Justia Contracts Opinion Summaries

David Platt and Steven Held purchased a ranch together and formalized their arrangement by entering into an operating agreement. Later, Held, Platt, and Tim Welu decided to divide the property into three parts, with each party owning 2,000 acres. After the land sale, all the parties entered into a recorded agreement. Later, the relationships soured. When Held refused to grant an easement across his property to Platt, Platt initiated this lawsuit, alleging easement by express grant, prescription and implication, and praying for reformation of the contract due to mutual mistake and fraud. Welu intervened, seeking reformation and alleging that the recorded agreement did not express the intent of the parties regarding usage. The district court reformed the recorded agreement consistent with its determination that the parties intended to grant each other non-exclusive, non-transferrable licenses to use each other’s property. The court granted a written, express easement in favor of Welu and Platt. The Supreme Court affirmed, holding that the district court did not err by (1) concluding that Platt and Welu’s mutual mistake claims were not barred by the statute of limitations; and (2) considering extrinsic evidence to interpret and reform the parties’ contract. View "Platt v. Held" on Justia Law

John Hoehn ("John") and his wife, Margaret, jointly owned the Foley Flea Market in Foley, Alabama ("the property"). In 2009, John, Margaret, and Roman Fitzpatrick (John and Margaret’s daughter) entered into an agreement to sell John's "1/2 undivided interest in the property" to Fitzpatrick and her then-husband, Paul Kihano. The agreement specified that Margaret would "retain her 1/2 undivided interest in the property." The agreement stated that Fitzpatrick and Kihano "shall be entitled to enter into possession of [the] property so long as [they are] not in default in the performance of [the agreement]." The agreement also made clear that title to John's "1/2 undivided interest in the property" would not pass to Fitzpatrick and Kihano until all the payments had been made under the agreement. John executed a quitclaim deed conveying his one-half interest in the property to Margaret; the quitclaim deed made no mention of the agreement. In 2013, Margaret changed the locks on the property so that Fitzpatrick could no longer access the property or operate the flea market. Fitzpatrick quit making payments under the agreement in December 2013. Fitzpatrick, with her sisters, initiated this lawsuit against Margaret, Kihano, and Mixon alleging intentional interference with a contract and intentional interference with business relations; against John's estate, breach of contract; and against Margaret, Kihano, and Mixon, tortious interference with an inheritance. In case no. 1160393 (Margaret's cross-appeal of the circuit court's judgment in favor of Fitzpatrick on Fitzpatrick's claims of interference with a contract and intentional interference with business relations), the Alabama Supreme Court reversed judgment in favor of Fitzpatrick and rendered judgment in favor of Margaret. In case no. 1160348 (Fitzpatrick's appeal of the amount of Fitzpatrick's compensatory-damages award and the circuit court's judgment in favor of Margaret on Margaret's counterclaim against Fitzpatrick), the Supreme Court dismissed the appeal as moot insofar as Fitzpatrick challenged the compensatory-damages award and affirmed the judgment on Margaret's counterclaim. View "Fitzpatrick v. Hoehn" on Justia Law

Dickinson Elks Building, LLC, appealed a judgment awarding Rick and Janan Snider, doing business as RJ Snider Construction ("RJ Snider"), $198,255.08 for unjust enrichment and quantum meruit claims. In 2011, RJ Snider contracted with Granville Brinkman to furnish materials and labor for construction work on real property owned by Dickinson Elks. RJ Snider's principal place of business was located in Washington. In 2012, RJ Snider applied for a contractor license from the North Dakota Secretary of State, and the license was issued on in February 2012. RJ Snider provided services and materials for Dickinson Elks' property from December 26, 2011, to November 30, 2012. Dickinson Elks paid RJ Snider for all of the services and materials it provided between December 26, 2011, and February 1, 2012. RJ Snider billed Dickinson Elks $174,642.10 for the services and materials it provided from March 15, 2012, until November 30, 2012. Dickinson Elks did not pay any of this amount. In January 2013, RJ Snider recorded a construction lien against Dickinson Elks' property. In May 2014, Dickinson Elks served RJ Snider with a demand to start a lawsuit to enforce the lien and record a lis pendens within 30 days of the demand. RJ Snider sued Dickinson Elks in June 2014, seeking foreclosure of the construction lien and a money judgment. RJ Snider recorded a notice of lis pendens on July 28, 2014. Dickinson Elks moved for summary judgment, arguing RJ Snider's complaint should be dismissed under N.D.C.C. 43-07-02 because RJ Snider was not a licensed contractor when it started work on the property. Dickinson Elks also argued RJ Snider did not have a valid construction lien, because RJ Snider did not record a lis pendens within 30 days of receiving the demand to enforce the lien. The district court partially granted the motion and entered a judgment forfeiting RJ Snider's construction lien because RJ Snider did not record a lis pendens within 30 days of receiving Dickinson Elks' demand to enforce the lien as required under N.D.C.C. 35-27-25. The court concluded RJ Snider's claims were not precluded under N.D.C.C. 43-07-02. RJ Snider amended its complaint, claiming it was entitled to a money judgment against Dickinson Elks under the principles of quantum meruit and unjust enrichment. The North Dakota Supreme Court concluded RJ Snider was not precluded from maintaining its claims; however, the Court reversed and remanded for the district court to determine whether any of the damages awarded were for services and materials provided before RJ Snider was licensed. View "Snider v. Dickinson Elks Building, LLC" on Justia Law

