Justia Contracts Opinion Summaries

James Whealon was employed by the Anaconda School District pursuant to a series of employment contracts. Upon retirement, Whealon filed a formal grievance, asserting that, under the terms of his contract, he was entitled to payment of his health insurance premiums by the District until he reached the age of sixty-five. The District denied his claim. The County Superintendent granted summary judgment to the District, holding that the language of the contract was unambiguous and that Whealon was not entitled to the claimed benefits beyond the date of his retirement. The State Superintendent of Public Instruction reversed and remanded for an evidentiary hearing, holding that the language of the contract was ambiguous. The district court reversed and reinstated the County Superintendent's ruling. The Supreme Court affirmed the district court, holding (1) the district court did not err in holding that a county superintendent has authority to grant summary judgment; and (2) the district court did not err in reinstating summary judgment in favor of the district where the language of the agreement was unambiguous and the District was entitled to judgment.

Campbell Farming Corporation had its shares controlled by three shareholders: Stephanie Gately controlled fifty-one percent of the shares, and H. Robert Warren and Joan Crocker controlled the remaining forty-nine percent. Stephanie awarded her son, Robert Gately, who was president of the company, a bonus after a vote by the shareholders. Warren and Crocker filed a derivative and direct action against the company and the Gatelys in federal district court seeking to void the bonus. The district court entered judgment in favor of Defendants. The Supreme Court accepted certification from the Tenth Circuit to answer several questions and held (1) the safe harbor provision of Mont. Code Ann. 35-1-462(2)(c) can be extended to cover a conflict-of-interest transaction involving a bonus that lacks consideration and would be void under Montana common law; (2) the business judgment rule does not apply to situations involving a director's conflict-of-interest transaction; and (3) the holding in Daniels v. Thomas, Dean & Hoskins does not apply to the claim challenging Stephanie's role in the director conflict of interest transaction, but the Daniels test does apply to the claim of breach of fiduciary duties alleged by the minority shareholders against Stephanie in her capacity as majority shareholder.

Gary Martin and Lewistown Miller Construction Company entered into a written contract for the construction of a dwelling on Martin's property. When construction was completed, Martin refused to pay additional amounts above the bid price, and LMCC filed a construction lien on the property. LMCC then filed suit, seeking damages for breach of contract, unjust enrichment, and foreclosure of the lien. Martin counterclaimed for declaratory relief that the lien was invalid and to quiet title, among other things. The district court (1) granted foreclosure of LMCC's construction lien and awarded damages to LMCC; and (2) denied LMCC's and Martin's request for attorney fees. The Supreme Court affirmed in part and reversed in part, holding (1) the district court did not err in ordering foreclosure of the construction lien, and the award of damages was not clearly erroneous; but (2) the district court erred in failing to award statutorily mandated attorney fees to LMCC, as it established its lien. Remanded.

The Fronks (Fronks) purchased two pieces of property from the Collinses (Collins), and the parties entered into an oral agreement whereby Collins would acquire horses and Collins would be entitled to keep the first foal from each mare as payment for their services. Fronks later transferred $215,000 to Collins for the acquisition of the horses. Fronks later deeded the properties back to Collins with the understanding that Collins would reconvey the land back to Fronks within five years. The parties subsequently signed an agreement setting forth each party's obligations. When Collins did not comply with the agreement, Fronks brought an action for breach of contract, breach of implied covenant of good faith and fair dealing, and misrepresentation seeking, inter alia, to enforce the agreement and recover damages, obtain ownership of the real property, and recover attorney fees. The district court determined that the agreement was a valid, enforceable contract and granted summary judgment to Fronks. The Supreme Court affirmed, holding that the agreement was a valid contract and the agreement did not suffer from a lack of consent by virtue of duress or menace.

The Heins rented a house from Julia Benintendi and the Perkerwicz family (hereinafter B&P). B&P alleged the Heins caused considerable damage to the property when they vacated the premises. The Heins countered that B&P unlawfully retained their security deposit and refused to reimburse the Heins for home and lawn improvements. B&P sued and obtained a default judgment. The district court subsequently set aside the default judgment and held a jury trial. B&P were awarded damages but not attorney fees or costs. The Supreme Court affirmed in part and reversed and remanded in part, holding (1) the district court did not abuse its discretion in denying attorney fees to both parties; (2) the district court incorrectly required each party to bear its own costs because, as the prevailing party, B&P was entitled to its costs under Mont. Code Ann. 25-10-101; and (3) the district court did not manifestly abuse its discretion in setting aside the default judgment because it had good cause to do so.

