Justia Contracts Opinion Summaries

In consolidated appeals, the Supreme Court addressed whether a claim for fraud in the inducement was available when the basis for the claim contradicts the very language of the contract at issue in the parties’ dispute. Upon review of the facts of this case, the Court concluded that when a fraudulent inducement claim contradicts the express terms of the parties’ integrated contract, it fails as a matter of law. Additionally, the Court addressed the propriety of the damages awarded by the jury under a separate claim for breach of contract. The Court affirmed the compensatory damages award in this case, but reversed the punitive damages award, as the Court reversed the finding of fraud on which the punitive damages were based. View "Road & Highway Builders v. N. Nev. Rebar" on Justia Law

Krystal Kinghorn and Kelly Clay agreed that Clay would co-sign for a loan for Kinghorn's benefit. In order to protect Clay in the event that Kinghorn defaulted on the loan, Kinghorn agreed to execute a quitclaim deed to real property that Clay could record if King defaulted. When Kinghorn defaulted, Clay recorded the deed and conveyed the property to BRP Incorporated (BRP). Kinghorn filed suit, and the district court unwound the conveyance, granting summary judgment that the deed was a mortgage and that Kinghorn had a right to redeem the property. BRP filed and prevailed upon a cross-claim against Clay for breach of its warranty deed. BRP later petitioned for a writ of attachment. The district court held that Kinghorn had not timely exercised her right to redeem and ordered Clay to foreclose the mortgage. Kinghorn and Clay stipulated that Kinghorn would purchase the property and that the court should perform an accounting and set off of their liabilities. The court found that a balance remained due to Clay, and entered judgment in his favor. Clay's attorney, Brian Smith (Smith), then moved to perfect an attorney's lien as to the judgment. Kinghorn deposited the amount due with the court, and after the court denied Smith's motion, the court awarded the deposited funds to BRP. Smith appealed the court's denial of the motion for lien, as well as the order for transfer of funds to BRP. Upon review, the Supreme Court dismissed the appeal, finding Smith was not a party to the action, and therefore had no standing to assert his claim. View "Kinghorn v. Clay " on Justia Law

In 2004, Edlow agreed to purchase three residential condominium units in RBW's luxury development, consisting of a Residential Unit, a Commercial Unit, and a Hotel Unit. It was anticipated that the Regent Hotel would operate the Hotel and that residential occupants would have privileged access to hotel amenities. According to marketing materials the Regent Boston was to offer a spa, meeting space, a signature restaurant by a Michelin chef, 24-hour concierge service, and an executive business center. When construction fell behind, RBW exercised its rights to extend closing dates several times. RBW representatives assured Edlow that "all promised amenities would be available." Edlow affirmed his commitment to purchase two units, but was released from obligation to buy one. The closing for the first unit took place in May 2008. In June, RBW informed Edlow that Regent was pulling out. In July, RBW informed him that the replacement hotel would not offer property management and concierge services discussed in original marketing materials. Despite these notices, Edlow executed a new agreement. Days later, Edlow demanded return of deposits on the remaining unit. Edlow sued, alleging contract, tort and statutory claims. The district court dismissed. The First Circuit affirmed. View "Edlow v. RBW, LLC" on Justia Law

The bankruptcy Trustee of MBS Management Services, Inc. (MBS), a management company for dozens of apartment complexes, appealed judgments rejecting his claim that payments made by the debtor to MXEnergy Electric, Inc (MX) to reimburse MX for supplying electricity to the complexes were avoidable preferences. The bankruptcy court and district court found that the payments were made on a "forward contract" expressly exempt from the Bankruptcy Code's preference provision. The Fifth Circuit Court of Appeals affirmed, holding that because the agreement was a forward contract within the meaning of 11 U.S.C. 546(e), and because expert testimony from the President and CEO of MX was admissible, the bankruptcy and district court's correctly rejected the Trustee's avoidance action. View "Lightfoot v. MXenergy Elec., Inc. " on Justia Law

The issue in this appeal was whether a homeowners' association may enforce a covenant prohibiting "business activities of any kind whatsoever" against homeowners who have operated a daycare in their home for a period of twelve years. The Supreme Court (1) affirmed the district court's order to the extent it found that the daycare business violated the "no business activities" covenant and to the extent it granted summary judgment on the defenses of estoppel, laches, and unclean hands; but (2) reversed the district court's grant of summary judgment in favor of the homeowners' association with respect to the affirmative defense of waiver raised by the homeowners because there were genuine issues of material fact surrounding this issue. View "Farmington Woods Homeowners Ass'n v. Wolf" on Justia Law

