Justia Contracts Opinion Summaries

This case concerned a disagreement over a claim for flood damage submitted by Plaintiff-Respondent Creekstone/Juban I, LLC (“Creekstone”), a Delaware limited liability company, under a commercial property and casualty insurance policy issued by Defendant-Appellant XL Insurance America, Inc. (“XL Insurance”), a Delaware corporation. The Policy was issued to named insured MRMG Commercial and delivered to MRMG Commercial in Lufkin, Texas. According to the parties, though not evident from the record, Creekstone was one of 20 unrelated additional insureds who obtained coverage under the Policy, which covered over 100 properties in more than 20 states. The Louisiana Supreme Court granted certiorari review to resolve the question of whether La. R.S. 22:868(A)(2) prohibited the enforcement of the forum selection clause in dispute. The Court determined the statute did not prohibit enforcement of the forum selection clause to which these parties contractually agreed. Accordingly, the Supreme Court reversed the ruling of the trial court and remanded the matter to the trial court for further proceedings. View "Creekstone Juban I, LLC v. XL Insurance America, Inc." on Justia Law

The Supreme Court affirmed in part and vacated in part the judgment of the intermediate court of appeals (ICA) finding that no evidence was introduced at trial to support the jury's findings that Regal Capital Corporation (Regal Corp.) violated the terms of agreements of sale it entered into with Elesther Calipjo for two parcels of land, Regal Capital Co., LLC (Regal LLC) engaged in unfair and deceptive acts or practices, and Jack Purdy was the alter ego of Regal Corp. and Regal LLC, holding that the ICA's holding was error.Based on the alter ego finding, the jury determined that Purdy, too violated the agreements for the two properties and committed unfair and deceptive acts or practices. The Supreme Court held (1) there was evidence to support the jury's verdict that Regal Corp. violated the terms of the agreements, Regal LLC engaged in unfair and deceptive acts or practices, and Purdy was the alter ego of Regal Corp. and Regal LLC; and (2) the ICA erred when it reversed the circuit court's final judgment against Purdy on the breach of contract and unfair and deceptive acts or practices claims. View "Calipjo v. Purdy" on Justia Law

The Ninth Circuit Court of Appeals certified a question of Washington law to the Washington Supreme Court concerning premises liability. Shannon Adamson, an employee of the Alaska Marine Highway System (AMHS), fell approximately 15 feet when the passenger ramp at the Port of Bellingham's (Port) Bellingham Cruise Terminal (BCT) collapsed. The accident caused severe, life-changing injuries. The State of Alaska leased the BCT from the Port, allowing ferries to dock at the BCT and load and unload passengers and their vehicles. The Port elected to not implement an interlock device; when Adamson was operating the passenger ramp, slack was created in some attached cables. When she removed the locking pins, the ramp collapsed, snapped the cables, and Adamson and the ramp fell approximately 15 feet until the ramp caught on the ferry. Adamson and her husband sued the Port in federal court, alleging negligence and seeking damages for medical expenses, loss of wages, pain and suffering and loss of consortium. The federal court determined Adamson was the Port's business invitee; the jury returned a verdict in favor of Adamson and awarded over $16 million in damages. The court found the Port under three separate theories of liability: duty to a business invitee, duty as a landlord, and a promise to perform repairs under the lease contract. The issue presented to the Washington Supreme Court centered on whether a property owner-landlord was liable for injuries that occur on its property when the lessee has exclusive possession at the time of the accident but only priority use under the lease and the landlord has contracted to maintain and repair the premises. The Supreme Court answered the first certified question in the affirmative and consequently, did not address the second question. View "Adamson v. Port of Bellingham" on Justia Law

In this case concerning a boundary realignment agreement entered into between the parties in this case, the Supreme Court affirmed the order of the district court granting specific performance of a contract to Plaintiff, holding that the district court correctly determined that the cause of action was timely prosecuted by Plaintiff and that Plaintiff was entitled to specific performance of a contract.The district court ruled that Plaintiff was entitled to specific performance and dismissed Defendants' trespass claim. The Supreme Court affirmed, holding that the district court (1) did not err by concluding that Plaintiff's breach of contract claim was not barred by the relevant statute of limitation; (2) did not err by determining that Plaintiff was entitled to specific performance of the contract; and (3) properly dismissed Defendants' trespass claim. View "Miller v. Kleppen" on Justia Law

The Eighth Circuit affirmed an adverse order by the FAA's Office of Dispute Resolution for Acquisition (ODRA) regarding property Southern leased to the Administration. Southern subsequently sold the property and surrounding land to Prairie Land, assigning its lease with the FAA to Prairie Land. After the FAA refused to vacate the premises, Prairie Land initiated a contract dispute with the ODRA.The court held that the FAA's continued occupancy of the property was permitted, and the ODRA did not err by concluding that the holdover provisions permitted the FAA to holdover on the property until either a new lease was agreed upon or it acquired the property in fee. Therefore, the FAA was fully within its rights to continue possessing the property. View "Prairie Land Holdings, LLC v. FAA" on Justia Law

