Justia Contracts Opinion Summaries

Talisker Finance, LLC and its affiliates defaulted on a $150 million loan secured by real property in Utah. The lenders, Wells Fargo Bank, N.A. and Midtown Acquisitions L.P., foreclosed on the collateral and purchased it at two sheriff’s sales, but the sale proceeds did not satisfy the debt. Talisker later discovered that the lenders had entered into a Common Interest Agreement with the court-appointed receiver, allegedly colluded to depress the sale price, and deterred potential bidders. Talisker claimed that the lenders bundled properties in a way that made them less attractive and that the receiver stalled a third party’s interest in purchasing some of the collateral.The Third District Court, Summit County, reviewed Talisker’s complaint seeking equitable relief from the deficiency judgments, arguing that the lenders’ conduct violated Utah Rule of Civil Procedure 69B(d) and common law principles. The district court accepted Talisker’s factual allegations as true for the purpose of the motion to dismiss but found that Talisker had broadly waived its rights related to the foreclosure process in the loan documents. The court concluded that the lenders’ actions, while possibly unfair, were not unlawful under the terms of the agreements and dismissed the complaint.On direct appeal, the Supreme Court of the State of Utah affirmed the district court’s dismissal. The court held that Talisker’s waivers in the loan documents were broad and explicit enough to encompass all rights under Rule 69B(d), including the requirement that property be sold in parcels likely to bring the highest price. The court further held that Talisker had also waived any equitable or common law claims related to the foreclosure sales. The Supreme Court affirmed the district court’s ruling, finding no error in its conclusion that Talisker’s waivers precluded relief. View "TALISKER PARTNERSHIP v. MIDTOWN ACQUISITIONS" on Justia Law

Casa Express Corp. obtained a $40 million judgment in the Southern District of New York against the Bolivarian Republic of Venezuela for unpaid bonds and a global note. After Venezuela failed to pay, Casa sought to enforce the judgment in Florida by targeting eight Miami properties owned by corporate entities allegedly controlled by Raul Gorrin Belisario. Casa claimed that Gorrin, through a bribery and currency-exchange scheme involving Venezuelan officials, used misappropriated Venezuelan funds to purchase these properties, and argued that the properties should be subject to a constructive trust in favor of Venezuela.Casa registered the New York judgment in the United States District Court for the Southern District of Florida and initiated supplementary proceedings under Florida law, seeking to execute the judgment against the properties. Casa impleaded Gorrin, several individuals, and six corporate entities as third-party defendants. The defendants moved for judgment on the pleadings, arguing, among other things, that the district court lacked ancillary jurisdiction over Casa’s claims. The magistrate judge recommended dismissal for lack of ancillary jurisdiction, and the district court adopted this recommendation, also finding a lack of personal jurisdiction over Gorrin. Casa appealed.The United States Court of Appeals for the Eleventh Circuit held that the district court lacked ancillary jurisdiction over Casa’s supplementary proceedings. The court reasoned that Casa’s action sought to impose liability on third parties not previously found liable for the New York judgment and was based on new facts and legal theories unrelated to the original breach of contract claims against Venezuela. The Eleventh Circuit affirmed the district court’s jurisdictional ruling, vacated its alternative merits rulings, and remanded with instructions to dismiss the case without prejudice for lack of subject matter jurisdiction. View "Casa Express Corp v. Bolivarian Republic of Venezuela" on Justia Law

