Justia Contracts Opinion Summaries

The Minnesota Supreme Court reversed a decision by the Court of Appeals, ruling that the district court did not abuse its discretion in certifying an order as a final partial judgment under Minnesota Rule of Civil Procedure 54.02. The case arose from a dispute between the City of Elk River and Bolton & Menk, Inc. over a large construction contract for a wastewater treatment plant improvement project. The City sued Bolton for alleged breach of contract and professional negligence. Bolton responded by filing a third-party complaint against three other parties involved in the contract. The district court dismissed Bolton's third-party complaint and Bolton sought to have the dismissal order certified as a final judgment for immediate appeal. The district court granted this certification, but the Court of Appeals dismissed Bolton's appeal, determining that the district court had abused its discretion in certifying the order as a final judgment. The Minnesota Supreme Court disagreed, finding that the district court had offered valid reasons for its certification, including that the third-party claims presented distinct issues from the principal claims and that the case was in its early stages at the time of certification. The Supreme Court therefore reversed the decision of the Court of Appeals and remanded the case for further proceedings. View "City of Elk River vs. Bolton & Menk, Inc." on Justia Law

In this case, Epochal Enterprises, Inc., also known as Divine Orchids, entered into a commercial lease agreement with LF Encinitas Properties, LLC and Leichtag Foundation. The lease included a limitation of liability clause which stated that the defendants were not personally liable for any provisions of the lease or the premises, and the plaintiff waived all claims for consequential damages or loss of business profits. After the plaintiff sued the defendants, a jury found the defendants liable for premises liability and negligence.The jury awarded the plaintiff damages for lost profits and other past economic loss. However, the trial court granted the defendants’ motion for judgment notwithstanding the verdict (JNOV), reasoning that the lease agreement’s limitation of liability clause prevented the plaintiff from recovering the economic damages the jury awarded.The Court of Appeal, Fourth Appellate District Division One State of California, reversed the order granting JNOV in the defendants' favor, finding that the limitation of liability clause did not bar plaintiff’s recovery of damages. The court reasoned that the jury's award of damages necessarily implied a finding of gross negligence on the part of the defendants, which would be outside the scope of the indemnification clause. Further, the court held that the limitation of liability clause was void to the extent that it sought to shield the defendants from liability for their violations of the Health and Safety Code, as it violated public policy under Civil Code section 1668.On the defendants' cross-appeal regarding the damages award, the court affirmed the denial of the defendants' motion for partial JNOV, finding that substantial evidence supported the damages award. The court concluded that the jury could reasonably interpret the term "other past economic loss" on the verdict form as a different form of lost profits, and that the evidence presented to the jury provided a reasonable basis for calculating the amount of the plaintiff's lost profits. View "Epochal Enterprises, Inc. v. LF Encinitas Properties, LLC" on Justia Law

In this case, the Supreme Court of the State of Montana addressed a dispute over a settlement agreement regarding the sale of a house and the subsequent release of construction-related claims. Daniel Perl and Sandra Perl (collectively, "the Perls"), who are the plaintiffs and appellants, entered into discussions with Christopher Grant and other related parties (collectively, "the Grants"), who are the defendants and appellees. The Perls had purchased a home from the Grants and later became dissatisfied with the construction quality. After negotiations, the parties, through text messages, appeared to reach an agreement wherein the Grants would buy back the property for $2.8 million, and the Perls would release all claims related to the house's construction. However, the Perls later objected to several terms in the formal documents prepared by the Grants' attorney and disputed the existence of an enforceable settlement agreement.The lower court, the Eleventh Judicial District Court, Flathead County, granted the Grants' motion for summary judgment and denied the Perls' cross-motion for partial summary judgment. The lower court held that there was indeed an enforceable settlement agreement.The Supreme Court of the State of Montana affirmed the lower court's decision. The Supreme Court found that the parties' text messages satisfied the statute of frauds and constituted an enforceable settlement agreement. The court pointed out that the text messages contained all the essential elements of a contract, including the parties, the subject matter, a reasonably certain description of the property, the purchase price, and mutual assent. The court also found that the Perls' objections to non-material terms in the formal documents did not invalidate the settlement agreement. Therefore, the Supreme Court affirmed the lower court's decision to grant the Grants' motion for summary judgment and deny the Perls' cross-motion for partial summary judgment. View "Perl v. Grant" on Justia Law

