Justia Contracts Opinion SummariesArticles Posted in Real Estate & Property Law
Olson Family Limited Partnership v. Velva Parks, LLC
In Dencember 2022, Olson Family Limited Partnership (“Olson”) served a summons and complaint on Velva Parks, LLC through Velva Parks’ registered agent, Legalinc Corporate Services Inc. (“Legalinc”). Olson alleged it entered into a contract for deed with Velva Parks for the sale of its mobile home park to Velva Parks. Olson alleged Velva Parks breached their contract for deed by failing to pay the final balloon payment of $406,414 when it became due December 1, 2022. Olson sought to have the contract judicially terminated and canceled. Velva Parks appealed an order denying its motion to vacate the default judgment entered after Velva Parks failed to answer or otherwise appear withn 21 days after being served with the summons and complaint. The North Dakota Supreme Court affirmed, concluding the district court did not abuse its discretion in denying Velva Parks’ motion to vacate. View "Olson Family Limited Partnership v. Velva Parks, LLC" on Justia Law
Castaic Studios v. Wonderland Studios
Plaintiff Castaic Studios, LLC (Castaic) and Wonderland Studios, LLC (Wonderland) entered an agreement under which Castaic granted Wonderland the “exclusive right to use” certain areas of its commercial property. The agreement specified that it was a “license agreement,” as opposed to a lease, with Castaic “retaining legal possession and control” of the premises. The agreement was to be “governed by the contract laws and not by the landlord tenant laws.” When Wonderland defaulted, Castaic nonetheless filed an unlawful detainer action seeking possession of the property. The trial court sustained Wonderland’s demurrer without leave to amend, reasoning that Castaic had waived its right to pursue the remedy of unlawful detainer The Second Appellate District affirmed. The court explained that the trial court correctly sustained Wonderland’s demurrer without leave to amend. Whether an agreement constitutes a lease or a license is “a subtle pursuit.” Although Castaic argued at length that the agreement was in fact a lease despite its express designation to the contrary, we need not decide this issue to resolve the appeal. Even assuming the agreement contains some elements of a lease, its express terms show the parties’ intent to waive any rights afforded by the landlord-tenant laws, including a landlord’s remedy of unlawful detainer. View "Castaic Studios v. Wonderland Studios" on Justia Law
Hanson v. Town of Fort Peck
The Supreme Court affirmed in part and reversed in part the judgments of the district court enforcing the parties' mediated memorandum of understanding (MOU) regarding a subdivision dispute and then implementing it in the form of a more formal final settlement agreement proposed by Developers for approval by the Town of Fort Peck, Montana, holding that the district court erroneously granted Developers judgment as a matter of law.The district court ultimately concluded that the mediated MOU was an independently valid and enforceable contract in accordance with its written terms and as approved by the Town Council at its closed meeting, thus granting Developers' motion to enforce and implement the mediated MOU. The Supreme Court reversed in part, holding that the district court erred in granting Developers judgment as a matter of law that the Town Council took action to approve the parties' mediated MOU at its closed meeting and that a genuine issue of material fact remained as to whether a majority a quorum of the Town Council satisfied the agreed condition precedent to contract formation and enforceability of the MOU. View "Hanson v. Town of Fort Peck" on Justia Law
Gattineri v. Wynn MA, LLC
The Supreme Judicial Court held that an agreement entered into between Plaintiff Anthony Gattineri and Defendants Wynn MA, LLC and Wynn Resorts, Limited (collectively, Wynn) in San Diego California (the San Diego agreement) was unenforceable for reasons of public policy.Wynn entered into an option contract with FBT Everett Realty, LLC (FBT) to purchase a parcel of property. As Wynn's application for a casino license proceeded, the Massachusetts Gaming Commission discovered that there was a possibility of concealed ownership interests in FBT by a convicted felon with organized crime connections. In response, FBT lowered the purchase price for the parcel. The Commission approved the amended option agreement. Gattineri, a minority owner of FBT, opposed the price reduction and refused to sign the certificate required by the Commission. Gattineri alleged that at the San Diego meeting Wynn had agreed to pay Gattineri an additional $19 million in exchange for Gattineri signing the certificate. After the Commission awarded Wynn a casino license Gattineri brought suit claiming breach of the San Diego agreement because Wynn never paid Gattineri the promised $19 million. The Supreme Judicial Court held (1) the agreement was deliberately concealed from the Commission and inconsistent with the terms approved by the Commission; and (2) enforcement of such a secret agreement constituted a clear violation of public policy. View "Gattineri v. Wynn MA, LLC" on Justia Law
Scott Fetzer Co. v. American Home Assurance Co.