The case centers on a long-standing dispute involving three churches over ownership and sale of real property in Los Angeles. Attorney Steven C. Kim represented one of the churches, Central Korean Evangelical Church, which granted him a deed of trust on the property to secure payment of attorney fees. Central Korean had contracted to sell the property to New Life Oasis Church but later reneged, leading to litigation. The trial court ordered Central Korean to honor the sale and expunged Kim’s deed of trust, which was obstructing the transaction. Kim’s client appealed, but the appeal was dismissed for lack of standing, and Kim did not pursue his own appeal. The judgment became final in 2018.Following the final judgment, Kim filed a new lawsuit against New Life Oasis Church and Bank of Hope, seeking a declaration that his deed of trust was still valid and challenging the prior expungement order. New Life and Bank of Hope moved for judgment on the pleadings, arguing that issue preclusion barred Kim from relitigating the validity of his lien. The Superior Court of Los Angeles County agreed and entered judgment against Kim. Additionally, New Life filed a cross-complaint alleging that Kim’s recording of a lis pendens constituted slander of title and abuse of process. After a bench trial, the court ruled in favor of New Life, awarding damages and not addressing Kim’s defense based on the litigation privilege.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. It affirmed the trial court’s application of issue preclusion, holding that Kim could not relitigate the validity of his deed of trust. However, it reversed the judgment on the cross-complaint, holding that the litigation privilege protected Kim’s recording of the lis pendens from claims of slander of title and abuse of process. The case was remanded for entry of judgment consistent with these holdings. View "Kim v. New Life Oasis Church" on Justia Law

A group of plaintiffs leased a 2,400-acre parcel of undeveloped land in San Luis Obispo County, California, from the predecessor of the defendant, Eureka Energy Company. The lease, originally executed in 1968 and later novated, provided for a 99-year term with an option to renew for another 99 years. The property, known as Wild Cherry Canyon, was historically used for cattle grazing, but the lease itself stated that the premises could be used for “any lawful purpose.” The parties understood that cattle grazing would continue, primarily to reduce wildfire risk rather than for commercial livestock production. In 2018, the plaintiffs exercised their option to renew the lease, but Eureka asserted that the lease was limited to 51 years under California Civil Code section 717, which restricts leases for agricultural purposes.The Superior Court of San Luis Obispo County held a court trial and issued a detailed statement of decision. It found that the lease was for agricultural purposes, specifically cattle grazing, and concluded that section 717 applied, limiting the lease to 51 years. The court entered judgment for Eureka, declaring that the lease expired in 2019 and that the plaintiffs had no further interest in the property. The plaintiffs appealed, arguing that the lease was not for agricultural purposes within the meaning of section 717, given the fire prevention intent.The California Court of Appeal, Second Appellate District, Division Six, reviewed the case. It held that, although cattle grazing generally constitutes an agricultural purpose under section 717, the particular circumstances here—where grazing was intended for fire prevention and not for commercial agriculture—meant the lease was not for agricultural purposes as defined by the statute. The court reversed the trial court’s judgment, finding that the lease was valid beyond the 51-year limit and that the plaintiffs’ leasehold interest should not be forfeited. View "Pacho Limited Partnership v. Eureka Energy Co." on Justia Law

Edward T. Saadi, a licensed attorney proceeding pro se, obtained a $90,000 judgment against Pierre Maroun and Maroun’s International, LLC (MILLC) following a jury verdict in a federal defamation suit. Despite the judgment, Saadi was unable to collect payment for nine years. In 2018, Saadi discovered information suggesting Maroun had transferred $250,000 from his personal account to MILLC, allegedly to evade the judgment. Saadi claimed these funds were used to purchase a condominium titled to MILLC but used as Maroun’s residence, and to pay Maroun’s personal expenses. Saadi initiated proceedings supplementary under Florida law, seeking to void the transfer and recover assets.The United States District Court for the Middle District of Florida allowed Saadi to file an impleader complaint against Maroun and MILLC, asserting claims for fraudulent transfer and actual and constructive fraud under Florida statutes. Saadi also sought sanctions when MILLC failed to produce a representative for deposition, but the district court denied the motion, finding the individual was not a managing agent of MILLC. Ultimately, the district court granted summary judgment for Maroun and MILLC, ruling that Saadi’s claims were time-barred under Florida’s statutes of repose and limitations, and that tolling provisions did not apply. The court also found that the remedies Saadi sought were unavailable under the relevant statutes.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed the district court’s rulings. Finding that several dispositive questions of Florida law lacked controlling precedent and were subject to conflicting interpretations by Florida’s intermediate appellate courts, the Eleventh Circuit certified five questions to the Florida Supreme Court. The court deferred its decision pending the Florida Supreme Court’s response to the certified questions. View "Saadi v. Maroun" on Justia Law

