Justia Contracts Opinion Summaries

The United States Court of appeals asked the court to answer a question that stemmed from a dispute over the proper interpretation under Georgia law of a contract insuring real property. The primary issue presented was whether the court's ruling in State Farm Mut. Auto. Ins. Co. v. Mabry, a case involving an automobile insurance policy wherein the court held that a provision requiring the insurer to pay for loss to the insured's car required the insurer to also pay for any diminution in value of the repaired vehicle, was applicable. The court held that its ruling in Mabry was not limited by the type of property insured, but rather spoke generally to the measure of damages an insurer was obligated to pay.

This case concerned a summary judgment granted by the district court in favor of the Plaintiff-Appellee RAHI Real Estate Holdings, LLC, against the Defendants-Appellants Vincent and Leslie Adams. The original plaintiff, Residential Funding Real Estate Holdings, LLC, filed a petition to foreclose in 2009, claiming Appellants defaulted on their note. Residential attached a copy of the subject note and mortgage to the petition. The note has a special indorsement from Gateway which states "Pay to The Order Of: Option One Mortgage Without Recourse." Also attached to the note was a blank indorsement by Option One Mortgage Corporation. The district court granted a motion to substitute RAHI as plaintiff in place of Residential in this foreclosure action and ordered that the caption be modified to reflect RAHI as plaintiff. One day after the order granting substitution, Residential as plaintiff filed its first amended petition. Defendants filed their answer admitting that a note and mortgage were executed but denied that the note and mortgage attached to the petition are the ones they signed. Further, they denied default and demanded strict proof. Appellants also attacked plaintiff's standing and the subject matter jurisdiction of the court. Appellee filed a motion for summary judgment alleging there is no controversy as to any material facts and attached an affidavit. Upon review, the Supreme Court found that there was no transcript of a June 29, 2010 hearing in the record, so the Court could not determine what evidence was presented, including any concerning whether or not the substitution of parties gave Option One Mortgage and Option One Mortgage Corporation the right to enforce the note. It did appear from the filed record that there was at least one issue of material fact and summary judgment was inappropriate. Accordingly, the Court reversed the grant of summary judgment and remanded the case for further proceedings.

Petitioners, David and Shirley Finch, appealed from an order entered by the circuit court, which granted summary judgment to Defendant, Inspectech, LLC. The circuit court concluded that, by signing the parties' inspection agreement, which contained a clause entitled "unconditional release and limitation of liability," the Finches had released Inspectech from liability for any defects it failed to report in its inspection of the house the Finches planned to, and ultimately did, purchase. The Supreme Court reversed, holding that Inspectech was not entitled to judgment as a matter of law based upon the terms of the parties' inspection agreement and the release language therein because anticipatory releases contained in home inspection contracts are void and unenforceable as contrary to the public policy of the State.

Plaintiff filed suit in Minnesota state court against her mortgage lender, seeking legal and equitable relief from the lender's foreclosure and sale of her home. The court held that, because there was no dispute as to whether the foreclosure was actually postponed, Minn. Stat. 580.07, subdiv. 1 was inapplicable. The court also held that the Minnesota Credit Agreement Statute (MCAS), Minn. Stat. 513.33, subdiv. 2, prohibited the enforcement of an oral promise to postpone a foreclosure sale and that the lender was entitled to summary judgment on plaintiff's promissory estoppel claim. Finally, the court held that plaintiff did not raise a genuine question of material fact as to whether she detrimentally relied on the lender's promise. Accordingly, the court affirmed the district court's grant of summary judgment on Counts I-V.

Appellees, Kristine Kittleson and James Kurtzenacker, purchased property pursuant to a warranty deed that referenced surveys conducted by Davis Surveying. Appellants, Davis Surveying and Kenneth Davis claimed they had nothing to do with Appellees until after they had purchased their property. Appellees sued Appellants, alleging negligent misrepresentation, negligence, and breach of contract based on a third-party beneficiary theory and claiming that because of Clark's incorrect flagging, they trespassed on neighboring property and needed to remove part of their landscaping and construction work. The district court held that Appellants were liable for breach of contract under a third-party beneficiary theory and for negligent misrepresentation. The Supreme Court affirmed in part and reversed in part, holding (1) the district court erred in determining that Appellees were third-party beneficiaries of a contract for a prior survey, but while the court erred in this reasoning, it reached the right result under Appellees' negligent misrepresentation claim; (2) the court did not err in determining that Appellees were entitled to damages based on negligent misrepresentation; and (3) there was a lack of substantial evidence to support the court's determination that Davis was personally liable to Appellees for work done by Davis Surveying.

