Justia Contracts Opinion Summaries

Fernandes injured his back when he stepped into a hole in the floor of a tire "shed," an old shipping container, which was on property leased by AGAR to Fernandes's employer, Penske Truck Leasing. He sued AGAR on the theory that it owed him a duty of care to maintain and repair the tire shed under the lease. The district court granted summary judgment to AGAR under Massachusetts law. The First Circuit affirmed, finding that, under the lease, Agar had no duty to repair or maintain the shed. View "Fernandes v. Agar Supply Co., Inc." on Justia Law

Plaintiffs leased state trust land and owned all structures and improvements on the land. Under the terms of the lease, the improvements that existed on the land would become the state's property upon lease termination. After the leases were entered into, the legislature created a property tax classification ("Class Nine") in which property was taxed at a lower rate than that applicable to commercial property. For certain years, Maricopa County classified the improvements under the classification applicable to general commercial property and taxed Plaintiffs accordingly. The State Board of Equalization denied Plaintiffs' request for Class Nine classification. Plaintiffs then filed a declaratory judgment action in the tax court. The tax court granted summary judgment for the County based on Plaintiffs' failure to meet the requirements of Ariz. Rev. Stat. 42-12009(A)(1)(a), which provides that improvements on land leased from the state qualify for a reduced ad valorem tax rate if they become the property of the state on termination of the leasehold interest in the property. The Supreme Court remanded, holding that section 42-12009(A)(1)(a) applies when, at the time of taxation, improvements exist on the land that, under the terms of the lease, would become the state's property upon lease termination. View "CNL Hotels & Resorts, Inc. v. Maricopa County" on Justia Law

These consolidated cases involved two properties purchased by John Hogan. Each parcel became subject to a deed of trust when Hogan took out loans from Long Beach Mortgage Company. Hogan was delinquent on both loans, which triggered foreclosure proceedings. A notice of trustee's sale recorded for the first parcel identified Washington Mutual Bank as the beneficiary and Deutsche Bank as the beneficiary for the second parcel. Hogan filed lawsuits seeking to enjoin the trustees' sales unless the beneficiaries proved they were entitled to collect on the respective notes. The superior court dismissed the cases. The court of appeals affirmed, holding that Arizona's non-judicial foreclosure statute (Statute) does not require presentation of the original note before commencing foreclosure proceedings. The Supreme Court affirmed the superior court's orders dismissing Hogan's complaints and vacated the court of appeals, holding that the Statute does not require the beneficiary to prove its authority or show the note before the trustee may commence a non-judicial foreclosure. View "Hogan v. Washington Mut. Bank, N.A." on Justia Law

Plaintiffs purchased a house from Defendant, who built the house. Plaintiffs later discovered mold in some of the windows and walls and sued Defendant. The jury found in favor of Plaintiffs on their negligence claim but found in favor of Defendant on Plaintiffs' negligent misrepresentation claim. The jury also found that Plaintiffs failed to perform all, or substantially all, of the things the contract required them to do and therefore the jury did not reach the question of whether Defendant breached the contract. The Supreme Court held (1) the economic loss rule prevented recovery of economic damages within the scope of the parties' contract but allowed for recovery of damages to other property or for bodily injury; (2) the trial court did not err when it permitted Dr. Eugene Cole to testify as an expert witness; (3) because Defendant prevailed in his claims under the contract, which provided the only basis for awarding attorney fees, he was entitled to recover attorney fees for the breach of contract suit; and (4) the trial court did not err when it denied Plaintiffs' motion for judgment notwithstanding the verdict. Remanded.

This appeal arose from a dispute between two competing creditors, DAFCO, LLC, and New Phase Investments, LLC. DAFCO appealed the district court's determination on summary judgment that DAFCO's deed of trust, although first recorded, was void under I.C. 32-912 because it encumbered community real property but was not signed by both spouses. Because I.C. 32-912 was enacted for the protection of the community rather than third-party creditors, the Supreme Court found that New Phase could not invoke that statute to void DAFCO's competing encumbrance. Accordingly, the Court reversed: the district court erred in declaring DAFCO's trust deed void under that statute at New Phase's request.

