Justia Contracts Opinion Summaries

John Miller pled guilty to two counts of deliberate homicide. Miller later filed suit against James Goetz, the attorney that defended him, and arranged for Patrick Begley's limited representation in his claims against Goetz. Begley later withdrew from representing Miller. Miller then filed suit against Begley, alleging breach of contract, breach of the covenant of good faith and fair dealing, and fraudulent deceit. The district court granted summary judgment to Begley, finding that Begley had reasonably assisted Miller with his claims against Goetz and the dismissal of the Goetz claim was based on legal deficiencies unrelated to Begley's legal services. The Supreme Court affirmed, holding that the district court did not err in granting summary judgment to Begley as Miller failed to demonstrate genuine issues of material fact existed regarding his claims.

Plaintiff appealed from the district court's grant of summary judgment to National Union with respect to his claims under the Texas Insurance Code (Insurance Code), Tex. Ins. Code Ann. 541.003, 541.051, 541.052, 541.061, and the Texas Deceptive Trade Practices Act (DTPA), Tex. Bus. & Com. Code Ann. 17.46, 17.50, asserting misrepresentation and unconscionability. At issue was the Description of Coverage documents that National Union sent to plaintiff regarding eligibility for permanent total disability benefits under two insurance policies. The court held that plaintiff's contention that he had insufficient notice of National Union's basis for seeking summary judgment on his misrepresentation claims was unsustainable. The court also held that the definition of permanent total disability in the Descriptions of Coverage was ambiguous. The court held, however, that the ambiguity did not rise to the level of a misrepresentation within the meaning of the Insurance Code or the DTPA. To the extent that the Insurance Code required additional information to clarify an ambiguity, the reference to the master policy as controlling adequately informed a reasonable person that an ambiguity in the Description of Coverage was not binding if it conflicted with the policy. The court further held that plaintiff's unconscionability claims failed where he had not offered any reasoning as to the relevance of certain evidence regarding allegations of unconscionable conduct and where the claims were premised on conduct that had occurred after his injury and well after the inception of coverage under the policies. Accordingly, the court affirmed the district court's grant of summary judgment.

A limited liability company (MIC) was formed for the purpose of building and operating a hotel. The original members of MIC were a revocable trust (the Trust), trustee Michael Siska, and Thomas, Jane, and Jason Dowdy. Later, Thomas and Jane Dowdy transferred, without the Trust's involvement, MIC's assets to Milestone Development, the Dowdy's family company. The Trust filed an amended complaint derivatively on behalf of MIC against Defendants, Milestone and the Dowdys. In its amended complaint, the Trust claimed that the transfer of assets to Milestone was not in the best interests of MIC or its members and alleging, inter alia, breach of fiduciary duty, breach of contract, unlawful distribution, and conversion, and seeking to recover damages. The Trust, however, did not join MIC as a party to the derivative action. The circuit court dismissed the Trust's amended complaint, holding that the Trust lacked standing to maintain the derivative action on behalf of MIC because the Trust could not fairly represent the interests of the Defendant shareholders. The Supreme Court reversed, holding that it would not entertain the appeal on the merits because MIC was a necessary party to the proceeding and had not been joined. Remanded.

Kivalina, a native community located on an Alaskan barrier island, filed a lawsuit (Complaint) in a California district court against The AES Corporation, a Virginia-based energy company, and numerous other defendants for allegedly damaging the community by causing global warming through emission of greenhouse gases. Steadfast Insurance, which provided commercial general liability (CGL) to AES, provided AES a defense under a reservation of rights. Later AES filed a declaratory judgment action, claiming it did not owe AES a defense or indemnity coverage in the underlying suit. The circuit court granted Steadfast's motion for summary judgment, holding that the Complaint did not allege an "occurrence" as that term was defined in AES's contracts of insurance with Steadfast, and that Steadfast, therefore, did not owe AES a defense or liability coverage. The Supreme Court affirmed, holding that Kivalina did not allege that its property damage was the result of a fortuitous event or accident, but rather that its damages were the natural and probable consequence of AES's intentional actions, and such loss was not covered under the relevant CGL policies.

Robert S. Grant Construction, Inc. (the corporation), Robert S. Grant (RSG), and Pam E. Grant (PEG) (collectively referred to as "the Grants") appealed an order striking their jury demands in an action commenced by Frontier Bank (the bank) against the Grants and others alleging breach of contract, fraud, and the fraudulent conveyance of real estate. This case arose out of a loan from the bank to the corporation. The loan ultimately involved a number of related agreements, including a construction-loan agreement between the corporation and the bank and a series of "continuing guaranties," whereby RSG personally guaranteed repayment of the loan. The Supreme Court was unable to reach the merits of the Grants' contentions, and dismissed the appeal because, despite the invocation of Rule 54(b), the trial court's order was not final and appealable.

