Justia Contracts Opinion Summaries

Sanpete America purchased 110 acres of farmland and water rights from Christian Willardsen pursuant to a land purchase agreement and a warranty deed. After discovering problems with respect to the conveyance of the water right at issue, Sanpete America filed a complaint against Willardsen and Douglas Neeley, Willardsen's attorney, asserting various causes of action and seeking damages. Two successive district court judges issued judgments dismissing Sanpete America's claims against Willardsen and Neeley. On appeal, the Supreme Court affirmed both judges' conclusion that Sanpete America was entitled to no damages and judgment dismissing Sanpete America's claims, holding (1) Willardsen conveyed his portion of the water right to Sanpete America under a warranty deed, (2) Willardsen breached no covenants in the deed, and (3) Neeley's actions were not the cause of Sanpete America's alleged damages.

Plaintiffs filed this diversity action to foreclose a contractor's lien and an architect's and engineer's lien against Phoenix Land & Acquisition, LLC (Phoenix Land) and Phoenix Health, LLC (Phoenix Health), as owners of the property in dispute, and three financial institutions with recorded security interests in the property. Phoenix Land filed a counterclaim, asserting breach of contract, negligence, breach of implied warranty, breach of fiduciary relationship, and deceptive trade practices by plaintiffs. Plaintiffs appealed the district court's order denying their motion to compel arbitration of Phoenix Land's counterclaim. The court held that the district court did not err in finding plaintiffs' motion to compel arbitration on the ground that they had waived their right to arbitrate the dispute; they knew of the right and acted inconsistently with that right; and Phoenix Land suffered prejudice by plaintiffs' inconsistent actions. Accordingly, the court affirmed the judgment of the court.

Joseph Graziano, an owner of property in the Stock Farm subdivision and a member of the Stock Farm Homeowners Association, filed a complaint against the Association and Stock Farm LLC (SFLLC), asserting several claims, including negligence, breach of fiduciary duties, defamation, and constructive fraud. The Association and SFLLC moved to stay the proceedings and compel arbitration pursuant to a provision of Stock Farm's Covenants, Conditions, and Restrictions (CCRs). The district court granted the motion, finding the CCRs were an enforceable agreement to arbitrate all the claims in Graziano's complaint. On review, the Supreme Court affirmed in part and reversed in part, holding (1) the district court did not err in finding the CCRs were not a contract of adhesion and were within Graziano's reasonable expectations, and thus were enforceable; (2) the district court erred in finding Graziano's claim of breach of fiduciary duty was not a personal injury claim exempt from arbitration under Mont. Code Ann. 27-5-114(2)(a); and (3) all of Graziano's remaining claims were subject to the valid and enforceable arbitration provision and must be arbitrated pursuant to the CCRs. Remanded.

Judith Berry brought negligence and consumer protection claims against defendants National Medical Services and Compass Vision after her urinalysis tests conducted as part of Berry's participation in the Kansas Nurses Assistance Program (KNAP) showed positive results, which meant Berry tested positive for substance abuse in violation of Berry's KNAP agreement. Berry claimed Defendants were negligent in designing, implementing, promoting, and managing their testing protocol and that Defendants knew that because she was a participant in KNAP, her nursing license would be in jeopardy if she tested positive. The district court dismissed Berry's petition with prejudice for failure to state a claim upon which relief may be granted. The court of appeals reversed on the negligence claim, finding that Berry was a foreseeable plaintiff, that the probability of harm was foreseeable, and that there was no public policy against imposing a duty on Defendants. The Supreme Court affirmed, holding (1) Berry was a foreseeable plaintiff and the probability of harm was foreseeable; and (2) there was no public policy to extend protection to Defendants simply because they contracted with a government agency. Remanded.

This case arose when Robert Morrison, Jr. pleaded guilty to, among other things, four counts of assault and battery on a public employee (the arresting police officer) and the officer consequently brought a civil suit against Morrison for his injuries. Morrison and Metropolitan Property and Casualty Insurance Company (Metropolitan) subsequently applied for direct appellate review on the issue of whether Metropolitan had a duty to defend and indemnify Morrisson in the civil suit. The court held that an exclusion in a liability policy for "intentional and criminal acts" applied where the insured intended to commit the conduct that caused injury and where the conduct was criminal. The court also held that a guilty plea did not negate an insurer's duty to defend, even where the duty to defend would be negated by a criminal conviction after trial, because a guilty plea was not given preclusive effect and was simply evidence that the insured's acts were intentional and criminal. The court further held that one of the consequences of such a breach of its duty to an insured by failing to provide a defense was that, in determining whether the insurer owed a duty to indemnify the insured for the default judgment, the insurer was bound by the factual allegations in the complaint as to liability. The court finally held that, because the judge based her conclusion that Metropolitan had no duty to indemnify in large part on Morrison's guilty pleas and because the judge determined that Metropolitan had no duty to indemnify without first determining whether it owed a duty to defend at the time of the default judgment, the court vacated the declaratory judgment and set aside the allowance of Metropolitan's motion for summary judgment as well as the denial of Morrison's motion for partial summary judgment. Accordingly, the court remanded for further proceedings.

