Justia Contracts Opinion Summaries

Eiden Construction, LLC (Eiden) entered into a subcontract with Hogan & Associates Builders, LLC (Hogan) for earthwork and utilities on a school construction project. Hogan sued Eiden and its bonding company, AMCO Insurance Company (AMCO), for breach of contract, claiming Eiden failed to complete its work, including draining sewage lagoons and constructing a fire pond. Eiden counterclaimed for unpaid work, arguing it was not responsible for draining the lagoons and that Hogan did not comply with the subcontract’s notice and opportunity to cure provisions. AMCO argued it was not liable under the performance bond because Eiden did not breach the subcontract and Hogan did not provide proper notice.The District Court of Uinta County found for Hogan on the claim regarding the sewage lagoons but not on other claims, ruling AMCO was not liable under the bond due to lack of notice. Eiden and Hogan both appealed. Eiden argued the court erred in finding it responsible for draining the lagoons and in awarding Hogan damages billed to an associated company. Hogan contended the court erred in not awarding damages for other work and in its calculation of prejudgment interest.The Wyoming Supreme Court affirmed the lower court’s decision. It held Eiden breached the subcontract by not draining the lagoons and that Hogan was entitled to recover costs for supplementing Eiden’s work. The court found Eiden’s late completion of the septic system justified Hogan’s directive to expedite lagoon drainage. It also ruled Hogan properly paid the supplemental contractors, despite invoices being sent to an associated company. The court rejected Hogan’s claims for additional damages, concluding Eiden complied with the notice to cure provisions for the fire pond and other work. The court also upheld the lower court’s calculation of prejudgment interest, applying the offset before calculating interest. View "Hogan & Associates Builders, LLC v. Eiden Construction, LLC" on Justia Law

A landlord, JJD-HOV Elk Grove, LLC (JJD), owns a shopping center in Elk Grove, California, and leased space to Jo-Ann Stores, LLC (Jo-Ann). The lease included a cotenancy provision allowing Jo-Ann to pay reduced rent if the number of anchor tenants or overall occupancy fell below a specified threshold. When two anchor tenants closed, Jo-Ann invoked this provision and paid reduced rent for about 20 months until the occupancy threshold was met again.The Sacramento County Superior Court ruled in favor of Jo-Ann, finding the cotenancy provision to be an alternative performance rather than a penalty. The Court of Appeal for the Third Appellate District affirmed this decision, distinguishing the case from a previous ruling in Grand Prospect Partners, L.P. v. Ross Dress For Less, Inc., which found a similar provision to be an unenforceable penalty.The Supreme Court of California reviewed the case to determine the validity of the cotenancy provision. The court held that the provision was a valid form of alternative performance, allowing JJD a realistic choice between accepting lower rent or taking steps to increase occupancy. The court found that the provision did not constitute an unreasonable penalty under California Civil Code section 1671, nor did it result in a forfeiture under section 3275. The court emphasized that contracts should be enforced as written, especially when negotiated by sophisticated parties.The Supreme Court of California affirmed the judgment of the Court of Appeal, upholding the cotenancy provision as a valid and enforceable part of the lease agreement. View "JJD-HOV Elk Grove, LLC v. Jo-Ann Stores, LLC" on Justia Law

Ms. Wilson owned a property in the District of Columbia, which she subdivided into three lots: 825, 826, and 827. She sold Lot 826 to Ntaky Management in 2009 and Lot 825 to Ms. Lumbih in 2010. The deed for Lot 826 described it as measuring twenty feet by forty feet, while the deed for Lot 825 described it as thirty-eight feet in length, based on an informal survey by Vyfhuis & Associates. This created a disputed area of eight feet between the properties. Ms. Lumbih installed an HVAC unit and deck in this disputed area. In 2018, Ntaky asked Ms. Lumbih to remove these installations, but she did not comply, leading Ntaky to sue her.The Superior Court of the District of Columbia held a non-jury trial and ruled that Ntaky owned the disputed area and could remove the encroachments at Ms. Lumbih’s expense. The court also denied Ms. Lumbih’s breach-of-contract claim against Ms. Wilson and her claim for implied indemnity, which sought to hold Ms. Wilson responsible for the costs associated with removing the encroachments.The District of Columbia Court of Appeals reviewed the case. The court upheld the trial court’s decision regarding Ntaky’s ownership of the disputed area and the removal of the encroachments. However, it vacated the denial of Ms. Lumbih’s breach-of-contract claim against Ms. Wilson, finding that the trial court did not address whether Ms. Wilson breached her duty to convey a property thirty-eight feet in length. The case was remanded for further proceedings on this issue. The court affirmed the trial court’s denial of Ms. Lumbih’s claim for implied indemnity, as she failed to identify a non-contractual duty of care owed by Ms. Wilson. View "Lumbih v. Wilson" on Justia Law