FWP and its designees filed suit against Chesapeake and related entities to recover payment allegedly due under a provision of a Surface Use Agreement governing Chesapeake's use of FWP's land. The Fifth Circuit affirmed the judgment of the district court determining that the payment provision was a covenant that ran with the surface of the land and that FWP accordingly forfeited the benefit of this covenant when it sold that land. Because FWP consequently forfeited its right to payment under this paragraph when it sold the surface of the land at issue to Chesapeake, the court did not address the district court's alternative holding. View "Fort Worth 4th Street Partners v. Chesapeake Energy Corp." on Justia Law

FWP and its designees filed suit against Chesapeake and related entities to recover payment allegedly due under a provision of a Surface Use Agreement governing Chesapeake's use of FWP's land. The Fifth Circuit affirmed the judgment of the district court determining that the payment provision was a covenant that ran with the surface of the land and that FWP accordingly forfeited the benefit of this covenant when it sold that land. Because FWP consequently forfeited its right to payment under this paragraph when it sold the surface of the land at issue to Chesapeake, the court did not address the district court's alternative holding. View "Fort Worth 4th Street Partners v. Chesapeake Energy Corp." on Justia Law

EvaBank appealed the grant of summary judgment in favor of Traditions Bank, TBX Title, Inc., and Terry Williams. In 2013, EvaBank customers William Michael Robertson and Connie Robertson, entered into a purchase agreement with Terry Williams, pursuant to which Williams agreed to purchase the Robertsons' property located on County Road 35 in Hanceville ("the property"). EvaBank held two mortgages on the property. Williams financed his purchase through Traditions Bank. TBX Title, a Traditions Bank subsidiary, acted as the closing agent for the real-estate transaction. EvaBank faxed Traditions Bank the payoff statement for the wrong EvaBank customer, Michael Roberson, with an address in Moulton, Alabama. TBX Title closed the real-estate transaction between the Robertsons and Williams. Traditions Bank thereafter delivered a check to EvaBank; EvaBank accepted and negotiated the check and applied the proceeds to the loan of Michael Roberson. TBX Title wired the net sales proceeds from the closing to the Robertsons. TBX Title recorded the warranty deed and mortgage and mailed the deed to Williams. When EvaBank contacted William Robertson about his loan being past due; Robertson responded that the loan should have been paid off at the closing with the proceeds from the sale. EvaBank learned at this point that there was a problem with the payoff statement it had provided. EvaBank sent Traditions Bank an e-mail explaining its mistake and noting that it had made a demand upon William Michael Robertson to pay the remaining balance due on the EvaBank mortgages but that Robertson had refused. Accordingly, EvaBank informed Traditions Bank that it would not release it mortgages encumbering the Robertsons' property until the balance on the loan they were securing had been fully satisfied. Traditions Bank sued EvaBank, asserting a claim of slander of title and seeking a judgment declaring that it was the first lienholder on the property. All parties moved for a summary judgment. The trial court entered judgment in favor of Traditions Bank and TBX Title, on the basis of equitable estoppel, on the claims involving those parties and dismissed all other claims. The Alabama Supreme Court determined that Traditions Bank and TBX Title were on notice of one or more discrepancies between the payoff statement and the closing documents, which, through the exercise of due diligence, would have revealed the fact that the payoff statement was not for the loan secured by the Evabank mortgages encumbering the property being sold by the Robertsons. Therefore, the Court concluded as a matter of law, that Traditions Bank and TBX Title's reliance on the payoff statement, without further inquiry, was not reasonable. Accordingly, they could not rely on estoppel as a basis on which to claim a priority interest in the property. View "Evabank v. Traditions Bank, et al." on Justia Law

