Justia Contracts Opinion Summaries

The dispute centers on a series of complex financial transactions involving a Wyoming family and their businesses, a local bank, and a commercial lender. The plaintiffs, including a married couple and their closely held LLC, entered into various loans and mortgages related to their commercial property and business operations. When financial difficulties arose—exacerbated by a downturn in the oil and gas industry—the parties restructured their debt, resulting in a 2017 mortgage and, after the operating company filed for bankruptcy, a 2019 settlement agreement. The plaintiffs later alleged that the bank and lender’s actions and omissions caused them to lose equity in both their home and commercial property, and the defendants counterclaimed for breach of the settlement agreement and sought attorney fees.The District Court of Natrona County dismissed or granted summary judgment for the bank and lender on all claims and counterclaims, finding the mortgage unambiguously secured two loans and the bank had no duty to release it after only one was repaid. It also concluded the plaintiffs could not establish justifiable reliance on any alleged misrepresentations, interpreted the settlement agreement as permitting (but not requiring) the lender to record the quitclaim deed after a sale period, and found no breach by the lender. The district court further ruled the plaintiffs breached the agreement by filing suit, thus entitling the bank and lender to attorney fees.On review, the Supreme Court of Wyoming affirmed the district court’s decisions dismissing the plaintiffs’ claims, holding the mortgage secured both loans and the bank acted within its rights. The Supreme Court, however, reversed the grant of summary judgment to the bank and lender on their counterclaims, finding that filing the lawsuit was not a breach of the settlement agreement or its implied covenant of good faith and fair dealing. Consequently, the award of attorney fees and costs to the bank and lender was also reversed. View "Adams v. ANB Bank" on Justia Law

A black-owned construction company was not invited to bid as general contractor on a major Boston public housing redevelopment project after participating in pre-construction work. Years earlier, the developer had called the company’s president to discuss possible involvement, but the parties disputed what promises, if any, were made during that conversation. The construction company performed pre-construction work and was later selected as general contractor for the first phase (Camden), but after performance and communication issues arose during that project, the developer chose a different, white-owned company for the second phase (Lenox). The construction company did not protest at the time but later sued, alleging breach of contract, quasi-contract, violation of Massachusetts consumer protection law, and racial discrimination under 42 U.S.C. § 1981.The matter was first brought in Massachusetts state court, then removed to the United States District Court for the District of Massachusetts based on federal question jurisdiction. After discovery, the developer moved for summary judgment. The District Court granted summary judgment for the developer, finding no enforceable contract or promise had been made regarding the Lenox phase, that the quasi-contract and Chapter 93A claims failed as derivative, and that there was insufficient evidence of racial discrimination.The United States Court of Appeals for the First Circuit affirmed the District Court’s decision. The First Circuit held that the summary judgment record did not contain evidence from which a reasonable jury could find an enforceable implied-in-fact contract or a promise sufficient for promissory estoppel. It further held that the plaintiff failed to create a triable issue of fact regarding pretext or discriminatory intent under § 1981, given the legitimate business reasons cited for the company’s exclusion. Thus, summary judgment on all claims was proper. View "John B. Cruz Construction Co. v. Beacon Communities Corp." on Justia Law

H.A.T., LLC entered into a bond-for-deed contract with Greenleaf Apartments, LLC to purchase three buildings in Portland for $1 million, with a down payment and monthly installments. H.A.T. took possession but would not receive title until the note was fully paid, and the parties executed additional agreements to address Greenleaf's concerns and clarify remedies for default. Over time, H.A.T. became delinquent in its payments, and Greenleaf lent additional funds to cover repairs after a series of casualty events. Despite proposals to consolidate debts and efforts to sell the property, H.A.T. remained in default. Greenleaf ultimately exercised its right under a memorandum agreement to terminate the contract without notice upon default, retaking possession of the property.H.A.T. then filed suit in the Maine Business and Consumer Docket, alleging various claims, including breach of contract and entitlement to insurance proceeds, while Greenleaf counterclaimed for breach of contract. The court dismissed claims against Greenleaf's counsel and, after a bench trial, ruled in favor of Greenleaf on all claims. The court found that H.A.T. had defaulted on payment obligations, that Greenleaf was justified in terminating the contract, and that H.A.T. was not entitled to insurance proceeds or a setoff. The final judgment awarded Greenleaf costs and attorney fees.On appeal, the Supreme Judicial Court of Maine affirmed the judgment. The Court held that H.A.T. breached the contract by missing payments, Greenleaf had no obligation to provide H.A.T. with insurance proceeds, and H.A.T. was not entitled to notice of a right to cure because the statutory notice provision for foreclosures did not apply to commercial purchasers like H.A.T. The court concluded the statute was intended to protect homeowners, not commercial investors. Judgment was affirmed. View "H.A.T., LLC v. Greenleaf Apartmetns, LLC" on Justia Law