The Supreme Court affirmed the judgment of the court of appeals in this dispute arising out of environmental-cleanup and remediation work at two Superfund sites in Bronson, Michigan, holding that Restatement (Second) 193 does not govern the choice-of-law analysis for bad faith claims.Scott Fetzer Company filed this action asserting a breach of contract claim against certain insurance companies, including Travelers Casualty and Surety Company, alleging breaches of certain insurance contracts. Fetzer also asserted a tort claim against each company, arguing that they had acted in bad faith when handling his claims. As to Travelers, an administrative judge concluded that Ohio law applied to a discovery dispute concerning Scott Fetzer's bad faith claim. The court of appeals affirmed, determining that Ohio law governed the bad-faith discovery dispute because the cause of action was a tort. In affirming, the court applied the choice-of-law rules set forth in section 145 of the Restatement. Travelers appealed, arguing that section 193 governs the choice-of-law analysis for bad faith claims because they arise out of insurance contracts. The Supreme Court affirmed, holding that the court of appeals correctly ruled that the choice-of-law analysis applicable to a bad-faith claim as provided by section 145. View "Scott Fetzer Co. v. American Home Assurance Co." on Justia Law
Cooper v. Durham
Cody Durham filed suit against Jacob Cooper, alleging breach of a purchase agreement between them involving the sale of Cooper's residence. In August 2020, Durham saw a listing on the Facebook Marketplace social-media website advertising for sale Cooper's house and the two acres of real property on which the house was situated. Over text messages between Durham and Cooper, they agreed to a purchase price and closing date, with Cooper paying the closing costs. Durham testified that he did not engage any realtor or lawyer to help him with drafting the purchase agreement. Instead, he just Google-searched for "residential purchase agreement" and used the first fillable form generated by that search. One of the conditions of Durham's FHA loan was that the loan would not be approved unless the subject property's appraised value was confirmed by a certified appraiser. A certified appraiser appraised the property's value, but that value was subject to the condition that a storage shed in Cooper's backyard needed to be fixed or torn down. Cooper told Durham he "don't have the money" to fix or tear down the storage shed, so it would be up to Durham to take care of it. Cooper then sent Durham a text stating he was backing out of the deal because the closing date had passed, and the issue of the shed had not been resolved. Durham sought specific performance of the purchase agreement. Following a bench trial, the trial court awarded Durham $79,000 in damages. Cooper appealed. The Alabama Supreme Court concluded the trial court misapplied the law to the facts by measuring Durham's damages based on the difference between the contract price and the subject property's assessed market value in a new appraisal because the proper legal standard for measuring damages for the breach of a contract involving the sale of real property was the difference between the contract price and the subject property's market value at the time of the breach. The judgment was reversed and the case remanded for a recalculation of damages. View "Cooper v. Durham" on Justia Law
Deutsche Bank National Trust v. Fidelity National Title Insurance Co.
The Supreme Court affirmed the judgment of the district court dismissing the complaint brought by a first deed of trust holder against its title insurance company for breach of contract and related claims, holding that there was no error.The insurer in this case denied coverage to a first deed of trust holder for its loss of interest in property following a foreclosed upon a "superpriority piece." At issue was whether the first deed of trust holder could recover for its loss of interest in the subject property by making a claim on its title insurance policy. The district court granted the title insurance company's motion to dismiss as to all claims, concluding that no coverage existed under the policy. The Supreme Court affirmed, holding (1) the claims for declaratory judgment, breach of contract, and breach of the covenant of good faith and fair dealing were properly dismissed; and (2) the first deed of trust holder was not entitled to relief on its remaining allegations of error. View "Deutsche Bank National Trust v. Fidelity National Title Insurance Co." on Justia Law
Berger, et al. v. Sellers, et al.
