Justia Contracts Opinion Summaries

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

The Supreme Court vacated the judgment of the court of appeals in this case involving the question of deed construction within the oil and gas context as to whether a royalty interest was fixed or floating, holding that further proceedings were required to evaluate this case in light of the framework articulated in Van Dyke v. Navigator Group, 668 S.W.3d 353 (Tex. 2023).The 1956 deed at issue expressly reserved an undivided 3/32's interest "(same being three-fourths (3/4's) of the usual one-eighth (1/8th) royalty)" in the oil, gas, and other minerals. The question before the Supreme Court was whether the reservation was a floating 3/4 interest of the royalty rather than a fixed 3/32 interest. The court of appeals concluded that the reservation was a floating 3/4 interest. Because the court of appeals' decision preceded Van Dyke, the Court's most recent double-fraction case, the Supreme Court granting the petition for review and vacated the lower court's decision, holding that this case must be remanded this case for further proceedings in light of Van Dyke. View "Thomson v. Hoffman" on Justia Law

The General Council of the Assemblies of God (General Council) governed the Assemblies of God denomination. Its affiliate, the Mississippi District Council for Assemblies of God (District), governed the denomination’s local churches in Mississippi, including Gulf Coast Worship Center (GCWC) in Long Beach. In January 2017, Kevin Beachy, the pastor of GCWC, did not renew his credentials as an ordained pastor with the General Council, ultimately informing the District that he and GCWC intended to disaffiliate from the General Council. The District then informed Beachy that GCWC was being placed under District supervision. On March 19, 2017, the GCWC congregation voted to disaffiliate from the General Council. The congregation voted also to remove a reverter clause from its constitution and bylaws; this clause would have caused the GCWC’s property to revert to the District in the event that GCWC ceased operating as a “church body.” In November 2017, the District filed a chancery court petition for declaratory judgment and injunctive relief against Beachy and the GCWC board of trustees, Eddie Kinsey, Andre Mulet, and Kris Williams (collectively, Defendants). Both the District and Defendants moved for summary judgment. The trial court granted the District’s motion for summary judgment and denied Defendants’ motion. Defendants appealed. After review, the Mississippi Supreme Court determined that issues concerning disaffiliation, i.e., actions taken at the congregational meeting on March 19, 2017, and whether GCWC was under the District’s supervision, were church-governing matters. Thus, the ecclesiastical abstention doctrine deprived the chancellor of jurisdiction to address those claims. But the Supreme Court found genuine issues of material fact remained regarding ownership of property. Therefore, the Court reversed the chancellor’s grant of summary judgment to the District and remanded all issues concerning ownership of property for further proceedings. View "Beachy, et al. v. Mississippi District Council for Assemblies of God" on Justia Law

The Supreme Court reversed the portion of the order of the district court granting summary judgment in favor of Buyer in this dispute arising from an ordinary course covenant in an asset purchase agreement, holding that the district court erred in granting summary judgment for Buyer.In April 2019, Seller entered into an agreement to sell a casino and hotel to Buyer. The agreement contained an ordinary course covenant requiring Seller to operate its business in the usual manner between the time the agreement was signed and closing. In March 2020, in response to the COVID-19 pandemic, Seller complied with the Governor's emergency directive mandating closure of all nonessential businesses. The pandemic also affected Buyer's duties under the agreement. Buyer subsequently terminated the agreement and sued Seller for return of the deposit, alleging various contract claims. Seller counterclaimed for breach of contract. The district court granted summary judgment for Buyer. The Supreme Court reversed, holding that Seller did not violate the agreement's ordinary course covenant by closing the casino and hotel as mandated by the Governor's emergency directive and was entitled to retain the earnest money deposit. View "Lucky Lucy D LLC v. LGS Casino LLC" on Justia Law