Justia Contracts Opinion Summaries

The case concerns an automobile accident in Prince George’s County, Maryland, involving George Bowens and a driver named Lisa Daniels, who was at fault. Bowens sustained injuries and held a $50,000 underinsured motorist (UIM) policy with State Farm. Daniels’ insurance had a $30,000 liability limit, which was offered to Bowens as a settlement for his injuries. Following established statutory procedures, Bowens notified State Farm of this offer, State Farm consented and waived subrogation rights, and Bowens accepted the $30,000. Bowens then sought to recover the remaining $20,000 available under his UIM policy from State Farm, which denied the claim.Bowens filed a breach of contract action in the District Court for Prince George’s County, seeking $20,000. State Farm moved to dismiss, arguing that the District Court lacked subject matter jurisdiction because Bowens would have to prove total damages of $50,000—exceeding the court’s $30,000 jurisdictional cap. The District Court agreed and dismissed the case. Bowens appealed to the Circuit Court for Prince George’s County, which affirmed the dismissal, reasoning that the District Court would need to find damages over $30,000 and thus could not grant relief.The Supreme Court of Maryland reviewed the case and held that the District Court’s jurisdiction is determined by the amount the plaintiff seeks from the defendant in the pending action, not by the total underlying damages or prior settlements received from the tortfeasor’s insurer. Since Bowens’ claim against State Farm was for $20,000, the District Court had jurisdiction. The Supreme Court of Maryland reversed the judgment of the circuit court and ordered the case remanded to the District Court for further proceedings. View "Bowens v. State Farm Mut. Auto. Ins." on Justia Law

A consumer purchased a used vehicle from a dealership, with the transaction documented in two contracts: a purchase order and a retail installment sale contract (RISC). The purchase order included an arbitration provision for disputes arising from the purchase or financing of the vehicle, while the RISC detailed the financing terms but did not include an arbitration clause. The RISC contained an assignment clause by which the dealership assigned its interest in "this contract" (the RISC) to a third-party lender, and defined the agreement between the buyer and the assignee as consisting "only" of the RISC and any addenda. The consumer later filed a class action against the lender, alleging improper fees under Maryland law.The Circuit Court for Baltimore City found for the lender, ruling that the purchase order and RISC should be read together as one contract for the purposes of the transaction, and that the arbitration agreement was enforceable against the consumer. The court granted the lender’s motion to compel arbitration. On appeal, the Appellate Court of Maryland affirmed, holding that the consumer was bound by the arbitration provision and that the assignee lender could enforce it, even though the consumer did not receive or sign a separate arbitration agreement.The Supreme Court of Maryland reviewed the case, focusing on contract interpretation and the scope of the assignment. The court held that, even if the purchase order’s arbitration provision was binding between the consumer and the dealer, it was not within the scope of the assignment to the lender. The RISC’s assignment language made clear that only the RISC and its addenda, not the purchase order or its arbitration clause, were assigned to the lender. As a result, the Supreme Court of Maryland reversed the judgment of the Appellate Court and remanded the case for further proceedings. View "Lyles v. Santander Consumer USA" on Justia Law

After a car accident in Prince George’s County, Maryland, George Bowens, who was injured by the clear negligence of another driver, sought to recover compensation for his injuries. The at-fault driver had $30,000 in liability insurance, which was offered to Bowens in settlement. Bowens, however, had a $50,000 underinsured motorist (UIM) policy with his own insurer, State Farm. After accepting the $30,000 from the at-fault driver’s insurer (with State Farm’s consent and waiver of subrogation rights), Bowens sought the remaining $20,000 from State Farm under his UIM policy, claiming breach of contract when State Farm denied the claim.Bowens filed his action in the District Court of Maryland, which has jurisdiction over contract claims not exceeding $30,000. State Farm moved to dismiss, arguing that to recover the $20,000, Bowens would have to prove total damages of $50,000—an amount above the District Court’s jurisdictional cap. The District Court granted the motion to dismiss for lack of subject matter jurisdiction, and the Circuit Court for Prince George’s County affirmed, reasoning that the court would need to find Bowens’ damages exceeded $30,000, thus exceeding the District Court's authority.The Supreme Court of Maryland reviewed the case and reversed the lower courts. It held that, for purposes of determining the District Court’s jurisdiction under § 4-401(1) of the Courts and Judicial Proceedings Article, the relevant amount is the “debt or damages claimed” in the pleadings—that is, the net recovery sought from the defendant in the action—not the plaintiff’s total damages. Because Bowens sought only $20,000 from State Farm, the District Court had jurisdiction to hear the case. The Supreme Court of Maryland remanded the case for further proceedings consistent with this opinion. View "Bowens v. State Farm Mutual Automobile Insurance Co." on Justia Law

