Justia Contracts Opinion Summaries

Fred and Nancy Eagerton petitioned the Supreme Court for a writ of mandamus to direct the Circuit Court to enter a judgment as a matter of law in their favor and against SE Property Holdings, LLC, consistent with the Court's mandate in "Eagerton v. Vision Bank," (99 So. 3d 299 (Ala. 2012)). SE Property Holdings, LLC, is the successor by merger to Vision Bank. The underlying suit arose from a loan that the Eagertons personally guaranteed, secured by a mortgage on property within the Rock Creek Tennis Club in Fairhope. The bank declared the original and second loans in default and accelerated balances due under both. The bank sued the primary obligor, and the Eagertons as person guarantors on one of the original loans. The primary obligor declared Chapter 11 bankruptcy. The reorganization plan consolidated the two loans. The obligor eventually defaulted on the terms of the reorganization plan. The bankruptcy was dismissed, the property foreclosed, and the money obtained in the foreclosure sale was applied to the consolidated loan. The Eagertons argued that the Chapter 11 reorganization of the debts of primary obligor (the consolidation of the original loan with the second loan), created a new indebtedness not encompassed by their guaranty contracts. The Eagertons therefore argued that the creation of this new indebtedness, without their knowledge or consent, operated to discharge them from any further obligations under their guaranty contracts. The bank, on the other hand, argued, among other things, that the consolidated loan was a replacement note contemplated by the guaranty contracts and that the Eagertons had waived the material-modification defense. The Supreme Court in "Eagerton v. Vision Bank" concluded that the Eagertons' guaranty contracts were unambiguous; that based on the language in the guaranty contracts the Eagertons did not intend to guarantee any indebtedness other than that indebtedness arising out of the original loan and any extensions, renewals, or replacements thereof; and that, once the Eagertons' original loan was modified pursuant to the Chapter 11 reorganization of Dotson 10s, the Eagertons were at that point discharged from any further obligations under their guaranty contracts. Because the circuit court did not follow the mandate in the Court's prior decision in "Vision Bank," the Supreme Court granted the Eagertons' petition and issued the writ. View "SE Property Holdings, LLC v. Eagerton" on Justia Law

This dispute arose out of a written option contract under which Respondent had the right to purchase real property from Appellants for $8 million. The property was subject to a deed of trust securing approximately $1.3 million in debt. At issue was whether the Respondent or Appellants were required to pay off the $1.3 million debt. The district court granted summary judgment for Respondent, concluding that the option contract required Appellants to deliver clear title, meaning Appellants were required to remove the $1.3 encumbrance for a net $6.7 option price. Appellants appealed, arguing that the option contract contemplated that Respondent take title subject to preexisting encumbrances, so that Appellants received the full $8 million option price. The Supreme Court affirmed, holding that the district court properly interpreted the option contract and that the contract placed responsibility for the $1.3 million debt on Appellants' side of the ledger. View " Galardi v. Naples Polaris, LLC" on Justia Law

This dispute centered on a contract for the construction of a residence. The contract between the general contractor (Contractor) and the owners (Owners) was contingent upon Owners obtaining financing. After construction was completed, Contractor asserted a materialman's lien on the house, arguing that Owners had refused to fully compensate Contractor. After Owners filed suit to protest the lien, the parties agreed to discharge the lien. Contractor later sued Owners based on Owners' failure to disclose that they had obtained inadequate financing. The circuit court dismissed the complaint on the grounds that Contractor's claims were statutorily barred for failure to strictly comply with requirements for the notice of its lien. The order was silent as to the other two grounds Owners had asserted for dismissal and with respect to any of the arguments raised in defense of Owners' motion to dismiss. Contractor appealed, arguing reversal based on other arguments raised below but not ruled on. The Supreme Court affirmed, as (1) the circuit court did not provide a ruling on Contractor's first three arguments, and they were therefore not preserved for appellate review; and (2) Contractor's fourth argument had no merit given the Court's summary affirmance on the first three points. View "TEMCO Constr., LLC v. Gann" on Justia Law

Vincennes Indiana Girls, Inc. (VIG) deeded Camp Wildwood to the predecessor of Girl Scouts of Southern Illinois, Inc. (GSSI) on the condition that the property be used for scouting purposes for forty-nine years. The deed provided that ownership of the campground would revert to VIG if the scouting-use condition was breached during that time. After forty-four years, GSSI stopped using the camp as a Girl Scout facility and decided to sell. VIG sued to quiet title to Camp Wildwood and enjoin GSSI from selling the camp until the forty-nine-year period had expired. The trial court granted summary judgment quieting title in VIG. At issue on appeal was whether the forty-nine-year land use limitation was enforceable despite a subsequently enacted statute, Ind. Code 32-17-10-2, which purported to limit reversionary clauses in land transactions to a maximum of thirty years. The Supreme Court affirmed, holding that section 32-17-10-2 was unconstitutional as applied retroactively to the land-use restriction in VIG's deed to GSSI. View "Girl Scouts of S. Ill. v. Vincennes Ind. Girls, Inc." on Justia Law