Defendant and her husband (Duckworths) purchased two automobile policies and one motorcycle insurance policy from plaintiff (State Farm) where all three insurance contracts contained "anti-stacking" provisions that precluded recovery of uninsured motorist benefits under any policy other than that covering the damaged vehicles. The Duckworths subsequently moved to Florida, where the husband was struck and killed by an uninsured motorist while driving the motorcycle covered under the Maryland policy. State Farm consequently brought this action in the district court, seeking a declaratory judgment that it had satisfied its contractual obligations to the husband's estate. At issue before the district court was the applicability of the public policy exception to Florida's choice of law rule in disputes over contract terms. The district court declared that State Farm had satisfied its contractual obligations to the husband's estate and dismissed defendant's counterclaims. Taking into account all of the undisputed facts, and assuming that defendant informed a State Farm representative that the Duckworths' move from Maryland to Florida would be "permanent," the court held that State Farm still did not receive reasonable notice sufficient to trigger the public policy exception. The court held that, even if defendant informed the representative as alleged, her later actions overwhelmingly indicated to State Farm that the Duckworths' move was not necessarily permanent and that, consequently Maryland law would continue to govern the Duckworths' policies. Therefore, the issue of fact upon which defendant's appeal rested was immaterial and, as State Farm was deprived of reasonable notice, judgment as a matter of law was proper.

Plaintiff Yvette Bouffard appealed a trial court's denial of her request for a declaratory judgment that she was entitled to uninsured motorist (UM) insurance coverage under her umbrella insurance policy issued by Defendant State Farm Fire & Casualty Company. Plaintiff was injured in 2006 from a car accident. She recovered $250,000 from the other party's insurer and her UM coverage under her personal automobile policy. Because her damages exceeded this sum, Plaintiff sought UM coverage under her umbrella policy. State Farm denied the claim because UM coverage was rejected on her original insurance application. The trial court found that Plaintiff authorized her husband to go to the insurance agency to purchase insurance for both of them, and that because the husband did not elect UM coverage, Plaintiff ratified his decision when she failed to object after reviewing the application in the car or after the policy arrived in the mail. Upon review, the Supreme Court found that the record supported the trial court's conclusion that the husband acted as Plaintiff's agent in rejecting UM coverage and affirmed the court's decision to deny Plaintiff declaratory relief.

This case arose when plaintiffs filed a nationwide consumer class action against Life of the South Insurance Company (Life of the South). At issue was whether Life of the South had a right to enforce against plaintiffs the arbitration clause in the loan agreement, between plaintiffs and the car dealership where they purchased their vehicle, where the loan agreement lead plaintiffs to enter into a separate credit life insurance contract with Life of the South. The court held that the loan agreement did not show, on its face or elsewhere, an intent to allow anyone other than plaintiffs, the car dealership, and Chase Manhattan, and the assignees of the dealership of Chase Manhattan, to compel arbitration of a dispute and Life of the South was none of those. The court also held that because the only claims plaintiffs asserted were based on the terms of their credit life insurance policy with Life of the South, which did not contain an arbitration clause, equitable estoppel did not allow Life of the South to compel plaintiffs to arbitrate. Accordingly, the court affirmed the district court's denial of Life of the South's motion to compel arbitration.

Appellants challenged the denial of their claim for benefits arising from an underinsured motorists (UIM) policy issued by appellee. Appellants appealed the adverse grant of summary judgment and the denial of their request for certification of a question of law to the North Dakota Supreme Court. The court held that the negligent driver's excess-liability policy was relevant to determining the underinsured status of his vehicle. Thus, as a matter of law, the negligent driver's vehicle was not underinsured and appellants were not entitled to coverage under the UIM endorsement. The court also declined to certify the question where the case had been decided by summary judgment. Accordingly, the court affirmed the judgment of the district court.

This case arose when appellant alleged claims of tortuous interference with contract or business expectancy and violation of the Arkansas Deceptive Trade Practices Act (ADTPA), Ark. Code Ann. 4-88-101, et seq. Appellant subsequently sought a temporary retraining order and preliminary injunction after appellee terminated appellant's patient privileges at a residential nursing home. The court held that appellant did not meet the factors in the Dataphase Syst. Inc. v. C.L. Syst., which evaluated whether to issue an injunction. Consequently, the court held that the district court did not abuse its discretion in denying the motion for a preliminary injunction and the judgment was affirmed.