Defendants Jay and Theresa Knowlton appealed the grant of summary judgment in favor of Plaintiffs-Appellants Tapadeera, LLC and Cary Hamilton (d/b/a C&J Construction) on their claim that Defendants prevented Plaintiffs from performing a settlement agreement to resolve a lawsuit between the parties. Tapadeera owned a parcel of property that had been platted as one lot. Tapadeera sold the property as two parcels -a two-acre parcel and a six-acre parcel purchased apparently under a real estate contract. The purchasers had a modular home placed on the two-acre parcel, but they failed to make the payments due in both transactions. As a result, the lender foreclosed on the two-acre parcel, and Tapadeera regained title to the six-acre parcel. Defendants desired both parcels to construct a home. They purchased the two-acre parcel from the bank, and contracted with Tapadeera to purchase the six-acre parcel. After making several payments under the contract, Mr. Knowlton contacted Cary Hamilton, Tapadeera's president, to determine the amount necessary to pay the contract in full. Mrs. Knowlton recorded the deed, and the Knowltons stopped payment on the check when they discovered that they could not obtain a building permit for the six-acre parcel because it had been wrongly divided from the two-acre parcel. For over four years, neither party took any action regarding this transaction. Eventually the parties sought to finish the deal, and it headed to court. Mr. Hamilton agreed to fix the subdivision problem and the Knowltons agreed to pay the balance owing. However, when notice of the subdivision was mailed to adjacent and affected property owners, the Knowltons were omitted from the notice. They learned of the hearing regarding the subdivision after it was over; they gave notice that they were withdrawing their subdivision application. The court held that the county's approval of the subdivision application was a condition precedent to the Knowltons' obligation to pay the balance, but that they had wrongfully prevented performance of that condition by withdrawing the subdivision application. The Knowltons moved for reconsideration which was denied. Upon review, the Supreme Court affirmed: "This case illustrates the time and expense that can be wasted when the parties fail to exercise common sense to resolve an issue. Clearly, Tapadeera should have had the lot subdivided in connection with the first sale. When the issue arose after the sale of the six-acre parcel to the Knowltons, the parties should have met and agreed to the resolution they reached six years later. Once they did so, they both should have been reasonable in doing whatever was necessary to effectuate the replatting of the lot."

This case was the third appeal to the Supreme Court arising from a 2002 real estate transaction between Thomas and Colleen Birch-Maile and the Theodore L. Johnson Revocable Trust. Attorney and Real Estate Broker Thomas Maile advised the Trust to reject an offer to sell certain trust property. Months later, Mr. Maile submitted an earnest money agreement for the same property. The prospective buyers, collectively the Taylors, sued the Mailes and Berkshire Investments, LLC (the company that the Mailes formed and to whom they assigned rights to the property) for professional malpractice and breach of fiduciary duties. The Mailes filed suit seeking to set aside a 2006 judgment against them, which the Court affirmed in the second appeal. The district court determined on summary judgment that the 2006 judgment was res judicata with regard to the issues raised in the Mailes' complaint. At trial the jury awarded damages against the Mailes on the Taylors' counterclaim. The Mailes appealed and the Supreme Court affirmed: the district court was correct in summarily dismissing the Mailes' lawsuit and denying their motion for JNOV. Further, the district court did not abuse its discretion in awarding attorney to two of the prospective buyers.

Liberty entered into a Master Declaration and Easements, Covenants, Conditions and Restrictions for a shopping mall. PMI purchased the property and entered into a Declaration that gave Liberty the right to prior approval of future purchasers and an option to purchase. PMI borrowed $3.5 million from Nationwide, using the property as collateral. Nationwide purchased title insurance from Commonwealth, containing the ALTA 9 endorsement. PMI defaulted and conveyed the property to Nationwide, which attempted to sell to Ironwood. Liberty’s successor, Franklin, refused to approve Ironwood under its rights conferred by the Declaration, based on Ironwood’s planned use as a school. Nationwide claimed that the restrictions upon which Franklin justified refusal rendered the property unusable and unsalable. Commonwealth denied the claim. The district court dismissed. The Third Circuit remanded, holding that Commonwealth is obligated to cover the claim if the restriction causing Nationwide’s harm was covered by the ALTA 9 Endorsement and not expressly excepted on Schedule B. The district court then ruled in favor of Nationwide. The Third Circuit affirmed and remanded for determination of damages owed Nationwide, relying on the plain language of the ALTA 9 rather than deferring to industry custom and usage.

A broker doing business as McCully Ranch Company brought suit against its client Baccaro Ranch, LLC, as seller, claiming that Baccaro breached the real estate listing agreement and that McCully was entitled to a commission from Baccaro under contract theory or, in the alternative, under the theory of unjust enrichment. In a previous appeal, the Supreme Court concluded that the listing agreement was enforceable and remanded the cause for further proceedings. After trial, the district court determined that McCully was not entitled to a real estate commission. The Supreme Court reversed, holding that McCully erred in its judgment, as MuCully produced a ready, willing, and able purchaser during the term of the listing agreement on terms acceptable to Baccaro and therefore was entitled to a commission.

This matter arose out of a controversy over a phrase in a trust. The language at issue established the calculation of the price of trust property offered for sale to certain trust beneficiaries. One of the trust beneficiaries filed a complaint for declaratory judgment, seeking judicial interpretation of the disputed provision. The trial court concluded that the disputed phrase was unambiguous and that the option price was the fair market value as determined by the appraisal. The court of appeals reversed after reviewing the trust document de novo, finding that the option language was susceptible to more than one interpretation and that the option price was the federal and/or Ohio qualified-use value. At issue on appeal was what standard of review an appellate court should employ in reviewing legal issues in a declaratory-judgment action. The Supreme Court affirmed, holding that the de novo standard of review is the proper standard for appellate review of purely legal issues that must be resolved after the trial court has decided that a complaint for declaratory judgment presents a justiciable question.