Justia Contracts Opinion Summaries

Articles Posted in Montana Supreme Court
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Clifford Sabo and Sabo Brothers Construction (the Sabos) entered into a written lease agreement with Vernon and Laura Caldwell for the excavation of scoria, a substance used in road construction, on the Caldwells' land. The Sabos agreed to pay the Caldwells a royalty rate for all scoria sold from the Caldwells' land, but the lease was silent as to when royalty payments were to be made. For several months, the Sabos made royalty payments to the Caldwells but for another period of several months, the Sabos did not make any royalty payments at all. The Caldwells subsequently filed a complaint against the Sabos, alleging breach of the lease for failure to pay royalties in a timely manner. The Caldwells also filed an application for a preliminary injunction. The district court enjoined the Sabos from hauling or selling any scoria from the Caldwells' land, concluding that the Caldwells had made a prima facie case that the Sabos had not paid them for all the scoria sold. The Supreme Court reversed, holding that the district court erred in granting the Caldwells a preliminary injunction in a breach of contract action when pecuniary compensation was contemplated and would afford adequate relief. Remanded. View "Caldwell v. Sabo" on Justia Law

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Whitney Schwan died in an automobile accident after Travis Turner, the driver, lost control of the vehicle. Whitney's parents sued Travis's estate and his parents (the Turners). The Turners had a homeowners policy with State Farm Fire and Casualty Company (State Farm). State Farm filed an action seeking a declaration that it owed no duty to defend or indemnify the Turners under the homeowners policy. Meanwhile, a mediation concluded with a settlement that included assignment of all of the Turners' rights and claims under the homeowners' policy to the Schwans, and the Schwans replaced the Turners in the declaratory action. The district court granted summary judgment to the Schwans on its counterclaim that State Farm had breached its duty to defend the Turners by not retaining separate counsel for the Turners in the underlying action. The Supreme Court reversed, holding that the district court erred by concluding that State Farm had breached its duty to defend under the policy, as State Farm did ensure a full defense was provided to the Turners even though its decisions regarding counsel did not include hiring additional counsel. View "State Farm Fire & Cas. Co. v. Schwan" on Justia Law

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Plaintiff, who carried health insurance through New West Health Services (New West), was injured in an automobile accident resulting in medical expenses totaling approximately $120,000. The tortfeasor's insurer paid approximately $100,000 of Plaintiff's medical bills. Plaintiff later filed a complaint against New West alleging individual and class claims, asserting that New West failed to pay approximately $100,000 of her medical expenses because the third party liability carrier had paid the majority of the bills. The district court certified the class complaint. The Supreme Court affirmed, holding that the district court did not abuse its discretion by adopting the class definition proposed by Plaintiff and denying New West's motion to modify the class definition. View "Rolan v. New West Health Servs." on Justia Law

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Leonard Landa was the sole managing member of a Montana limited liability corporation. Landa carried commercial general liability insurance through Assurance. After a former employee of Landa's filed a complaint alleging that Landa had committed various torts by inducing him to work for Landa under allegedly false pretenses, Landa tendered defense of the former employee's claim to Assurance. Assurance refused to defend Landa, stating that the complaint's allegations were not covered under Landa's policy. Landa filed a complaint seeking declaratory relief establishing that Assurance had a duty to defend and indemnify Landa and alleging violations of Montana's Unfair Trade Practices Act (UTPA), negligence, and other causes of action. The district court granted summary judgment for Assurance, finding that the complaint's allegations were not covered under Landa's policy and that Assurance was not liable under the UTPA because the denial of coverage was grounded on a legal conclusion. The Supreme Court affirmed, holding that Assurance correctly declined to provide a defense where the former employee's complaint did not allege an "occurrence" and, as a result, did not trigger a duty to defend under the policy. View "Landa v. Assurance Co. of Am." on Justia Law

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Wife sustained injuries as a result of Husband's negligent driving. Wife and Husband (Plaintiffs) sought coverage from Insurer, which denied coverage due to a family member exclusion in the umbrella police Husband held with Insurer. The district court concluded that the exclusion was unconscionable and entered summary judgment for Plaintiffs. The Supreme Court reversed and remanded for entry of summary judgment in favor of Insurer, holding (1) Plaintiffs failed to establish that the family member exclusion unconscionably favored State Farm, and the district court erred in so concluding; (2) the exclusion did not contravene and express statute, undermine the made-whole doctrine, or violate public policy in any other way; and (3) the policy unambiguously excluded Wife's claim from coverage, and the family member exclusion did not violate Plaintiffs' reasonable expectations. View "Fisher v. State Farm Mut. Auto. Ins. Co." on Justia Law

