Justia Contracts Opinion Summaries

Copper City Gaming, Inc. alleged that in July 2022, Eric Allen entered into a lease agreement with the corporation, resulting in four payments totaling $14,400. Copper City claimed these payments were fraudulent, part of a conspiracy between Eric and Russ Allen, and asserted causes of action for fraud, violation of the Montana Consumer Protection Act, breach of contract, unjust enrichment, and civil conspiracy. The complaint specifically alleged the lease used the wrong address and corporate name, Eric lacked authority to sublease or failed to provide usable space, and Copper City never stored property there.Previously, a related action (DV-22-206) involved disputes between shareholder groups over management and use of corporate funds. That action began in Copper City’s name but, by court order, Russ and Camy Allen were substituted as plaintiffs, and Copper City was no longer a named party. The parties reached a mediated settlement, which included a Mutual General Release and Settlement Agreement, and a Special Master’s Order waiving certain business dispute claims, including storage-unit fees. The Special Master dismissed the action with prejudice as fully settled.The Supreme Court of the State of Montana reviewed the District Court’s order granting Eric Allen’s motion to dismiss under M. R. Civ. P. 12(b)(6) on collateral estoppel grounds. The Supreme Court held that the complaint and materials properly considered at the pleading stage did not conclusively establish that the prior adjudication decided the identical issues now raised, that Copper City was adequately represented in the prior action, or that Copper City had a full and fair opportunity to litigate those issues. The Court also found the District Court erred by considering matters outside the pleadings without converting the motion to summary judgment under Rule 12(d). The Supreme Court reversed the dismissal and remanded for further proceedings. View "Copper City Gaming v. Allen" on Justia Law

In this case, a dispute arose over membership interests in Freedom Pass Partners, LLC, which owns undeveloped property near Big Sky, Montana. Carol Hudson, through her estate and beneficiaries Alan and Jeffrey Johnson, claimed that Hudson funded the purchase of the property based on assurances she would be a member of Freedom Pass. After Hudson’s death, her sons, acting as trustees and beneficiaries of her trust, filed suit asserting multiple claims including breach of contract, fraud, unjust enrichment, and conversion, alleging Hudson’s investment entitled her to membership or ownership interests.The Eighteenth Judicial District Court reviewed the claims and granted summary judgment for Freedom Pass Partners, LLC. It found that the Johnsons lacked standing because the estate’s personal representative had not joined the litigation, and concluded that all claims were time-barred based on the statute of limitations. The court also denied Johnsons’ motions to amend the complaint, to compel discovery identifying a prospective property buyer, and for relief from judgment regarding the dissolution of a lis pendens notice.The Supreme Court of the State of Montana reviewed the District Court’s decisions de novo for summary judgment and for abuse of discretion on the remaining motions. It held that genuine disputes of material fact existed about whether Hudson knew or should have known she was not a member of Freedom Pass, particularly given conflicting evidence and potential concealment or fiduciary duties. The Supreme Court also found the denial of leave to amend the complaint was an abuse of discretion because adding the estate’s personal representative could cure the standing defect. The denial of discovery and failure to consider mootness regarding the lis pendens were also found to be abuses of discretion. The Supreme Court reversed the District Court’s rulings and remanded the case for further proceedings. View "Hudson Revocable Trust v. Freedom Pass" on Justia Law

