroneously held that Insurer had no duty to defend the Church and Salgado, (2) improperly adjudicated the scope of Insurer's duty to indemnify, and (3) improperly asserted jurisdiction over Appellant's state-law claims. Additionally, the Court held (1) Insurer had a duty to defend the Church and Salgado in Appellant's underlying state lawsuit, and (2) the scope of Insurer's duty to indemnify could not be adjudicated until after Appellant's claims are decided in state court.

This case involved a wire transfer from Plaintiff's bank account to Defendant's wife. Plaintiff claimed that Defendant, a former employee of Plaintiff, initiated the transfer unlawfully. Defendant moved for summary judgment, offering evidence of another explanation for the transfer. Plaintiff did not offer any evidence in response, and the district court entered summary judgment for Defendant. At issue on appeal was whether Defendant made the initial showing required by Fed. R. Civ. P. 56 that there was no genuine issue of material fact and that he was entitled to judgment as a matter of law, thereby shifting the burden to Plaintiff to present affirmative evidence showing that a genuine issue of material fact existed. The Eighth Circuit Court of Appeals affirmed, holding that Defendant made the required showing.

Petitioner Mark Fountain brought this action for defamation based on a statement by Thomas C. Ewart, chief banking officer for Respondent First Reliance Bank, as to why the bank would not make a loan on a business venture between Fountain and Ernest Pennell. With at least some of Fountain's financial background known to Pennell, Fountain and Pennell approached First Reliance to request funds after two other lending institutions denied their loan requests. At this point in time, Ewart called Pennell in for a meeting to discuss the matter. Fountain was not present. At that meeting, Ewart stated that First Reliance would not be making the loan if Fountain was involved in the business. Pennell subsequently relayed Ewart's statement to Fountain, and told him to "tear up" the agreement between the two of them. Fountain later requested Pennell to meet him at his lawyer's office, where Pennell repeated the statement in front of Fountain's attorney. Fountain filed a complaint against First Reliance, Ewart, and Pennell for defamation and intentional infliction of emotional distress. All three defendants filed motions for summary judgment. The circuit court granted the motions, finding the statement was not defamatory, the publication of the statement was privileged, and no intentional infliction of emotional distress claim was established. Fountain appeals only the grant of summary judgment in favor of First Reliance and Ewart on his defamation claim. Upon review, the Supreme Court concluded Ewart's statement was not defamatory, and even if it was, a qualified privilege existed in this case. As there was no evidence that this privilege was abused by Respondents, summary judgment was proper.

This suit was filed by a daughter against an organ donation charity when she discovered that the charity - contrary to an earlier representation to her - would allegedly profit from harvesting her deceased mother's tissues. The charity requested a defense from its insurer, and the insurer denied a defense. The insurer's subsequent suit against the charity resulted in two certified questions from the Fifth Circuit Court of Appeals. The Supreme Court held (1) the insurance policy provision for coverage of "personal injury" does not include coverage for mental anguish, unrelated to physical damage to or disease of the daughter's body; and (2) the insurance policy provision for coverage of "property damages," does not include coverage for the underlying plaintiff's loss of use of her deceased mother's tissues, organs, bones, and body parts.

Plaintiffs Joseph and Josephine Iozzi owned a home located in Cranston. On October 15, 2005, excessive rainfall overwhelmed the sewer system servicing the Iozzis's home, causing water and sewage to back up and enter their basement, resulting in extensive damage to their home and personal property. Plaintiffs filed suit seeking declaratory relief and compensatory damages from Triton Ocean State, LLC (Triton); U.S. Filter Operating Services, Inc. (Veolia); and Peerless Insurance Company (Peerless). The complaint alleged that Triton and Veolia were jointly and severally liable for negligently "operating, maintaining and repairing the sewer disposal system" in the city. As to Peerless, the complaint alleged that it was liable for breach of contract for rejecting plaintiffs' claim for damages under their homeowner's insurance policy. Peerless moved for summary judgment arguing that the language in the homeowner's policy was clear and unambiguous and excluded coverage for the claims Plaintiffs made. Triton and Veolia filed a joint motion for summary judgment arguing that neither of them had a contractual or common-law responsibility to Plaintiffs for the damage to their property because a lease service agreement with the City of Cranston relieved them of responsibility for the damage and because the flooding that caused Plaintiffs' damages was caused by an "Act of God." Agreeing with the superior court's reasoning for granting defendants' motions for summary judgment, the Supreme Court affirmed dismissal of Plaintiffs' case.

This case arose from a fatal motorcycle accident in which Steven Wadzinski was struck and killed by an uninsured motorist. Steven's wife, Michelle, sought uninsured motorist (UM) coverage under an umbrella insurance policy that Steven's company carried on him at the time of his death. At issue was the meaning of an endorsement to the executive umbrella policy, and whether that endorsement caused contextual ambiguity such that a reasonable insured would expect $2,000,000 of UM coverage under the policy. The circuit court held that the executive umbrella policy was clearly intended to provide only third-party liability coverage and granted summary judgment in favor of Auto-Owners Insurance Company. The court of appeals reversed, concluding that the executive umbrella policy was contextually ambiguous, and therefore, the policy should be construed in favor of the insured to afford coverage. The Supreme Court reversed, concluding that the policy at issue unambiguously did not afford first-party UM coverage, and therefore, the circuit court's summary judgment in favor of Auto-Owners was proper.