Justia Contracts Opinion Summaries

Land Holdings I, LLC, d/b/a Scarlet Pearl, LLC (“Casino”), sought to expunge a lien filed by GSI Services, LLC (“GSI”). The chancellor denied the Casino’s petition to expunge the lien because GSI performed work at the Casino within ninety days of filing its lien. Finding no error, the Mississippi Supreme Court affirmed the chancellor’s order. View "Land Holdings I, LLC d/b/a Scarlet Pearl, LLC v. GSI Services, LLC" on Justia Law

Tenant filed suit against landlord and others after landlord rejected tenant's offer to purchase the building tenant rented for his audio recording business. Landlord ultimately sold the building to a third party because the offer was for considerably more money.The Court of Appeal affirmed the dismissal of the action and held that a right of first refusal is not an essential term that carries forward into a holdover tenancy unless the parties so indicate. In this case, there was no such indication and tenant's alternative theories for enforcing the right to first refusal lacked merit. View "Smyth v. Berman" on Justia Law

In this action involving a Texas mortgage dispute, the Fifth Circuit held that there was ambiguity in the contract's escrow provisions and thus the district court erred by granting summary judgment to defendants on claims arising from that ambiguity. The court noted that, at this stage, it was premature to conclude that defendants were entitled to their foreclosure counterclaim. Therefore, the court vacated the foreclosure ruling and remanded for reconsideration. The court affirmed the district court's grant of summary judgment for defendants on the Real Estate Settlement Procedures Act claim, and the district court's judgment on the Texas Debt Collection Practices Act claim. View "Wease v. Ocwen Loan Servicing, LLC" on Justia Law

The owners of units in Sienna Court Condominiums, a newly-constructed 111-residential-unit Evanston property sued, alleging that the developer, TR, sold the units with latent defects that resulted in water infiltration and other conditions that rendered the individual units and common areas unfit for habitation. The complaint alleged breach of an express warranty and breach of an implied warranty of habitability against TR, the general contractor, the architect and engineering design firms, material suppliers and several subcontractors. TR and the general contractor were bankrupt. The unit owners obtained relief from the automatic bankruptcy stay. TR and the general contractor had two separate insurance policies, each providing coverage of $1 million per occurrence with $2 million aggregate limits. Plaintiffs had recovered approximately $308,000 from TR through a warranty escrow fund required by Evanston ordinance. Subcontractors and the material suppliers asserted that they were not subject to an implied warranty of habitabililty. The circuit court denied their motion to dismiss. The Illinois Supreme Court reversed, holding that a purchaser of a newly constructed home may not assert a claim for breach of an implied warranty of habitability against a subcontractor who took part in the construction of the home, where the subcontractor had no contractual relationship with the purchaser. View "Sienna Court Condominium Assoc. v. Champion Aluminum Corp." on Justia Law

The Supreme Court affirmed the decision of the dismissing The Institute of Range and the American Mustang’s (IRAM) lawsuit seeking to void a seventeen-year-old deed of conservation easement and to quiet title to its property, holding that the circuit court did not err in granting summary judgment in favor of The Nature Conservancy on IRAM’s claims.Specifically, the Court held (1) because the statute of limitations expired more than six years prior to IRAM’s suit, the circuit court did not err in granting The Nature Conservancy summary judgment on IRAM’s fraud claim; (2) summary judgment was properly granted on IRAM’s ultra vires claim and claim to vacate deed for no meeting of the minds; and (3) the circuit court did not err in granting The Nature Conservancy summary judgment on IRAM’s claim to vacate the deed for failure of consideration. View "Institute of Range & American Mustang v. Nature Conservancy" on Justia Law

The issue raised on appeal in this matter centered on a trespass claim by Plaintiffs-Appellants Marvin and Mildred Bay that Defendants-Appellees Anadarko E&P Onshore LLC and Anadarko Land Corp. (together, “Anadarko”), that through a lessee, exceeded the scope of an easement by using excessive surface land to drill for oil and gas. The district court had diversity jurisdiction over the case and entered final judgment against the Bays pursuant to Federal Rule of Civil Procedure 54(b). The Tenth Circuit was presented with an issue of whether a deed reserving mineral rights in land (and the specific right to use the surface as “convenient or necessary” to access the minerals) requires applying a different test than the one prescribed in Gerrity Oil & Gas Corp. v. Magness, 946 P.2d 913 (Colo. 1997), to evaluate whether the mineral owner’s use of land constitutes a trespass. The Court concluded it did not, and reversed and remanded for further proceedings. View "Bay v. Anadarko E&P Onshore" on Justia Law