In 2014, Casey Moyer entered into an agreement with Doug Lasher Construction, Inc. for the construction and purchase of a new home, which was substantially completed in November 2014. Over the next six-and-a-half years, Moyer repeatedly informed Lasher Construction about issues with the home, particularly water leakage, and received assurances that the issues would be fixed. However, the problems persisted, and Moyer and Caitlin Bower filed suit against Lasher Construction in November 2021, alleging breach of contract and violation of the Idaho Consumer Protection Act.The District Court of the Fourth Judicial District of Idaho granted summary judgment in favor of Lasher Construction, ruling that all claims were time-barred under Idaho Code sections 5-241(b) and 5-216, which require that claims arising out of a contract for the construction of real property be brought within five years of the final completion of construction. The court also found that the Idaho Consumer Protection Act claims were time-barred under the two-year statute of limitations provided by Idaho Code section 48-619. The court rejected the homeowners' arguments for equitable estoppel and the repair doctrine, concluding that they failed to show that Lasher Construction prevented them from pursuing their claims within the statutory period.The Supreme Court of Idaho affirmed the district court's decision. The court reaffirmed that the repair doctrine is not available in Idaho and upheld the district court's conclusion that the homeowners failed to establish the elements of equitable estoppel. The court also agreed that the text messages and the July 2, 2021, response to the NORA demand did not constitute enforceable independent contracts. Lasher Construction was awarded attorney fees and costs on appeal as the prevailing party. View "Moyer v. Lasher Construction, Inc." on Justia Law

In 2014, due to severe drought conditions, the United States Bureau of Reclamation (Reclamation) was unable to meet its water delivery obligations to both the Exchange Contractors and the Friant Contractors under the Central Valley Project (CVP). Reclamation prioritized delivering water to the Exchange Contractors, including water from the San Joaquin River, which resulted in a near-zero allocation to the Friant Contractors. The Friant Contractors and individual growers sued the United States, alleging breach of contract and takings without just compensation.The United States Court of Federal Claims dismissed the Friant Growers' breach of contract claims for lack of standing and dismissed the takings claims for lack of a property interest. The court granted summary judgment to the government on the Friant Contractors' breach of contract claims, concluding that the Exchange Contractors' rights under the Exchange Contract were superior and that Reclamation's actions were not arbitrary, capricious, or unreasonable.The United States Court of Appeals for the Federal Circuit reviewed the case and affirmed the lower court's decision. The court held that the Exchange Contract allowed Reclamation to deliver San Joaquin River water to the Exchange Contractors when necessary, and that the government did not breach the Friant Contract by doing so. The court also found that the government was immune from liability under the Friant Contract because its actions were not arbitrary, capricious, or unreasonable. Finally, the court affirmed the dismissal of the takings claims, concluding that the Friant Contractors and Growers did not have a property interest in the water delivered by Reclamation under California law. View "CITY OF FRESNO v. US " on Justia Law

Majestic Asset Management, LLC, Wintech Development, Inc., Hai Huang, and Jen Huang owned and operated a golf course within a gated community governed by The Colony at California Oaks Homeowners Association. The owners had obligations to maintain the golf course and surrounding areas, secured by a performance deed of trust (PDOT). After failing to meet these obligations, the Association sought judicial enforcement, leading to a foreclosure decree and valuation of the PDOT.The Superior Court of Riverside County initially ruled in favor of the Association, finding the owners in breach of their maintenance obligations and issuing a permanent injunction. When the owners failed to comply, the court appointed a receiver to manage the golf course. After the receiver's efforts proved insufficient, the Association moved for foreclosure. The trial court valued the PDOT at $2,748,434.37, including the cost to repair the golf course and management fees, and ordered foreclosure.The California Court of Appeal, Fourth Appellate District, reviewed the case. The court affirmed the trial court's decision to use the cost of repair ($2,503,500) as the value of the PDOT but found the inclusion of management fees ($244,934.37) inappropriate. The court modified the foreclosure decree to reflect the correct value of $2,503,500. The court also upheld the ruling that the owners would remain bound by the maintenance obligations if they paid the PDOT's value to retain the property, ensuring the Association's right to performance as long as the owners held the golf course.The court concluded that the foreclosure decree was equitable and did not violate foreclosure law or the one form of action rule. The Association was awarded costs and reasonable attorney fees incurred on appeal. View "Majestic Asset Management, LLC v. The Colony at California Homeowners Assn." on Justia Law

Chris Welsh, representing CAL SD, LLC, entered into a purchase agreement with Interwest Leasing, LLC to buy commercial real estate, with a $30,000 earnest money deposit. Welsh passed away before closing, and CAL SD refused to close. Interwest sold the property to another buyer for the same price but did not return the earnest money. CAL SD filed a declaratory judgment action to recover the deposit, claiming the agreement was void due to their inability to obtain financing.The Circuit Court of the Seventh Judicial Circuit in Pennington County, South Dakota, treated the declaratory judgment as a breach of contract action and set it for a jury trial. The jury found in favor of CAL SD, and the court ordered the return of the earnest money deposit. Interwest appealed, arguing the action was equitable and should not have been decided by a jury, and also claimed the court gave erroneous jury instructions.The Supreme Court of the State of South Dakota reviewed the case. The court held that the declaratory judgment action was legal, not equitable, because it sought to enforce contractual rights under the purchase agreement, which was void if financing was not obtained. The court affirmed the lower court's decision to submit the case to a jury for a binding verdict, as the issue was whether CAL SD breached the contract by failing to secure financing. The court concluded that the jury's determination that CAL SD was unable to obtain financing rendered the purchase agreement void, entitling CAL SD to the return of the earnest money deposit. View "Cal SD, LLC v. Interwest Leasing, LLC" on Justia Law

