Justia Contracts Opinion Summaries

In May 2022, Garry Douglas Seaman shot and killed James Preston Freeman and seriously wounded Heidi Gabert, following the end of his romantic relationship with Gabert, with whom he shares a minor child. Seaman was criminally charged, and Gabert and Dawn Freeman, James’s spouse, filed a civil suit for damages. To prevent Seaman from transferring or selling assets during the litigation, Gabert and Freeman successfully sought a receivership over all of Seaman’s property. After negotiations, the parties reached a settlement memorialized in a memorandum of understanding (MOU), which included $10 million judgments for Gabert and Freeman, liquidation of Seaman’s assets, and a homestead exemption for Seaman.The Nineteenth Judicial District Court, Lincoln County, approved the creation of a designated settlement fund (DSF) to facilitate asset liquidation. Initially, the court’s DSF Order required the Liquidation Receiver to reserve funds from asset sales to pay Seaman’s capital gains taxes, interpreting the MOU’s tax payment provision as unambiguous. Gabert and Freeman moved to amend this order under Montana Rule of Civil Procedure 59(e), arguing the court erred in its interpretation and that the parties did not intend to reserve funds for Seaman’s capital gains taxes. After an evidentiary hearing, the District Court agreed, finding the MOU ambiguous and, based on extrinsic evidence, concluded the parties did not intend to reserve such funds. The court amended its order, striking the provision requiring reservation for capital gains taxes.The Supreme Court of the State of Montana reviewed whether the District Court abused its discretion in amending the DSF Order. The Supreme Court held that the District Court did not abuse its discretion, correctly found the MOU ambiguous, and its factual finding regarding the parties’ intent was not clearly erroneous. The Supreme Court affirmed the District Court’s amended order. View "Gabert v. Seaman" on Justia Law

A family leased a home within military housing at the Naval Amphibious Base Coronado in California. Shortly after moving in, they experienced persistent water intrusion and mold contamination, which they alleged damaged their property and affected their health. The family reported these issues to the property manager and the public-private entity responsible for the housing, but claimed that remediation efforts were inadequate and that their concerns were dismissed. After further testing confirmed hazardous mold, the family vacated the property and brought state law claims, including negligence and breach of contract, against the property manager, the public-private housing entity, and a mold remediation company.The defendants removed the case from California state court to the United States District Court for the Southern District of California, asserting federal enclave, federal officer, and federal agency jurisdiction. The district court denied the defendants’ motion to dismiss based on derivative sovereign immunity and, after further proceedings, found that it lacked subject matter jurisdiction on all asserted grounds. Specifically, the court determined there was no evidence that the United States had accepted exclusive jurisdiction over the property, that the defendants failed to show a causal nexus between their actions and federal direction, and that the public-private entity was not a federal agency. The district court remanded the case to state court.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the remand order under an exception allowing appellate review when federal officer removal is asserted. The Ninth Circuit held that the district court correctly found no federal enclave jurisdiction because there was no evidence of federal acceptance of exclusive jurisdiction over the property. The court also held that the defendants did not meet the requirements for federal officer or agency jurisdiction. The Ninth Circuit affirmed the district court’s remand to state court. View "CHILDS V. SAN DIEGO FAMILY HOUSING, LLC" on Justia Law

