Justia Contracts Opinion Summaries

In order to recover attorney’s fees against a negligent title searcher using the collateral litigation doctrine, the plaintiff must show that the title searcher’s negligence proximately caused the plaintiff to file a necessary collateral action, resulting in the plaintiff incurring reasonable litigation costs necessarily and in good faith, and that the plaintiff has not otherwise received compensation for those costs.The Ochses purchased property from the Henrys. The Ochses later learned that a encumbrance bisecting their lot was part of a strip of land that had been granted to Dorchester County. Prior to this discovery, the Ochses filed a lawsuit against the Henrys to quiet title. The Ochses later filed a lawsuit against Chicago Title Insurance Company and Eastern Shore Title Company (ESTC), the title examiner, alleging breach of contract and negligence. The trial court found in favor of the Ochses and awarded a $215,710 against ESTC and Chicago Title, which was the amount of the attorney’s fees awarded to the Ochses in the Henry litigation. The trial court subsequently reduced its judgment against ESTC and Chicago Title by $215,710. The Court of Appeals affirmed, holding that the trial court did not err by reducing the damages awarded to the Ochses by the amount previously satisfied by the Henrys. View "Eastern Shore Title Co. v. Ochse" on Justia Law

Landowners appealed from an order of the district court granting summary judgment to the City of Lewistown and allowing the City to annex portion of the Landowners’ properties. The Supreme Court affirmed, holding that the district court did not err in (1) concluding that the City followed the statutory annexation requirements of Title 7, chapter 2, part 43, Mont. Code Ann.; (2) concluding that the City had correctly determined that there were less than a majority of valid protests; (3) concluding that the Landowners were not denied equal protection of the law by the City’s decision of what properties to annex; and (4) concluding that the Landowners lacked standing to enforce a contract between the City and a subdivision developer. View "St. John v. Lewistown" on Justia Law

Plaintiff Fat Bullies Farm, LLC (Fat Bullies), and the counterclaim defendants, Donald Gould and Peter Simmons, appealed certain superior court findings and rulings made during the course of litigation with defendants Alan and Donna Perkins and Lori and Bret Devenport, involving the sale of a 3.1 acre horse farm in North Hampton known as Runnymede Farm. When the Devenports purchased the property in 1998, they promised to operate it as a horse farm in perpetuity, and to allow the former owner to maintain an office on site. Simmons told the Devenports that he was interested in purchasing the property. The Devenports told Simmons they would only sell if the buyer agreed to the horse farm and on site office conditions. Simmons spoke with Gould about purchasing the property jointly with the intent to develop and/or resell it. The two created Fat Bullies “for the purpose of acquiring real estate for development or resale.” After amendments to the purchase contract, the Devenports reiterated that they would sell the property only if Fat Bullies committed to operating it as a horse farm. Despite their intentions to develop the property, Simmons and Gould agreed. The parties executed a sales agreement. No payment had been made on the property; word got back to Lori Devenport that Simmons had talked to others in North Hampton about purchasing the farm. The Devenports rescinded the agreement, believing Simmons lied to them about promising to operate Runnymede as a horse farm. Fat Bullies invoked an option, but the Devenports refused to sell. In 2011, the Devenports sold Runnymede to the Perkinses. After trial, the jury returned a verdict in favor of the Devenports on Fat Bullies’ breach of contract claim, finding that Fat Bullies failed to prove the existence of a contract by a preponderance of the evidence, and a verdict in favor of Fat Bullies, Simmons, and Gould on the Devenports’ fraudulent inducement claim. The New Hampshire Supreme Court reversed the trial court with respect to a Consumer Protection Act violation decision; the Court reversed with respect to attorney fees related to that Act decision. The Court affirmed in all other respects, and remanded for further proceedings. View "Fat Bullies Farm, LLC v. Devenport" on Justia Law

In 2013, Herman Kauk, Sr. and Cletis Kauk ("Sellers") contracted to sell land to Herman Kauk, Jr. and Christy Kauk ("Buyers"). The property was known to the parties as “Walter’s Quarter.” The Buyers had their attorney draft a new version of the Sellers’ contract. This version was entitled "Extension of Purchase Agreement" and specified the new closing date. Notably, the new version removed language that granted an option to sell another piece of property, “Katie’s Quarter.” The parties signed the contract. Shortly thereafter, the Sellers sent the Buyers a letter “Notice of Cancellation of Option to Purchase Additional Land." The Sellers executed a Notice of Contract for Deed with the county recorder naming a third party as grantee of the option property. The Buyers filed a complaint on August 10, 2015 requesting a declaratory judgment that the option to purchase "Katie's Quarter" was still valid. Both Buyers and Sellers testified at trial. At trial, both parties acknowledged the first contained an incorrect legal description for the land in the option paragraph, "Katie's Quarter." The "Notice of Cancellation of Option" letter contained the same legal description appearing in that original contract. However, the Notice of Contract for Deed contained the correct legal description for "Katie's Quarter." The district court ultimately found the option was enforceable because it was supported by adequate consideration and nothing in the revised contract revoked the option from the original. The court indicated it was clear "Katie's Quarter" was incorrectly identified in the contract. The Sellers appealed when the district court reformed the contract and ruled in the Buyers’ favor. The Sellers also contended the district court "exceeded its authority when it ruled the issue of reformation was not res judicata" and claims the district court abused its discretion by ordering the same. The North Dakota Supreme Court, after review of the district court record and the Sellers' arguments, found “a structural problem with the district court's orders that this Court cannot ignore.” Concluding the district court abused its discretion by granting declaratory relief, the Supreme Court reversed the district court's orders and remanded for entry of an order of dismissal. View "Kauk v. Kauk" on Justia Law

