Justia Contracts Opinion Summaries

Keiland Construction, L.L.C. entered into a construction subcontract with Weeks Marine, Inc. for a project in Louisiana. Weeks terminated the contract for convenience, leading to a dispute over compensation. Keiland submitted pay applications and demobilization costs, which Weeks partially paid. The disagreement centered on whether the contract required lump-sum payments for work completed before termination or if it converted to a cost-plus basis upon termination.The United States District Court for the Western District of Louisiana held a bench trial and found the contract ambiguous. It construed the ambiguity against Keiland, the drafter, and ruled in favor of Weeks. The court awarded Keiland damages based on Weeks’s interpretation of the contract but denied Keiland’s claims for direct employee and demobilization costs. The court also awarded Weeks attorneys’ fees and costs, though less than requested, and denied Weeks’s motion for post-offer-of-judgment fees and costs.The United States Court of Appeals for the Fifth Circuit reviewed the case. It affirmed the district court’s findings, agreeing that the contract was ambiguous and that the ambiguity should be construed against Keiland. The appellate court upheld the district court’s rulings on damages, attorneys’ fees, and costs, including the denial of post-offer-of-judgment fees and costs. The court also affirmed the award of prejudgment interest to Keiland, finding no abuse of discretion.In summary, the Fifth Circuit affirmed the district court’s judgment in all respects, including the interpretation of the contract, the award of damages, attorneys’ fees, costs, and prejudgment interest. View "Keiland Construction v. Weeks Marine" on Justia Law

In this case, a law firm (HFM) appealed a trial court's judgment denying its third-party claim to $585,000 held in its client trust account. The funds were received from HFM's client, Mann, under a flat fee agreement for future legal services. Mann's judgment creditor, Dickson, served HFM with a notice of levy, asserting that the funds belonged to Mann. HFM contended that the funds belonged to it under the flat fee agreement.The Superior Court of San Diego County denied HFM's third-party claim, concluding that the funds belonged to Mann because HFM had not yet earned the fee by providing legal services. The court also denied HFM's motion for reconsideration, which sought to retain $53,457.95 of the funds based on a prior agreement with Mann. The court found that HFM failed to present this evidence initially and did not act with reasonable diligence.The Court of Appeal, Fourth Appellate District, Division One, State of California, affirmed the trial court's judgment. The appellate court held that under the Rules of Professional Conduct, a flat fee is not earned until legal services are provided, and HFM presented no evidence that it had performed any services under the agreement. The court also found that the location of the funds in the client trust account was not dispositive of ownership. Additionally, the appellate court upheld the trial court's denial of the motion for reconsideration, noting that HFM failed to provide a satisfactory explanation for not presenting the evidence earlier.The main holding is that a flat fee paid in advance for legal services is not earned until the services are provided, and funds in a client trust account are presumed to belong to the client unless the law firm can prove otherwise. The judgment denying HFM's third-party claim was affirmed. View "Dickson v. Mann" on Justia Law

Lippa and Manmohan Grewal sold a gas station to Theodore Hansen, who later sold it to Junction Market Fairview, L.C. (JMF). The sale contract required Hansen to make regular installment payments, with the final balance due after three years. Hansen missed many payments and failed to pay the full balance when due. The Grewals initiated foreclosure proceedings over six years after Hansen's first missed payment. The applicable statute of limitations for a breach of contract action is six years, raising the question of when the statute begins to run for installment contracts.The Sixth District Court in Sanpete County granted partial summary judgment in favor of JMF, concluding that the statute of limitations began when Hansen missed the first payment, making the Grewals' foreclosure action too late. The court awarded sole control of the gas station to JMF and ordered the Grewals to release the title. When the Grewals failed to comply, JMF seized the station and sold it to a third party. The district court also awarded JMF attorney fees under the Public Waters Access Act and the reciprocal attorney fees statute.The Utah Supreme Court reviewed the case and found that the sale of the gas station to a third-party bona fide purchaser rendered the Grewals' appeal on the title issue moot, as no court action could affect the litigants' rights to the property. However, the issue of attorney fees was not moot. The court held that the district court did not abuse its discretion in awarding attorney fees to JMF under the reciprocal attorney fees statute. The court affirmed the award of attorney fees and remanded to the district court to determine the amount of reasonable attorney fees JMF incurred in defending against the appeal. View "Grewal v. Junction Market Fairview" on Justia Law