A general contractor was hired to oversee the construction of a hotel in Vermont and subcontracted with a firm to install metal siding panels manufactured by a third party. The subcontractor relied on installation instructions available on the manufacturer’s website, which did not specify the use of a splice plate to connect the panels. The panels were installed without splice plates, and after construction, the panels began to detach from the building, causing some to fall and damage nearby property. The contractor later discovered that the manufacturer had created an instruction sheet in 2006 recommending splice plates, but this information was not publicly available at the time of installation.The contractor initially sued the installer for breach of contract, warranty, and negligence in the Vermont Superior Court, Chittenden Unit, Civil Division. The complaint was later amended to add a product liability claim against the manufacturer. After further discovery, the contractor sought to amend the complaint a third time to add new claims against the manufacturer, arguing that new evidence justified the amendment. The trial court denied this motion, citing undue delay and prejudice to the manufacturer, and granted summary judgment to the manufacturer on the product liability claim and on a crossclaim for implied indemnity brought by the installer, finding both barred by the economic-loss rule.On appeal, the Vermont Supreme Court affirmed the trial court’s decisions. The Court held that the trial court did not abuse its discretion in denying the third motion to amend due to undue delay and prejudice. It also held that the economic-loss rule barred the contractor’s product liability claim, as neither the “other-property” nor “special-relationship” exceptions applied. Finally, the Court found the contractor lacked standing to appeal the summary judgment on the installer’s implied indemnity claim. View "PeakCM, LLC v. Mountainview Metal Systems, LLC" on Justia Law

Daniel Flickinger, a litigator at Wainwright, Pope & McMeekin, P.C. (WPM), posted conservative commentary on his personal social media, including a controversial post about George Floyd. Lawrence Tracy King, a partner at King Simmons Ford & Spree, P.C., sent a screenshot of Flickinger’s post—paired with a professional photo from WPM’s website—to WPM partners, expressing concern about the post’s impact on the firm’s reputation. The WPM partners, after reviewing Flickinger’s social media activity and discussing with King, asked Flickinger to resign, which he did. Flickinger alleged that the screenshot misrepresented his post as being made in his professional capacity and falsely associated his views with WPM.Flickinger sued King and the King law firm for defamation, invasion of privacy, and tortious interference with a business relationship. The Jefferson Circuit Court dismissed all claims, but the Supreme Court of Alabama previously reinstated the tortious interference claim, remanding for further proceedings. On remand, the King defendants moved for summary judgment, submitting affidavits from WPM partners stating their decision to terminate Flickinger was based solely on their independent review of his public posts, not on King’s actions. Flickinger sought to compel production of King’s cell phone records and to continue the summary judgment hearing, but the circuit court denied both motions and granted summary judgment for the King defendants, finding no genuine issue of material fact on causation.The Supreme Court of Alabama affirmed summary judgment for the King law firm, holding King’s actions were outside the scope of his employment and did not benefit the firm. However, the Court reversed summary judgment for King, finding genuine issues of material fact regarding causation and justification. The case was remanded for further proceedings against King, while the denial of Flickinger’s discovery and continuance motions was affirmed. View "Flickinger v. King" on Justia Law

A waste hauling company operating in Kansas City brought suit against a mobile waste compaction business and its franchisor. The waste hauler owns containers that are leased to customers, who sometimes contract separately with the compaction company to compress waste inside those containers. The hauler alleged that the compaction company’s activities damaged its containers and interfered with its business relationships. The hauler sought various forms of relief, including damages, injunctive and declaratory relief, and nominal damages, but ultimately disavowed any claim for actual monetary damages, citing a lack of evidence to support such damages.The United States District Court for the Western District of Missouri denied the hauler’s request for a temporary restraining order, finding no irreparable harm. During discovery, the hauler admitted it could not identify or quantify any actual damages and stipulated it was not seeking damages outside Kansas City. The district court granted the compaction company’s motion to strike the hauler’s jury demand, holding that the hauler had not presented evidence of compensatory damages, that nominal damages were unavailable under Missouri law for the claims asserted, and that the remaining claims were equitable in nature. After a bench trial, the district court entered judgment for the compaction company and its franchisor, finding the hauler failed to prove essential elements of its claims, including actual damages and direct benefit conferred for unjust enrichment.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed. The court held that the hauler was not entitled to a jury trial under the Seventh Amendment because it failed to present evidence of compensatory damages and nominal damages were not available for its claims under Missouri law. The court also affirmed judgment for the compaction company on the trespass to chattels and unjust enrichment claims, finding the hauler failed to prove dispossession, damages, or a direct benefit conferred. View "Allied Services v. Smash My Trash, LLC" on Justia Law

