Justia Contracts Opinion Summaries

Jeanne and Nevin Tergesen appealed a judgment dismissing their complaint and awarding Nelson Homes, Inc. damages for its breach of contract counterclaim. The Tergesens argued the district court erred in dismissing their rescission and breach of contract claims, and the court erroneously found the Tergesens breached the contract. After review, the North Dakota Supreme Court concluded the district court did not err in dismissing the Tergesens’ claims or finding the Tergesens breached the contract, but the court did err in calculating the amount of prejudgment interest on Nelson Homes’ damages. View "Tergesen, et al. v. Nelson Homes" on Justia Law

Gavora, Inc., a real estate company, acquired an existing long-term lease with a purchase option for a municipality-owned property. Dry-cleaning businesses operating on the property contaminated the groundwater both prior to and during the real estate company’s involvement. The municipality knew about, but did not disclose, groundwater contamination at nearby sites when the real estate company ultimately purchased the property. A state agency later notified Gavora and the municipality of their potential responsibility for environmental remediation. Gavora sued the municipality in federal district court; the federal court determined that the parties were jointly and severally liable for the contamination, and apportioned remediation costs. Gavora also sued the municipality in state court for indemnity and further monetary damages, alleging that the municipality had misrepresented the property’s environmental status during purchase negotiations. The superior court ruled in the municipality’s favor, finding the municipality did not actively deceive Gavora; Gavora had reason to know of the contamination; and all physical harm occurred before the sale. Gavora challenged all three findings. Finding no error, the Alaska Supreme Court affirmed the superior court’s decision. View "Gavora, Inc. v. City of Fairbanks" on Justia Law

The Supreme Court affirmed in part and reversed in part the decision of the court of appeals affirming in part and reversing in part the trial court's grant of summary judgment in favor of Defendants and dismissing Plaintiffs' claims for negligence, negligent misrepresentation, fraud, unfair and deceptive trade practices, breach of contract, breach of the implied covenant of good faith and fair dealing, and breach of fiduciary duty, holding that a trial was required as to certain claims.This case arose from a dispute surrounding the purchase of an oceanfront beach house by Plaintiffs. When Plaintiffs later discovered significant structural damages to the house arising from past water intrusion Plaintiffs brought this complaint. The trial court granted summary judgment in favor of Defendants. The trial court reversed in part and remanded the case for a trial on the merits on certain claims, holding that the court of appeals (1) correctly held that the trial court erred by granting summary judgment with respect to Plaintiffs' claims of negligence and fraud against Re/Max Community Brokers and Robert Carroll; and (2) erred by reversing the trial court's summary judgment in favor of Rudd & Associates, Inc., Brooke Rudd-Gaglie, and James Goodman as to Plaintiffs' breach of fiduciary claim. View "Cummings v. Carroll" on Justia Law

BGC secured a $3.1 million mortgage loan from Romspen for the Arlington commercial property. Following a Foreclosure Judgment but before the sale of the property, the parties negotiated an agreement. Romspen agreed to forbear from exercising remedies for 60 days and to reinstate the loan and extend the maturity date for two years. BGC agreed to make a $1.6 million payment on the loan. Meanwhile, BGC learned that Romspen had filed a lien against BGC’s 1907 property. BGC had planned to refinance the 1907 Property to make the payment on the Arlington property required by the Forbearance Agreement. Romspen agreed to make “commercially reasonable efforts” to remove the lien. When BGC failed to provide proof of a refinancing plan for the Arlington Property, Romspen refused to remove the lien on the 1907 Property.After the foreclosure sale of the Arlington Property, BGC sought to file a counterclaim alleging that Romspen had breached the Forbearance Agreement. Romspen sought an order confirming the sale of the property. The Seventh Circuit confirmed the denial of BGC’s motion and the sale of the Arlington Property. Romspen did not breach the Forbearance Agreement because it made “commercially reasonable efforts” to remove the lien on the 1907 Property. Romspen was on solid ground in requesting some concrete proof of BGC's refinancing efforts before agreeing to remove the lien. View "Romspen Mortgage L.P. v. BGC Holdings LLC - Arlington Place One" on Justia Law

