Justia Contracts Opinion Summaries

A couple contracted to buy a lakefront home with the intention of demolishing it and building a new one. They later discovered a publicly recorded sewer line running through the property, which was not listed on the seller's disclosure form. Believing the sewer line would interfere with their construction plans, they attempted to back out of the deal, leading to litigation.The trial court granted summary judgment in favor of the seller, finding that the sewer easement was publicly recorded and that the buyers had constructive notice of its existence. The court also found no evidence that the sewer line materially and adversely impacted the use or value of the property, concluding that it was not a defect requiring disclosure.The Eighth District Court of Appeals reversed the trial court's decision, holding that there was a genuine issue of material fact regarding whether the sewer line materially and adversely affected the buyers' intended use of the property and whether the seller completed the disclosure form in good faith.The Supreme Court of Ohio reversed the appellate court's judgment, reinstating the trial court's decision. The court held that the sewer line did not constitute a material defect that the seller was required to disclose on the Residential Property Disclosure Form. The court reasoned that the term "defect" implies an inadequacy or flaw, and a working sewer line in an inconvenient location does not meet this definition. Additionally, the court noted that the disclosure form requires disclosure of conditions that could inhibit an ordinary buyer's use of the property, not a specific buyer's intended use. Therefore, the seller had no duty to disclose the sewer line, and the buyers' claim of fraudulent concealment failed. View "Ashmus v. Coughlin" on Justia Law

Sidney and Julian Helvik, who have lived on their family ranch since 1947, sold a portion of their ranch to Wesley and Karen Tuscano in 2018. In 2020, the Helviks agreed to sell the remainder of the ranch to the Tuscanos under an agreement that included a promissory note and provisions for the Tuscanos to assist the elderly Helviks with end-of-life issues. The Helviks signed a quitclaim deed, but the Tuscanos later had them sign a gift deed, which transferred the ranch without consideration. The Tuscanos never made any payments under the agreement and used the gift deed to obtain a mortgage on the ranch.The Helviks filed a complaint in the District Court of the Sixth Judicial District, Sweet Grass County, seeking to void the agreement and the gift deed, alleging undue influence and fraud. The Tuscanos counterclaimed and filed a third-party complaint against Jacqueline Conner, alleging tortious interference and abuse of process. The District Court granted summary judgment in favor of Conner on the tortious interference claim and excluded evidence of an Adult Protective Services investigation and an oral agreement to transfer land.The Supreme Court of the State of Montana reviewed the case. It affirmed the District Court's decision to rescind the agreement based on its equitable powers, noting the unique fiduciary duty in grantor-support agreements. The court found no abuse of discretion in excluding evidence of the APS investigation and the oral agreement. The court also held that the Tuscanos waived their argument regarding jury instructions on undue influence by not objecting at trial. The summary judgment in favor of Conner was upheld due to the lack of evidence of damages. The court declined to award attorney fees to Conner under M. R. App. P. 19(5). The District Court's orders and judgments were affirmed. View "Helvik v. Tuscano" on Justia Law

Bighorn Construction, LLC (Bighorn) and JED Spectrum, Inc. (JED) filed mechanic’s liens against property owned by Keith Stoakes, seeking to foreclose on the liens. Stoakes denied the validity of the liens and counterclaimed for slander of title against both companies, and for breach of contract, promissory estoppel, and fraud against JED. After a bench trial, the circuit court denied Bighorn’s and JED’s claims for lien foreclosure and ruled in favor of Stoakes on his slander of title claims, awarding him $252,225.27 in damages and $33,394.20 in attorney fees. The court denied relief on the remaining claims.The circuit court found that Bighorn had no reasonable grounds to file the lien after receiving a check for full payment, and that JED’s lien was untimely and insufficiently itemized. The court also found that Stoakes reasonably relied on JED’s promise of a shared well system, awarding him damages for promissory estoppel. However, the court later reversed its decision on the promissory estoppel claim and reduced the attorney fee award accordingly.The Supreme Court of South Dakota reviewed the case. It reversed the circuit court’s ruling on the slander of title claims, finding insufficient evidence to prove that Jerry, acting on behalf of Bighorn and JED, knew or recklessly disregarded the falsity of the liens. The court affirmed the denial of Stoakes’s promissory estoppel claim, concluding that Stoakes did not suffer substantial economic detriment. The court also affirmed the attorney fee award of $33,394.20 to Stoakes, as it was within the court’s discretion under SDCL 44-9-42. View "Jed Spectrum, Inc. v. Stoakes" on Justia Law