The Property of Unincorporated Associations Act, 765 ILCS 115/2, requires a labor union to notify its members and obtain their approval before entering into an agreement to lease or purchase real estate. The circuit court held that an agreement is enforceable despite a union’s failure to follow these requirements because the Act is silent as to the consequences of noncompliance. The appellate court affirmed. The Illinois Supreme Court reversed. Where a party lacks the legal authority to form a contract, the resulting contract is void ab initio. Absent compliance with the statutory prerequisites, an unincorporated association has no power to execute a valid real estate contract. The apparent authority doctrine is not relevant. A contract that is void ab initio is treated as though it never existed and, thus, cannot be enforced by either party. View "1550 MP Road LLC v. Teamsters Local Union No. 700" on Justia Law

The Supreme Court affirmed the judgment of the circuit court granting summary judgment against Petitioners in their action against Respondents based upon a coal lease agreement between the parties and granting summary judgment against Respondents’ counterclaim, holding that there was no error to the dismissal of the parties’ respective claims.In granting summary judgment against Petitioners, the circuit court concluded that Respondents had no obligation to diligently mine coal and did not have to make royalty payments based upon comparable sales by other mining companies. The circuit court also granted summary judgment against Respondents’ counterclaim seeking damages for Petitioners’ refusal to consent to an assignment or sublease of the coal lease and for alleged tortious interference with an asset agreement Respondents had with another company. The Supreme Court affirmed, holding that there was no error in the circuit court’s judgment. View "Bruce McDonald Holding Co. v. Addington Inc." on Justia Law

This case arose out of disputes between the parties involving a twelve year commercial lease of office space in Baltimore, Maryland. The Fourth Circuit held that the district court misconstrued the lease agreement and misapplied Maryland law in concluding that Montgomery Park had a duty to endeavor to relet the premises and minimize its damages as a condition precedent to recovering against NCO. The panel held that the lease agreement's language incorporated the common law mitigation-of-damages doctrine, which holds that a plaintiff cannot recover damages which it could have reasonably avoided. Therefore, Montgomery Park's recovery should only have been reduced by the amount of rent that NCO could demonstrate would have been recovered by reasonable efforts to re-let the space.The court also held that the district court, in evaluating the commercial reasonableness of Montgomery Park's mitigation efforts, applied the wrong standard. The court held that reasonable commercial efforts to mitigate damages did not require Montgomery Park to favor NCO’s space over other vacant space in the building, but rather, commercial reasonableness only required Montgomery Park to reasonably market NCO's space on an equal footing with the other spaces that it was seeking to rent. Accordingly, the court vacated the district court's judgment and remanded for further proceedings. View "NCO Financial Systems, Inc. v. Montgomery Park, LLC" on Justia Law

The Supreme Court reversed the order of the circuit court certifying as final the prior orders that granted summary judgment to Respondents in this civil action arising out of the modification of covenants pertaining to a residential subdivision developed by RJM Holdings, LLC, holding that the genuine issues of material fact precluded summary judgment.On appeal, Petitioners argued that the circuit court erred by granting summary judgment because genuine issues of material fact existed regarding whether Respondents were engaged in a joint venture with RJM to develop the subdivision and whether the corporate veils of the respondent businesses should be pierced to hold certain individuals personally liable. The Supreme Court agreed and reversed, holding that genuine issues of material fact existed with respect to the conduct of Respondents and the use of the various business entities to develop the subdivision. View "Dailey v. RJM Holdings, LLC" on Justia Law

The Supreme Court affirmed the district court’s order on summary judgment motions and order after bench trial in this dispute arising from an ill-conceived business conveyance plan during a downturn in the oil market, holding that the district court did not err or abuse its discretion in any respect.Three Garland brothers, who had separate entities providing specialized services to the oil industry, formed a company with their companies as members and the Garlands individually as members. Alex Mantle was president of the company. Mantle and the Garlands later entered into a memorandum of understanding (MOU) providing that Mantle and his wife would buy the company, but Mantle backed out of the deal. The Garlands liquidated the company, and this litigation followed. The district court disposed of some claims on summary judgment and resolved the remainder after a bench trial. The Supreme Court affirmed, holding (1) the Garlands and their entities did not abandon their counterclaims; (2) the MOU was an enforceable contract; (3) the district court correctly dismissed the Mantles’ fraud claim; (4) the district court correctly concluded that some conveyances by the Garlands fit the definitions of a fraudulent conveyance; (5) the elements for LLC veil-piercing were absent; and (6) the Garlands did not owe Mantle a duty of good faith. View "Garland v. Mantle" on Justia Law