Brett Deslonde appealed the grant of summary judgment entered in favor of Nationstar Mortgage, LLC, doing business as Mr. Cooper ("Nationstar"), and The Bank of New York Mellon, as trustee for Nationstar Home Equity Loan Trust 2007-C ("BNYM"), on Deslonde's claim seeking reformation of a loan-modification agreement on the ground of mutual mistake. In December 2006, Deslonde purchased real property in Fairhope, Alabama with a loan from Nationstar. Deslonde subsequently defaulted on his mortgage payments and applied for a loan modification through Nationstar's loss-mitigation program. By letter dated February 2014, Nationstar notified Deslonde that he had been approved for a "trial period plan" under the federal Home Affordable Modification Program ("the federal program"). Under the federal program, Deslonde was required to make three monthly trial payments in the amount of $1,767.38 and to submit all required documentation for participation in the program, including an executed loan-modification agreement. In July 2014, Nationstar informed Deslonde that his request for a loan modification under the federal program had been denied because he had not returned an executed loan-modification agreement or made the trial payments. That letter informed Deslonde that there were other possible alternatives that might be available to him if he was unable to make his regular loan payments. Deslonde submitted a second application package for loss mitigation in October 2014. Under the executed modification agreement from the second application, Deslonde made monthly payments sufficient to cover only interest and escrow charges on the loan. The loan-modification period, however, expired in November 2016, at which time the monthly payments reverted to the premodification amount so as to include principal on the loan. After the loan-modification period expired, Deslonde made three additional monthly payments, but he then ceased making payments altogether. In an attempt to avoid foreclosure, Deslonde filed a complaint against Nationstar and BNYM in the Baldwin Circuit Court ("the trial court"), requesting a temporary restraining order enjoining foreclosure of the mortgage, a judgment declaring the parties' rights under the executed modification agreement, and reformation of the executed modification agreement on the ground of mutual mistake. Finding that the trial court did not err in granting summary judgment in favor of Nationstar and BNYM, the Alabama Supreme Court affirmed. View "Deslonde v. Nationstar Mortgage, LLC, d/b/a Mr. Cooper et al." on Justia Law

MAPS Hotel and Resorts One LLC (the “Buyer”) agreed to purchase fifteen hotel properties from AB Stable VIII LLC (the “Seller”) for $5.8 billion. In response to the pandemic and without securing the Buyer’s consent, the Seller made drastic changes to its hotel operations, due in part to the damage the pandemic inflicted on the hospitality industry. The transaction was also plagued by problems with fraudulent deeds covering some of the hotel properties. The Buyer eventually called off the deal, relying on the Seller’s failure to comply with the sale agreement. The Seller sued in the Delaware Court of Chancery to require the Buyer to complete the transaction. The Court of Chancery concluded that the Buyer could terminate the sale agreement because the Seller breached a covenant and a condition in the sale agreement. According to the court, the Seller violated the ordinary course covenant by failing to operate in the ordinary course of its business - closing hotels, laying off or furloughing thousands of employees, and implementing other drastic changes to its business - without the Buyer’s consent. Additionally, a condition requiring title insurance for the hotel properties failed because the title insurers’ commitment letters had a broad exception covering the fraudulent deeds, and the Buyer did not cause the failure. On appeal, the Seller argued it satisfied the Ordinary Course Covenant because the covenant did not preclude it from taking reasonable, industry-standard steps in response to the pandemic; the court’s ruling negated the parties’ allocation of pandemic risk to the Buyer through the Material Adverse Effect provision; and its breach of the notice requirement in the covenant was immaterial. The Seller also claimed the Court of Chancery gave too expansive a reading to the exception in the title insurance condition, or, alternatively, that the court incorrectly found that the Buyer did not contribute materially to its breach. The Delaware Supreme Court affirmed the Court of Chancery’s judgment, finding the court concluded correctly that the Seller’s drastic changes to its hotel operations in response to the COVID-19 pandemic without first obtaining the Buyer’s consent breached the ordinary course covenant and excused the Buyer from closing. Because the Seller’s failure to comply with the ordinary course covenant was dispositive of the appeal, the Supreme Court did not reach whether the Seller also breached the title insurance condition. View "AB Stable VIII LLC v. Maps Hotels and Resorts One LLC" on Justia Law

