Justia Contracts Opinion Summaries

A homeowner alleged that he hired a roofing company in 2011 to install a specific type of roof on his residence. After installation, problems with roof materials became apparent, including issues with a protective layer that remained unresolved despite multiple repair attempts by both the roofing company and the manufacturer over more than a decade. The homeowner asserted that these defects persisted, and that communication from the roofing company ceased in early 2024. As a result, he filed a lawsuit in Etowah County, Alabama, alleging breach of express and implied warranties, as well as negligent or wanton installation and repair, and sought damages.The roofing company moved to dismiss the lawsuit for improper venue, arguing that a forum-selection clause in a “Service Agreement” required all disputes to be heard in Madison County, Alabama. The company attached an unsigned and undated sample agreement to its motion, but did not produce a copy signed by the homeowner or any evidence that the homeowner had agreed to such a clause. The homeowner responded that he had never signed, nor was he aware of, the agreement submitted by the company and also challenged the clause’s reasonableness. The Etowah Circuit Court denied the company’s motion to dismiss for improper venue.The Supreme Court of Alabama reviewed the company’s petition for a writ of mandamus, which sought to compel the lower court to dismiss the case or transfer it to Madison County. The Supreme Court held that the company failed to meet its burden of proving that the forum-selection clause applied, as it did not present evidence linking the blank agreement to the parties’ actual contract. Therefore, the Supreme Court of Alabama denied the petition, concluding that the circuit court did not clearly err in refusing to dismiss or transfer the case. View "Ex parte Continental Roofing Company, LLC" on Justia Law

A tenant and her adult son rented a house in Arlington, Virginia, for a year. Several months into the lease, they noticed water leaking through a skylight and informed the landlord. The landlord and a contractor inspected the skylight and confirmed it was leaking, but no repairs were made. After a period of snow and rain, the tenant slipped on water that had accumulated from the leak, suffering significant injuries. She then sued the landlord, alleging breach of contract for failing to complete repairs as required by the lease and state law, and common-law negligence in failing to take steps to prevent injury from the leak.The landlord removed the case to the United States District Court for the Eastern District of Virginia, which treated the landlord’s demurrer as a motion to dismiss. The district court dismissed the negligence claim, finding the complaint did not allege that the landlord or contractor undertook repairs or performed any negligent acts—only that they inspected and confirmed the leak. The court concluded Virginia law does not impose a tort duty on landlords for failing to repair, but only for negligent acts in the course of repair. The breach of contract claim survived the motion to dismiss, but the parties later stipulated to voluntarily dismiss it to allow an immediate appeal.The United States Court of Appeals for the Fourth Circuit first determined it had appellate jurisdiction, accepting the tenant's binding representation that she was abandoning the contract claim with prejudice. The court then affirmed the district court’s dismissal of the negligence claim. It held that, under Virginia law, a landlord is not liable in tort for failing to make repairs unless the landlord undertakes repairs and does so negligently. Because the complaint did not allege any negligent repair or positive act, only nonfeasance, the negligence claim failed as a matter of law. View "Metz v. McCarthy" on Justia Law

A resident of a retirement community, who has celiac disease and relies on a gluten free diet, experienced multiple episodes of illness after consuming meals labeled as gluten free at the facility. She signed a residential contract based on assurances that her dietary needs would be accommodated. Over several years, she reported incidents of illness to staff, including a crab cake in 2018, a stuffed tomato in 2020, and chicken marsala in 2021, all purportedly gluten free. The facility made various adjustments in response to her complaints, including menu changes, staff training, and kitchen modifications. She continued to use her meal plan but gave away the food. In 2023, she filed suit alleging violations of federal disability rights statutes and several state-law claims.The United States District Court for the District of Maryland granted summary judgment to the retirement community on all claims. The court found her federal claims untimely and denied her request for injunctive relief, concluding she lacked standing. It also rejected her state-law breach of contract and negligence claims, holding they were barred by the statute of limitations and unsupported by evidence.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court affirmed the district court’s judgment as to the federal claims, holding that the plaintiff lacked standing for injunctive relief under the Americans with Disabilities Act and that her Fair Housing Act and Rehabilitation Act claims were barred by the applicable statutes of limitations. It also affirmed dismissal of state-law claims related to the 2018 incident. However, the court vacated summary judgment as to her breach of contract and negligence claims arising from the January 2021 chicken marsala incident, finding genuine issues of material fact that should be resolved by a jury. The case was remanded for further proceedings on those claims. View "McGinn v. Broadmead, Inc." on Justia Law