In this case, the husband filed for an absolute divorce, and the wife counterclaimed. The parties attempted mediation but did not reach a settlement. The wife’s counsel later sent a settlement package to the husband’s counsel, which included a Voluntary Separation and Property Settlement Agreement, a promissory note, and a guaranty. The cover letter specified that the husband needed to sign the agreement and note by the end of the day on September 25, 2020. The husband signed the documents on September 28, 2020, and filed an amended complaint for divorce based on mutual consent, incorporating the agreement.The Circuit Court for Anne Arundel County found that the husband had timely accepted the wife’s offer and that a binding settlement agreement was formed. The court granted the husband’s motion to enforce the settlement agreement and entered a judgment for absolute divorce based on mutual consent, incorporating but not merging the agreement into the judgment. The wife appealed, and the Appellate Court of Maryland reversed the circuit court’s judgment, finding that the husband had not timely accepted the wife’s offer and that no contract was formed.The Supreme Court of Maryland reviewed the case and affirmed the Appellate Court’s judgment. The court held that the wife’s offer was conditioned on the husband signing the agreement and note by September 25, 2020, and that the husband’s failure to meet this deadline meant that no contract was formed. The court also found no evidence that the wife had waived the deadline. The court concluded that the husband’s signing of the documents on September 28, 2020, constituted a counteroffer, which the wife was not obligated to accept. View "Pattison v. Pattison" on Justia Law

An investor, Snowden Investment LLC, was denied its contractual right to purchase a membership interest in two companies, Boomerang Franchise LLC and Ashburn Indoor Play LLC, which were formed by Maryland Indoor Play, LLC (MIP) and its members. Snowden had a right to invest in these ventures under a Loan and Security Agreement but was not given the required notice.The Circuit Court for Howard County granted summary judgment to Snowden on liability for breach of contract and awarded specific performance for Boomerang and compensatory damages for Ashburn. Snowden's expert valued the damages for Ashburn at $453,333 using a "fair value" approach, which the court accepted. The court also ordered specific performance for Boomerang, requiring the defendants to offer Snowden the opportunity to invest on the same terms as the original members.The Appellate Court of Maryland upheld the Circuit Court's decisions, rejecting the defendants' arguments that specific performance was inappropriate without evidence that Snowden was ready, willing, and able to invest, and that damages should have been measured at the time of breach using "fair market value" rather than "fair value."The Supreme Court of Maryland reviewed the case and held that the proper measure of damages for the breach of an investor’s right is general damages, calculated using the fair market value at the time of the breach minus the price the investor would have paid. The court found that the Circuit Court erred in awarding specific performance for Boomerang without sufficient evidence that Snowden was ready, willing, and able to meet the terms of membership. The Supreme Court reversed the specific performance order and remanded the case for the Circuit Court to enter nominal damages for the Ashburn breach and reconsider attorneys' fees. View "Maryland Indoor Play v. Snowden Investment" on Justia Law

An investor, Snowden Investment LLC, was denied its contractual right to purchase a membership interest in two companies, Boomerang Franchise LLC and Ashburn Indoor Play LLC, both related to a children's indoor play facility business called Hyper Kidz. The right was stipulated in a Loan and Security Agreement with Maryland Indoor Play, LLC (MIP), which required MIP to notify Snowden of new ventures and offer an opportunity to invest. Snowden was not given the required notice for either Boomerang or Ashburn.The Circuit Court for Howard County granted summary judgment to Snowden on liability for breach of contract and awarded specific performance for Boomerang and compensatory damages for Ashburn. Snowden's expert valued the damages for Ashburn at $453,333 using a "fair value" approach, which the court accepted. The court also ordered specific performance for Boomerang, requiring the Founders to offer Snowden the opportunity to invest on the same terms as the original members.The Supreme Court of Maryland reviewed the case and found that the Circuit Court erred in its rulings. The court held that the proper measure of damages for the breach of the investment right should be general damages, calculated using the fair market value of the interest at the time of the breach, not "fair value" as used by Snowden's expert. The court also found that specific performance was not appropriate for Boomerang because the Circuit Court failed to consider all relevant facts and circumstances, including whether Snowden was ready, willing, and able to meet the terms of membership.The Supreme Court of Maryland reversed the judgment for specific performance regarding Boomerang and vacated the compensatory damages award for Ashburn, remanding the case for further proceedings consistent with its opinion. The court also vacated the award for attorneys' fees, costs, and interest, instructing the Circuit Court to revisit these in light of the new findings. View "Maryland Indoor Play v. Snowden Investment" on Justia Law

Badlia Brothers, LLC, a check-cashing business, cashed 15 checks issued by the State of Maryland. These checks had already been paid by the State before Badlia presented them for payment. Some checks were deposited using a mobile app, creating "substitute checks," and were then fraudulently or negligently presented to Badlia. Others were reported lost or stolen, leading the State to issue stop payment orders and replacement checks, which were also cashed by Badlia. Badlia accepted the checks without knowledge of prior payments and sought payment from the State, which refused.Badlia filed complaints in the District Court of Maryland, claiming the right to enforce the checks as a holder in due course. The court consolidated the cases, ruled that the State enjoyed qualified immunity, and dismissed the cases. The Circuit Court for Baltimore City reversed, holding that a check is a contract, and thus, the State had waived sovereign immunity. On remand, the District Court found that Badlia was a holder in due course entitled to enforce the checks. The Circuit Court affirmed, and the State petitioned for certiorari.The Supreme Court of Maryland reviewed the case and held that a check is a contract for purposes of the State’s waiver of sovereign immunity under § 12-201(a) of the State Government Article. The court affirmed the Circuit Court's decision, concluding that the State has waived sovereign immunity for claims by a holder in due course seeking payment on an authorized State-issued check. View "Comptroller v. Badlia Brothers, LLC" on Justia Law