Sandra Gleason filed suit against Charles Halsey and Jim McDonough d/b/a Jim McDonough Home Inspection ("McDonough"), seeking to recover for damage that Gleason allegedly incurred as a result of defendants' allegedly negligent and/or fraudulent conduct associated with Gleason's purchase of a house from Halsey and McDonough's inspection of the house. Although Gleason's claims against Halsey and McDonough involve different legal theories, the issue underlying the claims was essentially the same: whether the house was inspected. The issue underlying Gleason's claims against Halsey was whether McDonough's inspection of the house could be credited to Gleason for purposes of determining whether Gleason may assert an argument under the health or safety exception to the doctrine of caveat emptor; the issue underlying Gleason's claims against McDonough appeared to be whether McDonough owed Gleason a duty in inspecting the house or in consulting with Gleason as she personally inspected the house. The Alabama Supreme Court found that Gleason's claims against Halsey, the judgment on which was certified as final under Rule 54(b), and Gleason's claims against McDonough that remain pending in the circuit court "are so closely intertwined that separate adjudication would pose an unreasonable risk of inconsistent results." As a result, the Court concluded that the circuit court exceeded its discretion in certifying the June 23, 2021, order granting Halsey's summary-judgment motion as final. The Court therefore dismissed the appeal. View "Gleason v. Halsey" on Justia Law

The Supreme Court affirmed the ruling of the district court that the contractual default interest rate applied in this dispute over the redemption of farmland and affirmed the court of appeals' decision requiring timely full payment of the amount necessary, holding that remand was required in this case.An attorney representing an investor underpaid the amount necessary to redeem farmland by at least $1,798 below the minimum owed. After concluding that the redemption was timely the district court resolved the parties' dispute over the interest rate by ruling that the contract default rate of twenty-one percent controlled, not the 4.25 percent nondefault rate. The court of appeals affirmed the twenty-one percent interest rate but concluded that the attempted redemption was untimely. The Supreme Court affirmed the judgment of the court of appeals and declined to grant equitable relief, holding that the court of appeals correctly held that the attempted redemption failed as untimely. View "Great Western Bank v. Clement" on Justia Law

Tax sharing agreements between the County of San Benito and the City of Hollister require the city to pay the county a fixed fee (the “Additional Amount”) for each residential unit constructed on land that is annexed into the city from the county. Plaintiff entered into development agreements with the city to build residential units on land subject to the city-county tax sharing agreements, and agreed to satisfy certain obligations from the tax sharing agreements, but sued the city and the county seeking a declaration that payment of the Additional Amount is not among plaintiff’s obligations.The court of appeal affirmed a defense judgment. The plaintiff agreed to pay the city the Additional Amount fees as part of the development agreements. Nothing in the tax sharing agreement suggests that obligations created by it would cease to exist merely because a project annexed during its effective period was not constructed until after the agreement expired. The court rejected the plaintiff’s argument that because the Additional Amount is an obligation of the city to the county under the tax sharing agreement, it cannot be a “Developer’s obligation.” The reference to “Developer’s obligations” in the development agreement did not mean only the capital improvement and drainage fees discussed in the tax sharing agreement; the term includes the Additional Amount. View "Award Homes, Inc. v. County of San Benito" on Justia Law

A tax-sharing agreement between the County of San Benito and the City of Hollister requires the city to pay the county a fixed fee (Additional Amount) per residential unit constructed on land annexed into the city from the county during the period covered by that agreement. Plaintiff’s predecessor entered into an annexation agreement with the city, agreeing to comply with “all applicable provisions” of that tax sharing agreement. When the plaintiff purchased the annexed land and sought to develop it into subdivisions, the city informed the plaintiff that it was liable for the Additional Amount fees. Plaintiff paid the fees under protest, then sued, seeking a declaration of its rights and duties under various written instruments.The court of appeal affirmed a defense judgment. Plaintiff is contractually liable for the Additional Amount by the terms of the annexation agreement. Any challenge to the calculation of the Additional Amount is beyond the scope of a declaratory relief action and time-barred. The court rejected the plaintiff’s arguments that neither the annexation agreement nor the tax sharing agreement requires the plaintiff to pay the Additional Amount and that the fees violate the Mitigation Fee Act and federal constitutional constraints on development fees as monetary exactions. View "BMC Promise Way, LLC v. County of San Benito" on Justia Law