The appellant in this case was a member of two limited liability companies, holding approximately a 33% interest. After disputes arose concerning the operation of the LLCs, the appellant initiated litigation seeking dissolution and other relief. Subsequently, he was expelled as a member. The LLCs’ operating agreement required immediate compensation for expelled members’ interests, but the appellant was not paid. While the case was ongoing, the district court enjoined the LLCs from harming the appellant’s interests and appointed a special master to value those interests. Despite the injunction, the appellant’s membership interests were assigned and sold to a third party without his knowledge. The appellant amended his complaint to assert conversion and defamation claims.A jury in the District Court of Park County found for the appellant, awarding $1,784,640 for conversion and $75,000 for defamation per se. Defendants moved post-judgment under Wyoming Rules of Civil Procedure 50(b), 59, and 60, arguing the conversion damages should not exceed the special master’s valuation and that defamation damages lacked evidentiary support. The district court initially denied the Rule 50(b) motion, affirming the jury’s findings. Later, under Rule 60(b), the court reduced conversion damages to $293,017 (the special master’s value) and defamation damages to $500, citing the appellant’s rightful expulsion and lack of proof of reputational harm or economic loss.The Supreme Court of Wyoming reviewed the district court’s reductions. It held that the appellant retained a property interest in the LLCs after expulsion until compensated, and the jury’s conversion award was proper based on fair market value at the time of conversion. For defamation per se, the Court clarified that Wyoming law allows presumed damages above nominal amounts, and sufficient evidence supported the jury’s $75,000 award. The Supreme Court reversed the district court’s reductions and reinstated the original jury awards. View "Mccall v. Best of the West Productions, LLC" 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

Ronald B. Panting, an independent contractor serving as a Designated Pilot Examiner (DPE) for the FAA, was conducting a pilot certification checkride for Michael Trubilla in a plane rented from the LeMay Aero Club, a government-affiliated organization. Both men died when the plane crashed during the checkride. Five days prior to the accident, Ronald signed a covenant not to sue the government for injuries sustained while participating in Aero Club activities, applicable to himself and his estate. His spouse, Lynne D. Panting, sued the United States under the Federal Tort Claims Act, alleging negligent maintenance of the aircraft.The United States District Court for the District of Nebraska denied the government’s motion for summary judgment, ruling the covenant not to sue was void as against public policy under Nebraska law. The court did not address Lynne’s alternative argument that the covenant did not apply to Ronald’s activities as a DPE on the day of the crash. Following a bench trial, the district court found the government negligent and entered judgment for Lynne, awarding damages. The government appealed, challenging the district court’s decision regarding the covenant’s validity.The United States Court of Appeals for the Eighth Circuit held that it had jurisdiction to review the denial of summary judgment because the enforceability of the covenant was a purely legal issue. Applying Nebraska law, the appellate court determined the covenant was neither clearly repugnant to public policy nor the product of disparate bargaining power, and that the Aero Club did not provide a public or essential service. The Eighth Circuit reversed the district court’s judgment and remanded for consideration of whether the covenant covered Ronald’s activities as a DPE, and for further proceedings as appropriate. View "Panting v. United States" on Justia Law

A carpenter employed by a subcontractor was injured after falling from a ladder owned by another subcontractor, DAL Electrical Corporation, while working on a renovation project at an office building. The injured worker was using his own employer’s equipment in the morning but, after lunch, returned to the worksite without his equipment and used an unattended DAL ladder, which was defective and marked with blue tape. He was injured when the ladder wobbled and he fell, impaling himself on a tool in his belt. The worker brought claims under New York Labor Law and for common-law negligence against the project’s general contractor, premises owner, and DAL, asserting the defective ladder caused his injuries. The general contractor and owner sought indemnification from DAL under their subcontract.The Supreme Court of Bronx County granted the worker’s motion for partial summary judgment on one Labor Law claim and denied DAL’s motion to dismiss other claims and cross-claims by the general contractor and owner. The court also granted the general contractor and owner summary judgment on their contractual indemnification claim against DAL. The Appellate Division, First Department, modified this order by denying summary judgment on contractual indemnification and granting summary judgment for DAL on all claims and cross-claims against it. The general contractor and owner appealed to the New York Court of Appeals.The New York Court of Appeals affirmed the Appellate Division’s decision. The Court held that none of the indemnification provisions in the subcontract required DAL to indemnify the general contractor or owner for the worker’s injuries because the injuries did not arise from DAL’s performance of its contractually defined work. The Court also found that DAL did not owe a duty of care in tort to the injured worker, as the facts did not fit within any recognized exception to the general rule against extending contractual duties to non-contracting third parties. The certified question was answered in the affirmative. View "Dibrino v Rockefeller Ctr. N., Inc." on Justia Law