The case concerns a failed sale of a bar and restaurant in Bismarck, North Dakota. Neil Galpin, as assignee of Galpin Entertainment, sought to recover a $100,000 earnest money deposit after Cantina Holdings, LLC and Clay Butte Holdings, LLC (the buyers) did not complete the purchase. The parties had executed a confidential offer letter, which required the deposit and stated it would become non-refundable after the buyer’s due diligence period expired, unless the buyer notified the seller of its intent not to proceed before that date. Later, the parties signed a standard form purchase agreement that both incorporated the confidential letter and included a conflicting, pre-printed provision stating that if financing failed after a certain date, the earnest money would be returned to the buyer. The transaction never closed, and Galpin Entertainment ultimately sold the property to someone else.The District Court of Burleigh County, South Central Judicial District, heard the case in a bench trial. The court concluded that the specially drafted provision in the confidential letter, rather than the standard form language in the purchase agreement, controlled the disposition of the earnest money. It found that the buyers did not properly exercise their right to terminate before the due diligence deadline and that Galpin did not breach the contract by failing to negotiate the contract for deed in good faith. Judgment was entered in favor of Neil Galpin for the earnest money, and the buyers’ counterclaims were denied.On appeal, the Supreme Court of the State of North Dakota affirmed the district court’s judgment. The Supreme Court held that, when conflicting contract provisions exist, specially drafted terms control over standard form language, especially where the parties who caused the uncertainty seek to benefit from it. The court also found no clear error in the district court’s finding that Galpin negotiated in good faith. View "Galpin v. Cantina Holdings" 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

Four brothers who had previously formed a diamond partnership later entered into an oral agreement in 1995 with a fifth brother to create a separate real estate partnership. The agreement was never reduced to writing, consistent with family custom. Over several years, the brothers jointly acquired and managed a large portfolio of California real estate. Tensions arose after the original real estate owner repaid a loan that was a condition for his partnership interest. One brother, who controlled the partnership’s entities, began excluding the others and denied the existence of any partnership, asserting sole ownership over the assets.The litigation began in 2003 when the excluded brother sued his siblings and related entities for his partnership share and damages. Two other brothers, who initially disclaimed the partnership under alleged economic coercion, later filed cross-complaints for their shares in both the diamond and real estate partnerships. The case saw multiple prior appeals and writ proceedings. After the trial court initially granted summary adjudication against the main plaintiff on most claims, the California Court of Appeal reversed, allowing contract, fiduciary duty, and fraud claims to proceed. Further cross-complaints were filed by the brothers, which survived demurrer on statute of limitations grounds.In 2024, after a lengthy jury trial, the Superior Court of Los Angeles County entered judgment in favor of the three plaintiff brothers, awarding declaratory relief, partnership shares, compensatory and punitive damages, and prejudgment interest totaling about $6.85 billion against the controlling brother and the partnership entities. On appeal, the California Court of Appeal, Second Appellate District, Division One, rejected most challenges to the trial court’s evidentiary rulings and instructions, but held the court erred in admitting an undisclosed expert opinion concerning lost investment profits. The appellate court conditionally affirmed the judgment, ordering a reduction of the economic damages awards relating to the real estate partnership by amounts attributable to this opinion, unless the plaintiffs opt for a new trial on those damages and related punitive damages. The judgments were otherwise affirmed. View "Jogani v. Jogani" on Justia Law

Mark Weaver, the owner of a commercial property in Gadsden, entered into a ten-year lease with Frios Gourmet Pops, LLC, managed by Andy Harp, in 2016. The lease required monthly rent payments of $4,800, with Harp as a personal guarantor. The lease contained specific provisions addressing default, termination, and the parties’ obligations in the event of breach. In 2018, Harp assigned the lease to Frios Manufacturing, LLC, involving Kevin Harper as a new guarantor. After the original business moved out of the property in early 2019, Harp attempted to find new tenants and eventually established Gardens on Air, LLC on the premises. However, this venture ended in July 2019, and by early 2020, the Frios defendants stopped paying rent. Weaver subsequently terminated their right of possession and reentered the property, later reletting it at a lower rent and ultimately selling it.The Etowah Circuit Court first denied Weaver’s request for summary judgment and instead partially granted summary judgment to the Frios defendants, concluding that Weaver’s recovery was limited to the rent accrued before the termination of tenancy. The trial court excluded evidence of damages beyond that amount and, after a bench trial, awarded Weaver damages limited to unpaid rent, interest, and attorney’s fees up to the time of termination. Weaver’s postjudgment motion was denied by operation of law, and he appealed.The Supreme Court of Alabama reviewed the case de novo, holding that the lease provisions allowed for posttermination damages, including the difference between reserved rent and rent received from reletting, and reasonable costs incurred due to breach. The Court found that the trial court erred in limiting Weaver’s recovery to accrued rent only and excluding evidence of further damages. The judgment was reversed, and the case was remanded for further proceedings consistent with the Supreme Court’s opinion. View "Weaver v. Frios Gourmet Pops, LLC" on Justia Law

