Justia Contracts Opinion Summaries

Plaintiff sought to open a Victoria's Secret franchise and sought assistance from Richard Domingo, an employee of Rekomdiv International. At the recommendation of Domingo, Plaintiff retained the law firm of Venable, LLP to assist him in establishing a business relationship with Victoria's Secret. Plaintiff paid Venable a $400,000 retainer fee, and paid $225,000 to Rekomdiv. Plaintiff later discovered Victoria's Secret franchise was not available. Plaintiff sued Rekomdiv and Domingo for breach of contract and dolo. The jury found in favor of Plaintiff and assessed damages in the amount of $625,000. In the meantime, Plaintiff sued Venable, and the parties settled. The court later found that it could not offset the damages award in the Rekomdiv suit by the Venable settlement amount. While their appeal was pending in this matter, Rekomdiv and Domingo filed a legal malpractice suit against Lamboy, their trial counsel. The district court dismissed the complaint against Lamboy. The First Circuit Court of Appeals (1) affirmed the district court's denial of offset of the damages award, as offset was not required; and (2) affirmed the court's dismissal of the legal malpractice suit, holding that the allegations in the complaint failed to establish the causation element necessary to make out a plausible legal malpractice claim. View "Portugues-Santana v. Rekomdiv Int'l, Inc." on Justia Law

Appellant sued the trustee of his deceased wife's estate, claiming that the trustee improperly transferred Appellant's assets into the trust. Appellant also sought to disqualify the attorney who prepared the trust documents (Attorney) from representing the trustee based on the district court's conclusion that a prior attorney-client relationship existed between Appellant and Attorney, creating a conflict of interest. After the trust litigation settled, Appellant sued Attorney for legal malpractice due to Attorney's failure to verify Appellant's intentions before preparing he documents for his signature. Before trial, Appellant sought to preclude Attorney from arguing that an attorney-client relationship did not exist because, under the doctrine of issue preclusion, Attorney could not deny the existence of an attorney-client relationship. The district court denied Appellant's motion. During trial, the district court ruled that evidence of Appellant's intent in executing the documents was precluded by the parol evidence rule. The Supreme Court affirmed, holding (1) the district court properly refused to apply the doctrine of issue preclusion because the issue of an attorney-client relationship between Appellant and Attorney was not necessarily litigated in the trust action; and (2) the district court did not err in applying the parol evidence rule. View " Frei v. Goodsell" on Justia Law

In 2000, Gregory T. Ludlow, S. Reid Ludlow, and Jean E. Cowles entered into an exclusive listing agreement with real estate brokerage firm Gibbons-White, Inc. for the sale of approximately 131 acres of vacant land in Boulder County. Over the next seven years, the Sellers received offers from at least three different buyers to purchase portions of the land; none of the offers resulted in a completed sale. In 2007, Actis, LLC made an offer to purchase half of the land. The issue before the Supreme Court in this matter stemmed from that offer. The Court concluded that to sustain a professional malpractice claim against a transactional real estate broker, a plaintiff must show that but for the alleged negligent acts of the broker he either:(1) would have been able to obtain a better deal in the underlying transaction; or (2) would have been better off by walking away from the underlying transaction. The Court concluded that the Sellers here failed to present evidence of damages because they did not establish beyond mere speculation they suffered a financial loss because of the transactional brokers' professional negligence. View "Gibbons v. Ludlow" on Justia Law

Plaintiff appealed from the district court's dismissal of his amended complaint, which alleged that FXDD engaged in dishonest and deceptive practices in managing its online foreign exchange trading platform in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(c), and New York General Business Law 349(h), and 350. Plaintiff also alleged breach of contract and of the implied covenant of good faith and fair dealing. The court concluded that, at this stage, some part of the underlying transaction occurred in New York State, giving plaintiff statutory standing to sue for deceptive practices and false advertising under sections 349 and 350; because the complaint alleged that FXDD failed to act in good faith and intentionally delayed trades or caused them to fail in order to enrich itself at the expense of its customers, these practices were incompatible with a promise to execute orders on a best-efforts basis and, therefore, the court vacated the dismissal of the breach of contract claim; and the court affirmed the judgment of the district court as to the RICO claim and the claim for breach of the implied covenant of good faith and fair dealing. View "Cruz v. FXDirectDealer, LLC" on Justia Law

Exact developed business software. Infocon began distributing Exact’s software in 1998. A conflict arose when Exact allegedly abandoned a scheduled upgrade, leaving distributors like Infocon out to dry, and Infocon allegedly failed to remit fees. Exact sued Infocon in 2003. According to the district court, Exact showed “persistent noncompliance with… ever more stringent” discovery orders. When Infocon moved for a default judgment, Exact fired its lawyer, hired new counsel and entered settlement negotiations. . On the eve of settlement, Infocon fired its lawyer, DeMoisey. DeMoisey placed a charging lien on the settlement proceeds. Exact delivered the $4 million settlement to the district court, which distributed most of it to Infocon and placed the remaining $1.2 million in escrow pending resolution of the fee dispute. Nine months later, Infocon sued DeMoisey in Kentucky state court for malpractice. After a summary judgment ruling in favor of the lawyer, the district court held a bench trial and awarded DeMoisey $1.4 million in quantum meruit relief. The Sixth Circuit affirmed, rejecting arguments that the amount was too high, that Infocon had a right to a jury trial and, for the first time on appeal, that the district court lacked jurisdiction because DeMoisey and Infocon are both from Kentucky. View "Exact Software N. Am., Inc. v. Infocon Sys., Inc." on Justia Law