In 1971, Plaintiff began subleasing a half-acre parcel of land that was part of an undivided 1040-acre parcel of property (master parcel). Plaintiff and the master parcel's owner, Princeville Development Corporation, subsequently entered into a license agreement effective until 2003 that included an option to purchase and a right of first refusal. The agreement also contained a provision stating that any holding over after the expiration of the term of the agreement should be on the terms and conditions specified in the agreement. In 2005, the Corporation sold the master parcel to Princeville Prince Golf Course (PPGC). Plaintiff filed a complaint against the Corporation in 2005, praying for specific performance of the option to purchase clause. PPGC was substituted as Defendant. The circuit court dismissed Plaintiff's claim for specific performance, holding that the sale of the master parcel did not constitute a "decision to sell" the premises which would trigger Defendant's right of first refusal. The intermediate court of appeals (ICA) affirmed. The Supreme Court reversed, holding (1) Plaintiff's right of first refusal continued into the holdover period; and (2) the right of first refusal was triggered by the Corporation's decision to sell the master parcel in 2005. Remanded. View "Kutkowski v. Princeville Prince Golf Course, LLC" on Justia Law

Northern Oil & Gas, Inc. appealed a judgment ordering reformation of an oil and gas lease and quieting title to the oil and gas leasehold estate in Murex Petroleum Corporation, John H. Holt, LBK Sales & Service, Inc., Racer Oil & Gas, LC, and Double L, LLC. In 2007, a landman working for Morris Creighton signed an oil and gas lease with the original mineral holder. The lease was recorded, but a month later, a typographical error was discovered in the lease’s property description. Six months later, Creighton assigned his interest in the lease, with an exception of an overriding royalty interest, to Antares Exploration Fund, L.P. Antares then assigned its interest in the Creighton lease to Northern. Northern brought an action to quiet title against Creighton and Murex to determine rights of the parties to the oil and gas leasehold estate. Murex filed a third-party complaint against the original mineral rights holders, a cross-claim against Creighton, and a counterclaim against Northern. Upon review, the Supreme Court concluded that the district court erred in concluding, as a matter of law, that Creighton was not a good faith purchaser and the Court held that there was a question of fact whether Creighton had constructive notice when he acquired rights under the lease. The Court reversed the judgment and remanded the case for further proceedings. View "Northern Oil & Gas, Inc. v. Creighton" on Justia Law

Affordable appealed the district court's grant of Fannie Mae's motion to dismiss, concluding that EFA had not acted as Fannie Mae's agent in originating the loan for a senior living complex that Affordable purchased and that the loan documents unambiguously authorized a prepayment penalty. The court affirmed the dismissal of Affordable's claims for negligent misrepresentation, breach of the covenant of good faith and fair dealing, and unjust enrichment. However, the court reversed the dismissal of Affordable's breach of contract claim where the agreement was ambiguous as to whether "condemnation award" included a sale in lieu of condemnation and remanded for further proceedings. View "Affordable Communities of MO v. Federal Nat'l. Mortgage Assoc." on Justia Law

After defendant, a developer, had not furnished a "printed property report," as required by the Interstate Land Sales Full Disclosure Act (ISLA), 15 U.S.C. 1701 et seq., plaintiff claimed that their contract to purchase a condominium unit from defendant was voidable. On appeal, defendant challenged the district court's grant of summary judgment to plaintiff. At issue was whether a single-floor condominium unit in a multi-story building was a "lot," thus triggering the disclosure and reporting requirements of the ISLA. The Consumer Financial Protection Bureau (CFPB) and the Department of Urban Development (HUD) promulgated a rule defining the term "lot" to require the "exclusive use of... land," and, in turn, interpreted the term "land" to mean "realty," thus applying ILSA's requirements to condominium units in multi-story buildings. Because "land" could be used as a term of art meaning "realty," the court held that CFPB and HUD have reasonably interpreted their own definition of the term "lot." Accordingly, the court concluded that the district court properly granted summary judgment to plaintiff. Further, the district court did not err or abuse its discretion by awarding attorneys' fees. View "Berlin v. Renaissance Rental Partners, LLC" on Justia Law

Defendants The Pantry, Inc., and Herndon Oil Corporation appealed a judgment entered on a jury verdict in favor of plaintiffs Kaycee Mosley and Alana Byrd. The appeals primarily concerned whether Kaycee and Alana's mother, Murel Mosley, unreasonably withheld consent to Herndon Oil's assignment of a lease between Murel and Herndon Oil. Upon review of the matter, the Supreme Court reversed the judgment and remanded the case, concluding that Murel unreasonably withheld consent to the assignment of the lease from Herndon Oil to The Pantry. Thus, Herndon Oil had the right under the lease agreement to assign the lease to The Pantry despite Murel's failure to consent. Furthermore, neither Herndon Oil nor The Pantry could be liable on a conversion claim. View "The Pantry, Inc. v. Mosley" on Justia Law

Landlord and Tenant entered into a twelve-year lease for commercial space. The lease required a separate guaranty agreement to be executed by Guarantor. Tenant stopped making rent payments a couple of years later, and thereafter, Landlord reentered and took possession of the premises, thereby terminating the lease. Landlord subsequently filed suit against Tenant and Guarantor for damages arising from the breach of contract. The superior court granted summary judgment to Landlord as to liability and awarded damages in the amount of $1,092,653, for which Tenant and Guarantor were jointly liable. The appeals court affirmed in part and vacated the judgment assessing damages and remanded. The Supreme Court (1) affirmed the part of the judgment finding Tenant liable for breach of the lease and assessing damages for the period before termination of the lease in the amount of $37,276 plus prejudgment interest; and (2) vacated the part of the judgment assessing damages for the period following termination of the lease and awarding attorney's fees. View "275 Washington St. Corp. v. Hudson River Int'l, LLC" on Justia Law