A developer formed a company in 2006 and purchased property in the Town of West Yellowstone, Montana, intending to construct a 48-unit condominium project. The developer obtained a building permit and a “Will Serve Letter” from the Town, confirming that water, sewer, and storm drainage services would be provided. Construction began in 2007 but ceased in 2011, after which the building permit expired due to inactivity. The developer did not reapply for a permit, nor did it renew related approvals. In 2019, the Town adopted a resolution limiting new wastewater connections due to capacity concerns. In 2020, the developer attempted to sell the property, contingent on confirmation that service connections would still be honored. The Town responded that hookups would be permitted when capacity allowed but did not guarantee immediate service.The Eighteenth Judicial District Court, Gallatin County, denied the Town’s argument that the developer’s claims were time-barred under statutory limitations, ruling that the claims accrued only when the Town refused to guarantee connections in 2020. However, the District Court granted summary judgment for the Town on the merits, finding that the Will Serve Letter did not create an enforceable contract or vested right to service after years of inactivity and expired permits, and that the Town did not owe a special duty under the public duty doctrine.The Supreme Court of the State of Montana affirmed the District Court’s rulings. It held that the developer’s claims were timely but that, even assuming a contract existed, any right to service under the Will Serve Letter expired after a prolonged period of project inactivity and lapsed permits. The Court further held that the Town owed no special duty to the developer beyond its general obligations to the public, and summary judgment for the Town was appropriate. View "West Development, LLC v. Town of W. Yellowstone" on Justia Law

Two couples, who were friends and interested in purchasing vacation property to accommodate their families, entered into identical purchase agreements in 2015 with the owner of a luxury resort in Montana. The agreements granted each couple a fractional interest in a three-bedroom villa, with the understanding that they would be transferred to a four-bedroom villa once one was constructed. Until that time, they were to be exempt from maintenance fees and allowed use of a four-bedroom cabin. Both couples paid the purchase price and received warranty deeds for the three-bedroom villas but never received the promised upgrade, as no four-bedroom villas were ever constructed. In 2023, the resort owner demanded maintenance fees and cancelled their reservations when the couples refused to pay, citing the unfulfilled contractual obligation. After the resort was sold to a new owner, the couples received no further communication or access.The couples sued for breach of contract and under the Montana Consumer Protection Act (MCPA), seeking damages and attorney fees. The Montana Nineteenth Judicial District Court granted summary judgment in their favor on the breach of contract claim, finding the agreements valid and breached by the owner for failing to provide the upgrade and improperly charging fees. The court denied summary judgment on the MCPA claim, which went to a jury along with the issue of contract damages. The jury awarded $250,000 in contract damages to each couple but found for the defendant on the MCPA claim. The court subsequently awarded all attorney fees and costs to the couples, finding these were inseparable from the contract claim.On appeal, the Supreme Court of the State of Montana affirmed. It held that substantial credible evidence supported the jury’s damages award, including damages for loss of use after the property changed hands, and that the verdict was consistent with the instructions and supported by the evidence. The court also upheld the award of full attorney fees, finding the claims and related work inseparable, and remanded for a determination of fees and costs incurred on appeal. View "McNain Holdings v. Wilderness Preserve" on Justia Law

A couple owned a large property in Missoula County, Montana, known as Marshall Mountain, and agreed to sell it to buyers for $2,150,000. The original purchase agreement called for conventional financing, but the parties later amended their agreement to provide for seller financing through a contract for deed, specifying essential terms such as the down payment, interest rate, amortization period, and payment responsibilities. The agreement contained a title contingency, among others, and the buyers approved the preliminary title commitment, which did not include any public access easements.After negotiating drafts of the contract for deed, the sellers’ attorney added numerous new provisions, including a public access easement that would allow various groups to use the property, which was not present in the original agreement or amendment. The buyers objected to this new term, arguing that it changed the character of the property. The sellers refused to accept the buyers’ proposed revisions and terminated the agreement. The buyers filed suit in the Montana Fourth Judicial District Court, alleging breach of contract, among other claims. The District Court found that the executed buy-sell agreement and its amendment constituted an enforceable contract, that the sellers breached its express terms by refusing to close, and that the buyers were damaged, but left other issues for trial.On appeal, the Supreme Court of the State of Montana reviewed de novo whether the parties’ failure to agree to the final terms of the contract for deed rendered the agreement unenforceable. The Court held that the buy-sell agreement and amendment contained all material terms necessary for the enforceable sale of real property, and that the parties did not clearly condition contract formation on later agreement to the contract for deed’s terms. The Court affirmed the District Court’s order granting partial summary judgment to the buyers. View "Melby v. Doering" on Justia Law

