Justia Contracts Opinion Summaries

This case involves a dispute between two neighboring landowners, David W. Axelrod, as Trustee of the David W. Axelrod Family Trust, and Reid Limited Partnership (RLP), over real property and easement rights. Axelrod purchased a property in Teton County in 2003, which was not accessible by road. Michael Reid, who owned and operated an organic dairy farm on land owned by RLP, leased land adjacent to Axelrod's property. Axelrod built an access road through the RLP property, which led to a series of disputes between the parties. In 2017, Axelrod filed a lawsuit seeking clarification about his easement rights. The parties reached a settlement agreement, which required Axelrod to build a new road along a different easement and Reid to pay for the installation of a cattle guard. However, disagreements arose over the placement and cost of the cattle guard, leading to further litigation.The district court granted Axelrod's motion for summary judgment, concluding that Axelrod did not have an express easement for use of the RLP Easement, but he did have an easement by estoppel. The court also found that Reid had breached the settlement agreement by failing to pay for the cattle guard. Reid appealed the decision.The Supreme Court of the State of Idaho affirmed the district court's decision in part and vacated it in part. The court affirmed the grant of summary judgment against Reid and the dismissal of RLP's counterclaims for conversion and violation of the implied covenant of good faith and fair dealing. The court also affirmed the judgment on Axelrod's breach of contract claim and the refusal to allow amendment of the pleadings to add Reid Family Limited Partnership as a party. However, the court vacated the dismissal of RLP's trespass claim and the award of attorney fees to Axelrod against RLP, remanding for further proceedings. View "Axelrod v. Reid Limited Partnership" on Justia Law

A real estate developer, Audthan LLC, and property owner, Nick & Duke, LLC (N & D), entered into a 40-year lease agreement in 2013 to replace a Single Room Occupancy (SRO) hotel with a mixed-use residential and commercial building. The agreement required approval from the New York City Department of Housing Preservation and Development (HPD) due to a previous harassment finding against the property. The lease required Audthan to obtain a "cure" agreement from HPD and develop low-income housing on the site. However, disagreements arose over the terms of the cure agreement and the parties disputed who was at fault for the termination of the ground lease.The Supreme Court dismissed parts of Audthan's complaint, including a claim for anticipatory repudiation based on N & D's refusal to sign any cure agreement, and rejected N & D's motion to dismiss the remaining portions of the complaint. The Appellate Division affirmed the Supreme Court's decision, holding that Audthan could not seek separate redress for anticipatory repudiation based on the same conduct that allegedly breached the contract in 2015.The Court of Appeals of New York disagreed with the lower courts' dismissal of Audthan's claim for anticipatory repudiation. The court held that a claim for breach and a claim for anticipatory repudiation could both be stated based on the facts at the pleading stage. The court found that N & D's refusal to sign the 2015 cure agreement could be seen as falling short of its contractual requirements without amounting to a total breach. However, N & D's 2021 statement that it would never sign any agreement could be seen as a clear and unequivocal statement that N & D would never perform its obligations, constituting a repudiation of the contract. The court modified the Appellate Division's order by denying N & D's motion to dismiss in part, affirmed the order as modified, and answered the certified question in the negative. View "Audthan LLC v Nick & Duke, LLC" on Justia Law

The Ute Indian Tribe of the Uintah and Ouray Indian Reservation brought a suit against the United States, alleging various claims concerning water rights and water-related infrastructure. The Tribe claimed that the United States breached duties of trust by mismanaging water rights and infrastructure held by the United States and operated for the Tribe, breached contracts with the Tribe, and effected unconstitutional takings of the Tribe’s property. The Claims Court dismissed all the breach of trust claims, held that one breach of contract claim was barred by a 2012 settlement agreement, and found the remaining breach of contract and takings claims time barred.The United States Court of Appeals for the Federal Circuit affirmed in part and vacated and remanded in part the Claims Court's decision. The Court of Appeals held that the Winters doctrine and the 1899 Act did not sufficiently establish trust duties to support Indian Tucker Act jurisdiction with respect to the Tribe’s claims that the United States has a duty to construct new infrastructure and secure new water for the Tribe. However, the Court found that the 1906 Act imposes trust duties on the United States sufficient to support a claim at least with respect to management of existing water infrastructure. The Court also affirmed the dismissal of one breach of contract claim, vacated and remanded another, and affirmed the dismissal of the takings claims. View "UTE INDIAN TRIBE OF THE UINTAH & OURAY INDIAN RESERVATION v. US" on Justia Law