A “pickle line” processes hot rolled steel coil through acid tanks to remove impurities. In 2006, Toll purchased a used pickle line, in need of repair. Kastalon had previously serviced the machine. In 2008, Kastalon agreed to move and store the machine, at no cost, until Toll could order reconditioning. Both parties believed that Toll would move the equipment within months; they did not discuss a specific timeframe. For two years, Kastalon stored the equipment indoors. Toll negotiated with various companies, to run or sell the equipment, but was not in communication with Kastalon. Kastalon eventually greased and wrapped the equipment before moving it to outside storage under tarps. Toll employees with whom Kastalon had communicated were laid off. Kastalon thought that Toll had gone out of business and that the equipment had been abandoned. Kastalon had the equipment scrapped, without inspecting it, and received $6,380.80. In June 2011, Toll requested a price for reconditioning and learned that they had been scrapped. Toll obtained quotes for replacement: the lowest was about $416,655. Toll sued. The Seventh Circuit reversed, in part, summary judgment entered in favor of Kastalon. A reasonable jury could conclude that Toll’s prolonged silence, alone, did not constitute unambiguous evidence of intent to abandon. The court did not consider whether Kastalon had an extra-contractual duty not to dispose of the equipment or Kastalon’s evidence that the loss was not due to Kastalon’s failure to exercise reasonable care. Affirming rejection of a contract claim, the court stated the parties’ oral agreement was not sufficiently definite as to duration. View "Toll Processing Services, LLC v. Kastalon, Inc." on Justia Law

Plaintiff filed suit against defendant for causes of action arising out of defendant's breach of contract, and for fraud. Plaintiff and defendant had entered into a contract under which plaintiff paid the purchase price for a Malibu residence to be held by defendant as the "nominal owner." The trial court rejected plaintiff's fraud claim, but found that defendant had breached the contract. The trial court denied plaintiff's request for rescission, but ordered that the property be sold and the proceeds apportioned between the parties in accordance with the contract. The Court of Appeal held that the trial court did not err by granting plaintiff relief based on defendant's breach of contract; defendant's challenge to particular provisions of the judgment were rejected; and plaintiff's appeal from an order denying his motion for leave to amend was moot. Accordingly, the court affirmed the judgment. View "Guan v. Hu" on Justia Law

This case involved an implied covenant to market gas. Energen owned and operated oil and gas wells in the San Juan Basin in northwestern New Mexico and southern Colorado. Its wells were subject to leases and other agreements (many of which were quite old) requiring it to pay a monthly royalty or overriding royalty on production to the Anderson Living Trust, the Pritchett Living Trust, the Neely-Robertson Revocable Family Trust (N-R Trust), and the Tatum Living Trust. Believing Energen was systematically underpaying royalties, the Trusts filed a putative class action complaint against it. The New Mexico Trusts claimed Energen was improperly deducting from their royalties their proportionate share of (1) the costs it incurs to place the gas produced from the wells in a marketable condition (postproduction costs) and (2) a privilege tax the State of New Mexico imposes on natural gas processors (the natural gas processors tax). They also alleged Energen had not timely paid royalties or interest thereon, as required by the New Mexico Oil and Gas Proceeds Payments Act. Both the New Mexico Trusts and the Tatum Trust further claimed Energen was wrongfully failing to pay royalty on the gas it used as fuel. The district judge dismissed the New Mexico Trusts’ marketable condition rule claim for failure to state a claim under Fed. R. Civ. P. 12(b)(6) and entered summary judgment in favor of Energen on the remaining claims. All of the Trusts appealed those judgments. For the most part, the Tenth Circuit agreed with the district court. The Tenth Circuit’s analysis differed from that of the district court relating to: (1) the fuel gas claims made by the N-R Trust and Tatum Trust; and (2) the New Mexico Trusts’ claim under the New Mexico Oil and Gas Proceeds Payments Act. As to the former, the N-R Trust’s overriding royalty agreement required royalty to be paid on all gas produced, including that gas used as fuel. And the Tatum Trust’s leases explicitly prohibited Energen from deducting post-production costs (Energen treats its use of the fuel gas as an in-kind postproduction cost). Moreover, the “free use” clauses and royalty provisions in the Tatum Trust’s leases limited the free use of gas to that occurring on the leased premises. Because use of the fuel gas occurred off the leased premises, Energen owed royalty on that gas. With regard to the latter, the district court was right in permitting Energen to hold funds owed to the N-R Trust in a suspense account until a title issue concerning a well was resolved in favor of that Trust. However, the district court did not address whether the N-R Trust was entitled to statutory interest on those funds. It was so entitled, yet the current record (at least in the Tenth Circuit’s analysis) did not show interest to have been paid on the funds. View "Anderson Living Trust v. Energen Resources" on Justia Law

The doctrine of equitable conversion operates to protect a buyer’s interest in the land from the time a land sales contract is capable of being specifically enforced by the buyer. The Utah Supreme Court affirmed the district courts judgment that the seller's creditor was unable to attach a judgment lien to land that the seller had already entered into a real estate purchase contract to sell. In this case, the real estate purchase contract was an executory real estate contract and, as such, it was subject to the equitable conversion doctrine. View "SMS Financial v. CCB, LLC" on Justia Law