Justia Contracts Opinion Summaries

Respondent Annapolis Towne Centre (ATC), the owner and developer of a mixed-use development, entered into an agreement with petitioner Hovnanian Land Investment, a residential developer, under which ATC agreed to sell a portion of the property to Hovnanian for the construction of a residential tower. The contract required certain conditions to be met by ATC prior to the closing and contained a clause stating that any waiver of the contract had to be in writing. Before closing, Hovnanian terminated the agreement, alleging that ATC failed to meet a condition precedent. ATC sought a declaratory judgment, and both parties filed motions for summary judgment on the issue of whether ATC had complied with the condition precedent. The circuit court granted ATC's motion for summary judgment on that issue, holding that Hovnanian waived the condition precedent. The court of special appeals affirmed. The Court of Appeals reversed, holding that summary judgment was not appropriate because (1) a condition precedent may be waived by a party's conduct, despite a non-waiver clause, but whether Hovnanian's actions amounted to a waiver was a dispute of material fact; and (2) the question of whether ATC strictly fulfilled the condition also involved material questions of fact. Remanded.

Barbara and Steven Selvig, as sellers, and Blockbuster Enterprises, as buyer, entered into a real estate purchase contract for the purchase of a bed and breakfast. The contract specified that the deed to the property would be recorded when Blockbuster paid the full purchase price. Before paying the full purchase price, however, Blockbuster recorded the deed. The sellers sued in district court on several theories of liability. The district court granted Blockbuster's motion to dismiss, dismissing (1) the seller's claims for breach of contract and breach of the covenant of good faith and fair dealing, holding that the sellers had elected their remedy pursuant to an election of remedies provision in the contract by keeping the earnest money deposit; and (2) the seller's unjust enrichment claim. The Supreme Court affirmed in part and reversed in part, holding (1) the district court erred in dismissing the seller's contractual claims because the election of remedies provision does not apply to a breach of contract claim out of a wrongful recording of the deed; and (2) the district court correctly dismissed the seller's claim for unjust enrichment because the sale of the property was covered by a written contract.

Plaintiff purchased a house in the early 2000s and fell behind on his payments. The lender extended two forbearance agreements, but assessed late fees and reported the late payments; plaintiff was unable to refinance and, when plaintiff was unable to catch up, the lender foreclosed. Plaintiff alleged violation of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605 and Indiana Home Loan Practices Act, IND. CODE 24-9-1-1. The district court rejected the claims on summary judgment. The Seventh Circuit affirmed. The lender acted within its contract rights and did not violate the clear terms of the forbearance agreements.

Plaintiffs William and Vivian Allen contracted defendant V and A Brothers, Inc. (V&A) to landscape their property and build a retaining wall to enable the installation of a pool. At the time, V&A was wholly owned by two brothers, Defendants Vincent DiMeglio, who subsequently passed away, and Angelo DiMeglio. The corporation also had one full-time employee, Defendant Thomas Taylor. After V&A completed the work, Plaintiffs filed a two-count complaint naming both corporate and individual defendants. The first count was directed solely to V&A and alleged that the corporation breached its contract with Plaintiffs by improperly constructing the retaining wall and using inferior backfill material. The second count was directed to the corporation and Vincent's estate, Angelo, and Taylor individually, alleging three "Home Improvement Practices" violations of the state Consumer Fraud Act (CFA). Before trial, the trial court granted the individual defendants' motion to dismiss the complaint against them, holding that the CFA did not create a direct cause of action against the individuals. Plaintiffs' remaining claims were tried and the jury returned a verdict in favor of plaintiffs on all counts, awarding damages totaling $490,000. The Appellate Division reversed the trial court's order dismissing the claims against the individual defendants under the CFA. The panel remanded the matter to determine whether any of the individual defendants had personally participated in the regulatory violations that formed the basis for Plaintiffs' CFA complaint. The panel precluded relitigation of the overall quantum of damages found by the jury in the trial against the corporate defendant. Upon review, the Supreme Court held that employees and officers of a corporation might be individually liable under the CFA for acts they undertake through the corporate entity. Furthermore, individual defendants are not collaterally estopped from relitigating the quantum of damages attributable to the CFA violations. The Court remanded the case for further proceedings.

George Sonnett, Jr. and Wendy Burgers-Sonnett purchased twenty acres of land and improvements from Elk Ridge Lodge, which Elk Ridge conveyed by warranty deed. The Sonnetts financed part of the purchase price by giving Elk Ridge a promissory note secured by a mortgage on the property. After the Sonnetts defaulted on the note, Elk Ridge filed suit against the Sonnetts seeking judgment and foreclosure on the property, and the Sonnetts filed counterclaims alleging breach of warranty. Both parties filed competing motions for summary judgment. The district court granted summary judgment in favor of Elk Ridge on its foreclosure claim and denied Elk Ridge's request for attorneys' fees. Both parties appealed. The Supreme Court affirmed the district court's decisions in both appeals, holding (1) the district court did not err in granting summary judgment to Elk Ridge and in denying summary judgment to the Sonnetts on their counterclaim of breach of warranty; (2) the record did not support the applicability of the Sonnetts' equitable defenses of equitable estoppel, waiver, or laches; and (3) the district court reasonably concluded that Elk Ridge was not entitled to attorneys' fees.