Vandercar, L.L.C. entered into a $36 million purchase contract for the Millennium Hotel in Cincinnati and then assigned its interest in the hotel to the Port of Greater Cincinnati Development Authority. The agreement stipulated that the Port would pay Vandercar a $5 million redevelopment fee if the Port issued bonds to redevelop the hotel within a year of its acquisition. The Port acquired the hotel and issued acquisition bonds, but it denied that the bonds were for redevelopment of the hotel, so it refused to pay the redevelopment fee. Vandercar sued the Port for breach of contract for failing to pay the redevelopment fee and also moved for prejudgment interest.The trial court found that Vandercar was entitled to the redevelopment fee and granted Vandercar’s motion for summary judgment on that issue. However, the trial court denied Vandercar’s motion for prejudgment interest, concluding that prejudgment interest could not be imposed on the Port since it was “an arm/instrumentality of the state.” Both parties appealed to the First District Court of Appeals, which affirmed the trial court’s decisions.The Supreme Court of Ohio reversed the judgment of the First District Court of Appeals. The court held that the Port, a port authority created under R.C. 4582.22(A), is not exempt from the application of R.C. 1343.03(A), which entitles a creditor to prejudgment interest when the creditor receives a judgment for the payment of money due under a contract. Therefore, the Port may be held liable to pay prejudgment interest. The court remanded the case to the trial court to evaluate Vandercar’s motion for prejudgment interest under the correct standard. View "Vandercar, L.L.C. v. Port of Greater Cincinnati Development Authority" on Justia Law

The case revolves around a dispute between Sharon Ann Koch, a member of the Buffalo Trail Ranch subdivision, and Melissa R. Gray, who was purchasing a tract in the subdivision. Koch, along with other members and the developer of the subdivision, Rocky Mountain Timberlands, Inc. (RMT), sued Gray for allegedly violating the subdivision's restrictive covenants by placing garbage, junk, and other prohibited items on her property. The covenants, filed by RMT in 2008, also required the formation of a road maintenance association, which was never established.The District Court of Albany County dismissed all claims against Gray, applying the contractual "first to breach" doctrine. The court reasoned that RMT, by failing to form the road maintenance association, was the first to breach the covenants. Therefore, it was impossible to hold Gray to the covenants. Koch appealed this decision, arguing that she had no contractual relationship with Gray, and thus the "first to breach" doctrine should not apply to her claim.The Supreme Court of Wyoming agreed with Koch. It found that the "first to breach" doctrine, which is based on a contractual relationship, could not be applied as there was no contract between Koch and Gray. The court also rejected the lower court's conclusion that RMT's breach of the covenants rendered them inapplicable to Gray. The court found no legal basis for applying the "first to breach" doctrine to a third party's enforcement of covenants. Consequently, the Supreme Court reversed the lower court's decision and remanded the case for further proceedings. View "Koch v. Gray" on Justia Law