A construction worker employed by a subcontractor was injured when a scaffold collapsed at a Manhattan worksite. The worker sued the property owner and general contractor in New York Supreme Court, alleging negligence and violations of state labor laws. The owner’s insurer, Liberty Insurance Corporation, sought a declaration in federal court that the subcontractor’s insurer, Hudson Excess Insurance Company, was obligated to defend and indemnify the owner as an additional insured under the subcontractor’s commercial general liability policy. The subcontract between the general contractor and the subcontractor required the latter to provide insurance coverage for the owner and general contractor.In the New York Supreme Court, summary judgment was granted to the injured worker on some claims, while other claims remained pending. The court denied summary judgment to the owner on its contractual indemnification claim against the subcontractor, finding factual questions about the scope of the subcontractor’s work. Later, after the federal district court’s decision, the state court dismissed all third-party claims against the subcontractor, finding the indemnity provision in the subcontract invalid due to lack of a meeting of the minds.The United States Court of Appeals for the Second Circuit reviewed the case. It affirmed the district court’s finding, after a bench trial on stipulated facts, that the subcontractor’s actions proximately caused the worker’s injuries and that Hudson owed a duty to indemnify the owner under the policy. The Second Circuit held that the later state court decision did not alter this result. However, the Second Circuit reversed the district court’s award of attorney’s fees to Liberty, holding that Hudson was entitled to a statutory safe harbor under New York Insurance Law, and thus was not required to pay Liberty’s attorney’s fees for the federal action. View "Liberty Insurance Corp. v. Hudson Excess Insurance Co." on Justia Law

Gary Birdsall was stopped in traffic on the Bay Bridge when his van was rear-ended by Barton Helfet, resulting in serious injuries to Gary and a loss of consortium claim by his wife, Pamela. The Birdsalls’ attorney sent Helfet’s insurer a settlement demand for the $100,000 policy limit, specifying acceptance required delivery of a standard bodily injury release to be executed by both Gary and Pamela, a settlement check, and proof of policy limits by a set deadline. The insurer responded before the deadline with a letter accepting the offer, a release (which mistakenly listed Pamela as a releasee rather than a releasor), the check, and proof of policy limits. A corrected release was sent after the deadline. The Birdsalls’ attorney rejected the settlement, citing the release’s error and the late correction, and returned the check.The Birdsalls filed suit in the San Francisco County Superior Court. Helfet’s answer included affirmative defenses of settlement and comparative fault for Gary’s failure to wear a seat belt. The Birdsalls moved for summary adjudication on the settlement defense, which the law and motion judge granted. At trial, the assigned judge excluded evidence and jury instructions regarding Gary’s seat belt use. The jury found Helfet negligent, awarded substantial damages to both plaintiffs, and judgment was entered. Helfet’s post-trial motions were denied, and he appealed.The California Court of Appeal, First Appellate District, Division Two, reviewed the case. It held that summary adjudication of the settlement defense was improper because there was a triable issue of material fact regarding mutual consent to the settlement. The court also found error in excluding seat belt evidence and instructions, holding that such evidence is admissible and, under the circumstances, expert testimony was not required. The judgment and amended judgment were reversed, with instructions for a new trial and denial of summary adjudication. View "Birdsall v. Helfet" on Justia Law

