Justia Contracts Opinion Summaries

Darren and Tamara Berger (“Bergers”) appealed a judgment dismissing their claims of violation of a planned unit development (PUD), breach of contract, breach of fiduciary duty, private nuisance, and negligence against their neighbors Jason and Krysta Sellers (“Sellers”), Sellers’ homebuilder Jordan Anderson and Big River Builders, Inc. (together, “Builder”), and the Misty Waters Owners’ Association (“Association”). Sellers and Builder cross-appealed the judgment dismissing their claims of defamation, interference with contract and business, and negligence against Bergers and neighbor Jeff Carlson. The central issue in this case was whether the PUD minimum setback from the bay could be changed by obtaining a new Letter of Map Revision (LOMR) from the Federal Emergency Management Agency (FEMA) without an amendment to the PUD. To this, the North Dakota Supreme Court concluded the PUD unambiguously set the minimum setback from the bay as the contour line in the 2005 LOMR-F and therefore Sellers’ home violated the PUD. The Supreme Court reversed the district court’s grant of summary judgment on Bergers’ claims against Sellers for violation of the PUD, breach of restrictive covenants, negligence (drainage), and private nuisance (setbacks). The Court remanded with instructions to grant Bergers partial summary judgment on their claims against Sellers for violation of the PUD and breach of restrictive covenants and for declaratory relief (against Sellers) as requested in their motion for partial summary judgment. The Court reversed the trial court’s grant of summary judgment on Bergers’ claims against the Association for breach of fiduciary duty and negligence. The Court affirmed the court’s grant of summary judgment on all of Bergers’ claims against Builder, namely the PUD violation, breach of restrictive covenants, and negligence. The Court affirmed the grant of summary judgment on Bergers’ claims against the Association for breach of restrictive covenants and private nuisance. The Court affirmed the grant of summary judgment on all of Sellers’ and Builder’s claims. View "Berger, et al. v. Sellers, et al." on Justia Law

In this discretionary appeal brought by Discovery Oil and Gas, LLC to determine whether an express indemnification provision in its contract with Wildcat Drilling, LLC evinced a clear intent by the parties to abrogate the common-law notice requirements for indemnification set forth in Globe Indemnity Co. v. Schmitt, 53 N.E.2d 790 (Ohio 1944), the Supreme Court held that the requirements announced in Globe Indemnity did not apply.Specifically, the Supreme Court held (1) when the parties have entered into a contract containing an express indemnification provision, the common-law notice requirements set forth in Globe Indemnity do not apply, and the parties are bound by the terms of their contract because the provision evinces a clear intent by the parties to abrogate the common law; and (2) the language of the contract in this case evicted the parties' clear intent to abrogate the common-law notice requirements for indemnification. View "Wildcat Drilling, LLC v. Discovery Oil & Gas, LLC" on Justia Law

Fitness International, LLC was operating an indoor gym and fitness center when it entered into an amended lease with KB Salt Lake III, LLC, that required Fitness International to renovate the premises. However, the COVID-19 pandemic prompted government orders that closed indoor gyms but allowed commercial construction to continue. Fitness International nevertheless stopped construction at the Chatsworth site, remained in possession of the premises, and stopped paying rent. KB Salt Lake filed an unlawful detainer action, and the trial court granted KB Salt Lake’s motion for summary judgment. Fitness International appealed.   The Second Appellate District affirmed the trial court’s judgment. The court explained that Fitness International argued that the lease is a “monthly installment contract” and that each month it could not operate the premises as a fitness facility, frustrated the purpose of the contract. The court wrote that neither the pandemic nor the COVID-19 closure orders, however, prevented Fitness International from reopening the gym. Thus, even if California law recognized temporary frustration of purpose, and even if the lease was an “installment contract,” Fitness International still had to make rent payments under the lease. Moreover, the court explained that Fitness International argues the purpose of section 1511 “is to excuse performance under circumstances like these,” but Fitness International cites no authority describing the purpose of section 1511, nor does Fitness International explain how the trial court’s ruling was contrary to any such purpose. View "Fitness International v. KB Salt Lake III" on Justia Law