BMK Enterprises purchased a commercial property from Bailey Enterprises in 2018. As part of the transaction, the parties agreed to a provision granting BMK a right of first refusal if Bailey decided to sell the adjacent Bolinger Property, which contained storage units. In 2019, Bailey informed BMK of its intent to sell the Bolinger Property, but BMK did not purchase it at that time. Bailey later sold the Bolinger Property to a third party in 2021 without further notice to BMK. BMK subsequently filed suit against Bailey for breach of contract and breach of the implied covenant of good faith and fair dealing, alleging that Bailey failed to honor the right of first refusal provision. BMK also sued the real estate broker and agent involved in the sale, but those claims were dismissed and are not part of this appeal.The District Court of the Eighteenth Judicial District granted summary judgment in favor of Bailey. It concluded that the right of first refusal provision was unenforceable as a matter of law because it inadequately described the property subject to the right and failed to specify the price, rendering the contract provision ambiguous and void. The court declined to consider extrinsic evidence to clarify the parties’ intent, reasoning that the ambiguity could not be resolved through legal canons or extrinsic evidence.The Supreme Court of the State of Montana reviewed the District Court’s decision de novo. It held that while the provision was ambiguous, the District Court erred by not considering extrinsic evidence to ascertain the parties’ intent and resolve the ambiguity. The Supreme Court reversed the District Court’s grant of summary judgment and remanded the case for further proceedings to determine whether extrinsic evidence could clarify the object of the contract and render the right of first refusal enforceable. View "BMK Enterprises v. Bailey" on Justia Law

The case involves a dispute between an individual and two defendants whom he sued for breach of contract, fraud, intentional infliction of emotional distress, and defamation. After a bench trial, the trial court entered judgment in favor of the defendants on all claims. The plaintiff then filed multiple post-trial and post-judgment motions, alleging, among other things, that new evidence showed interference in the case by the Federal Bureau of Investigation. All of these motions were denied. Subsequently, the plaintiff filed several motions seeking to disqualify the presiding judge for alleged bias and misconduct, each of which was also denied.Following these filings, the trial court judge issued an order declaring the plaintiff a vexatious litigant and enjoining him from filing further pleadings without first obtaining the court’s permission. The plaintiff appealed, raising issues about the vexatious litigant order, the denial of his motions to disqualify the judge, and the completeness of the record on appeal.The Supreme Court of the State of Montana reviewed the case. It held that the trial court abused its discretion by declaring the plaintiff a vexatious litigant and issuing a pre-filing order without first providing notice and an opportunity to be heard. The court vacated the vexatious litigant order and remanded for further proceedings, requiring the trial court to allow the plaintiff a chance to be heard and then, if warranted, issue a substantive order with adequate analysis. The Supreme Court affirmed the denial of the plaintiff’s motions for judicial disqualification, finding the motions procedurally deficient, and concluded that the trial court transmitted a sufficient record on appeal. The judgment was affirmed in part, reversed in part, and remanded for further proceedings. View "Heaven v. Weber" on Justia Law