The City of New Orleans filed suit against BellSouth Telecommunications, LLC, claiming that the company owed it additional compensation for the use of its public rights-of-way. The district court rejected the City's claims for additional compensation pursuant to the various contracts between the parties. The court, however, awarded the City $1.5 million in unjust enrichment damages to compensate the City for benefits the company had received from its use of the City's rights-of-way. Both parties appealed. The City then enacted an ordinance to force BellSouth to continue compensating the City in future years for the unjust enrichment identified by the district court. BellSouth moved for a preliminary injunction to enjoin the City from enforcing the ordinance, which the district court denied. The Fifth Circuit Court of Appeals (1) affirmed the district court's findings of fact and conclusions of law, in part, to the extent the court rejected the City's claims for damages; and (2) reversed and vacated the district court's judgment awarding unjust enrichment damages to the City, holding that BellSouth had justification in contract for any enrichment it was enjoying from its use of the City's rights-of-way. Remanded with instructions to permanently enjoin enforcement of the City's ordinance. View "City of New Orleans v. BellSouth Telecomm., Inc." on Justia Law

The City of New Orleans filed suit against BellSouth Telecommunications, LLC, claiming that the company owed it additional compensation for the use of its public rights-of-way. The district court rejected the City's claims for additional compensation pursuant to the various contracts between the parties. The court, however, awarded the City $1.5 million in unjust enrichment damages to compensate the City for benefits the company had received from its use of the City's rights-of-way. Both parties appealed. The City then enacted an ordinance to force BellSouth to continue compensating the City in future years for the unjust enrichment identified by the district court. BellSouth moved for a preliminary injunction to enjoin the City from enforcing the ordinance, which the district court denied. The Fifth Circuit Court of Appeals (1) affirmed the district court's findings of fact and conclusions of law, in part, to the extent the court rejected the City's claims for damages; and (2) reversed and vacated the district court's judgment awarding unjust enrichment damages to the City, holding that BellSouth had justification in contract for any enrichment it was enjoying from its use of the City's rights-of-way. Remanded with instructions to permanently enjoin enforcement of the City's ordinance. View "BellSouth Telecomm., LLC v. City of New Orleans" on Justia Law

Bowers Oil and Gas, Inc. (BOG) entered into a Gas Purchase Contract with Kinder Morgan Operating, L.P. (Kinder Morgan), pursuant to which Kinder Morgan agreed to purchase coal bed methane gas from certain of BOG's wells. Kinder Morgan transferred its interest in the Contract, and Kinder Morgan's successor eventually terminated the Contract pursuant to a provision that allowed either party to terminate if in the terminating party's sole opinion, the sale or purchase of the gas became unprofitable or uneconomical. BOG thereafter filed suit asserting claims for breach of contract and breach of the covenant of good faith and fair dealing. Following a bench trial, the district court found no contract breach or covenant breach and ruled in favor of Kinder Morgan and its successor. Upon review, the Supreme Court affirmed. The Court found no breach of contract in the successor's removal of the pipelines connecting BOG to the gas gathering system and that the Gas Purchase Contract was properly terminated for economic cause. Furthermore, the Court found no clear error in the district court's rejection of BOG's claim for breach of the implied covenant and fair dealing. View "Bowers Oil & Gas, Inc. v. DCP Douglas, LLC" on Justia Law

When Sean and Dee Anna Ryan divorced, they agreed to sell two properties they owned and divide the proceeds, subject to a proviso that neither party was required to accept a sale yielding net proceeds below specified minimums. When the properties could not be sold at or above the specified minimums, Dee Anna refused to waive the proviso. Sean filed a motion for relief from judgment, seeking a court order that the properties be sold at prevailing fair market value and the private agreement be declared of no further force and effect. The trial court denied Sean's request. The Supreme Court affirmed the judgment of the trial court, holding (1) general rules applicable to contract construction dictated that Dee Anna was not required to agree to sell the properties for net proceeds less than the amounts set forth in the parties' agreement; and (2) Sean was not entitled to relief under Trial Rule 60(B), under which a court may relieve a party from a judgment. View "Ryan v. Ryan" on Justia Law

Appellant and Respondents entered into a lease agreement for a residence to be used by one of Respondents. Appellant later filed a petition for breach of contract and property damage against Respondents, claiming they had breached the terms of the lease and had committed waste on the property. Respondents filed a counterclaim against Appellant. The trial court ruled in favor of Respondents on Appellant's petition and in favor of Appellant on Respondents' counterclaim. The Supreme Court affirmed, holding, among other things, that there was substantial evidence supporting the trial court's determination that Respondents did not breach the lease agreement. View "Kieffer v. Icaza" on Justia Law