Justia Contracts Opinion Summaries

Petitioner Cogswell Farm Condominium Association filed a declaratory judgment action with respect to two exclusions in insurance policies issued by respondents Tower Group, Inc. and Acadia Insurance Company. The trial court held that the two exclusions at issue precluded coverage for petitioner's underlying lawsuit against Lemery Building Company, Inc. In 2009, Cogswell sued Lemery and others, alleging negligence, breach of contract, and negligent supervision in the construction of 24 residential condominium units. Cogswell asserted that the "weather barrier" components of the units – including the water/ice shield, flashing, siding, and vapor barrier – were defectively constructed and resulted in damage to the units due to water leaks. Because the units were sold at different times and the policies were in effect during two different time periods, the Supreme Court concluded that the trial court erred in holding that one policy exclusion served as a bar for coverage for each unit after it was sold. Furthermore, the Court found that the other exclusion was subject to more than one reasonable interpretation, the Supreme Court concluded the trial court erred in granting respondents summary judgment with respect to that exclusion. The trial court was reversed and the case remanded for further proceedings. View "Cogswell Farm Condominium Ass'n v. Tower Group, Inc." on Justia Law

A shopping center owner challenged provisions in its commercial lease with Ross, conditioning Ross’s obligation to open a store and pay rent on Mervyn’s operating a store in the shopping center on the lease’s commencement date and allowing Ross terminate the lease if Mervyn’s ceased operations and was not replaced by an acceptable retailer within 12 months. Mervyn’s filed for bankruptcy and closed its store. Ross took possession of the space, never opened for business, never paid rent, and terminated the lease after the 12-month cure period. The trial court found the provisions unenforceable. The jury awarded $672,100 for unpaid rent and $3.1 million in other damages. The court of appeal held that there was no procedural unconscionability. The parties were sophisticated and experienced concerning commercial leases. The rent abatement and termination provisions must be examined separately because they involve separate consequences triggered by different conditions. The determination that rent abatement constituted an unreasonable penalty was supported by findings that Ross did not anticipate it would suffer any damages from Mervyn’s not being open on the lease’s commencement date and the rent forfeited was $39,500 per month. There is no reasonable relationship between $0 of anticipated harm and forfeiture of $39,500 in rent per month. View "Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc." on Justia Law

In 2005, Donald Devine and his wife Nancy Devine acquired ownership of Rock Hall, a 200-year-old house. In 2007, Charles Buki and Kimberly Marsho signed a contract agreeing to purchase Rock Hall. Later that year, Buki and Marsho (together, Plaintiffs) brought suit against Donald and Nancy (together Defendants), alleging that Defendants fraudulently induced them to enter into the real estate contract and to close on Rock Hall by misrepresenting and concealing the true condition of the house. The trial court concluded that Nancy had committed no wrong but nonetheless granted rescission of the real estate contract against both Donald and Nancy, concluding that Nancy should be “responsible jointly and severally with her husband for the payment of the purchase price” of Rock Hall. The Supreme Court reversed, holding that because there was no evidence of any wrongdoing on the part of Nancy, the trial court had no basis for awarding any remedy, including rescission, against Nancy. View "Devine v. Buki" on Justia Law

In 2005, Donald Devine and his wife Nancy Devine acquired ownership of Rock Hall, a 200-year-old house. In 2007, Charles Buki and Kimberly Marsho signed a contract agreeing to purchase Rock Hall. Later that year, Buki and Marsho (together, Plaintiffs) brought suit against Donald and Nancy (together Defendants), alleging that Defendants fraudulently induced them to enter into the real estate contract and to close on Rock Hall by misrepresenting and concealing the true condition of the house. The trial court concluded that Plaintiffs were entitled to rescission of the contract where David, but not Nancy, committed fraud. The court awarded consequential damages and attorney’s fees. The Supreme Court affirmed in part and reversed in part, holding that the trial court (1) did not err in granting rescission of the real estate contract based on Donald’s fraudulent concealment of the true state of the house and did not err in awarding attorney’s fees; (2) did not abuse its discretion in refusing to award punitive damages; and (3) erred in awarding consequential damages and prejudgment interest. View "Devine v. Buki" on Justia Law

In building their home, Plaintiffs purchased SuperFlex, a stucco-like material, to cover the house’s exterior. GrailCoat Worldwide, LLC and GrailCo, Inc. (collectively, GrailCoat), the manufacturers of SuperFlex, provided an express twenty-year warranty for the product. Several years after the construction of their home was completed, the product failed. Plaintiffs brought suit against GrailCoat and Hartley Construction, Inc., the company that had designed and built the home, for damages. Hartley moved for summary judgment under N.C. Gen. Stat. 1-50(a)(5), North Carolina’s six-year statute of repose for claims arising out of improvements to real property. The trial court granted summary judgment for Defendants. The Supreme Court reversed the trial court’s dismissal of Plaintiffs’ claim for breach of express warranty against GrailCoat, holding that GrailCoat knowingly and freely entered into a valid contract of sale with Plaintiffs that provided for a warranty term that exceeded the repose period, and therefore, GrailCoat waived the protections provided by the statute of repose. View "Christie v. Hartley Constr., Inc." on Justia Law