Badlia Brothers, LLC, a check-cashing business, cashed 15 checks issued by the State of Maryland. These checks had already been paid by the State before Badlia presented them for payment. Some checks were deposited using a mobile app, creating "substitute checks," and then fraudulently or negligently presented to Badlia. Others were reported lost or stolen, leading the State to issue stop payment orders and replacement checks, which were then cashed by the original payees with Badlia. Badlia, unaware of the prior payments, presented the checks for payment, which the State refused.Badlia filed complaints in the District Court of Maryland, claiming the right to enforce the checks as a holder in due course. The court consolidated the cases, ruled that the State enjoyed qualified immunity, and dismissed the cases. The Circuit Court for Baltimore City reversed, holding that a check is a contract, and thus, the State had waived sovereign immunity. On remand, the District Court found that Badlia was a holder in due course entitled to enforce the checks. The Circuit Court affirmed, and the State petitioned for certiorari.The Supreme Court of Maryland held that the State has waived sovereign immunity for claims by a holder in due course seeking payment on an authorized State-issued check. The court affirmed the decision of the Circuit Court for Baltimore City, concluding that a check is a formal contract and that the State's waiver of sovereign immunity under § 12-201(a) of the State Government Article applies to such contracts. View "Comptroller of Md. v. Badlia Bros." on Justia Law

The case involves two homebuyers, Wynton Sanders and Tosha Lindsey, who entered into contracts with SM Landover, LLC and SM Parkside, LLC, respectively, for the purchase of new homes. Both contracts included provisions for deferred water and sewer charges and a one-year statute of limitations for bringing any claims related to the contracts. The homebuyers later filed class action complaints alleging that the sellers failed to disclose required information about the deferred charges, as mandated by Maryland law.The Circuit Court for Prince George’s County consolidated the cases for pretrial purposes and dismissed the complaints with prejudice. The court found that the sellers did not need to register as home builders because Stanley Martin Companies, LLC, a registered home builder, was also a party to the contracts. The court also concluded that the homebuyers’ claims accrued at the time of contracting, making them time-barred under the one-year contractual limitations period.The Appellate Court of Maryland affirmed in part and reversed in part. It held that the one-year contractual limitations period was reasonable and that the homebuyers’ claims accrued at the time of settlement, not contracting. Therefore, the claims were timely. However, the court also held that the sellers did not need to register as home builders because a registered home builder was a party to the contracts.The Supreme Court of Maryland reviewed the case and held that the homebuyers’ claims accrued at the time of contracting. The court also held that the sellers were required to register as home builders under Maryland law, even though a registered home builder was a party to the contracts. Consequently, the sellers could not enforce the one-year contractual limitations period, making the homebuyers’ claims timely. The court affirmed in part and reversed in part the judgment of the Appellate Court of Maryland. View "SM Landover LLC v. Sanders" on Justia Law

Bonnie Campbell, a federal employee, and Michael Campbell, her ex-husband, entered into a divorce property settlement agreement in which Mr. Campbell waived his rights to Ms. Campbell's Thrift Savings Plan (TSP) account. Despite this agreement, Ms. Campbell did not remove Mr. Campbell as the beneficiary of her TSP account before her death. After her death, Mr. Campbell received the balance of the TSP account. The estate of Ms. Campbell (the Estate) sued Mr. Campbell for breach of contract to enforce the terms of the divorce settlement agreement.The Circuit Court for Montgomery County granted summary judgment in favor of the Estate on its breach of contract claim, awarding money damages. The court rejected Mr. Campbell's argument that the Federal Employees’ Retirement System Act of 1986 (FERSA) preempted the Estate's claim. The Appellate Court of Maryland reversed, holding that FERSA preempted the Estate's breach of contract claim.The Supreme Court of Maryland reviewed the case and held that FERSA does not preempt the Estate’s post-distribution breach of contract action. The court found that FERSA’s purposes, which include establishing a federal employee retirement plan and ensuring it is fully funded and financially sound, do not concern plan beneficiaries. The court also noted that FERSA’s provisions elevate the requirements of a qualifying state property settlement agreement over a deceased participant’s designated beneficiary, provided notice is given before payment. The court concluded that a post-distribution suit to enforce contractual obligations in a divorce property settlement agreement does not hinder any governmental interest in administrative convenience or avoiding double payment. The judgment of the Appellate Court was reversed, and the Circuit Court's judgment was affirmed. View "In re Isely" on Justia Law