In the early 1990s, Kevin Costner commissioned Peggy Detmers and Detmers Studios, Inc. (collectively, Detmers) to design several sculptures, intending to display them at the entrance of a luxury resort called The Dunbar that Costner had envisioned. Subsequently, Costner and The Dunber (collectively, Costner) and Detmers entered into a binding contract in which Costner would provide Detmers additional compensation. Paragraph three of the agreement provided that if The Dunbar was not built within ten years or the sculptures were not "agreeably displayed elsewhere," Costner would give Detmers fifty percent of the profits from the sale of the sculptures. The sculptures were later placed on Costner's project called Tatanka. Detmers later brought suit against Costners, seeking a declaratory judgment that she did not agree to the placement of the sculptures as required by paragraph three of the parties' contract. The trial court granted judgment in favor of Costner. The Supreme Court affirmed, holding that the circuit court did not err in (1) determining that the sculptures were "agreeably displayed elsewhere," in the absence of a guarantee from Costner that The Dunbar would be built; and (2) concluding that Tatanka was "elsewhere" under the language of the contract.

A group of residential tenants (collectively, Tenants) alleged claims of negligence against Canyon Cover Properties, LLC and Apartment Management Consultants, LLC (collectively, AMC). AMC argued that it was relieved from liability because Tenants signed a residential lease agreement (Agreement) that included a limited liability provision (Exculpatory Clause) waiving the right to bring an action for negligence against AMC. The district court concluded that the Agreement and Exculpatory Clause did not violate public policy and were therefore valid and enforceable, and accordingly, granted summary judgment for AMC. The Supreme Court reversed, holding that because AMC failed to respond meaningfully to Tenants' claim that the Exculpatory Clause was unenforceable because it violated public policy, AMC's brief was rejected and Tenants' claim was accepted that the Exculpatory Clause in the Agreement was unenforceable. Remanded.

Defendant-Appellee Barbara McDermott appealed a district court's grant of partial summary judgment in favor of Plaintiff-Appellee Kevin Pifer when the court concluded that Defendant's mother Dorothy Bevan, validly gifted Plaintiff an option to purchase land. In 2001, Ms. Bevan executed a durable power of attorney in favor of Plaintiff who was a distant relative. Thereafter, Plaintiff assisted Bevan with managing her farmland and performing miscellaneous other tasks. Ms. Bevan granted Plaintiff the option to purchase that land in 2004. Ms. Bevan died in 2010, and Plaintiff recorded a notice of his intent to exercise the option. Defendant rejected the attached cashier's check, questioning Ms. Bevan's capacity to execute the purchase option agreement. Plaintiff subsequently sued for specific performance of the purchase option. The district court granted Plaintiff partial summary judgment, concluding the purchase option agreement was valid and enforceable. In its judgment, the district court stated, "This Judgment shall be final for appeal purposes, and there is no just reason for delay." Upon review, the Supreme Court concluded the district court inappropriately certified the partial summary judgment under the North Dakota Rules of Civil Procedure, and the court abused its discretion in directing an entry of final judgment. Accordingly, the Court dismissed Defendant's appeal and directed the district court to vacate its portion of the partial summary judgment certifying the judgment as final.

Plaintiffs sued Juno under the Interstate Land Sales Full Disclosure Act (ILSFDA), 15 U.S.C. 1701, seeking rescission of their purchase agreement in a lot at Creighton Farms, claiming that Juno misrepresented its involvement with the Ritz-Carlton in regards to the Creighton Farms development. The court held, among other things, that plaintiffs established that they merit equitable rescission and that the district court properly determined that the equitable remedy was to return the property title to Juno and return the purchase price, plus interest, to plaintiffs. The court held, however, that the district court abused its discretion when it denied plaintiffs pre-judgment interest on the debt portion of their purchase funds. Therefore, the court reversed the district court and awarded plaintiffs prejudgment interest on the funds at issue at 7 percent. Accordingly, the court affirmed in part and reversed in part.

In 1999, the Baltimore City Council enacted an urban renewal plan (Plan) to renew a portion of Baltimore City. A five-block area located in the renewal area was the subject of protracted litigation between 120 West Fayette, LLLP and the Mayor and City Council of Baltimore. The current iteration of the litigation focused on a memorandum of agreement (MOA) between the City and the Maryland Historical Trust relating to the treatment of historic properties in connection with the Plan. The MOA required the City to submit redevelopment plans to the Trust for approval. After the Trust's director provided conditional approval of a fifth set of plans 120 West Fayette (Appellant) filed a complaint seeking a declaration of rights interpreting the terms of the MOA. The circuit court dismissed the complaint, finding that Appellant was neither a party to, nor an intended beneficiary of, the MOA, and therefore, Appellant failed to state a claim upon which relief could be granted. The Court of Appeals affirmed, holding that Appellant, at best an incidental beneficiary to the MOA, could not file a suit requesting declaratory judgment that interprets and enforces an agreement to which it had no part.