In Mississippi, Samuel and Sandra Evans appealed the trial court's decision not to set aside a foreclosure sale. They executed a deed of trust for real property in 2003, but defaulted on their payments. Foreclosure proceedings were initiated and the property was purchased at the foreclosure sale by MC&J Investments, LLC. The Evans alleged that they had an oral agreement with the managing member of MC&J Investments to buy the property at the foreclosure sale and then sell it back to them. The trial court found that the bid price paid by MC&J Investments was not so inadequate as to shock the conscience of the court and that no written evidence was provided to support the alleged promise to sell back the property. The Supreme Court of Mississippi affirmed the trial court's decision, ruling that the oral agreement was barred under the statute of frauds and did not fall under the doctrine of promissory estoppel because there was no evidence that the Evans relied on the alleged promise. Additionally, the court found that the price paid at the foreclosure sale didn't shock the conscience of the court and therefore didn't err in not setting aside the foreclosure sale. View "Evans v. MC & J Investments, LLC" on Justia Law

The case in question involved a dispute between Epochal Enterprises, Inc., doing business as Divine Orchids, and LF Encinitas Properties, LLC and Leichtag Foundation, over a commercial lease agreement for a property containing dilapidated commercial greenhouses known to contain asbestos and lead paint. Epochal Enterprises claimed that the defendants failed to disclose the presence of these hazardous substances, which resulted in economic damage when the County of San Diego quarantined the leased premises. A jury found the defendants liable for premises liability and negligence, and awarded Epochal Enterprises damages for lost profits and other past economic loss.However, the trial court granted the defendants' motion for judgment notwithstanding the verdict (JNOV), based on a limitation of liability clause in the lease agreement that purported to prevent Epochal Enterprises from recovering the economic damages awarded by the jury.The Court of Appeal, Fourth Appellate District Division One State of California, reversed the trial court's judgment. It found that the jury necessarily concluded that the defendants had violated the Health and Safety Code by failing to disclose the existence of asbestos, and that this violation of law rendered the limitation of liability clause invalid under Civil Code section 1668. The court concluded that the limitation of liability clause could not bar Epochal Enterprises from recovering damages for the defendants' statutory violations.The court also affirmed the trial court's denial of the defendants' motion for partial JNOV on the issue of damages, finding that the jury had a reasonable basis for calculating the amount of lost profits. The court remanded the case for further proceedings. View "Epochal Enterprises, Inc. v. LF Encinitas Properties, LLC" on Justia Law

In a dispute between K&S Staffing Solutions, Inc. (K&S) and The Western Surety Company (Western) and VSS International, Inc. (VSSI), the Court of Appeal of the State of California Third Appellate District upheld the Superior Court of San Joaquin County's decision that K&S was not a “laborer” within the meaning of the mechanics’ lien law and that payment bonds issued for the projects in question were subject to the mechanics' lien law’s requirements.K&S, a staffing company, sued VSSI and Western to recover unpaid amounts for services provided on state projects, arguing it was a “laborer” under the mechanics' lien law and thus entitled to assert a claim against payment bonds for the projects. The court disagreed, interpreting the term “laborer” in the law as a person "acting as an employee" performing labor or bestowing necessary services on a work of improvement, and concluded K&S, as an employer, did not qualify.Furthermore, K&S argued that the payment bonds issued for these state projects were not subject to the mechanics' lien law’s requirements because they were not "payment bonds" within the meaning of the law. However, the court disagreed, ruling that the bond requirements of the mechanics' lien law apply to state projects that require a bond under Public Contract Code section 7103 and other public entity projects that require a bond under section 9550. Consequently, the court affirmed the lower court's attorney fee award to the defendants under section 9564, which mandates attorney fees be awarded to the prevailing party in any action to enforce the liability on a payment bond. View "K & S Staffing Solutions v. The Western Surety Co." on Justia Law

In a case before the Supreme Court of Rhode Island, plaintiffs Mark Quillen and Dawn Quillen entered into a Purchase and Sales Agreement (P & S Agreement) with defendant Clint Cox to purchase a property for a total sale price of $632,000, which included a $31,000 deposit. An issue arose when the parties' chosen escrow agent, Beycome Brokerage Realty, refused to accept the deposit, leading to an amendment in the agreement that allowed the plaintiffs to submit the deposit to a different brokerage firm, Trusthill. This amendment led to a dispute with the defendant claiming the plaintiffs failed to meet the deposit requirement, thereby breaching the contract.The trial justice in the Superior Court found that the defendant had prevented the plaintiffs from effectuating delivery of the deposit, thereby eliminating the condition precedent. The court also found that the plaintiffs were ready, willing, and able to purchase the property. Despite the defendant's claims, the court concluded that plaintiffs had met all their obligations under the contract. The court ordered specific performance, directing the defendant to transfer the property to the plaintiffs. The defendant's counterclaims for breach of contract, declaratory judgment, and damages were dismissed.On appeal, the Supreme Court of Rhode Island affirmed the judgment of the Superior Court. The court held that the trial justice correctly determined that the plaintiffs timely and properly delivered the deposit in accordance with the amended agreement. The court also agreed with the trial justice's finding that the plaintiffs were ready, willing, and able to purchase the property. The court rejected the defendant's argument that the trial justice failed to apply the clear and convincing standard in her factual findings, noting that the defendant failed to raise this issue in the lower court. The court also dismissed the defendant's contention that he was entitled to the deposit as damages, as the court found no evidence of breach on the part of the plaintiffs. View "Quillen v. Cox" on Justia Law