In this case, David W. Axelrod, as Trustee of the David W. Axelrod Family Trust, and Reid Limited Partnership (RLP), along with Michael Reid, an individual, were neighboring landowners in Teton County, Idaho. Axelrod purchased a parcel of land in 2003 that was not accessible by road. Reid, who owned and operated an organic dairy farm nearby, leased land adjacent to Axelrod's parcel. Axelrod had two options for building an access road: build along two easements provided in his deed or build onto an existing dirt road that came through the RLP property. Reid preferred Axelrod to build onto the existing dirt road, which Axelrod did in 2004. However, in 2011, the relationship between Axelrod and Reid began to sour, leading to a series of disputes and legal actions.The District Court of the Seventh Judicial District, State of Idaho, Teton County, initially concluded that Axelrod did not have an express easement for use of the RLP Easement, but he did have an easement by estoppel. The parties then executed a settlement agreement and stipulated to dismiss the suit. However, disagreements over the implementation of the settlement agreement led to further litigation. The district court granted Axelrod's motion for summary judgment, concluding that Reid, as the nonmoving party, had failed to properly support any assertion of fact or address the assertions of fact in Axelrod’s motion for summary judgment.On appeal, the Supreme Court of the State of Idaho affirmed the district court's grant of summary judgment against Reid individually and affirmed the district court’s judgment dismissing RLP’s counterclaims for conversion and violation of the implied covenant of good faith and fair dealing. The Supreme Court also affirmed the judgment of the district court on Axelrod’s breach of contract claim and the judgment of the district court refusing to allow amendment of the pleadings to add Reid Family Limited Partnership (RFLP) as a party. However, the Supreme Court vacated the judgment of the district court dismissing RLP’s trespass claim and remanded for further proceedings. The Supreme Court also vacated the attorney fee award as against RLP and remanded for determination of an appropriate fee award at the conclusion of the proceedings. View "Axelrod v. Reid Limited Partnership" on Justia Law

This case involves a dispute among Players Recreation Group, LLC, an Alabama limited-liability company, three of its members, Jason L. McCarty, Felix McCarty, and Doyle Sadler, and S&M Associates, Inc., a company owned by Sadler. The LLC, established in 1999, owns and operates a bowling alley known as 'the Super Bowl.' In 2003, S&M, a company owned by Sadler, loaned the LLC $150,000, which is evidenced by a promissory note. In 2006, the Super Bowl began incurring substantial losses, and the LLC ultimately defaulted on the promissory note payable to S&M. In July 2015, S&M and Sadler sued the LLC and the other members of the LLC, asserting a breach-of-contract claim and a claim seeking an accounting. In August 2015, the LLC, Jason, and Felix filed an answer and a counterclaim, alleging that Sadler had breached his duty of loyalty and his duty of care to the LLC.The case proceeded to a bench trial. The parties initially stipulated that the LLC owed S&M a total of $310,139.66 on the promissory note; the trial court ultimately entered a judgment against the LLC for that amount based on the parties' stipulation. The case was then tried solely on the counterclaims asserted against Sadler by the LLC, Jason, and Felix. The trial court entered a judgment against Sadler on the counterclaims, based on its findings that Sadler had breached not only a duty of loyalty and a duty of care to the LLC, but also the implied covenant of good faith and fair dealing owed to the LLC. The trial court assessed damages against Sadler in the amount of $368,167.92.On appeal to the Supreme Court of Alabama, Sadler argued that the trial court erred insofar as it entered a judgment against him on the counterclaims asserted against him by the LLC, Jason, and Felix. The Supreme Court of Alabama agreed and reversed the judgment entered against Sadler on the counterclaims asserted against him because there was no evidence to support findings that Sadler had breached the duty of loyalty and the duty of care owed to the LLC or the implied covenant of good faith and fair dealing, and remanded the case to the trial court for the entry of a judgment consistent with this opinion.On remand, S&M and Sadler filed a motion for attorney's fees, costs, and expenses. The trial court denied the motions for attorney's fees, costs, and expenses. The trial court also found that the LLC had incurred $2,713,230.33 in expenses without contribution by Sadler or Scott Montgomery. That finding was not disturbed on appeal and has become the law of the case. The trial court took judicial notice that Jason and Felix McCarty have perfected, as the remaining members of the LLC, that claim or debt by filing a second mortgage with the Probate Court of Jefferson County, which second mortgage is inferior to the mortgage held by the late Ferris Ritchey’s real estate company, and the perfection of this claim makes it a priority over and superior to the claims of other creditors, including S&M.S&M and Sadler appealed the trial court's order on remand. The Supreme Court of Alabama affirmed the trial court's order on remand insofar as it denied S&M's and Sadler's requests for attorney's fees and costs, reversed the order insofar as it addressed the LLC's mortgage executed in favor of Jason and Felix and its purported priority, and remanded this case with instructions for the trial court to set aside that portion of its order that addressed the LLC's mortgage and its purported priority. View "S&M Associates, Inc. v. Players Recreation Group, LLC" on Justia Law