The case involves East Central Water District ("East Central") and the City of Grand Forks ("City"). East Central alleged that the City unlawfully curtailed its water service area, violating federal and state laws. East Central sought to declare a water supply and service agreement with the City void from the beginning under a specific North Dakota statute. The agreement, entered into in 2000, was designed to avoid conflict in providing potable water as the City annexed territory in East Central's service area. The agreement was subject to a North Dakota statute that required the public lending authority to be a party to the agreement. However, the Bank of North Dakota, the public lending authority, was not a party to the agreement.The case was initially brought before the United States District Court for the District of North Dakota. The City answered East Central’s complaint and counterclaimed, and brought a third-party complaint against William Brudvik and Ohnstad Twichell, P.C. for legal malpractice in their representation of the City during negotiations and execution of the Agreement. The City then moved the federal district court to certify questions to the Supreme Court of North Dakota on the interpretation of the North Dakota statute.The Supreme Court of North Dakota was asked to answer two certified questions of law: whether the language “invalid and unenforceable” in the North Dakota statute means an agreement made without the public lending authority as a party is (1) void from the beginning or (2) voidable and capable of ratification. The court concluded that the language “invalid and unenforceable” means void from the beginning, and does not mean voidable and capable of ratification. The court reasoned that the statute speaks to the authority to contract on this subject matter, as opposed to the manner or means of exercising one’s power to contract. Therefore, none of the parties were authorized to contract for water services without the public lending authority being a party to the agreement. View "East Central Water District v. City of Grand Forks" on Justia Law

The case revolves around a dispute between Carmen Nicholas and Terry L. Bonnie, an attorney who negligently prepared the will of Carmen's mother. The will, which was not notarized and lacked an attestation clause, was denied probate, resulting in Carmen losing full ownership of a property she was supposed to inherit. Carmen filed a lawsuit against Bonnie, alleging that his negligence caused her loss. Bonnie, in a letter, admitted his mistake and expressed willingness to make financial amends. A consent judgment was signed, establishing Bonnie's liability for all damages caused by his negligence.The trial court denied Bonnie's exception of peremption, arguing that the matter was a legal malpractice suit and was perempted after three years from the act of malpractice under Louisiana Revised Statutes 9:5605. Carmen opposed this, arguing that the matter was not a legal malpractice action and that Bonnie had renounced prescription by voluntarily entering a consent judgment that acknowledged liability for all damages caused by his negligence. The trial court denied both the exception of peremption and the motion for summary judgment, leaving quantum as the only issue.The appellate court reversed the trial court's decision, finding Carmen’s petition was filed after the three-year peremptive period for a legal malpractice action. It held that the consent judgment could not revive the extinguished claim and dismissed Carmen’s claims with prejudice.The Supreme Court of Louisiana, however, reversed the appellate court's judgment and reinstated the trial court's decision. It held that the consent judgment formed a bilateral contract between the parties, with Bonnie conceding fault or liability and contractually assuming an obligation to pay damages. The court ruled that the action to enforce the consent judgment was based in contract, not legal malpractice, and was therefore enforceable. The case was remanded for further proceedings consistent with this opinion. View "Nicholas v. Bonnie" on Justia Law

In this case, the Supreme Court of the State of Idaho upheld a lower court's summary judgment in favor of the defendants, George and Jesse’s Les Schwab Tire Store, Inc., and two of its owners, Bruce and Richard Byram. The plaintiff, Adam Davis, had been employed as an assistant manager at Les Schwab from April 2016 till June 2019. In March 2019, there was a shortage in the cash deposits and surveillance footage showed Davis bending down out of camera view in the area where the cash deposits were kept while he was alone in the store. This led to Davis being arrested and charged with grand theft, and his employment was terminated. Although the charges against Davis were later dropped, he sued the defendants for breach of his employment contract, false arrest, defamation per se, and for knowingly giving a false report to the police. The district court granted the defendants’ motion for summary judgment on all of Davis’s claims. The Supreme Court affirmed the lower court's decision, finding no genuine issue of material fact that could support Davis’s claims. The court found that Davis was an at-will employee who could be terminated without cause and that there was no evidence to show that the defendants had acted with malice. The court also found that the plaintiff's attorney had violated Rule 11.2 by submitting arguments that were not well grounded in fact, and awarded a portion of the defendants' attorney fees to be paid by the plaintiff's counsel. View "Davis v. George and Jesse's Les Schwab Tire Store, Inc." on Justia Law