The plaintiff, Colleen Ryan, was injured in a parking lot owned by Sea Colony Recreational Association, Inc. while attending an event organized by Operation SEAs the Day, Inc. Before the event, Ryan signed a liability waiver that covered the event organizer and its agents. Upon arrival, she was directed to park in Sea Colony's lot, where she tripped in a hole and injured her ankle. The relationship between the event organizer and the parking lot owner was not clear from the pleadings.The Superior Court of Delaware granted judgment on the pleadings in favor of Sea Colony, concluding that Sea Colony was an agent of the event organizer based on the fact that the parking lot was used for the event. The court found the waiver unambiguous and applicable to Sea Colony, and that Ryan's injuries fell within its scope. Ryan's motion for reargument, which included new information that she was a registered guest at Sea Colony, was denied.The Supreme Court of Delaware reviewed the case and reversed the Superior Court's decision. The Supreme Court held that the Superior Court erred in finding an agency relationship between Sea Colony and the event organizer based solely on the use of the parking lot. The Supreme Court noted that the pleadings did not contain sufficient facts to establish an agency relationship and that other reasonable inferences could be drawn, such as a license agreement or public use of the lot. The case was remanded for further proceedings to determine whether the waiver covered Sea Colony and whether Ryan's injuries fell within its scope. View "Ryan v. Sea Colony Recreational Association, Inc." on Justia Law

The Nelson Estate claimed an interest in a coin shop and alleged conversion of its property. Dr. Earl Nelson had provided funds for the business, resulting in a 50% ownership interest, which was confirmed by William Tinkcom. After Dr. Nelson's death in 2013, Tinkcom continued to operate the business and assured Nelson's heirs of their 50% interest. Tinkcom died in 2022, and the business was sold to Eddie Welch without including the Nelson Estate in the final agreement. The Nelson Estate sued the Tinkcom Estate, Welch, and Mere Coin Company, LLC, for breach of contract, unjust enrichment, and other claims, including conversion of valuable coins and collectibles.The Circuit Court of the Second Judicial Circuit in Minnehaha County, South Dakota, granted the defendants' motion for judgment on the pleadings, concluding that the statute of limitations barred all claims. The Nelson Estate argued that the statute of limitations had not expired and that equitable estoppel or fraudulent concealment should prevent the statute of limitations defense.The Supreme Court of South Dakota reviewed the case and affirmed the circuit court's determination that the first six business interest claims accrued upon Dr. Nelson's death in 2013. However, the court reversed the dismissal of these claims because the circuit court did not address the Nelson Estate's defenses of equitable estoppel and fraudulent concealment. The court also reversed the dismissal of the tortious interference and civil conspiracy claims, as these claims arose from the 2022 sale of the business. Lastly, the court reversed the dismissal of the conversion claim, noting that the record did not establish when the conversion occurred or when the Nelson Estate became aware of it. The case was remanded for further proceedings. View "Nelson v. Tinkcom" on Justia Law

James E. Carroll, Jr. signed a contract with Isle of Palms Pest Control, Inc. and SPM Management Company, Inc. for termite protection services for his home. The contract specified the use of the Exterra Termite Interception and Baiting System, with a liability limit of $250,000 for new termite damage. However, the respondents abandoned the bait station system without informing Carroll and began using a liquid application, which was allegedly done negligently. Carroll continued to renew the bait station contract, unaware of the change, and discovered significant termite damage to his home ten years later.Carroll sued the respondents for negligence and breach of contract. The Circuit Court granted summary judgment to the respondents on the negligence claim, citing the economic loss rule, which confined Carroll's remedy to the breach of contract action. The Court of Appeals affirmed this decision.The Supreme Court of South Carolina reviewed the case and reversed the lower courts' decisions. The court clarified that the economic loss rule applies only in the product liability context when the only injury is to the product itself. Since the contract did not involve the sale of a product, the economic loss rule did not apply. The court found that the respondents' conduct in secretly switching to a liquid termiticide application was beyond the contract's scope, creating a duty of due care. The court held that there was sufficient evidence to create a genuine issue of material fact regarding the respondents' negligence and its proximate cause of the termite damage. The case was remanded for further proceedings, with the $250,000 liability limitation applying only if the verdict is based solely on the breach of contract claim. View "Carroll v. Isle of Palms Pest Control, Inc." on Justia Law