Justia Contracts Opinion Summaries

Jose Santoyo appealed a judgment that awarded damages to Darwin Savre for overpayments under the parties' lease and purchase option agreement and dismissed Santoyo's counterclaim for damages to the leased property. Savre owned and operated Savre's Heavy Truck & Auto Repair in Fargo. Santoyo owned the two parcels of real property and building that are the subject of the leases and option agreement in this case. The original lease term was from June 15, 2008, to June 15, 2010, with Savre paying rent of $2,300 per month until June 15, 2009, at which time the rent would increase to $2,708.33. About the time of the rent increase, Savre and Santoyo entered into a "Lease to Purchase Option Agreement." Although the lease and option agreement required Savre to pay his monthly rent payments on the first of each month, Savre was frequently late in his payments from the beginning of the lease. Santoyo accepted the payments and did not give Savre written notice of any intent to terminate the lease based on Savre's late payment. Savre made monthly payments in varying amounts under the option agreement, and the district court found he paid at least a total of $4,000 each month. In the fall of 2012, Savre and another individual formed JDDS, LLC, intending to use the entity to finance the purchase of Santoyo's property. The district court found, however, that Savre did not attempt to assign, convey, delegate or transfer his purchase option to JDDS. In late 2012, Savre made his first attempt to exercise his option to purchase the property with a handwritten notice to Santoyo. In early 2013, Savre made a second attempt to exercise the option with another handwritten notice to Santoyo. Santoyo did not respond to Savre. By the time of the second attempt to exercise the option, Savre had paid at least $180,000 in monthly payments, satisfying an option agreement requirement. After Santoyo did not sell him the property, Savre stopped making monthly payments. Santoyo initiated eviction proceedings against Savre in the district court. The court granted the eviction and entered judgment against Savre for unpaid rent and Santoyo's costs and disbursements. Savre vacated Santoyo's property at the end of June 2013 and began leasing a different space in Fargo. Savre subsequently commenced this action, alleging that Santoyo breached the option agreement when he failed to sell the property leased to Savre after he exercised his option and that Santoyo had been unjustly enriched. Santoyo denied the allegations and counterclaimed, alleging Savre violated his contractual and statutory duties by damaging the property upon being evicted from the premises. Santoyo argued the district court erred as a matter of law when the court concluded Santoyo had a contractual duty to sell his property to a third party that did not exist at the time of the agreement and had no rights under the agreement. The Supreme Court concluded the district court did not clearly err in finding that Santoyo had breached the agreement and that Santoyo had waived strict compliance with the option agreement's terms when he accepted Savre's late lease payments. Furthermore, the Court concluded the court failed to make sufficient findings of fact to explain dismissal of Santoyo's counterclaim for damages. The Court accordingly affirmed in part, reversed in part, and remanded for further proceedings. View "Savre v. Santoyo" on Justia Law

Developer filed suit against the University after the University terminated the lease agreement between the parties because Developer failed to make a rental payment. The district court granted summary judgment in favor of the University. The court vacated and remanded for further proceedings, concluding that there is a genuine dispute whether a rental payment was due on May 30, 2013, and therefore whether the University was entitled to terminate the lease and to collect damages. View "Howard Town Center Developer v. Howard University" 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

In anticipation of renting an apartment from Sheldon Ashby, Jennifer Roussel gave Ashby a security deposit. Roussel never moved into the apartment and sought the return of her security deposit. When Ashby did not respond to Roussel’s demand for a refund, Roussel filed a complaint against Ashby. The superior court entered default against Ashby and entered judgment for Roussel in the amount of $24,628. Roussel appealed, and Ashby cross-appealed the denial of his motion to set aside the default. The Supreme Court affirmed, holding that the trial court did not err in (1) declining to aware punitive damages to Roussel; (2) denying Roussel’s motion to amend the judgment by awarding additional attorney fees; and (3) denying Ashby’s motion to set aside the default. View "Roussel v. Ashby" on Justia Law

Tenant was the successor lessee to a thirty-year lease on a commercial property in Brattleboro. The lease was executed in 1987. The lease established a basic annual rent of $26,500 in paragraph 8, and then set forth how the rent would increase in subsequent years. Pursuant to the rent-increase provision, each year landlords calculated the annual rent increase and sent a notice to tenant. The increase was calculated as the percentage change in the CPI from the previous year to the current year multiplied by the previous year's rent. This increase was then added to the prior year's rent to arrive at the new annual rent. In March 2007, tenant assumed the lease. From 2008 to 2012, landlords sent rent-increase notices and tenant paid rent annually adjusted for increases, calculated according to this method, without objection. In 2013, landlords sent the annual rent increase notice to tenants. The notice reflected the new 2013 rent as $54,060. Tenant objected to the amount of rent and the calculation method for rental increases. The parties were unable to resolve their dispute, and tenant filed an action seeking both a declaration that its interpretation of the lease language was correct and damages for overpaid rent. Tenant appealed the court's order granting summary judgment in favor of defendant landlords on the parties' dispute concerning a rental-increase provision of the lease. Tenant argued on appeal that the court erred in using extrinsic evidence to interpret a portion of the lease tenant believed was unambiguous, and in reaching an inequitable result. Finding no reversible error, the Supreme Court affirmed. View "B&C Management Vermont, Inc. v. John, Ringey & Beck" on Justia Law