Endeavor Operating Company, LLC (Endeavor) is a “holding company” that owns “various subsidiaries in the entertainment, sports, and fashion business sectors.” Endeavor sued the insurers for (1) declaratory relief and (2) breach of contract related to COVID-19 closures. The insurers demurred to the complaint. The trial court issued a ruling (1) sustaining the demurrer without leave to amend and (2) denying Endeavor’s motion for a new trial. The court modified its initial ruling to find that the “actual” or “threatened presence” of COVID-19 or the SARS-CoV-2 virus “does not constitute a physical loss or damage required to trigger coverage for property insurance coverage” but reaffirmed its initial ruling that the contamination/pollution exclusion applied, which in the court’s view obviated its need to address the argument Endeavor raised for the first time in its new trial motion. Endeavor appealed.   The Second Appellate District affirmed. The court concluded that the insurance policy unambiguously requires “direct physical loss or damage to property” before Endeavor may recover under the business interruption clauses. The court held that Endeavor failed as a matter of law to plead “direct physical loss or damage to property.” The court explained that California courts are in accord that the phrase “direct physical loss or damage to property” means a “‘distinct, demonstrable, physical alteration’” of the insured property. This is the default definition to be applied where a policy does not provide a different definition of “direct physical loss or damage.” The policy here provides no different definition. View "Endeavor Operating Co., LLC v. HDI Global Ins. Co." on Justia Law

Between 2015 and 2019, BitterSweet Ranch and its managers (“BitterSweet”) leased three parcels of farmland from Frank Sullivan and two of his business entities, The Green Desert, LLC, and The Sullivan Limited Partnership (collectively, “Sullivan”). The parties signed three identical five-year leases (“the Leases”) involving three separate parcels of real property, each owned by one of the three Sullivan parties. The Leases specified that Sullivan was to be responsible for payment of the property taxes, but that those parties were to be reimbursed by BitterSweet, and that BitterSweet was to be responsible for bi-annual rent payments, utilities, and water assessments. For a variety of reasons, the parties purportedly orally agreed to modify the Leases to offset amounts owed to each other throughout the terms of the Leases. Shortly before the Leases were set to expire at the end of their five-year terms, Sullivan claimed that BitterSweet was in breach of the Leases for its alleged failure to make timely rent payments, to pay all property taxes, and to pay the water assessments pursuant to the terms of the Leases. Sullivan then filed three lawsuits (one for each of the Leases and in the names of each of the three parties) in district court. The district court ordered the cases consolidated and then granted summary judgment in favor of BitterSweet, concluding that a genuine issue of material fact had not been created as to whether BitterSweet had breached the Leases. Sullivan appealed the adverse order. Finding no reversible error, the Idaho Supreme Court affirmed. View "Sullivan v. BitterSweet Ranch, LLC" on Justia Law

The Supreme Court affirmed in part and vacated in part the judgment of the superior court in favor of Plaintiffs following the court's grant of summary judgment on counts one (declaratory judgment) and three (anticipatory repudiation) of the complaint, holding that the grants of specific performance and attorneys' fees were improper.After a real estate action soured, Plaintiffs filed a complaint alleging eight counts. On summary judgment, the hearing justice granted a declaratory judgment for Plaintiffs, entered summary judgment for them on their anticipatory repudiation claim, ordered specific performance, and awarded attorney fees. The Supreme Court vacated the judgment in part, holding (1) the hearing justice's grant of specific performance was premature; and (2) Plaintiff raised justiciable issues of fact that impelled this Court to reverse the award of attorneys' fees. View "Bennett v. Steliga" on Justia Law