Darren and Tamara Berger (“Bergers”) appealed a judgment dismissing their claims of violation of a planned unit development (PUD), breach of contract, breach of fiduciary duty, private nuisance, and negligence against their neighbors Jason and Krysta Sellers (“Sellers”), Sellers’ homebuilder Jordan Anderson and Big River Builders, Inc. (together, “Builder”), and the Misty Waters Owners’ Association (“Association”). Sellers and Builder cross-appealed the judgment dismissing their claims of defamation, interference with contract and business, and negligence against Bergers and neighbor Jeff Carlson. The central issue in this case was whether the PUD minimum setback from the bay could be changed by obtaining a new Letter of Map Revision (LOMR) from the Federal Emergency Management Agency (FEMA) without an amendment to the PUD. To this, the North Dakota Supreme Court concluded the PUD unambiguously set the minimum setback from the bay as the contour line in the 2005 LOMR-F and therefore Sellers’ home violated the PUD. The Supreme Court reversed the district court’s grant of summary judgment on Bergers’ claims against Sellers for violation of the PUD, breach of restrictive covenants, negligence (drainage), and private nuisance (setbacks). The Court remanded with instructions to grant Bergers partial summary judgment on their claims against Sellers for violation of the PUD and breach of restrictive covenants and for declaratory relief (against Sellers) as requested in their motion for partial summary judgment. The Court reversed the trial court’s grant of summary judgment on Bergers’ claims against the Association for breach of fiduciary duty and negligence. The Court affirmed the court’s grant of summary judgment on all of Bergers’ claims against Builder, namely the PUD violation, breach of restrictive covenants, and negligence. The Court affirmed the grant of summary judgment on Bergers’ claims against the Association for breach of restrictive covenants and private nuisance. The Court affirmed the grant of summary judgment on all of Sellers’ and Builder’s claims. View "Berger, et al. v. Sellers, et al." on Justia Law
Wildcat Drilling, LLC v. Discovery Oil & Gas, LLC
In this discretionary appeal brought by Discovery Oil and Gas, LLC to determine whether an express indemnification provision in its contract with Wildcat Drilling, LLC evinced a clear intent by the parties to abrogate the common-law notice requirements for indemnification set forth in Globe Indemnity Co. v. Schmitt, 53 N.E.2d 790 (Ohio 1944), the Supreme Court held that the requirements announced in Globe Indemnity did not apply.Specifically, the Supreme Court held (1) when the parties have entered into a contract containing an express indemnification provision, the common-law notice requirements set forth in Globe Indemnity do not apply, and the parties are bound by the terms of their contract because the provision evinces a clear intent by the parties to abrogate the common law; and (2) the language of the contract in this case evicted the parties' clear intent to abrogate the common-law notice requirements for indemnification. View "Wildcat Drilling, LLC v. Discovery Oil & Gas, LLC" on Justia Law
Fitness International v. KB Salt Lake III
Fitness International, LLC was operating an indoor gym and fitness center when it entered into an amended lease with KB Salt Lake III, LLC, that required Fitness International to renovate the premises. However, the COVID-19 pandemic prompted government orders that closed indoor gyms but allowed commercial construction to continue. Fitness International nevertheless stopped construction at the Chatsworth site, remained in possession of the premises, and stopped paying rent. KB Salt Lake filed an unlawful detainer action, and the trial court granted KB Salt Lake’s motion for summary judgment. Fitness International appealed. The Second Appellate District affirmed the trial court’s judgment. The court explained that Fitness International argued that the lease is a “monthly installment contract” and that each month it could not operate the premises as a fitness facility, frustrated the purpose of the contract. The court wrote that neither the pandemic nor the COVID-19 closure orders, however, prevented Fitness International from reopening the gym. Thus, even if California law recognized temporary frustration of purpose, and even if the lease was an “installment contract,” Fitness International still had to make rent payments under the lease. Moreover, the court explained that Fitness International argues the purpose of section 1511 “is to excuse performance under circumstances like these,” but Fitness International cites no authority describing the purpose of section 1511, nor does Fitness International explain how the trial court’s ruling was contrary to any such purpose. View "Fitness International v. KB Salt Lake III" on Justia Law