This case stemmed from a dispute over damage to a leased commercial space. The case was tried before a jury, which awarded plaintiff-landlord David Walsh, just under $11,000 in damages attributable to defendant-tenant Frank Cluba. Following the jury verdict, the trial court awarded Walsh over $44,000 in attorney's fees. Cluba appealed, arguing that the court erred by allowing Walsh to testify on the reasonableness of repair work done after Cluba vacated the property and by awarding Walsh an unreasonable amount of attorney's fees under the circumstances. Walsh cross-appealed, arguing that the court erred by dismissing his claims against defendant Good Stuff, Inc., the business that Cluba and his partner incorporated shortly after Cluba signed the initial lease of the subject property. Finding no reversible error, the Supreme Court affirmed. View "Walsh v. Cluba" on Justia Law

A Landlord leased separate properties to two different sets of Tenants using nearly identical written documents. This appeal concerned a dispute between the Landlord and Tenants regarding whether the leases were enforceable for their stated five-year terms or whether a clause providing for “annual review of rental rates” resulted in unenforceable “agreements to agree.” The Landlord sued the Tenants in separate actions, seeking a declaratory judgment to determine its rights under the leases. The district court concluded that the leases were valid and enforceable for their five-year terms. The Supreme Court affirmed as modified, holding that the terms of the leases were clear and unambiguous and contemplated only an annual review without requiring an annual agreement. View "Gibbons Ranches, LLC v. Bailey" on Justia Law

A shopping center owner challenged provisions in its commercial lease with Ross, conditioning Ross’s obligation to open a store and pay rent on Mervyn’s operating a store in the shopping center on the lease’s commencement date and allowing Ross terminate the lease if Mervyn’s ceased operations and was not replaced by an acceptable retailer within 12 months. Mervyn’s filed for bankruptcy and closed its store. Ross took possession of the space, never opened for business, never paid rent, and terminated the lease after the 12-month cure period. The trial court found the provisions unenforceable. The jury awarded $672,100 for unpaid rent and $3.1 million in other damages. The court of appeal held that there was no procedural unconscionability. The parties were sophisticated and experienced concerning commercial leases. The rent abatement and termination provisions must be examined separately because they involve separate consequences triggered by different conditions. The determination that rent abatement constituted an unreasonable penalty was supported by findings that Ross did not anticipate it would suffer any damages from Mervyn’s not being open on the lease’s commencement date and the rent forfeited was $39,500 per month. There is no reasonable relationship between $0 of anticipated harm and forfeiture of $39,500 in rent per month. View "Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc." on Justia Law

Gail and Scott Helm filed a personal injury action against Gallo Realty, Inc., one of its real estate agents, and 206 Massachusetts Ave, LLC (owner of the property). The Helms rented a beach house at 206 Massachusetts Avenue in Lewes for a week in 2010. As Gail descended the stairs, she fell and sustained injuries. Gail sought to recover damages based on claims of negligence and breach of contract; Scott claimed loss of consortium. The Superior Court granted defendants' motions for summary judgment, dismissing the Helms' claims. The Helms appealed, arguing: (1) the Superior Court erred in granting defendants' motion for summary judgment on the issue of primary risk assumption and comparative negligence as a matter of law; (2) the Superior Court erred in holding that an indemnification clause provision in the lease protected defendants from liability; and (3) the Superior Court erred in granting summary judgment on the contract claims. After review, the Supreme Court concluded the Superior Court applied both the doctrine of primary assumption of risk and the doctrine of comparative negligence incorrectly. The record reflected that the Superior Court never specifically based its decision on the indemnification clause. The Superior Court's initial ruling in favor of defendants was only on the negligence claims. Furthermore, the Supreme Court found that the record reflected that the Superior Court's dismissive rulings on the Helms' contract claim was "cursory and inextricably intertwined" with its erroneous rulings on the negligence claims. As such, the Supreme Court reversed the Superior Court and remanded this case for further proceedings. View "Helm v. 206 Massachusetts Avenue,LLC" on Justia Law

Plaintiff, a property owner, and Defendant, a tenant, entered into a one-year commercial rental lease agreement. Prior to the end of the one-year term, the parties extended the lease for a nine-year term. Several months after executing the lease extestion, Defendant vacated the premises and ceased paying rent. Plaintiff commenced this action for rent arrears and an amount equal to the future remaining rent owed on the lease. Supreme Court entered judgment for Plaintiff in the amount of $1,488,604, consisting of the rent remaining due under the lease, reduced by the amount of rent Plaintiff was able to collect by reletting the premises. Defendants appealed, arguing that Plaintiff was barred from collecting unpaid future rents pursuant to an acceleration clause in the leasehold agreement. The Court of Appeals affirmed as modified, holding that the court below erred by limiting the damages hearing to whether Plaintiff relet the premises without allowing Defendants the opportunity to present evidence that the undiscounted accelerated rent amount was disproportionate to Plaintiff’s actual losses, notwithstanding that Plaintiff had possession and no obligation to mitigate. View "172 Van Duzer Realty Corp. v Globe Alumni Student Assistance Ass’n, Inc." on Justia Law