Plaintiffs filed a class action against the Pegasus Pipeline's current owners and operators, Exxon, alleging that the company's operation of the pipeline was unreasonable and unsafe. The Eighth Circuit agreed with the district court's decision to decertify the class based on a lack of commonality of issues. In this case, the contract claims would require examination of how Exxon's operation of the pipeline affects plaintiffs, which varies depending on where individual class members' property was located, as well as many other factors. The Eighth Circuit also concluded that the evidence here was insufficient to raise a genuine issue of material fact as to whether there was unreasonable interference. The court explained that the question of unreasonable use of an easement was generally one of fact, dependent on the nature of the easement, the terms of the grant, and other relevant circumstances. Finally, the district court did not clearly abuse its discretion by denying plaintiffs' motion to alter or amend the judgment where the additional evidence at issue would not have produced a different result. Accordingly, the Eighth Circuit affirmed the judgment. View "Webb v. Exxon Mobil" on Justia Law

Because the plain language of the exculpatory clauses at issue in this case did not limit the homeowner’s association’s liability, and the association, as an entity distinct from internal boards acting as its agents, could not benefit from exculpatory clauses protecting those agents, the Colorado Supreme Court concluded the petitioners could bring their claims against the association. Petitioners Mac McShane and Cynthia Calvin had hoped to build a multistory home overlooking the Roaring Fork Valley. After belatedly discovering their design for that home exceeded county height regulations, they ended up with something less: a one-story home and an attached “pod.” Making the required changes proved costly, and they sued the homeowners association which allegedly improperly approved the architectural plans, then later allegedly improperly denied approval of revised plans. View "McShane v. Stirling Ranch Property Owners Association, Inc." on Justia Law

The faulty, inadequate, or defective work exclusion did not apply to the loss in this case. At issue in this appeal was the dismissal of Plaintiff’s action seeking to recover under an insurance policy for the loss of her house caused when a renter, who had an option to purchase the house, demolished it. The district court held that coverage for such loss was excluded under the policy. The Supreme Court vacated the judgment of the district court and remanded this case for further proceedings. View "Fisher v. Garrison Property & Casualty Ins" on Justia Law

Respondent, who owned a ranch, sued Petitioner, which produced natural gas on the ranch, for underpayment of royalties and underproduction of its lease. The parties resolved their dispute with two agreements that contained an arbitration provision. Respondent later sued Petitioner for environmental contamination and improper disposal of hazardous materials on the ranch. Before arbitration commenced, Respondent asked the Railroad Commission (RRC) to investigate contamination of the ranch by Petitioner. Meanwhile, an arbitration panel awarded Respondent $15 million for actual damages and $500,000 for exemplary damages. At issue on appeal was whether the RRC had exclusive or primary jurisdiction over Respondent’s claims, precluding the arbitration, and whether the arbitration award should be vacated for the evident partiality of a neutral arbitrator or because the arbitrators exceeded their powers. The Supreme Court answered in the negative, holding (1) because Respondent’s claims were inherently judicial, the doctrine of primary jurisdiction did not apply, and vacatur was not warranted for failure to abate the arbitration hearing; and (2) the arbitrators did not exceed their authority. View "Forest Oil Corp. v. El Rucio Land & Cattle Co." on Justia Law

Leslie Meadows filed a complaint against William Erps claiming that Erps owed he money from several real estate projects that she shared with him. For purposes of appeal, Meadows’s claims involved two of those transactions with Erps: (1) claims related to the purchase of, improvements to, and sale of the Sutphin property; and (2) claims related to the financing for the Twiford apartments. The circuit court awarded judgment to Meadows in the amount of $18,675 with respect to the Sutphin property and $67,000 for the Twiford apartments, for a total sum of $85,675. The Supreme Court reversed in part, holding (1) the circuit court’s award of judgment of $18,675 to Meadows as an abuse of discretion; and (2) the circuit court’s award of $67,000 was an abuse of discretion, and the circuit court’s award of judgment on the Twiford apartments is hereby reduced to $30,000. Remanded with directions to vacate the judgment for Meadows on the Sutphin property and to enter judgment for Meadows on the Twiford apartments in the amount of $30,000. View "Erps v. Meadows" on Justia Law

Canadian Imperial Bank of Commerce loaned Dobson Bay Club II DD, LLC and related entities (Dobson Bay) $28.6 million for Dobson Bay’s purchase of commercial properties. The loan was secured by a deed of trust encumbering the properties. Under the terms of a promissory note, as a consequence for any delay in payment, Dobson Bay was required to pay, in addition to regular interest, default interest and collection costs and a five percent late fee assessed on the payment amount. When Dobson Bay failed to make the required payments, La Sonrisa de Siena, LLC, which bought the note and deed of trust, noticed a trustee’s sale of the secured properties, arguing that Dobson Bay owed more than $30 million, including a nearly $1.4 million late fee. At issue during the ensuing trial was whether the note was an enforceable liquidated damages provision. The superior court concluded that the late fee was enforceable as liquidated damages. The court of appeals reversed. The Supreme Court vacated the court of appeals’ opinion and reversed the trial court’s partial summary judgment in favor of La Sonrisa on the liquidated damages claim, holding that an approximately $1.4 million late fee is unreasonable and an unenforceable penalty. View "Dobson Bay Club II DD, LLC v. La Sonrisa De Siena, LLC" on Justia Law