Justia Contracts Opinion Summaries

The Andersons appealed the grant of summary judgment by the district court in favor of Hess Corporation (Hess), the successor in interest to and lessee of mineral rights on the Andersons' land. The Andersons contended that the district court erred in construing the five leases at issue as requiring Hess to engage in "drilling operations" rather than actual "drilling" in order to extend the primary terms of the leases and granting Hess's motion for summary judgment. The court held that the district court did not abuse its discretion in declining to certify the Andersons' question regarding the meaning of the phrase "engaged in drilling or reworking operations." The court also held that this disputed lease language was not ambiguous and meant "engaged in drilling operations or reworking operations." Therefore, the district court correctly interpreted the disputed lease language and properly granted summary judgment in favor of Hess on the Andersons' quiet title claim.

Joseph Graziano, an owner of property in the Stock Farm subdivision and a member of the Stock Farm Homeowners Association, filed a complaint against the Association and Stock Farm LLC (SFLLC), asserting several claims, including negligence, breach of fiduciary duties, defamation, and constructive fraud. The Association and SFLLC moved to stay the proceedings and compel arbitration pursuant to a provision of Stock Farm's Covenants, Conditions, and Restrictions (CCRs). The district court granted the motion, finding the CCRs were an enforceable agreement to arbitrate all the claims in Graziano's complaint. On review, the Supreme Court affirmed in part and reversed in part, holding (1) the district court did not err in finding the CCRs were not a contract of adhesion and were within Graziano's reasonable expectations, and thus were enforceable; (2) the district court erred in finding Graziano's claim of breach of fiduciary duty was not a personal injury claim exempt from arbitration under Mont. Code Ann. 27-5-114(2)(a); and (3) all of Graziano's remaining claims were subject to the valid and enforceable arbitration provision and must be arbitrated pursuant to the CCRs. Remanded.

The Industrial Development Board of the City of Montgomery (IDB) appealed a circuit court's interlocutory order that denied its motion for summary judgment as to a breach-of-contract claim asserted against it by George and Thomas Russell as co-executors and co-trustees of the wills and testamentary trusts of Earnest and Myrtis Russell, Price and Mary McLemore and several others. In 2001, various officials of the State of Alabama, the City of Montgomery, the Montgomery County Commission, Montgomery Chamber of Commerce and the local water works board began making preparations to secure options to purchase property in the Montgomery area in an attempt to persuade Hyundai Motor Company to build an automobile plant in the area. All the trusts owned acres of land in the targeted area. The IDB signed separate options with the Russells, the McLemores and other trusts to purchase the respective properties. Hyundai's plans for its manufacturing plant changed, and subsequently, not all of the options were exercised. The Russells and the McLemores each filed breach-of-contract actions against the IDB and Hyundai alleging that neither adhered to the terms of their respective options. Upon review, the Supreme Court found that the trial court did not err in denying the IDB's motion for summary judgment. The Court affirmed the lower court's decision.

Two appeals between MPQ, Inc. (d/b/a Freedom Enterprises) and Birmingham Realty Company were consolidated by the Supreme Court for the purposes of this opinion. The parties entered into a commercial lease agreement. Birmingham Realty filed suit against MPQ for unpaid rent in circuit court. MPQ filed a counterclaim. Birmingham Realty filed a separate unlawful-detainer action against MPQ in district court. The district court dismissed the detainer action, reasoning that the simultaneous actions in the district and circuit courts violated Alabama's abatement statute. Birmingham Realty appealed the district court's dismissal to the circuit court and filed a motion to dismiss MPQ's counterclaim. The circuit court conducted a hearing on all pending motions. It then entered an order affirming the district court's dismissal of the unlawful-detainer action and dismissed MPQ's counterclaims in the rent action. The court suggested that Birmingham Realty move to dismiss the rent action without prejudice so it could refile its unlawful-detainer action in the district court and then later refile an action in circuit court to seek the unpaid rent. Birmingham Realty took the court's advice and filed the suggested motions. MPQ filed a motion to alter, amend or vacate the court's decision in its counterclaim. The circuit court did not rule on either motion. The parties appealed to the Supreme Court. Upon review, the Supreme Court found Birmingham Realty's appeal from the district court to the circuit court was not timely, and as such, the court did not have jurisdiction over the appeal. The Supreme Court dismissed the appeal and cross-appeal with regard to the unlawful-detainer action and remanded the remaining issues for further proceedings.