A homebuyer entered into an agreement to purchase a property in Titusville, Pennsylvania, and, before completing the purchase, orally contracted with a home inspector to perform an inspection. The inspector delivered a report that did not disclose any structural or foundational issues. Relying on this report, the buyer purchased the property. The following winter, a burst pipe led to the discovery of significant defects, including the absence of a proper foundation and improper ductwork, which had not been disclosed in the inspection report. The buyer filed suit against the inspector more than two years after the report was delivered, alleging violations of the Pennsylvania Home Inspection Law, breach of contract, and violations of the Unfair Trade Practices and Consumer Protection Law.The Court of Common Pleas of Crawford County overruled most of the inspector’s preliminary objections and denied a motion for judgment on the pleadings, finding ambiguity in the statute governing the time to bring actions arising from home inspection reports. The trial court reasoned that the statute could be interpreted as either a statute of limitations or a statute of repose and declined to grant judgment for the inspector. On appeal, the Superior Court reversed, holding that the statute in question was a statute of repose, not a statute of limitations, and that all of the buyer’s claims were time-barred because they were filed more than one year after the inspection report was delivered.The Supreme Court of Pennsylvania reviewed whether the relevant statutory provision, 68 Pa.C.S. § 7512, is a statute of repose or a statute of limitations. The Court held that the statute is a statute of repose, barring any action to recover damages arising from a home inspection report if not commenced within one year of the report’s delivery, regardless of when the claim accrues. The Court affirmed the Superior Court’s judgment. View "Gidor v. Mangus" on Justia Law

This dispute arose from the use of easements on subdivided property in Yellowstone County, Montana. After a series of conveyances, Patti and Steve Schubert owned Tract 7B-2, which benefited from a 30-foot-wide access easement across neighboring Tract 7B-1, owned by Jeremy and Tynagh Toepp. The Schuberts installed a large electric gate, keypad, and package box within the easement, and engaged in activities such as removing vegetation and using heavy equipment, which the Toepps claimed damaged their property and overburdened the easement. The Schuberts also challenged the Toepps’ rights to use a shared well. The parties attempted to resolve their disputes through mediation, resulting in a signed Memorandum of Understanding (MOU), but disagreements persisted over the interpretation and scope of the settlement, particularly regarding the gate and the use of the easement.The Thirteenth Judicial District Court, Yellowstone County, heard cross-motions to enforce the MOU. Sitting without a jury, the District Court found the MOU to be a binding agreement that implied the Schuberts’ encroaching gate could remain in place. The court limited the Schuberts’ use of the access easement to ingress and egress only, prohibited unnecessary removal of vegetation, and awarded attorney fees to the Toepps, finding the Schuberts had unreasonably multiplied the proceedings by insisting on additional terms not included in the MOU.On appeal, the Supreme Court of the State of Montana reversed the District Court’s conclusion that the MOU allowed the encroaching gate to remain, holding that the MOU did not contemplate a gate easement and that the gate constituted an unlawful encroachment requiring removal. The Supreme Court affirmed the District Court’s limitation of the easement to ingress and egress and its award of attorney fees to the Toepps, finding no abuse of discretion. The case was remanded for entry of judgment consistent with these holdings. View "Schubert v. Toepp" on Justia Law