The Supreme Court affirmed the judgment of the trial court granting Defendant's motion to dismiss the underlying complaint filed by Port of Louisville for defamation and professional malfeasance, holding that Port of Louisville had no legally recognized relationship with R. Wayne Stratton, CPA and Jones, Nale & Mattingly PLC (collectively, Stratton), and therefore, Stratton did not owe the Port of Louisville any duty.Louisville and Jefferson County Riverport Authority filed a lawsuit seeking to terminate Port of Louisville's lease based on allegations that Port of Louisville breached the parties' lease The action was stayed while the claims were referred to an arbitrator, who found that Port of Louisville had not breached the lease. Based on what occurred during the arbitration the Port of Louisville brought a complaint against Stratton for defamation and professional malfeasance. The trial court granted Stratton's motion to dismiss, and the court of appeals affirmed. The Supreme Court affirmed, holding that Port of Louisville had no legally recognized relationship with Stratton that would cause Stratton to owe it a duty. View "New Albany Main Street Properties, LLC v. R. Wayne Stratton, CPA" on Justia Law

The trial court entered judgment for Respondent in this breach of contract claim. The Second Appellate District affirmed and also imposed sanctions against Appellant's counsel for filing a frivolous appeal.The Second Appellate District explained "An appeal is frivolous only when it is prosecuted for an improper motive – to harass the respondent or delay the effect of an adverse judgment – or when it indisputably has no merit – when any reasonable attorney would agree that the appeal is totally and completely without merit." The court held that here, the appeal was frivolous because it "indisputably has no merit." The matter was entirely within the discretion of the trial court, and the fact that Appellant's counsel consulted with two other attorneys who believed the claim had merit did not change the court's opinion. View "Champlin/GEI Wind Holdings, LLC v. Avery" on Justia Law

Law firm Halscott Megaro, P.A. (“Halscott Megaro” or “the firm”) sued former clients and their guardians (collectively “former clients”), seeking to recover unpaid legal fees and expenses. A district court dismissed the action under Federal Rule of Civil Procedure 12(b)(6). The district court took judicial notice of a North Carolina State Bar Disciplinary Hearing Commission (“Commission”) decision that found the firm’s lead partner misled the former clients and engaged in other unethical conduct. The court then held the firm was precluded from relitigating issues decided by the Commission. It held that Halscott Megaro failed to plausibly plead claims for which relief could be granted. Halscott Megaro appealed, arguing the district court improperly considered matters outside the pleadings and failed to accept its allegations and all reasonable inferences from them as true in concluding that the Commission’s decision as to its lead partner bound the law firm.   The Fourth Circuit affirmed and held that the district court committed no reversible error in granting the former clients’ motion to dismiss or in denying the law firm’s motion for recusal. The court wrote that it agreed with the district court’s conclusion that the Commission was acting in a judicial capacity when it entered its discipline order against Megaro. The court also agreed that Megaro received a full and fair opportunity to litigate the issues and due process protections. Further, the court held that the firm’s allegations of impartiality were not related to any particular facts, sources or statements. A presiding judge is not required to recuse himself simply because of unsupported or highly tenuous speculation. View "Halscott Megaro, P.A. v. Henry McCollum" on Justia Law

Vivera Pharmaceuticals, Inc. (Vivera) was developing a medical test kit, but had received “negative publicity” from its litigation with a rival company. Vivera hired Sitrick Group, LLC (Sitrick) to manage a public relations campaign. Vivera did not make any payments and Sitrick filed demands for arbitration with Judicial Arbitration and Mediation Services (JAMS). Judge Swart was selected to serve as an arbitrator in a separate matter between Sitrick and Legacy Development (the Legacy matter). In that matter, Sitrick was employing the same law firm (but a different lawyer) as was representing it in the arbitration with Vivera. Sitrick filed petitions to confirm the arbitration award. Vivera asked the trial court to vacate the arbitrator’s award due to Judge Swart’s inadequate disclosure of the Legacy matter. The trial court issued an order confirming the arbitrator’s award.   The Second Appellate District affirmed. The court explained that the California Arbitration Act (the Act) requires arbitrators to disclose, among other things, matters that the Ethics Standards for Neutral Arbitrators in Contractual Arbitration (Ethics Standards) dictate must be disclosed. At issue here is whether the Ethics Standards require a retained arbitrator in a noncommercial case to disclose in one matter that he has been subsequently hired in a second matter by the same party and the same law firm. The court held “no,” at least where the arbitrator has previously informed the parties—without any objection thereto—that no disclosure will be forthcoming in this scenario. Because the arbitrator’s disclosures were proper here, the trial court properly overruled an objection based on inadequate disclosure. View "Sitrick Group v. Vivera Pharmaceuticals" on Justia Law