This case arose from certain hurricane damage claims made by respondent under a 2004 insurance policy issued by respondent's original insurer. When the original insurer became insolvent, the Florida Insurance Guaranty Association (FIGA) then became obligated to respond to certain claims made under that insurance policy. At issue was the proper test to be utilized by a court when determining whether a statute could be applied retroactively, in this case to a contract of insurance. The court held that the court's precedents both before and after the Fourth District's decision required the court to engage in a two-pronged inquiry to determine if the 2005 amendments to section 627.7016, Fla. Stat., were to be applied retroactively. Thus, the Fourth District misapplied this precedent when it omitted the first inquiry into whether the Legislature clearly expressed an intent that the statute be applied retroactively and moved directly to the second inquiry, whether retroactive application would be constitutional. For this reason, and because there was no clear evidence of legislative intent for retroactivity, the court quashed the decision of the Fourth District to the extent it was inconsistent with the opinion and remanded for further proceedings.

Jacklin Land Company (Jacklin) owned real property that it developed into a commercial industrial complex. The development was subject to multiple covenants, conditions and restrictions (CC&Rs). One of the CC&Rs was that the development was not intended for retail businesses. In April 2008, Blue Dog RV, a retailer, began negotiating with Jacklin about the purchase of land in within the complex. During the course of the negotiations, Blue Dog also discussed renting four undeveloped lots across the street, but still within the complex. KL Properties owned those four lots. Ultimately Blue Dog leased space from KL Properties. Citing the CC&Rs, Jacklin sent notice to Blue Dog to vacate the KL leased space. When further negotiations between the parties proved unfruitful, Jacklin filed suit to enjoin KL Properties and Blue Dog from using the space for RV retail. The trial court ruled in KL and Blue Dog's favor. On reconsideration, the court issued an injunction against Blue Dog for violation of the CC&Rs. Upon review, the Supreme Court found that the district court's injunction was technically flawed because it did not give "explicit notice of precisely what conduct was outlawed," and that it enjoined unknown persons who were not party to this action. The Court vacated the district court's judgment, and remanded the case for further proceedings.

Plaintiffs Stephen and Marilee Bell hired contractor Defendant Perception Construction Management, Inc. (PCM) to build a log home. The parties' relationship deteriorated, and the Plaintiffs terminated the contract before construction was complete. Plaintiffs refused to pay PCM's final invoices, and PCM filed suit to enforce a lien it placed on the home for the unpaid invoices. Plaintiffs filed multiple counterclaims, including construction defect and breach of contract. PCM prevailed at trial, and the district court found PCM was entitled to damages, prejudgment interest and attorney fees. Plaintiffs appealed, contending that the district court erred by excluding certain evidence relating to their defense against the lien, and in its determination of the monies allegedly owed under the lien. The Supreme Court found that the district court impermissibly excluded Plaintiffs' evidence, and as such, the Court vacated the district court's judgment and remanded the case for further proceedings.

Russell and Melissa Levens and Al Ballard, neighboring property owners, entered into an agreement defining the location of the boundaries of their properties. The agreement provided that Ballard would not excavate on his property within thirty feet of the Levens' property. After Ballard occupied the area between the two properties and refused to sign a certificate of survey pursuant to the agreement, Levens brought an action against Ballard to enforce the agreement and for an injunction. The district court enjoined Ballard from excavating on the disputed property and later granted Levens' motion for summary judgment. Levens later filed a motion for contempt against Ballard for failure to abide by the judgment. The district court denied the motion and entered an order awarding attorney fees to Ballard. On appeal, the Supreme Court reversed the orders, holding that the judgment must be construed to prevent Ballard from excavating in such a way that the pit intrudes into the thirty-foot buffer strip at the edge of Levens' property.

The Board of County Commissioners of Cecil County voted to grant a water services and wastewater franchise to two related companies, after which it approved an agreement providing for the sale and transfer to the companies of county-owned water and wastewater facilities. County residents filed petitions for judicial review of the decisions. The circuit court granted the Board's motion for summary judgment on the issue of its right to award the franchise agreements and ultimately concluded that the Board had a right to sell the county-owned property. The residents appealed, arguing that Md. Code Ann. art. 25, 8(a) prohibits the Board from conveying the property. At issue was whether Md. Code Ann. art. 25, 8(a) prohibited the Board from selling facilities that will continue to provide essential services to county citizens. The Court of Appeals affirmed, holding that the Board was not prohibited from entering into the asset purchase agreements at issue.