A woman was injured after slipping and falling in the parking lot of an automobile repair shop. She filed a claim with the shop’s insurance provider, which began covering some medical and wage expenses. After the insurance company’s representative informed her that liability for her claim was being accepted, the claimant ceased gathering evidence or seeking legal counsel, believing liability would not be contested. Over two years later, when settlement negotiations failed, she retained an attorney and sued both the repair shop and the insurer. After settling with the shop and dismissing it from the lawsuit, the claimant pursued multiple claims against the insurer, including breach of contract, promissory estoppel, spoliation, and equitable estoppel, contending that the insurer’s communications led her to detrimentally alter her conduct regarding evidence collection.The Fourth Judicial District Court initially indicated from the bench that the insurer was estopped from denying liability, but ultimately denied the claimant’s motion for partial summary judgment and granted summary judgment to the insurer on all claims. The District Court concluded that under Montana law as it existed before a 2023 statutory amendment, a third-party claimant could only bring statutory or common law bad faith claims against an insurer for mishandling a claim, and that the claimant had not sufficiently pled or could not prove the elements of her other asserted causes of action.The Supreme Court of the State of Montana held that, under the pre-2023 version of Montana law, third-party claimants are not restricted to statutory or common law bad faith claims and may assert other causes of action such as breach of contract or torts based on how an insurer handled a claim. The Court affirmed summary judgment for the insurer on promissory estoppel, breach of contract, and insufficiently pled claims, but reversed summary judgment on spoliation and equitable estoppel, remanding those claims for further proceedings. View "D'Hooge v. Cincinnati Insurance Co." on Justia Law

A Montana limited liability company and its sole member obtained a $450,000 loan secured by real property from a lender affiliated with New York-based entities. The loan documents included a promissory note, guaranty, and deed of trust, all referencing the lender as Axos Bank, though the servicing and assignment of the loan eventually resided with the lender’s subsidiaries. The loan imposed a high annual interest rate, and after the company defaulted, the property was sold. The borrower alleges it paid more than twice the loan amount and asserts that the lender’s arrangement with Axos Bank was a scheme to avoid Montana’s usury laws.The borrowers sued in the Montana Eighteenth Judicial District Court, seeking, among other relief, a declaration that the lender—not Axos Bank—was the true lender and subject to Montana usury law. The lender moved to dismiss and compel arbitration under the arbitration provisions in the loan documents. The District Court considered extrinsic evidence, including the borrower’s declaration, and found that the arbitration provisions conflicted with bold, capitalized jury trial waiver language, resulting in ambiguity. The District Court determined that the borrower had not knowingly, voluntarily, and intelligently waived its constitutional right of access to the courts, denied the motion to compel arbitration, and the lender appealed.The Supreme Court of the State of Montana reviewed the District Court’s denial of the motion to compel arbitration de novo. The Supreme Court affirmed, holding that the loan documents were ambiguous due to conflicting provisions regarding dispute resolution, and that such ambiguity prevented the borrower from giving the required knowing, voluntary, and intelligent consent to arbitrate and waive constitutional rights. As a result, the arbitration provisions were held unenforceable, and the District Court’s denial of the motion to compel arbitration was affirmed. View "Bluebird v. World Business Lenders" on Justia Law

A woman with dementia became a resident at a memory care facility in Montana in June 2021. She died in November 2021 after suffering infections and complications. Her son, acting both individually and as personal representative of her estate, filed suit against the facility and related entities in November 2023, alleging claims including wrongful death, negligence, infliction of emotional distress, elder abuse, unjust enrichment, and contract rescission. The claims centered on allegations that the facility’s staff failed to provide adequate care, leading to the woman’s injuries and death. The original complaint, and a subsequent first amended complaint filed in November 2024, were never served on any defendant.The Montana Eleventh Judicial District Court, Flathead County, dismissed all claims with prejudice in March 2025, finding that the son’s claims were medical malpractice actions subject to the two-year statute of limitations and six-month service requirement under Montana law. The court concluded that because the complaints were not timely served, and the amended complaint was filed after the statute of limitations had expired, the claims were time-barred. The court also rejected arguments that the filing of the original complaint tolled the statute or that the amended complaint related back to the original complaint.On appeal, the Supreme Court of the State of Montana held that the care-related claims (Counts I-VI) were medical malpractice claims subject to the statutory time limits and service requirements, and affirmed their dismissal as time-barred. However, the court found that the unjust enrichment and contract rescission claims (Counts VII and VIII) were not medical malpractice claims and were not subject to those limitations. The Supreme Court reversed the dismissal of those two counts and remanded for further proceedings solely on those claims. View "Estate of Athy v. Edgewood" on Justia Law