A commercial landlord and tenant entered into a lease for office space, which was later amended to include a limited personal guaranty by an officer of the tenant. The guaranty, often referred to as a "good guy" guaranty, stated that the guarantor would be liable for the tenant’s monetary obligations under the lease up to the date the tenant and its affiliates had completely vacated and surrendered the premises, provided the landlord was given at least thirty days’ notice. The tenant stopped paying rent and utilities in 2020, notified the landlord of its intent to vacate, and surrendered the premises at the end of November 2020.The landlord sued both the tenant and the guarantor in the Supreme Court, New York County, seeking unpaid rent and expenses from before and after the surrender, as well as attorneys’ fees. The Supreme Court initially granted summary judgment to the landlord for pre-vacatur damages but denied summary judgment for post-vacatur damages pending further discovery. Upon reargument, the Supreme Court granted summary judgment for post-vacatur damages as well, holding both the tenant and guarantor jointly and severally liable. The Appellate Division, First Department, affirmed, reasoning that the guaranty required the landlord’s written acceptance of the surrender for the guarantor’s liability to end.The New York Court of Appeals reviewed the case and reversed the lower courts’ decisions. The Court of Appeals held that, under the terms of the guaranty, the guarantor’s liability ended when the tenant vacated and surrendered the premises, and that liability was not conditioned on the landlord’s acceptance of the surrender. The court found that the language of the guaranty was clear and did not require the landlord’s written acceptance, and that interpreting it otherwise would render key provisions superfluous. The court denied the landlord’s motions for summary judgment on post-vacatur damages. View "1995 CAM LLC v. West Side Advisors, LLC" on Justia Law

Nilfisk, Inc. leased a large warehouse building in Springdale, Arkansas from Fort Worth Partners, LLC under an industrial lease that required Nilfisk to maintain property insurance covering the full replacement cost of the building, excluding certain foundation and below-grade structures. In March 2022, a tornado destroyed the building, and Nilfisk’s insurance coverage at the time was significantly less than the full replacement cost required by the lease. Fort Worth Partners sued Nilfisk and its parent company for breach of contract, seeking damages equal to the full replacement cost that would have been covered by adequate insurance.The United States District Court for the Western District of Arkansas reviewed cross-motions for summary judgment. It denied Nilfisk’s motion and granted Fort Worth Partners’ motion in part, finding Nilfisk had breached its insurance obligation under the lease. The court held a bench trial to determine damages, considering expert testimony from both parties. It awarded Fort Worth Partners damages for the building’s replacement cost, excluding foundation damages per the lease, and also awarded attorney’s fees and costs, with reductions for limited success and prevailing local rates. Nilfisk appealed the denial of summary judgment and the damages award, while Fort Worth Partners cross-appealed aspects of the damages and fee awards.The United States Court of Appeals for the Eighth Circuit affirmed the district court’s grant of partial summary judgment for Fort Worth Partners and its denial of Nilfisk’s summary judgment motion. The appellate court held that Fort Worth Partners’ claim was timely, as each deficient insurance policy constituted a separate breach with its own limitations period. The court also affirmed the district court’s interpretation of the lease excluding all foundation damages and upheld the reduction in attorney’s fees. However, it reversed and remanded the damages award for unrebutted costs, instructing the district court to make specific factual findings supporting that portion of the award. View "Fort Worth Partners, LLC v. Nilfisk, Inc." on Justia Law

A lessor and two lessees entered into a lease with an option to purchase a residential property in Calhoun County, Alabama. The agreement required the lessees to make monthly rent payments, annual payments, and an initial deposit, with certain payments to be credited toward the purchase price if the option was exercised. Disputes arose near the end of the lease term regarding the timeliness of the lessees’ payments and whether the lessees had complied with all contractual requirements, including providing written notice of their intent to purchase.The Calhoun Circuit Court conducted a bench trial and found that a valid lease-to-purchase contract existed, that the lessees had complied with its terms, and that the lessor still owed a mortgage on the property. The court ordered that all funds held by the parties be paid to the lessor to reduce the mortgage principal, required the lessor to satisfy the mortgage and convey clear title to the lessees by a specified date, and assigned responsibility for property taxes to the lessees. The lessor’s postjudgment motion, which challenged the findings regarding compliance and payment timeliness, was denied.On appeal, the Supreme Court of Alabama reviewed the trial court’s factual findings under the ore tenus standard, deferring to the trial court’s credibility determinations unless clearly erroneous. The Supreme Court affirmed the trial court’s finding that the lessees had not breached the lease, concluding that the lessor’s actions had contributed to any payment delays. However, the Supreme Court reversed the trial court’s judgment to the extent it credited monthly rent payments toward the purchase price, holding that only the initial deposit and annual payments should be applied, as the contract unambiguously required. The case was remanded for further proceedings consistent with this holding. View "McCain v. Sneed" on Justia Law