In 2002, the Defendant-appellee Carmela Hill (Hill) pursued counterclaims against U.S. Bank and its mortgage servicer Nationstar following bank's dismissal of its foreclosure action against Hill. A jury returned a verdict against bank on borrower's wrongful foreclosure claim and a verdict against the mortgage servicer on multiple claims including violations of the Oklahoma Consumer Protection Act (OCPA) and the Fair Debt Collection Practices Act (FDCPA). The trial court awarded attorney's fees and costs to Hill. The Bank and mortgage servicer appealed and Hill counter-appealed. The Oklahoma Court of Civil Appeals dismissed in part borrower's appeal and found neither the OCPA or the FDCPA was applicable. It reversed the attorney's fee award and reduced the amount of awarded costs. In addition, it reversed the wrongful foreclosure judgment against bank and affirmed the remainder of the judgment which concerned breach of contract and tort claims against the mortgage servicer. The Oklahoma Supreme Court dismissed that portion of Hill's appeal seeking review of the trial court's Category II punitive damages ruling; reversed Hill's wrongful foreclosure judgment against U.S. Bank; reversed the OCPA portion of the judgment against Nationstar; affirmed the FDCPA portion of the judgment against Nationstar, including the $1,000.00 award under the FDCPA; reversed the award of attorney's fees and remanded the matter to the trial court to determine a reasonable attorney's fee consistent with the Court's opinion; and reversed $1,223.39 of the costs awarded to Hill. The remainder of the judgment was affirmed. View "U.S. Bank National Assoc. v. Hill" on Justia Law

Plaintiff NexPoint holds $7.5 million in subordinated notes issued by Acis CLO-2015-6 Ltd. (the “Issuer”), as part of a CLO. The Issuer acquired the CLO collateral and conveyed it to a trust under an indenture between the Issuer and U.S. Bank National Association as Trustee (the “Indenture”). Defendant-appellee Acis Capital Management, L.P. (“Acis”) was engaged as the CLO’s portfolio manager pursuant to a Portfolio Management Agreement between the Issuer and Acis (the “PMA”). NexPoint claims that Acis, Terry, and Brigade (together, the “Advisers”) maximized their own profits at the expense of the CLO in violation of fiduciary duties imposed by Section 206 of the IAA. The district court concluded that NexPoint failed to state a claim under Section 215(b). NexPoint appealed, arguing that the District Court erred in limiting Section 215(b)’s application to contracts that require illegal performance, as opposed to lawful contracts performed in an unlawful manner.   The Second Circuit affirmed. The court held that under Section 215(b), a contract’s performance involves the violation of the IAA only if performing a contractual duty requires conduct prohibited by the IAA. No such unlawful conduct is required by the contracts NexPoint seeks to rescind. The court further explained that the text and structure of the IAA, interpreted with the benefit of TAMA, Oxford, and other precedent, make clear that a contract’s performance “involves” the violation of the IAA only if performing a contractual duty requires a party to engage in conduct prohibited by the IAA. NexPoint does not seek rescission of any contract requiring a party to engage in conduct prohibited by the IAA. View "NexPoint Diversified Real Est. Tr. v. Acis Cap. Mgmt., L.P." on Justia Law

The Supreme Judicial Court affirmed in part and vacated in part the summary judgment entered by the Business and Consumer Docket in an action brought by Defendant's neighbors issuing a declaratory judgment and injunction based on the court's determination that Defendant's short-term rentals had violated a deed restriction that limits the use and occupancy of certain property and the structures on it, holding that remand was required.Specifically, the Supreme Judicial Court (1) affirmed the lower court's declaration that Defendant's short-term rentals of his oceanfront property had violated a deed restriction that limited the use and occupancy of the property and the structures upon it, holding that there was no error in the summary judgment as to these issues; but (2) vacated the court's injunction against further violations, holding that the injunction lacked specificity on what did and did not comply with the deed restriction in question. View "Morgan v. Townsend" on Justia Law

The Court of Appeals held that an heirship judgment that conveyed mineral rights to a good faith buyer’s predecessor in interest was void for lack of jurisdiction. The issue presented for the New Mexico Supreme Court was whether the buyer was entitled to rely on the void judgment in its claim of bona fide purchaser status. In accordance with its Court’s decision in Archuleta v. Landers, 356 P.2d 443, the Court concluded that a party who purchases property sold under a judgment that is not void on its face is entitled to bona fide purchaser status. The Court further clarified that extrinsic evidence of lack of jurisdiction was not permitted to overcome the rights of a purchaser who properly relied upon the order of the court as “an authority emanating from a competent source.” Here, the Court held that Respondent Premier Oil & Gas, Inc. (Premier) was a bona fide purchaser, and affirmed the Court of Appeals. View "Premier Oil & Gas v. Welch" on Justia Law