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Plaintiffs Dorothy Harris and Tedeen Holbert were injured in separate automobile accidents caused by third-party tortfeasors. Plaintiffs were treated at Billings Clinic and St. Vincent Healthcare (Providers) for their injuries. Both Harris and Holbert were members of health plans administered by Blue Cross Blue Shield (BCBS), which entered into a preferred provider agreement (PPA) with the Providers pursuant to which Providers accepted payment from BCBS at a discounted reimbursement rate for certain medical services for BCBS insureds. Plaintiffs subsequently filed a complaint against Billings Clinic, asserting breach of contract and constructive fraud claims and requesting compensatory damages equal to the difference between the amount the third-party insurers paid to the Providers and the reduced reimbursement rates under the PPA with BCBS. Harris also filed similar claims against St. Vincent Healthcare. The district courts dismissed the claims for failure to state a claim upon which relief can be granted. The Supreme Court affirmed, holding that the district court did not err in determining that the Providers were entitled to collect from third-party insurers payment for the full amount of the billed charges for the medical treatment provided to Plaintiffs. View "Harris v. St Vincent Healthcare" on Justia Law

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The Leonards entered into contracts with Centennial for the sale of a log home kit and construction of a custom log home. The Leonards later released Centennial from any claims for damages for defective construction or warranty arising out of the home's construction. Greg and Elvira Johnston held a thirty-six percent interest in the property at the time the release was signed. Eventually, all interest in the property was transferred to the Elvira Johnston Trust. A few years later, because of a number of construction defects affecting the structural integrity of the house, the Johnstons decided to demolish the house. The Johnstons sued Centennnial for negligent construction, breach of statutory and implied warranties, and other causes of action. The district court granted summary judgment for Centennial, finding that the Johnstons' claims were time-barred and were waived by the Leonards' release. The Supreme Court (1) reversed the court's ruling that the Johnstons' claims were time-barred and directed that the decision on remand apply only to the interest owned by the Johnstons at the time the release was executed; and (2) affirmed the district court's conclusion that the release was binding on the Leonards' sixty-four percent interest, later transferred to the Trust. View "Johnston v. Centennial Log Homes & Furnishings, Inc." on Justia Law

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This case involved a dispute between Johnny Hughes and his parents, Jack and Shirley Hughes, regarding borrowed money, the partition of jointly owned real property and accompanying water rights, and a contested pasture lease. The district court ruled in favor of Johnny on all of the issues except for the water rights. The Supreme Court affirmed in part, reversed in part, and remanded, holding (1) the jury's determination that Johnny paid interest on a promissory note executed in favor of Jack and Shirley in 1989 restarted the statute of limitations on the note, and therefore, the matter was remanded to consider the amount of principal and interest Johnny owed on the note; (2) the partition agreement between the parties dissolved whatever right Jack and Shirley may have possessed in a life estate on a house on the land Johnny received pursuant to the agreement or to insurance proceeds Johnny received after the house was destroyed by fire; (3) Jack was entitled to an easement for stock water across Johnny's property; and (4) the arbitrator who arbitrated the pasture lease did not exceed his authority or miscalculate damages. View "Hughes v. Hughes" on Justia Law

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Bruce Nelson subdivided property in the 1970s. Appellant claimed he purchased tract eighteen from Nelson ten days after Nelson filed the plat. Appellant claimed that at the time of the conveyance, Nelson guaranteed that it would not sell adjoining tracts sixteen and seventeen. Appellee filed a notarized declaration four years later. In 2005, however, Nelson sold tracts sixteen and seventeen. Appellee purchased tracts sixteen and seventeen in 2008. Appellee filed a quiet title action to clear her title of any cloud that may have arisen as a result of Appellant's declaration. The district court granted summary judgment for Appellee, concluding that Appellant's declaration did not create a restriction on development and that there was no restriction on the property prohibiting the sale of the disputed tracts. The Supreme Court affirmed, holding that the district court did not err in granting summary judgment to Appellee. View "Pennington v. Flaherty" on Justia Law

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After Sarah West was involved in a motor vehicle accident, West made a claim against her insurer, State Farm, for underinsured motorist benefits of $75,000. State Farm paid only $20,000 in benefits. Attorney Tracey Morin subsequently filed a complaint against State Farm on behalf of Sarah and her parents, Ausra and James West, for breach of contract, violation of the Montana Unfair Trade Practices Act, and breach of the implied covenant of good faith and fair dealing. At the conclusion of the action, the district court imposed sanctions on Morin individually under Mont. R. Civ. P. 11. Morin appealed, contending that the depth and breadth of the sanctions constituted an abuse of discretion. The Supreme Court affirmed, holding that the district court did not abuse its discretion in imposing the level of sanctions imposed in this case. View "Morin v. State Farm Mut. Auto. Ins. Co." on Justia Law