Trustee Annette Besaw held a security interest in fifty shares of stock of the Champlain Bridge Marina, Inc. She acquired the interest previously held by Ernest Giroux upon his death, in her capacity as trustee of his living trust. Champlain Bridge Marina was a family business in Addison, Vermont. Ernest (defendant Bryan Giroux’s grandfather) and Raymond Giroux (defendant’s father) started it in 1987. In the beginning, grandfather and father each owned fifty of the Marina’s 100 shares. On December 30, 1998, grandfather sold his fifty shares to father in exchange for the promissory note in which father promised to pay grandfather $272,000 plus interest. The associated January 1, 1999 security agreement gave grandfather a security interest in the fifty shares of Marina stock to secure payment on the note. Trustee appealed the superior court’s ruling on summary judgment that her suit to recover collateral under a security agreement was time-barred. The central issue in this case was when the trustee’s right to sue accrued, starting the statute-of-limitations clock. The Vermont Supreme Court concluded trustee’s right to sue under the security agreement accrued in 2013 when the borrower failed to pay the balance due on the note within forty-five days of trustee’s notice of default and borrower’s right to cure. Accordingly, the suit was not time-barred; the Court reversed and remanded. View "Besaw v. Giroux" on Justia Law

This appeal concerned a dispute over which party to a failed commercial real estate sale is entitled to the buyer’s deposit. The seller, 913 Market, LLC, claims that it was entitled to the deposit because the buyer failed to close the deal on the agreed date, and brought this action against the buyer claiming breach of contract and seeking a declaratory judgment regarding its rights under the purchase agreement. The buyer, Kamal Bathla, made two reasons why the deposit is rightfully his: (1) 913 Market could not convey title free and clear of all liens and encumbrances, as required by the purchase agreement, due to potential claims by a previous potential buyer of the building that had also failed to close; and (2) one of the conditions precedent was not satisfied because the title insurance commitment he received contained an exception, relating to litigation risk from the previous potential buyer, that did not exist in 913 Market’s existing title insurance policy. In either case, Bathla maintained, he was relieved of any obligation to close, and therefore had a right to get his money back. The Superior Court granted summary judgment for 913 Market. In rejecting Bathla’s first argument, the court reasoned that potential claims by the previous failed buyer did not cloud title because the previous buyer “had not perfected (nor did it seek to perfect) a lis pendens claim.” In rejecting Bathla’s second argument, the court read the purchase agreement as establishing a test based not on “what exceptions the Purchaser’s title insurance carrier might insist upon,” but rather on “whether Seller was able to convey satisfactory title, which it did.” The Delaware Supreme Court affirmed the Superior Court’s decision. "Contrary to Bathla’s exhortations, the mere possibility that a previous potential buyer who failed to close might later claim an interest in the building does not constitute a lien or encumbrance under the purchase agreement, and the condition precedent identified by Bathla does not require that he obtain a title commitment with exceptions that mirror those of 913 Market’s existing policy. And ultimately, the basic premise of Bathla’s case - that there was a genuine risk that the previous potential buyer would sue Bathla over the property - is implausible and does not provide a basis under the contract to avoid the obligation to close." View "Bathla v. 913 Market, LLC" on Justia Law

The Supreme Court answered two state-law questions from the Bankruptcy Appellate Panel for the United States Sixth Circuit Court of Appeals by holding that the failure to identify a person who has initialed, signed, and acknowledged a mortgage agreement by name in the body of the agreement does not render the agreement unenforceable as a matter of law against that signatory.The panel specifically asked whether a mortgage is invalid and unenforceable against a signatory who is not identified by name in the body of the mortgage agreement. The Supreme Court answered in the negative, holding that, as a matter of general contract interpretation, it is possible for a person who is not identified in the body of the mortgage, but who has signed and initiated the mortgage, to be a mortgagor of her interest. View "Bank of New York Mellon v. Rhiel" on Justia Law

Montecito neighbors had a dispute over an easement created by recording in 1994, which contained an unpaved road. The owner of the burdened property wanted the easement limited to historical use; a new owner of the other property wanted to use the road for construction traffic and asserted that he might pave the road. The trial court “interpreted” the easement, ruled that the easement was ambiguous, decided the case based upon extrinsic evidence of historic use, and added language limiting the easement. The court of appeal reversed and remanded with directions, noting that the use of the easement for construction traffic has become a moot issue. An ambiguity is not apparent from the “failure” to specify how frequently the road can be used or the type of vehicle allowed on the road, but ambiguity is not the test for admission of extrinsic evidence. A bona fide purchaser could reasonably rely on the language of the grant of the easement, which gave him “a use limited only by the requirement that it be reasonably necessary and consistent with the purpose[] for which the easement was granted,” i.e., “access, ingress, and egress to vehicles and pedestrians.” View "Zissler v. Saville" on Justia Law