RCH IV-WB, LLC (RCH) appealed a circuit court's order that set aside its mortgage foreclosure sale. At a bench trial, RCH offered as evidence a copy of a document allegedly assigning the mortgage at issue from Wachovia Bank to RCH. Defendant Wolf Bay Partners, LLC objected to the admission of the assignment documents, arguing that RCH failed to show that the individual who signed the assignment had authority to act, and that the form of the assignment failed to conform to Alabama law. The trial court sustained the objection and eventually set aside the foreclosure sale of the subject property. RCH unsuccessfully filed a motion for new trial and appealed to the Supreme Court. Upon review of the trial court record, the evidence submitted and the applicable legal authority, the Supreme Court concluded that the trial court erred in holding that the mortgage assignment was not admissible. The Court reversed the lower court's judgement and remanded the case for further proceedings.

A developer was required to make public improvements to be turned over to the city and, in 2006, obtained bonds to ensure performance, as required by ordinance. Work began, but the subdivision failed and subcontractors filed mechanics' liens. The developer notified the city that three foreclosures were pending and recommended that it redeem the bonds. The insurer refused to pay. The city did not follow up, but a subcontractor sued, purporting to bring its case in the name of the city for its own benefit. The subcontractor contends that it should be paid out of the proceeds of the bonds. The case was removed to federal court. The district court dismissed, finding that the subcontractor did not have standing to assert claims on the bonds because it was not a third-party beneficiary to the bonds. The Seventh Circuit affirmed, based on the language of the contract.

Defendant Linus Poitra appealed a default judgment entered by the district court regarding a lease between Plaintiff Darrel Gustafson as lessee and Leon and Linus Poitra as lessors. Linus Poitra argued the district court did not have subject matter jurisdiction to enter the default judgment because the Poitras were members of the Turtle Mountain Band of Chippewa Indians, and the land subject to the lease is Indian-owned fee land located within the boundaries of the Turtle Mountain Indian Reservation. Linus Poitra argued the default judgment infringed upon tribal sovereignty because of cases pending in the Turtle Mountain Tribal Court. Upon review of the applicable legal authority and the evidence presented at trial, the Supreme Court vacated the default judgment finding that the district court did not have subject matter jurisdiction over the lease.

This case arose when Shoe Show, Inc. (Shoe Show) entered into a lease as lessee of a store space in a shopping mall in Houston, Texas. The lease expressly prohibited Shoe Show from operating another business under the name "The SHOE DEPT." or any "substantially similar trade-name," within two miles of the leased premises. Shoe Show subsequently opened a retail footwear store under the name "SHOE SHOW" in a commercial center located less than a quarter mile from the mall in which the leased premises was located. At issue was whether the two trade names were substantially similar. The court held that, under the uncontested facts of the case and the discrete provisions of the lease, the trade name SHOE SHOW was not substantially similar to The SHOE DEPT. Therefore, the court reversed the district court's order of summary judgment and remanded for further proceedings.

Plaintiff appealed the dismissal for lack of subject matter jurisdiction of its action against defendant, alleging tort, contract, and state statutory claims and seeking, among other remedies, a constructive trust and declaratory judgment over an oil and gas lease located on allotted land, wherein title to the land was held by the United States in trust for various Indian allottees. At issue was whether the district court had federal jurisdiction. The court held that 28 U.S.C. 1360(b), 28 U.S.C. 1331, and 25 U.S.C. 345 did not grant federal jurisdiction and therefore, plaintiff presented no basis for concluding that the action was within the "limited jurisdiction" of federal courts. Accordingly, the district court properly dismissed the suit based on lack of subject matter jurisdiction and the court did not need to reach any other issues raised by the parties, including exhaustion of tribal remedies. The court noted, however, that its holding did not preclude plaintiff from seeking relief in Blackfeet Tribal Court.

Matador Holdings, Inc. and HoPo Realty Investments, LLC filed separate appeals to challenge elements of a circuit court's order involving commercial property owned by Matador. Matador sued HoPo for payment for materials and services Matador provided to HoPo's lessee Stratford Plastic Components of Alabama. The lease agreement contained provisions allowing for HoPo or its agents to enter the property during the lease-term to make inspections or repairs. Stratford had applied for and received a line of credit with Matador. After taking possession of the leased property, Stratford ordered materials from Matador to convert the property into one suitable for Stratford's production needs. Stratford vacated the property before the lease term expired without paying Matador for the materials. HoPo's agents testified that Stratford did not request any changes be made to the leased property and had no knowledge that Matador would supply materials to the lessee. To resolve the dispute, the trial court denied Matador's claim that HoPo was unjustly enriched by the services provided to Stratford that were unpaid, but the court placed a lien on HoPo's property for the unexpired portion of the Stratford lease. Upon review of the trial court record and its order, the Supreme Court affirmed the lower court's denial of Matador's unjust enrichment claim. Furthermore, the Court reversed the lower court's order insofar as it enforced any portion of a lien against HoPo's property or the improvements made to the property. The Court ruled the lien void.