A Texas truck driver was injured while making roadside repairs in Iowa when his parked semi was struck by another vehicle. After the accident, the driver retained a Texas attorney to pursue his personal injury claim. That attorney negotiated with the insurer for the other driver, ultimately agreeing to a settlement of $125,000 and requesting a release. However, the client did not sign the release and later replaced his attorney, claiming he had not authorized the settlement. The client then filed a lawsuit in Iowa, seeking additional compensation and naming the driver, the driver’s employer, and others as defendants.The defendants responded by moving to enforce the settlement agreement in the Iowa District Court for Warren County. The district court, acting as factfinder with no objection from either party, held a hearing, accepted evidence, and considered the client’s affidavit. The court found that the attorney was presumed to have settlement authority and that the client had not rebutted this presumption with clear and convincing evidence. The court enforced the settlement and dismissed the case upon payment of the agreed sum. The client’s motion to reconsider was denied, and he appealed.The Iowa Court of Appeals affirmed, finding the district court’s factual findings were supported by substantial evidence. The Iowa Supreme Court granted further review. The Supreme Court held that, because the client did not object to the district court’s procedure, the court properly acted as factfinder. The Supreme Court further held that the district court’s finding—that the attorney had authority to settle—was supported by substantial evidence, and thus the settlement agreement was enforceable. The court affirmed the decisions of the lower courts. View "Recio v. Fridley" on Justia Law

A member of the Kuwaiti royal family was defrauded by a Baltimore restaurateur, who convinced her to send nearly $7.8 million under the guise of investing in real estate and restaurant ventures in the United States. The restaurateur used the funds to acquire multiple properties, including a condominium in New York City and a home in Pikesville, Maryland, but secretly held ownership in his own name and for his personal use. After the fraud was uncovered, the investor sued the restaurateur for fraud and sought to impose a constructive trust over the properties purchased with her funds. Around the same time, she attempted to file a notice of lis pendens to protect her interest in the Pikesville property, but the notice was recorded against the wrong property and was thus ineffective.During discovery, the investor learned that World Business Lenders, LLC (WBL) had issued three loans to the restaurateur, each secured by properties acquired with her funds. She then filed suit against WBL in the United States District Court for the District of Maryland, alleging that WBL aided and abetted the restaurateur’s fraud by encumbering the properties with liens, thereby hindering her ability to recover on any judgment. Following a bench trial, the district court found for WBL on two of the loans, but found WBL liable for aiding and abetting fraud in relation to the loan secured by the Pikesville home, awarding compensatory and punitive damages.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the district court’s factual findings for clear error and legal conclusions de novo. The appellate court affirmed the district court’s judgment for WBL on the first two loans but reversed as to the Pikesville loan. The Fourth Circuit held that WBL was not willfully blind to the restaurateur’s fraud in any of the loans as a matter of law and remanded with instructions to enter final judgment for WBL on all claims. View "Al-Sabah v. World Business Lenders, LLC" on Justia Law

A security services company and its sole shareholder, who is also its president and CEO, provided security services to two Iowa cities under separate contracts. After the shareholder published a letter criticizing media coverage of law enforcement responses to protests, a local newspaper published articles highlighting his critical comments about protestors and the Black Lives Matter movement. Subsequently, a city council member expressed concerns about the shareholder’s views, and the city council voted unanimously to terminate the company’s contract. The council member also pressured officials in the other city to end their contract with the company. Facing negative publicity, the company voluntarily terminated its second contract to avoid harm to a pending business transaction.The plaintiffs filed suit in the United States District Court for the Southern District of Iowa against the city, the council member, and other council members, alleging First Amendment retaliation, tortious interference with business contracts, and defamation. The district court granted the defendants’ motion to dismiss all claims under Rule 12(b)(6). It found that the shareholder lacked standing to assert a First Amendment retaliation claim for injuries to the corporation, and that the corporation failed to state a retaliation claim because only the shareholder engaged in protected speech. The court dismissed the tortious interference claim for lack of sufficient factual allegations and because the contract was terminated voluntarily. The defamation claim was dismissed for failure to identify any actionable statements by the defendants.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the dismissal of the shareholder’s First Amendment retaliation and defamation claims, but directed that these dismissals be without prejudice. The court reversed the dismissal of the corporation’s First Amendment retaliation and tortious interference claims, finding that the complaint alleged sufficient facts to survive a motion to dismiss, and remanded those claims for further proceedings. View "Conley v. City of West Des Moines" on Justia Law