The Bank of Commerce (Bank) brought an action against SouthGroup Insurance and Financial Services, LLC (SouthGroup) and Norman White, an agent of SouthGroup, for negligent misrepresentations made by White regarding the type of liability insurance coverage they would need to purchase. The trial court granted summary judgment for SouthGroup and White on two grounds: (1) that the Bankâs claims are barred by the statute of limitations; and (2) that the damages sought by the Bank constituted a voluntary payment which may not be recovered under Mississippiâs voluntary payment doctrine. The Bank appealed the trial courtâs decision. Upon review, the Supreme Court concluded that the three-year statute of limitations began to run when the Bank first received notice that it did not have entity coverage on January 18, 2005. When the Bank filed its claim against Defendants on July 17, 2008, the statute of limitations already had run, therefore barring the Bankâs claims against them. The Court affirmed the trial court's grant of summary judgment dismissing the Bank's case.

Dane Shattuck died from injuries after being hit by an automobile. Dane received medical care at Hospital for his injuries. Dane was enrolled in a children's health insurance program (CHIP), administered by the department of public health and human services (DPHHS). Hospital submitted the bill for Dane's care to Blue Cross and Blue Shield (BCBS), which served as third-party administrator of the CHIP program for DPHHS. Hospital then asserted a lien for the full bill amount against recoveries Gail Shattuck, as personal representative of Dane's estate, may obtain against third parties. Shattuck sued Hospital, BCBS, DPHHS, and the State, asserting that Defendants unlawfully acted to avoid application of "made whole" rules and that Hospital could not foreclose the lien because Shattuck had not been made whole. The district court granted partial summary judgment to Shattuck. The Supreme Court reversed in part and affirmed in part, holding (1) the district court erred by determining that CHIP constitutes insurance and was governed by the made whole doctrine, and (2) the district court did not err by determining that BCBS was not an insurer in its role here and, therefore, was not subject to the made whole statute. Remanded.

Plaintiff purchased a security alarm for her home from HSM Electronic Protection Services, Inc. (HSM), which was later purchased by Stanley Convergent Security Solutions (Stanley). Plaintiff sued Stanley, claiming that Stanley did not respond properly to a low-temperature alarm from Gage's home and therefore was liable for over $250,000 in damages for willful and wanton negligence, intentional misconduct, fraud, and misrepresentation. Plaintiff subsequently appealed the district court's denial of her motion and grant of summary judgment in favor of Stanley, contending that the district court applied an incorrect theory of law. The court held that the district court misapplied Minnesota law where the Minnesota Supreme Court's case law recognizing and developing willful and wanton negligence was still valid, provided a precise definition of the claim, and was therefore binding upon the court. Consequently, the court disagreed with the district court's reliance on New York case law applying gross negligence as "instructive" despite there being a "principled distinction between wanton negligence and gross negligence." The court also held that there was a genuine issue of material fact as to whether the operator, who knew of the peril present in plaintiff's home, exercised reasonable and ordinary care in response. Accordingly, summary judgment was not appropriate and the case was remanded for further proceedings.

Plaintiff, employee, brought an action against Defendants, an archdiocese and a parish pastor, claiming that their refusal to renew her contract for employment as the principal of the parish school constituted, inter alia, wrongful termination in violation of public policy, breach of implied contract and breach of promissory estoppel. The trial court denied Defendants' motion to dismiss the action on the ground that adjudication of Plaintiff's claims called for impermissible judicial interference in the internal governance of the archdiocese with respect to its selection of religious leaders. At issue on appeal was whether the ministerial exception to judicial authority that precludes a court from adjudicating certain religious disputes required dismissal of the action. The Supreme Court first determined it had subject matter jurisdiction over the interlocutory appeal, and then reversed the trial court, holding that (1) in considering whether the ministerial exception is applicable in a particular case, a Connecticut state court must follow the Rweyemamu v. Cote standard; and (2) the ministerial exception applied to the various claims in the plaintiff's complaint. Remanded with direction to dismiss Plaintiff's complaint.

This case concerned the proper application of stare decisis and required the Supreme Court to decide whether "Collins v. Farmers Ins. Co." was still good law. In "Collins," the Court held that an exclusion in a motor vehicle liability insurance policy that purported to eliminate all coverage for a claim by one insured against another insured under the same policy was unenforceable to the extent that it failed to provide the minimum coverage required by the Financial Responsibility Law (FRL). The exclusion, however, was enforceable as to any coverage beyond that statutory minimum. In this case, Plaintiff Farmers Insurance Company issued an insurance policy to Defendant Tosha Mowry that contained an exclusion identical to the exclusion in "Collins". Defendant was injured in an accident in which her friend -- a permissive user and thus an insured person under the policy -- was driving. Plaintiff brought this action seeking a declaration that Defendant had $25,000 available in coverage under her policy -- the minimum coverage required by the FRL for bodily injury to one person in any one accident. Defendant argued that her coverage was $100,000, the insurance amount stated on the declarations page of her policy. The parties filed cross-motions for summary judgment, and the trial court granted Plaintiff's motion and denied Defendant's. The Court of Appeals affirmed in a per curiam opinion that cited "Collins." The Supreme Court concluded that Defendant "advanced no argument that this court has not previously considered for reaching a different result from that in 'Collins.' Defendant failed to carry the burden for overturning a fully considered precedent of this court."