Justia Contracts Opinion Summaries

Ronald Bacon was injured while working at a construction site. Bacon sued the general contractor, the general contractor's commercial liability insurer, the subcontractor, and the parent company of the subcontractor. Bacon settled with the insurer, which together with the general contractor's separate liability insurer, made payments to Bacon pursuant to the settlement agreement. After Bacon settled with the subcontractor's parent company, the general contractor's two insurers filed a breach of contract action because Bacon received the proceeds of his second settlement but refused to make payment to the insurers under the terms of the first settlement agreement. The district court granted summary judgment for the insurers, finding Bacon, his lawyer, and the lawyer's law firm liable in the amount of $437,500. The Supreme Court reversed the district court's finding that lawyer and law firm were personally liable on the contract, holding that an attorney and/or law firm is not liable on a contract negotiated on behalf of a client when the contract provides that both the client and the attorney "agree to and will pay" a certain sum of money and the attorney signs the contract under the legend "Agreed to in Form & Substance". The Court otherwise affirmed.

Appellants, three individuals, filed an initiative and referendum petition to refer a proposed ballot measure, which would have amended a city ordinance imposing an occupation tax, to the electorate of the City. The City filed a declaratory judgment action to have the proposed measure declared invalid. The district court ruled that the petition proposed a referendum measure that violated Neb. Rev. Stat. 18-2528(1)(a), which prohibits referendums that interfere with a city's contractual obligations. The electors voted on the proposed amendment. The district court subsequently ordered the county clerk not to count the votes cast and not to report or certify the results. The Supreme Court affirmed in part and reversed in part and vacated, holding (1) the district court lacked the authority to block the count of the votes cast because the City failed to comply with the statutory requisites that would allow a court to take that action; (2) the district court erred in ruling that the proposed referendum violated section 18-2528(1)(a); and (3) the proposed referendum violated a common-law single subject rule, which invalidates proposed ballot measures that ask voters to approve independent and distinct measures in a single vote.

Thirteen-year-old Efrain Ramos-Domingo was killed by a Union Pacific Railroad Company train. Two days later, Efrain's mother, Manuela Gonzalez signed a document releasing Union Pacific from liability for Efrain's death in exchange for $15,000. Manuela later filed a complaint in district court for wrongful death and breach of fiduciary duty. Union Pacific filed a motion to dismiss Manuela's complaint, arguing that the release barred Manuela's claims. The district court sustained the motion to dismiss with respect to the wrongful death claim but overruled the motion with respect to the fiduciary duty claim. The district court then granted Union Pacific's motion for summary judgment on the remaining claim, finding that there was no fiduciary duty owed by Union Pacific to Manuela. The Supreme Court affirmed in part and reversed in part, holding (1) the district court erred in dismissing Manuela's wrongful death claim because Manuela alleged facts that, if proved, could demonstrate that the release was void on the basis of its failure to represent a binding mutual understanding of the parties or was voidable as the product of fraud, overreaching or duress; and (2) the district court correctly concluded that Union Pacific owed no fiduciary duty to Manuela. Remanded.

McKinnis Roofing and Sheet Metal and homeowner Jeffrey Hicks entered into two contracts. The first contract related to Hicks' roof, and the second contract related to copper awnings on Hicks' residence. McKinnis filed a complaint in the district court alleging that Hicks breached both contracts after Hicks refused McKinnis' demand for advance payment. After trial, he district court determined that Hicks had breached both contracts, awarding McKinnis damages in the amount of $4,419 with regard to the roofing contract and $789 with regard to the awning contract. McKinnis appealed, arguing that the district court erred in calculating the amount of damages to which it was entitled. Hicks cross-appealed and claimed that the district court erred when it determined that he breached the contracts. The Supreme Court reversed, holding that based on the facts and contract language, Hicks did not breach either contract.

Stephen O'Bryant, a commercial truckdriver, was killed during the course of his employment as the result of a motor vehicle accident. Sylvia Devese, the representative of his estate, sought to recover under O'Bryant's occupational accident policy with Transguard Insurance Company of America. Transugard denied the claim on the ground that O'Bryant did not have a valid commercial driver's license (CDL) at the time of the accident, and the personal representative brought this action against Transguard for breach of contract and bad faith. The policy stated that no benefits would be paid for any claim resulting from any loss occurring while the insured person was operating a vehicle without a valid CDL. The trial court granted summary judgment in favor of Transguard. On appeal, the Supreme Court reversed and remanded, holding that Neb. Rev. Stat. 44-358 applies so as to require a showing of causation between the breach and the loss, despite the language of the policy.

This case arose from a boundary dispute between R and B Farms and Cedar Valley Acres. The disputed property, a parcel of cropland located north of a fence, was encompassed by a legal description deeded to Cedar Valley under the agreement conveying the land. R and B, however, claimed that all parties to the contract decided the fence line would serve as the boundary for the property. R and B filed suit against Cedar Valley, alleging among other causes of action mutual recognition and acquiescence. In its complaint R and B did not explicitly plead mutual mistake as a theory of recovery. The district court ultimately found in favor of R and B on the theory of mutual mistake and reformed the contract on that basis. The Supreme Court reversed and remanded, holding that because the facts pleaded by R and B were sufficient to place the theory of mutual mistake at issue and because mutual mistake was tried by the implied consent of the parties, the claim of mutual mistake was properly before the district court. However, because the record did not support a finding of mutual mistake, the Court held the district court erred in reforming the contract.