The plaintiff, Dino J. Guilmette, owned a property in North Providence, Rhode Island, and executed a mortgage in favor of Option One Mortgage Corporation in 2006. The mortgage was later assigned to Wells Fargo, with PHH Mortgage Services as the servicing company. Guilmette requested a modification of his mortgage in 2014, resulting in a Shared Appreciation Modification Agreement. This agreement increased the principal balance and included a provision for a shared appreciation amount if the property value increased and was sold.Guilmette sold the property in 2022 and disputed the calculation of the shared appreciation amount provided by PHH. He argued that PHH's calculation was incorrect and that they overcharged him by $40,708.33. Guilmette filed a breach of contract action, claiming that PHH did not properly calculate the shared appreciation amount according to the modification agreement.The Superior Court granted summary judgment in favor of the defendants, PHH and Wells Fargo, concluding that the modification agreement was clear and unambiguous. The court found that the defendants correctly calculated the shared appreciation amount based on the terms of the agreement and the attached disclosure statement, which provided specific examples of the calculation method.The Rhode Island Supreme Court reviewed the case de novo and affirmed the Superior Court's judgment. The Supreme Court held that the modification agreement was unambiguous and that the defendants' calculation of the shared appreciation amount was correct. The court emphasized that the disclosure statement, which was part of the agreement and signed by Guilmette, clearly illustrated the calculation method, and there was no ambiguity in the contract terms. View "Guilmette v. PHH Mortgage Services FKA Ocwen Loan Servicing LLC" on Justia Law

Kratzer Construction entered into a subcontract with Hardy Construction Co. to perform work on a building addition for Ekalaka Public Schools. Kratzer completed the work and submitted pay applications, including one for $92,856.45, which Hardy partially disputed due to unapproved change orders. Hardy offered to pay $81,153 upon Kratzer signing a release, but Kratzer refused, demanding the full amount plus interest. Hardy later offered the same amount without requiring a release, but Kratzer still declined, insisting on interest.The Sixteenth Judicial District Court granted summary judgment to Kratzer, ruling that Hardy owed $81,153 plus 18% interest from January 6, 2022, and attorney fees, as Kratzer was deemed the prevailing party. Hardy appealed, arguing that Kratzer failed to meet a condition precedent in the subcontract requiring submission of releases from his subcontractors before final payment.The Supreme Court of Montana reviewed the case and concluded that the subcontract's provisions were clear and unambiguous. The court determined that Kratzer's failure to submit the required releases constituted a breach of the subcontract, and Hardy was entitled to withhold payment. The court found that Hardy's offers to settle did not constitute a waiver of the condition precedent or a novation of the contract.The Supreme Court reversed the District Court's summary judgment in favor of Kratzer, including the awards for interest and attorney fees. The court remanded the case for entry of judgment in favor of Hardy, requiring Hardy to pay Kratzer $81,153 for services rendered under the subcontract, less reasonable attorney fees and costs incurred by Hardy. View "Kratzer Construction v. Hardy Construction" on Justia Law

Mark Radford and the State Board of Land Commissioners and the Idaho Department of Lands (collectively, "the State") were involved in a contract dispute over the State's easement on Radford's property. The State used the easement to access and manage state endowment lands leased for grazing. Historically, the State accessed the easement through the Hallo Property, which Radford purchased in 2020, subsequently revoking the State's access. Radford claimed that an email from the State indicated the easement was no longer needed, leading him to file a lawsuit alleging the State breached the termination clause of the easement agreement by not providing a statement confirming termination.The District Court of the Seventh Judicial District of Idaho granted summary judgment in favor of the State, determining that the termination clause gave the State sole and subjective power to decide whether the easement was necessary. The court found that the State had not made any determination that the easement was no longer needed, thus dismissing Radford's breach of contract claim. Radford appealed the decision.The Supreme Court of the State of Idaho reviewed the case and affirmed the district court's decision. The court held that the State had no contractual duty to assess whether the easement was necessary for its granted purposes. The agreement's termination clause did not impose an obligation on the State to periodically reassess the easement's necessity. The court also rejected Radford's argument that the State's refusal to terminate the easement violated the covenant of good faith and fair dealing, as the State had not determined the easement was no longer needed. The court awarded attorney fees and costs on appeal to the State, concluding that Radford's appeal was unreasonably pursued. View "Radford v. Van Orden" on Justia Law

The City of Oakland entered into agreements with Oakland Bulk and Oversized Terminal, LLC (OBOT) to develop a bulk cargo shipping terminal at the former Oakland Army Base, including a 66-year Ground Lease. Amid public backlash over potential coal transportation, the City moved to block coal, leading to extensive litigation. The City terminated OBOT’s Ground Lease, claiming OBOT failed to meet the Initial Milestone Date for construction. OBOT and its subtenant, Oakland Global Rail Enterprise (OGRE), sued the City for breach of the Ground Lease, breach of the implied covenant of good faith and fair dealing, and sought declaratory relief, alleging the City’s actions made it impossible for OBOT to meet the milestone and triggered a force majeure provision.The Alameda County Superior Court, after a bifurcated bench trial, found the City liable for breaching the Ground Lease and the implied covenant of good faith and fair dealing. The court issued a detailed statement of decision, highlighting the City’s failure to cooperate, its obstructionist actions, and its bad faith efforts to terminate the lease. The court awarded OBOT attorney fees and costs.The City appealed to the California Court of Appeal, First Appellate District, Division Two, arguing that the trial court misinterpreted the force majeure provision, improperly applied the implied covenant of good faith and fair dealing, erroneously declined to apply claim preclusion, and improperly entered judgment for OGRE. The appellate court affirmed the trial court’s judgment and orders, concluding that the City’s arguments lacked merit. The court held that the City’s actions constituted force majeure events, excusing OBOT’s performance delays, and that the City breached the implied covenant of good faith and fair dealing by obstructing OBOT’s efforts to develop the terminal. The court also found that claim preclusion did not apply as the federal case involved different issues and contracts. View "Oakland Bulk and Oversized Terminal v. City of Oakland" on Justia Law

