Justia Contracts Opinion Summaries

The Mathewses conveyed a parcel of land by deed of trust to a credit union to secure a promissory note. PHH Mortgage Corporation subsequently became the holder of the note and the beneficiary of the deed of trust. After the Mathewses failed to make payments, PHH commenced foreclosure proceedings on the parcel. The Mathewses filed a complaint seeking a declaratory judgment that the foreclosure sale would be void because PHH had not satisfied conditions precedent to foreclosure set forth in the deed of trust. Specifically, they alleged that 24 C.F.R. 203.604 (the Regulation) required PHH to have a meeting with them thirty days before the commencement of foreclosure proceedings. The circuit court dismissed the complaint, concluding that the Regulation was incorporated into the deed of trust as a condition precedent to foreclosure but that, under Virginia common law, the party who breaches a contract first cannot sue to enforce it. The Supreme Court reversed in part, holding (1) borrowers may sue to enforce conditions precedent to foreclosure even if they were the first party to breach the note secured by a deed of trust through non-payment; and (2) the Mathewses pled sufficient facts for the Regulation to apply. Remanded.

Plaintiffs sought to establish a nationwide class of thousands of borrowers who allegedly paid inflated appraisal fees in connection with real estate transactions financed by Wells Fargo. Plaintiffs subsequently appealed the district court's dismissal of their claims contending that the appraisal practice of Wells Fargo and Rels unjustly enriched Rels and violated the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq.; the Real Estate Settlement Procedures Act of 1974 (RESPA), 12 U.S.C. 2601 et seq.; California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200 et seq.; and Arizona's anti-racketeering statute (AZRAC), Ariz. Rev. Stat. 13-2314.04. Because plaintiffs did not plausibly allege a concrete financial loss caused by a RICO violation, the district court did not err in concluding that they lacked standing under RICO and AZRAC. In regards to the UCL claims, the court agreed with the district court that the complaint did not allege "lost money or property" where plaintiffs admitted that Wells Fargo charged them market rates for appraisal services as disclosed on the settlement. The court also rejected plaintiffs' claims under RESPA Section 8(a) and (b), as well as plaintiffs' assertion that the district court erred in dismissing their claims with prejudice rather than sua sponte allowing them leave to amend the complaint for the third time.

John and Minerva Sutherland entered into a mining lease granting Meridian Granite Company the right to conduct mining operations on the Sutherlands' property. A dispute developed between the Sutherlands and Meridian regarding the Sutherlands' obligation to pay taxes relating to the mineral production. The dispute led to litigation. The district court granted Meridian's motion for summary judgment, ruling that the Sutherlands were obligated to pay the disputed taxes. The Supreme Court affirmed, holding that the district court did not err in allowing Meridian to deduct ad valorem and severance taxes from payments to the Sutherlands when such tax payments were not required by the State, as the Sutherlands and Meridian agreed in the mining lease that the Sutherlands would pay the taxes.

Respondent Hook Point, LLC (Hook Point) was granted a preliminary injunction preventing Appellant Branch Banking and Trust Company (BB&T) from drawing on, and Defendant First Reliance Bank (First Reliance) from honoring, a $1.5 million letter of credit. BB&T appealed. In late 2007, Hook Point sought a loan from BB&T for the purpose of developing a subdivision on property Hook Point owned on Lake Murray called Panama Pointe. BB&T issued a commitment letter to Hook Point in September 2007 indicating that it would loan the company $5.1 million and establish a $2 million line of credit to enable Hook Point to develop the subdivision. Security for the loan included a first mortgage on the Panama Pointe property, personal guarantees of Hook Point’s four principals, and a $1.5 million standby letter of credit issued by First Reliance in favor of BB&T. On December 23, Hook Point filed suit alleging several causes of action against BB&T, including for fraudulent misrepresentation by which BB&T induced Hook Point to enter into a loan agreement. Hook Point admitted to being $70,000 in arrears on interest but argued that the terms of the agreement did not permit BB&T to draw the full amount of the letter of credit (LC) if that exceeded the amount of interest due. It also sought an ex parte temporary restraining order to prevent First Reliance from honoring a draft on the LC by BB&T, which the court granted. After a hearing, the court also granted a preliminary injunction against drafts on or honor of the LC beyond amounts of accrued interest, requiring extension of the LC for one year, and requiring Hook Point to post a $50,000 bond with the court. The Supreme Court reversed the circuit court's grant of the injunction: "[t]he standard under which a fraud in the transaction claim must be measured when deciding whether to enjoin honor of a letter of credit requires that the beneficiary have no colorable claim or basis in fact for asserting its rights under the letter of credit. In this case BB&T has, in [the Court's] view, not only a colorable claim but an undeniable basis in fact for asserting its rights under the letter of credit. Therefore, the circuit court erred when it granted the preliminary injunction."

Lake Cabin Development entered into two separate written agreements with the Robert Hurly and John Hurly families to purchase their respective properties. Pursuant to an agreement, Lake Cabin provided Robert Hurly with a $250,000 option payment. After public opposition to Lake Cabin's proposed development on the land forced Lake Cabin to extend the deadline on the closing date of its agreement with the Hurlys, Lake Cabin declared the contract to be null and void and demanded return of its option payment. Both Hurly families brought separate breach of contract actions. The district court concluded that Robert Hurly was required to refund the $250,000 option payment to Lake Cabin because there was never an enforceable contract between the parties. The Supreme Court reversed, holding (1) the district court erred in determining that the parties had not entered into a binding agreement, and (2) Lake Cabin was not entitled to a refund of the option payment. Remanded.