The case involves a dispute between a developer, Campbellton Road, Ltd., and the City of San Antonio, specifically the San Antonio Water System (SAWS). The developer entered into a contract with SAWS in 2003, which included an option for the developer to participate in and fund the construction of off-site oversized infrastructure for a municipal water system. The developer planned to develop two residential subdivisions and needed sewer service for them. The contract stated that if the developer decided to participate in the off-site oversizing project, a contract would form, and the developer would earn credits that could be used to satisfy some or all of the collection component of assessed impact fees.The Court of Appeals for the Fourth District of Texas concluded that the Local Government Contract Claims Act did not apply, and therefore did not waive immunity, because there was no agreement for providing services to the system. The court held that the system had no contractual right to receive any services and would not have “any legal recourse” if the developer “unilaterally decided not to proceed.”The Supreme Court of Texas disagreed with the lower court's decision. The Supreme Court held that the Act waived the system’s immunity from suit because the developer adduced evidence that a contract formed when the developer decided to and did participate in the off-site oversizing project. The court found that the contract stated the essential terms of an agreement for the developer to participate in that project, and the agreement was for providing a service to the system that was neither indirect nor attenuated. The Supreme Court reversed the court of appeals’ judgment and remanded the case to the trial court for further proceedings. View "Campbellton Road, Ltd. v. City of San Antonio" on Justia Law

A homeowner, Mohammad Rafiei, sued his builder, Lennar Homes, alleging personal injuries due to a construction defect. The purchase contract between Rafiei and Lennar contained an agreement to submit disputes to arbitration under the Federal Arbitration Act, including issues of formation, validity, or enforceability of the arbitration agreement. Lennar moved to compel arbitration, but Rafiei argued that the arbitration agreement was unconscionable because the cost of arbitration was prohibitively high. The trial court denied Lennar's motion to compel arbitration.The Court of Appeals for the Fourteenth District of Texas affirmed the trial court's decision, holding that Rafiei had sufficiently demonstrated that the cost to arbitrate was excessive, making the arbitral forum inadequate to vindicate his rights. The court of appeals concluded that if Rafiei were required to pay more than $6,000, he would be precluded from pursuing his claims.The Supreme Court of Texas reversed the judgment of the court of appeals. The court held that the record failed to support a finding that the parties' delegation clause was itself unconscionable due to prohibitive costs to adjudicate the threshold issue in arbitration. The court noted that Rafiei had not provided sufficient evidence to show that he could not afford the cost of arbitrating the arbitrability question. The court also noted that Rafiei had not provided evidence of how the fee schedule would be applied to resolve the unconscionability issue. The court remanded the case to the trial court for further proceedings consistent with its opinion. View "Lennar Homes Of Texas Inc. v. Rafiei" on Justia Law

Whitetail Wave LLC, a Montana Limited Liability Company, sued XTO Energy, Inc., a Delaware corporation, the Board of University and School Lands of the State of North Dakota, the State of North Dakota, and the Department of Water Resources and its Director. Whitetail Wave claimed ownership of certain property in McKenzie County, North Dakota, and alleged that XTO Energy had breached their lease agreement by failing to make required royalty payments. Whitetail Wave also claimed that the State's assertion of an interest in the mineral interests associated with the property constituted an unconstitutional taking without just compensation.The District Court of McKenzie County granted summary judgment in favor of the State and XTO Energy. The court concluded that the State owned certain mineral interests within the ordinary high watermark as defined by North Dakota law. The court also found that XTO Energy was within the safe harbor provision provided by North Dakota law and did not breach the parties’ lease agreement when it withheld the royalty payments. The court awarded XTO Energy recovery of its attorney’s fees.On appeal, the Supreme Court of North Dakota affirmed the judgment of the district court. The Supreme Court found that the district court did not err in dismissing Whitetail Wave's claim of an unconstitutional taking against the State, as the State's actions were limited to a title dispute. The Supreme Court also found that the district court did not err in dismissing Whitetail Wave's claim against XTO Energy for the non-payment of royalties, as XTO Energy fell within the safe harbor provision of North Dakota law. Finally, the Supreme Court found that the district court did not err in awarding XTO Energy a recovery of its attorney’s fees as the prevailing party. View "Whitetail Wave v. XTO Energy" on Justia Law