Justia Contracts Opinion Summaries

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

Several development groups entered into a public improvement contract with a Texas city, purchasing over 60 acres of land, much of it in a flood zone. The developers received a variance from the city, exempting them from obtaining a federal floodplain permit (CLOMR), and invested significant funds in developing the property, including constructing a bridge. In 2018, the parties executed updated agreements, including a Master Development Agreement (MDA), which required certain conditions to be met within five years or the contract would automatically terminate, ending the city’s reimbursement obligations. As the deadline approached, the city informed the developers that they would now need to obtain the previously waived CLOMR, citing a later-enacted ordinance. Unable to comply in time, the developers sought an extension, which the city council denied, resulting in termination of the MDA.The developers sued in Texas state court, alleging the city’s actions constituted an unconstitutional taking under federal and state law, and also brought claims for breach of contract and violations of the Texas Vested Rights Statute. The city removed the case to the United States District Court for the Northern District of Texas and moved to dismiss. The district court dismissed the federal takings and declaratory judgment claims, finding the developers had not sufficiently alleged that the city acted in its sovereign rather than commercial capacity, and remanded the remaining state-law claims to state court.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed. The court held that the developers’ allegations arose from a contractual dispute, not a sovereign act by the city, and thus did not state a plausible takings claim under the Fifth Amendment. The court also found no abuse of discretion in the district court’s decision to dismiss the declaratory judgment claim, as the core issues would be resolved in the remanded state court action. View "Mesquite Asset Recovery Grp v. City of Mesquite" on Justia Law

A business operating a strip club featuring nude dancing and alcohol sales entered into a settlement agreement with DeKalb County, Georgia, in 2001, which was later amended in 2007. The amended agreement granted the club non-conforming status, allowing it to continue its business model for fifteen years, with the possibility of renewal, and required annual licensing fees. In 2013, the City of Chamblee annexed the area containing the club and subsequently adopted ordinances restricting adult entertainment establishments, including bans on alcohol sales, stricter food sales requirements for alcohol licenses, and earlier closing times. The City initially issued alcohol licenses to the club but later denied renewal, citing failure to meet new requirements and the club’s status as an adult establishment.The United States District Court for the Northern District of Georgia dismissed some of the club’s claims for lack of standing and granted summary judgment to the City on the remaining claims. The district court found that the club lacked standing to challenge certain ordinances as it was not an alcohol licensee, and that the City’s ordinances regulating adult entertainment and alcohol sales were constitutional under the secondary-effects doctrine, applying intermediate scrutiny. The court also determined there was no valid contract between the club and the City, rejecting the Contract Clause claims, and found no equal protection violation, as the club failed to identify a similarly situated comparator.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s rulings. The Eleventh Circuit held that the club lacked standing for equitable relief due to its permanent closure, but had standing for damages for a limited period. The court upheld the application of intermediate scrutiny to the ordinances, found no impairment of contract, and agreed that the club failed to establish an equal protection violation. The district court’s judgment in favor of the City was affirmed. View "WBY, Inc. v. City of Chamblee, Georgia" on Justia Law

The dispute centers on an option agreement for the lease of approximately 598 acres of land owned by one party and sought by another for use in a biomass power plant operation. The option agreement granted the potential lessee an irrevocable one-year option to lease the property, with a proposed lease attached that included some terms, such as base rent amounts, but omitted others, including the effective date and certain pricing details for a percentage rent provision. After the lessee attempted to exercise the option, the lessor sent a lease largely in the form of the proposed lease, but with key terms still blank. The lessee never signed this lease, and the parties disagreed about whether a binding lease had been formed.The owner filed suit in the Circuit Court of the Fifth Circuit, seeking breach of contract and specific performance. After a bench trial, the circuit court found that the proposed lease was missing essential terms and that the parties did not intend to be bound by it when executing the option agreement. The court granted the lessee’s motion for directed verdict, awarded attorneys’ fees and costs, and entered final judgment. On appeal, the Intermediate Court of Appeals (ICA) vacated the circuit court’s judgment, holding that the proposed lease was sufficiently definite and enforceable, and that the parties were bound by its terms upon exercise of the option.The Supreme Court of Hawai‘i reviewed the ICA’s decision. It held that the proposed lease lacked sufficiently definite terms, specifically regarding the effective date and percentage rent provision, and that the parties did not intend to be bound by the proposed lease without further negotiation. The Supreme Court reversed the ICA’s judgment and affirmed the circuit court’s directed verdict, fee award, and final judgment in favor of the lessee. View "Moloaa Farms LLC v. Green Energy Team LLC" on Justia Law

Two former employees of a large technology company, along with a real estate developer and related individuals and entities, were alleged to have engaged in a kickback scheme involving real estate transactions in Northern Virginia. The employees, responsible for managing real estate deals for the company, allegedly steered contracts to the developer’s firm in exchange for secret payments funneled through a network of trusts and entities. The scheme purportedly inflated the company’s costs for both leasing and purchasing properties, with millions of dollars in kickbacks distributed among the participants. The company discovered the scheme after a whistleblower report, conducted an internal investigation, and reported the matter to federal authorities.The United States District Court for the Eastern District of Virginia granted summary judgment in favor of the defendants on several claims, including those under the Racketeer Influenced and Corrupt Organizations (RICO) Act, fraud, unjust enrichment, and conversion, and partially on a civil conspiracy claim. The district court found that the company failed to establish the existence of a RICO enterprise, did not show injury to its business or property, and that equitable claims were precluded by the availability of legal remedies or the existence of contracts. The court also ruled that an attorney defendant could not be liable for conspiracy with his clients.The United States Court of Appeals for the Fourth Circuit reversed the district court’s summary judgment. The appellate court held that genuine disputes of material fact existed regarding the existence of a RICO enterprise, whether the company suffered financial harm, and the viability of the fraud, unjust enrichment, conversion, and civil conspiracy claims. The court clarified that the company was entitled to pursue legal and equitable remedies in the alternative and that the attorney’s potential liability for conspiracy could not be resolved on summary judgment. The case was remanded for further proceedings. View "Amazon.com, Inc. v. WDC Holdings LLC" on Justia Law