Appellants David and Barbara Moore defaulted on the Note to their mortgage in 2008. U.S. Bank, National Association, commenced foreclosure proceedings later that year, not in its individual capacity, but solely as trustee on behalf of GSAA Home Equity Trust 2006-6 (Appellee). According to the verified petition, the Appellee was "the present holder of said Note and Mortgage having received due assignment through mesne assignments of record or conveyance via mortgaging servicing transfer." The original petition did not attach a copy of the note in question sued upon. Appellants answered, pro se in 2009, disputing all allegations and requesting that the Appellee "submit additional documentation to prove [its] claims including the representation that they were the "present holder of said Note." Appellee subsequently filed an amended petition and a second amended petition to add additional defendants. Neither of these amendments included a copy of the note. Appellee submitted its Motion for Summary Judgment to the court, again representing that it was the holder of the Note. Documentation attached to the Motion attempted to support this representation: including the Mortgage, the Note, an Assignment of Mortgage, and an Affidavit in Support of Appellee's Motion for Summary Judgment. For the first time, Appellee submitted the Note and Mortgage to the trial court. The note was indorsed in blank and contained no date for the indorsement. Appellants did not respond to Appellee's Motion, and the trial court entered a default judgment against them. The trial court entered a final judgment in favor of the Appellee. Upon review, the Supreme Court found no evidence in the record establishing that Appellee had standing to commence its foreclosure action: “[t]he trial court's granting of a default judgment in favor of Appellee could not have been rationally based upon the evidence or Oklahoma law.” The Court vacated the trial court’s judgment and remanded the case for further proceedings.

This case involved a dispute between a surface owner and a timber estate owner. In the first appeal, the Supreme Court reversed a judgment on the pleadings in favor of the surface owner and remanded for proceedings to examine the facts and circumstances surrounding the timber estate owner's predecessor in interest's (Union Pacific) reservations of timber in deeds from the early 1900s in order to determine the parties' intent with regard to the duration of the timber estates. The district granted judgment in favor of the surface owner, concluding (1) Union Pacific intended to reserve only those trees in existence at the time of the grant and of sufficient size to be suitable for use in construction, and (2) Union Pacific's timber reservations had expired. The Supreme Court affirmed, holding (1) the district court properly ruled, on the evidence before it, that Union Pacific intended its reservation of timber to include only trees of a suitable size which existed on the subject properties at the time of the deeds; and (2) the evidence presented at trial clearly established that such timber no longer existed on the properties.

This derivative action challenged a series of related-party transactions. Defendants moved for judgment on the pleadings, contending that laches barred the bulk of the claims. Defendants were partly right, laches barred the challenges to certain stock options granted in 2004 and 2005. Laches also barred a portion of the challenge to compensation received under certain employment agreements and rent-free sublease. With respect to these claims, the doctrine applied to the extent the compensation was paid and rent-free space provided before March 18, 2008. The doctrine did not apply to the extent that compensation was paid and rent-free space provided on or after March 18, 2008. On a final set of claims, the court granted plaintiffs leave to replead because although the complaint alleged facts sufficient to invoke the doctrine of equitable tolling, the pleading failed to identify when plaintiffs subsequently found out about the self-dealing transactions.

The Supreme Court granted certiorari to consider whether the doctrine of "contra non valentem" applied to suspend a ten year liberative prescriptive period applicable to an action by a mineral interest owner against the operator of a unit well who failed to pay the owner share of the proceeds for mineral production. Plaintiff James Wells filed suit after being contacted by a landman concerning leasing of his mineral interest in lands inherited from his parents. In the 1950s, Plaintiff's parents sold the land but reserved the mineral interests. Plaintiff's mother executed a mineral lease which was released a few years later because the well drilled resulted in a dry hole. However, the landowners executed their own mineral lease, which achieved production in 1965, and continued producing until 2007. Plaintiff filed suit against Defendants Donald Zadeck and Zadeck Energy Group and several other companies who were allegedly conducting oil and gas exploration and production activities from his unleased unitized acreage without tendering to him (or his parents) their rightful share of proceeds from the production. In response, Zadeck filed a Peremptory Exception of Prescription, urging that Plaintiff's claim to recover payments was a quasi contract that prescribed ten years from Zadeck's successor's cessation of involvement with the "dry hole." Plaintiff argued that the doctrine of "contra non valentem" applied to suspend the running of prescription since he had no knowledge of the existence of the mineral interests or production until December 2008. Plaintiff contended that his ignorance was not attributable to any fault of his own, and he clearly exercised due diligence in discovering the relevant facts once he learned from the landman that he owned the mineral interests. Upon review, the Supreme Court concluded the doctrine of contra non valentem applied to suspend the running of prescription because the mineral interest owners did not know nor reasonably should they have known of the mineral production until December 2008.

Charles and Lisa Hart filed a complaint against TICOR Title Insurance Company for breach of contract after TICOR refused to defend the Harts under their title insurance policy against an escheat claim asserted by the State. The district court entered judgment in favor of TICOR and awarded TICOR attorneys' fees and costs. The Intermediate Court of Appeals (ICA) affirmed. The Supreme Court vacated the ICA's judgment and reversed the judgment of the district court in favor of TICOR and vacated the district court's award of attorneys' fees and costs to TICOR, holding that TICOR owed a duty to defend the Harts under the policy against the State's claim and prayer for affirmative relief. Remanded to the district court with instructions (1) to enter judgment in favor of the Harts, and (2) to determine an award of attorneys fees and costs to the Harts.