JHVS Group, LLC and its members, Jasanjot Singh and Harshana Kaur, purchased a 66.4-acre pistachio orchard from Shawn Slate and Dina Slate for approximately $2.6 million. The Slates agreed to carry a loan for $1,889,600, and JHVS made a $700,000 down payment. The agreement included provisions for interest payments and additional payments coinciding with expected crop payments. JHVS alleged that the Slates and their brokers, Randy Hayer and SVN Executive Commercial Advisors, misrepresented material facts about the property, including water rights and the value of the 2022 crop. JHVS claimed the actual value of the crop was significantly lower than represented, and they fell behind on payments, leading the Slates to record a notice of default.JHVS filed a lawsuit in the Superior Court of Madera County, raising seven causes of action, including breach of fiduciary duty, negligence, intentional fraud, negligent misrepresentation, breach of contract, rescission based on fraud or mutual mistake, and injunctive relief to stop the foreclosure process. JHVS filed a motion for a preliminary injunction to prevent the foreclosure sale, arguing that the Slates and Hayer had lied about water restrictions and misrepresented the crop's value. The trial court granted the preliminary injunction after the defendants did not appear or file a response.The California Court of Appeal, Fifth Appellate District, reviewed the case and found that the trial court lacked fundamental jurisdiction over the Slates because they were never served with the summons and complaint. The appellate court determined that the trial court's order was void as to the Slates due to the lack of proper service and reversed the preliminary injunction order with respect to the Slates. The case was remanded for further proceedings consistent with the appellate court's opinion. View "JHVS Group, LLC v. Slate" on Justia Law

Daniel Genho and Riverdale Hot Springs, LLC had a dispute over payment for construction work Genho performed at Riverdale Resort. Genho was not a registered contractor at the start of the project but became registered midway through. Riverdale refused to pay Genho and prevented him from retrieving his tools and materials. Genho filed a Mechanic’s and Materialmen’s Lien and sued for breach of contract, unjust enrichment, quantum meruit, conversion, and to foreclose on the lien.The District Court of the Sixth Judicial District of Idaho granted Riverdale’s motion for a directed verdict on the breach of contract claim but denied it on the other claims. The court found that there were two separate transactions: one before and one after Genho became a registered contractor. The court allowed the jury to consider the unjust enrichment, quantum meruit, conversion, and lien foreclosure claims. The jury found in favor of Genho, awarding him $295,568, which was later reduced to $68,681. The district court also awarded attorney fees to Genho.The Supreme Court of Idaho reviewed the case and affirmed the district court’s decision in part and reversed it in part. The court held that equitable remedies are available under the Idaho Contractor Registration Act (ICRA) for work performed after a contractor becomes registered, provided the work is severable from the unregistered work. The court affirmed the denial of a directed verdict on the unjust enrichment, quantum meruit, and lien foreclosure claims but reversed the award of attorney fees for the conversion claim, as it was not based on a commercial transaction. The court also affirmed the award of attorney fees for the foreclosure action under Idaho Code section 45-513. Neither party was awarded attorney fees on appeal. The judgment was vacated and remanded for modification consistent with the opinion. View "Genho v. Riverdale Hot Springs, LLC" on Justia Law

JHVS Group, LLC and its members, Jasanjot Singh and Harshana Kaur, purchased a 66.4-acre pistachio orchard from Shawn Slate and Dina Slate for approximately $2.6 million. The Slates agreed to carry a loan for $1,889,600, and JHVS made a $700,000 down payment. The agreement included interest payments and additional payments tied to crop yields. JHVS alleged that the Slates and their brokers, Randy Hayer and SVN Executive Commercial Advisors, misrepresented critical information about water rights and crop values, leading to financial losses and a notice of default filed by the Slates.The Superior Court of Madera County issued a preliminary injunction to prevent the foreclosure sale of the property, based on JHVS's claims of fraud and misrepresentation. The court granted the injunction after the defendants failed to appear or respond to the motion. The order was intended to preserve JHVS's right to rescind the contract.The California Court of Appeal, Fifth Appellate District, reviewed the case and found that the trial court lacked fundamental jurisdiction over the Slates because they were never properly served with the summons and complaint. The appellate court determined that the preliminary injunction was void as to the Slates due to this lack of jurisdiction. Consequently, the appellate court reversed the trial court's order granting the preliminary injunction against the Slates and remanded the case for further proceedings consistent with its opinion. The appellate court awarded costs to the Slates. View "JHVS Group, LLC v. Slate" on Justia Law