In an appeal from a property dispute in Ketchum, Idaho, the Supreme Court of the State of Idaho affirmed the lower court's judgment, in part, and vacated and remanded the case, in part, for further proceedings. The dispute arose when Trustees Glen Miller and Cynthia Anderson attempted to build a home on a lot they purchased in the Rocking Ranch No. 3 subdivision. The Rocking Ranch No. 3 Property Owners’ Association denied their application to construct the home and asserted several counterclaims to recover unpaid homeowners association (HOA) assessments. The district court granted summary judgment to the Association on Miller and Anderson’s claims and dismissed the Association’s counterclaims. On appeal, the Supreme Court of the State of Idaho affirmed the district court's dismissal of the Association’s counterclaims, concluding that the Association failed to establish its breach of contract counterclaim because it had not established two elements of the prima facie case: breach of the contract and damages resulting from the breach. The Supreme Court of the State of Idaho also vacated and remanded the district court's award of attorney fees to the Association for further proceedings, finding that the Association was not entitled to recover attorney fees for the counterclaims on which it did not prevail. View "Miller v. Rocking Ranch No. 3" on Justia Law

In this case, Richard Mullen and Cheryl Mullen petitioned the Supreme Court of Alabama for a writ of mandamus to direct the Jefferson Circuit Court to transfer their case to the Walker Circuit Court. The case at hand arises from a dispute between the Mullens and Karl Leo and Fay Leo, who purchased a parcel of property from the Mullens in Walker County. The Leos alleged that the Mullens, unlicensed homebuilders, sold them a residence with multiple latent defects and refused to remedy these defects. The Leos filed a suit against the Mullens in the Jefferson Circuit Court, where the Mullens resided, claiming breach of contract, breach of the implied warranty of habitability, fraud, negligence, and fraudulent suppression.The Mullens sought dismissal or transfer of the case to Walker County, arguing that as the property in question was located there, it was the appropriate venue. The Jefferson Circuit Court, however, denied their motion. The Mullens then petitioned the Supreme Court of Alabama, arguing that Walker County was the proper venue due to the location of the property and the Leos' request for equitable relief in their complaint.The Supreme Court of Alabama granted the Mullens' petition for a writ of mandamus. The Court found that the property sold by the Mullens to the Leos in Walker County was the "subject matter" of the action within the meaning of Rule 82(b)(1)(B). Therefore, the Court directed the Jefferson Circuit Court to vacate its order denying the Mullens' motion to transfer the action and to transfer the case to the Walker Circuit Court. View "Ex parte Mullen" on Justia Law

In Alabama, RAM-Robertsdale Subdivision Partners, LLC contracted Construction Services LLC, d/b/a MCA Construction, Inc. ("MCA") to build infrastructure for a proposed housing subdivision. The relationship between the two parties deteriorated, leading to a lawsuit by RAM-Robertsdale against MCA for various claims including breach of contract, negligence, and negligent misrepresentation, among others. MCA counterclaimed and also filed third-party claims against Retail Specialists, LLC, a member of RAM-Robertsdale, and Rodney Barstein, a corporate officer for Retail Specialists and RAM-Robertsdale, for breach of contract, fraud, unjust enrichment, and defamation. The RAM defendants moved for summary judgment on MCA's counterclaims and third-party claims, arguing that MCA was not properly licensed when it signed the contract, thus making the contract void for public policy. The circuit court granted the RAM defendants' motion for summary judgment and certified its judgment as final.On appeal, the Supreme Court of Alabama found that the circuit court had exceeded its discretion in certifying its judgment as final under Rule 54(b), Ala. R. Civ. P., because the claims pending below and those on appeal were closely intertwined, arising from the same contract and the parties' performance under that contract. The Court noted that if the contract was indeed void for public policy, then neither party would be able to enforce it, impacting the remaining claims pending in the circuit court. As the Court found that deciding the issues at this stage would create an intolerable risk of inconsistent results, it dismissed the appeal for lack of jurisdiction. View "Construction Services, LLC v. RAM-Robertsdale Subdivision Partners, LLC" on Justia Law