Norma Slater-Moore hired the Goeldner Law Firm and its attorneys to represent her in what ultimately was an unsuccessful lawsuit and its appeal. Slater-Moore and Goeldner entered into two separate contracts during the course of that litigation, both containing nearly identical provisions stating that any attorney-fee disputes would be submitted to arbitration. Slater-Moore later sued Goeldner for legal malpractice and breach of contract, disputing, among other allegations, the amount she was billed for attorney fees. Goeldner successfully moved the Circuit Court to compel arbitration of the attorney-fee dispute, and Slater-Moore appealed that decision to the Supreme Court. Because the Supreme Court found ]no grounds for revocation of a valid agreement to arbitrate the fee dispute, the Court affirmed the circuit court's judgment. View "Slater-Moore v. Goeldner" on Justia Law

Martello, a doctor with a law degree, never passed the bar exam despite four attempts; in 1997 she passed the Multistate Professional Responsibility Examination. In 1991, Martello started reviewing medical malpractice cases for Santana, who paid an hourly rate. She alleges that they changed the arrangement for three cases and that Santana wrote that he would pay Martello 20 percent of his fee if the case settled before filing and 25 percent if the case settled after filing suit. Martello alleges that the document was intended to cover future cases. Later, Santana sent Martello a letter stating that: Kentucky canons of ethics prohibit the payment of your fees for assisting … on a contingency basis … you will be billing us on an hourly basis. Martello claims that Santana told her to fabricate time to earn the equivalent of what she would have received under the contract. Martello was dissatisfied with what she received and sued. The district court determined that Martello’s contract claims were barred because the contracts were void as against public policy, while her fraud claims, even accepting tolling agreements, were barred by the statute of limitations. The Sixth Circuit affirmed. View "Martello v. Santana" on Justia Law

The law firm represented a potential buyer in the purchase of a drugstore. Buyer and Seller executed the sales contract separately. The firm misfiled the contract executed by Buyer, however, and Seller subsequently attempted to rescind the contract, which it characterized as an offer, because it had not timely received a copy of the contract executed by Buyer. When Seller’s efforts to avoid the purported contract were successful, Buyer sent a “formal notice of claim” to the firm, which sought coverage from its professional liability insurer. That insurer concluded that the firm was not entitled to coverage because it failed to properly notify the insurer of the mistake that ultimately led to the malpractice claim. The firm sought a declaratory judgment. The district court granted the insurer summary judgment. The Seventh Circuit affirmed, finding that the firm’s knowledge of the email exchange with Seller’s counsel and of an Alabama declaratory-judgment action constituted knowledge of “any circumstance, act or omission that might reasonably be expected to be the basis of” a malpractice claim. View "Koransky, Bouwer & Poracky, P. C. v. Bar Plan Mut. Ins. Co." on Justia Law

Appellants Thomas and Vera Gladden appealed the trial court's order granting summary judgment to Respondent Palmetto Home Inspection Services, alleging the limit of liability provision in a home inspection contract was unenforceable as violative of public policy and as unconscionable under the facts of this case. Upon review, the Supreme Court concluded that contractual limitation of a home inspector's liability did not violate South Carolina public policy as expressed by the General Assembly and, as a matter of law, was not so oppressive that no reasonable person would make it and no fair and honest person would accept it. Accordingly, the Court affirmed the trial court's order granting summary judgment to the inspector. View "Gladden v. Palmetto Home Inspections" on Justia Law

In 2007, Appellant Derick Villanueva acted as the closing attorney for a mortgage-refinance transaction in which Homecomings Financial, LLC served as the lender supplying funds to pay off earlier mortgages on the secured property. Appellee First American Title Insurance Company issued title insurance on the transaction. Pursuant to Villanueva’s instructions, Homecomings wired funds into a specified escrow account. However, the funds were not used to pay off the earlier mortgages; instead, the funds were withdrawn and the account closed by a person not a lawyer. First American paid off the earlier mortgages and, pursuant to its closing protection letter to Homecomings, became "subrogated to all rights and remedies [Homecomings] would have had against any person or property…." First American then filed this lawsuit against appellants, the estate of another attorney, the escrow account, the non-lawyer who withdrew the funds from the escrow account, and others, seeking damages for legal malpractice and breach of a contract with Homecomings. The trial court denied summary judgment to appellants. The issue before the Supreme Court was whether a legal malpractice claims were not per se unassignable. After studying the issue, the Court agreed with the appellate court that legal malpractice claims are not per se unassignable. View "Villanueva v. First American Title Ins. Co." on Justia Law