A steel subcontractor was hired to perform work for a university construction project and entered into a subcontract with the general contractor. The general contractor began defaulting on payments, prompting the subcontractor to notify the surety insurance company, which had issued a payment bond guaranteeing payment for labor, materials, and equipment. The surety made partial payment but disputed the remaining amount. The subcontractor then demanded arbitration against the contractor, with the surety notified and invited to participate. The contractor filed for bankruptcy and did not defend in arbitration, nor did the surety participate. The arbitrator awarded the subcontractor damages, including attorneys’ fees and interest, and the award was confirmed in court. The subcontractor sought to enforce the arbitration award against the surety, including attorneys’ fees and prejudgment interest, and also brought a bad faith claim under Pennsylvania’s insurance statute.The Centre County Court of Common Pleas initially excluded evidence of the arbitration award against the surety at trial and ruled the surety was not liable for attorneys’ fees or bad faith damages. A jury found for the subcontractor on the underlying debt, and the court awarded prejudgment interest at the statutory rate. Both parties appealed. The Superior Court held the arbitration award was binding and conclusive against the surety, who had notice and opportunity to participate, and affirmed liability for attorneys’ fees related to pursuing the contractor in arbitration. The court rejected the bad faith claim, holding the statute did not apply to surety bonds, and confirmed the statutory interest rate.On appeal, the Supreme Court of Pennsylvania affirmed in all respects. It held that Pennsylvania’s insurance bad faith statute does not apply to surety bonds, based on statutory language. The court also held that the surety is bound by the arbitration award against its principal, and is liable for attorneys’ fees incurred in arbitration and prejudgment interest at the statutory rate. View "Eastern Steel v. Int Fidelity Ins. Co." on Justia Law

Morgan Lohman purchased a 25.8-acre property, knowing that a homeowners’ association, Cave Bay Community Services, Inc., held a permanent easement on 7.31 acres and had an option agreement with the sellers, the Drehers, to purchase the easement land for one dollar once the Drehers’ loans were paid off. Despite concerns about the effect of this option on the value and use of his property, Lohman proceeded with the purchase. After the sale, the Drehers paid off their loans, and Cave Bay exercised its option to buy the easement property for one dollar, which Lohman refused to honor.Cave Bay filed suit against Lohman in the District Court of the First Judicial District of Idaho, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and seeking specific performance of the option agreement. Cave Bay moved for summary judgment only as to the specific performance “claim.” The district court granted summary judgment to Cave Bay on that basis, struck much of Lohman’s opposing declaration, and awarded Cave Bay attorney fees and costs. The court did not address the merits of the underlying breach of contract claim. After the parties dismissed the remaining claims, Lohman appealed.The Supreme Court of the State of Idaho reviewed the case and held that specific performance is a remedy, not a stand-alone cause of action. The court concluded that the district court erred by granting summary judgment on specific performance without first determining liability on the underlying breach of contract claim. The Supreme Court vacated the district court’s amended judgment, reversed the summary judgment ruling, and remanded the case for further proceedings. The court also vacated the award of attorney fees and costs, but awarded appellate costs to Lohman. No attorney fees were awarded on appeal as there was no prevailing party at this stage. View "Cave Bay Community Services v. Lohman" on Justia Law

A Wyoming firearms manufacturer sought to expand its operations by constructing a new facility. The company, unable to directly access specific state economic development funds, partnered with a city and a local non-profit to obtain funding, resulting in a written agreement outlining each party’s roles. The non-profit was charged with managing the project, including hiring architects and contractors. During and after construction, the manufacturer identified substantial design and construction defects, including climate control problems, leaks, and structural issues. The manufacturer sued the non-profit for breach of contract and also sued the architect and contractor, asserting it was a third-party beneficiary of their contracts with the non-profit.In the District Court of Park County, the court dismissed the manufacturer’s claims against the architect and contractor, finding it was not an intended third-party beneficiary under their contracts, and granted summary judgment to the non-profit on all but one claim, determining that the non-profit’s contractual obligations were limited to financial administration of the project. The remaining claim was later dismissed by stipulation.The Supreme Court of Wyoming reviewed the case de novo. The court held that the district court erred in dismissing the manufacturer’s claims against the architect and contractor because, accepting the complaint’s factual allegations as true and considering the relevant contracts, the manufacturer had sufficiently alleged facts that could support third-party beneficiary status and breach of contract. The court also found the district court erred in granting summary judgment to the non-profit, concluding that the contract’s language and context imposed broader duties on the non-profit, including project administration and construction oversight, not merely financial management. The Supreme Court of Wyoming reversed the lower court’s orders of dismissal and summary judgment, allowing the manufacturer’s claims to proceed. View "Gunwerks, LLC v. Forward Cody Wyoming, Inc." on Justia Law