Sellers entered an alleged contract with Buyer for the sale of property. After the parties failed to complete the sale, Buyer sued Sellers, seeking specific performance of the alleged contract. Buyer filed an amended complaint that added as a defendant Attorney, who had served as counsel for Sellers in the failed transaction, alleging fraud and other tortious conduct. Attorney filed a motion to substitute the district court judge, which the district court denied after finding Attorney's motion was untimely. At issue on appeal was whether Attorney qualified as a third-party defendant who possessed an independent right of substitution as opposed to a subsequently joined defendant. The Supreme Court reversed, holding (1) Attorney and Buyer qualified as adverse parties, and therefore, Attorney was a third-party defendant; and (2) Attorney timely filed his motion of substitution. Remanded.

Frederick and Mandelena Harmon bought a home pursuant to a buy-sell agreement that realtor Dianne Burright, a licensed real estate salesperson who worked for Fiscus Realty, prepared at the Fiscus Realty office. The home was built by Dianne's husband, Jerry. The Harmons subsequently discovered numerous construction problems. The Harmons sued Defendants Jerry and Dianne Burright and Fiscus Reality, raising several causing of action, including a claim under the Unfair Trade Practices and Consumer Protection Act (the Act). A jury returned a verdict against the Burrights on breach of warranty and negligent misrepresentation claims and held for Defendants on all other claims. After trial, Defendants filed motions for attorney fees as prevailing parties under the Act, which the district court denied. Fiscus Realty appealed. The Supreme Court affirmed, holding that the district court did not abuse its discretion in denying an award of attorney fees to Fiscus Realty as the Harmons' claims had a basis in fact and law and were not frivolous, unreasonable or unfounded.

John Miller pled guilty to two counts of deliberate homicide. Miller later filed suit against James Goetz, the attorney that defended him, and arranged for Patrick Begley's limited representation in his claims against Goetz. Begley later withdrew from representing Miller. Miller then filed suit against Begley, alleging breach of contract, breach of the covenant of good faith and fair dealing, and fraudulent deceit. The district court granted summary judgment to Begley, finding that Begley had reasonably assisted Miller with his claims against Goetz and the dismissal of the Goetz claim was based on legal deficiencies unrelated to Begley's legal services. The Supreme Court affirmed, holding that the district court did not err in granting summary judgment to Begley as Miller failed to demonstrate genuine issues of material fact existed regarding his claims.

Dane Shattuck died from injuries after being hit by an automobile. Dane received medical care at Hospital for his injuries. Dane was enrolled in a children's health insurance program (CHIP), administered by the department of public health and human services (DPHHS). Hospital submitted the bill for Dane's care to Blue Cross and Blue Shield (BCBS), which served as third-party administrator of the CHIP program for DPHHS. Hospital then asserted a lien for the full bill amount against recoveries Gail Shattuck, as personal representative of Dane's estate, may obtain against third parties. Shattuck sued Hospital, BCBS, DPHHS, and the State, asserting that Defendants unlawfully acted to avoid application of "made whole" rules and that Hospital could not foreclose the lien because Shattuck had not been made whole. The district court granted partial summary judgment to Shattuck. The Supreme Court reversed in part and affirmed in part, holding (1) the district court erred by determining that CHIP constitutes insurance and was governed by the made whole doctrine, and (2) the district court did not err by determining that BCBS was not an insurer in its role here and, therefore, was not subject to the made whole statute. Remanded.

Mother consented to the adoption of her two biological children, after which the children were placed in the legal care of Guardians. Guardians later arranged for the adoption of the children by Adoptive Parents and relinquished the children. After six months of living with Adoptive Parents, Guardians moved to have their relinquishment and consent to adoption set aside, claiming their consent was fraudulently obtained by their reliance on a deficient pre-placement evaluation provided to them by Adoptive Parents. The district court denied the motion. The Supreme Court affirmed, holding that because Guardians failed to establish the existence of actual or constructive fraud by clear and convincing evidence, there was no statutory basis to set aside the relinquishments and consents given by Guardians.