Elanore Vaughan purchased a ticket and signed an online liability waiver to go tubing at Eagle Island State Park, operated by Gateway Parks, LLC. The next day, Vaughan was injured when her tube went over an embankment and crashed into a flatbed trailer housing snowmaking equipment. Vaughan sued Gateway, alleging negligence and premises liability, claiming Gateway failed to maintain the tubing hill safely and created a hazard by placing the trailer at the end of the tubing run.The District Court of the Fourth Judicial District of Idaho denied Gateway's motion to dismiss Vaughan's complaint. Gateway argued that Vaughan's claims were barred by the liability waiver she signed and the Responsibilities and Liabilities of Skiers and Ski Area Operators Act. The district court found that while the Act applied, there was a genuine issue of material fact regarding the placement of the snowmaking equipment. The court also concluded that the liability waiver did not preclude Vaughan's claims. Gateway then sought and was granted permission to appeal the denial of its motion for summary judgment.The Supreme Court of the State of Idaho reviewed the case and reversed the district court's decision. The court held that the electronic liability waiver Vaughan signed precluded her claims against Gateway. The waiver explicitly acknowledged the risks of tubing, including collisions with manmade obstacles such as snowmaking equipment. The court determined that the waiver's language was broad enough to encompass Vaughan's accident and injuries. Consequently, the court directed the district court to grant summary judgment in favor of Gateway and dismiss Vaughan's complaint. The court also denied Gateway's request for attorney fees on appeal, as the gravamen of Vaughan's lawsuit was a tort, not a commercial transaction. View "Vaughan v. Gateway Park, LLC" on Justia Law

In 1997, William Brokaw Price’s parents entered into a contract with Carri Scharf Trucking, Inc. (CST) for surface-level mining on their property. The contract allowed CST to extract sand, gravel, and topsoil in exchange for royalty payments. As the contract neared its end in 2010, Bill Price, Brokaw’s father, communicated with CST about future plans for the property but passed away shortly after. Years later, Brokaw discovered that the property had not been reclaimed as required by the contract, leading to a dispute over CST’s reclamation obligations and alleged trespassing.The Prices sued CST for breach of contract, and CST counterclaimed for breach based on the Prices’ trespass accusations. The first trial ended in a mistrial, and the second trial resulted in a verdict for CST. The district court denied the Prices’ motion for judgment as a matter of law and rejected CST’s request for attorney’s fees under the contract’s fee-shifting provision.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court’s decision, holding that the contract did not set a firm deadline for reclamation and allowed for a jury to resolve factual disputes about the instructions given by Bill Price. The jury had a sufficient basis for its verdict in favor of CST. Additionally, the court held that CST was not entitled to attorney’s fees because the contract’s fee-shifting provision only applied to parties enforcing the contract’s terms, and CST’s successful defense did not trigger that provision. The court affirmed the judgment of the district court in all respects. View "Price v Carri Scharf Trucking, Inc." on Justia Law

A contractor hired a subcontractor to work on a remote bridge construction project. The scope of the work changed, and neither party kept detailed records of the changes and associated costs. Years after the project was completed, the subcontractor sued for damages, claiming unpaid work. The superior court found that the subcontract did not govern the extra work, awarded some damages to the subcontractor, and precluded some claims due to discovery violations. The court also found the contractor to be the prevailing party and awarded attorney’s fees. Both parties appealed.The superior court denied summary judgment motions from both parties, finding factual disputes. It precluded the subcontractor from pursuing certain damages claims due to insufficient documentation but allowed evidence for contingent findings. After a bench trial, the court awarded the subcontractor $191,443.42, later reduced to $146,693.42 upon reconsideration. The court found the contractor to be the prevailing party under Rule 68 and awarded attorney’s fees.The Supreme Court of Alaska reviewed the case. It concluded that the superior court abused its discretion by precluding the subcontractor’s claims for snowmachine use and labor without considering less severe sanctions. The court affirmed the superior court’s findings on other damages but reversed the awards for Morris Johnson’s labor and boat use, remanding for recalculation. The prevailing party determination and attorney’s fee award were vacated and remanded for reconsideration. The court otherwise affirmed the superior court’s judgment. View "Johnson v. Albin Carlson & Co." on Justia Law