The respondents, Shared Towers VA, LLC and NH Note Investment, LLC, appealed, and petitioner Joseph Turner, individually and as trustee of the Routes 3 and 25 Nominee Trust, cross-appealed, Superior Court orders after a bench trial on petitioner’s petition for a preliminary injunction enjoining a foreclosure sale and for damages and reasonable attorney’s fees. The parties’ dispute stemmed from a commercial construction loan agreement and promissory note secured by a mortgage, pursuant to which petitioner was loaned $450,000 at 13% interest per annum to build a home. Respondents argued the trial court erred when it: (1) determined that they would be unjustly enriched if the court required the petitioner to pay the amounts he owed under the note from November 2009 until April 2011; (2) applied the petitioner’s $450,000 lump sum payment to principal; (3) excluded evidence of the petitioner’s experience with similar loans; (4) ruled that, because the promissory note failed to contain a "clear statement in writing" of the charges owed, as required by RSA 399-B:2 (2006), respondents could not collect a $22,500 delinquency charge on the petitioner’s lump sum payment of principal; and (5) denied the respondents’ request for attorney’s fees and costs. Petitioner argued that the trial court erroneously concluded that respondents’ actions did not violate the Consumer Protection Act (CPA). After review, the Supreme Court affirmed in part, reversed in part, vacated in part, and remanded: contrary to the trial court’s decision, petitioner’s obligation to make the payments was not tolled. Because the loan agreement and note remained viable, it was error for the trial court to have afforded the petitioner a remedy under an unjust enrichment theory. The trial court made its decision with regard to the payment of $450,000 in connection with its conclusion that the petitioner was entitled to a remedy under an unjust enrichment theory. Because the Supreme Court could not determine how the trial court would have ruled upon this issue had it not considered relief under that equitable theory, and because, given the nature of the parties’ arguments, resolving this issue requires fact finding that must be done by the trial court in the first instance, it vacated that part of its order and remanded for further proceedings. In light of the trial court’s errors with regard to the attorney’s fees and costs claimed by respondents, the Supreme Court vacated the order denying them, and remanded for consideration of respondents’ request for fees and costs. The Supreme Court found no error in the trial court’s rejection of petitioner’s CPA claim. View "Turner v. Shared Towers VA, LLC" on Justia Law

Gail and Scott Helm filed a personal injury action against Gallo Realty, Inc., one of its real estate agents, and 206 Massachusetts Ave, LLC (owner of the property). The Helms rented a beach house at 206 Massachusetts Avenue in Lewes for a week in 2010. As Gail descended the stairs, she fell and sustained injuries. Gail sought to recover damages based on claims of negligence and breach of contract; Scott claimed loss of consortium. The Superior Court granted defendants' motions for summary judgment, dismissing the Helms' claims. The Helms appealed, arguing: (1) the Superior Court erred in granting defendants' motion for summary judgment on the issue of primary risk assumption and comparative negligence as a matter of law; (2) the Superior Court erred in holding that an indemnification clause provision in the lease protected defendants from liability; and (3) the Superior Court erred in granting summary judgment on the contract claims. After review, the Supreme Court concluded the Superior Court applied both the doctrine of primary assumption of risk and the doctrine of comparative negligence incorrectly. The record reflected that the Superior Court never specifically based its decision on the indemnification clause. The Superior Court's initial ruling in favor of defendants was only on the negligence claims. Furthermore, the Supreme Court found that the record reflected that the Superior Court's dismissive rulings on the Helms' contract claim was "cursory and inextricably intertwined" with its erroneous rulings on the negligence claims. As such, the Supreme Court reversed the Superior Court and remanded this case for further proceedings. View "Helm v. 206 Massachusetts Avenue,LLC" on Justia Law

Dennis and Charlene Deckert appealed the grant of summary judgment dismissing their action for a declaratory judgment and specific performance of an option to purchase certain Burleigh County real property and quieting title to the property in Margaret McCormick and Judy Hertz. Because the Supreme Court concluded there was no genuine issue of material fact that the Deckerts did not properly exercise the gratuitous option before it was revoked, the Court affirmed the judgment. View "Deckert v. McCormick" on Justia Law

Marina Pacifica was built on Long Beach waterfront land owned by McGrath and leased to the limited partnership (LP) in the 1970s. The ground lease was subdivided into 570 leases, one for each condominium unit. When LP sold a unit, it assigned the unit lease to the purchaser. The leases required owners to pay monthly rent to McGrath and an “assignment fee” to LP. Both payments were nominal ($15) until 2006, when they would be recalculated so that together, they would equal 10 percent of the value of the underlying land. In 1999, the Homeowners Association purchased the underlying land from McGrath for $17 million. Each owner paid a pro rata share. Owners no longer pay rent. The HOA attempted to buy out the assignment fee before the 2006 adjustment. In 2000, it purchased the interests of two limited partners (56.25 percent) for $5 million. It was unable to reach agreement with Lansdale to buy his 43.75 percent interest. Litigation resulted in a finding that the land’s fair market value was $60,615,500. The HOA instructed owners not to pay and filed suit, alleging that the assignment fee is invalid or overstated, and that the purchase of the underlying land extinguished the lease. The court of appeal reversed a holding that the assignment fee was an invalid transfer fee after December 31, 2008, under Civil Code 1098 and 1098.5 and directed the court to enter judgment for the HOA on contract claims. View "Marina Pac. Homeowners Ass'n v. So. Cal. Fin. Corp." on Justia Law

Terry and Cindy Leonhardt sued Terry’s father, Delbert Leonhardt, for specific performance of an oral lease and right of first refusal. The Leonhardts alleged that they had entered into an oral lease with Delbert whereby they would have the right to lease Delbert’s farmland during the lifetime of Delbert and his wife and that Delbert orally promised them a right of first refusal to purchase the farmland after he and his wife died. The Leonhardts claimed that Delbert breached the agreements when he gave Terry notice of his intent to terminate the Leonardts’ lease. On remand, the circuit court entered judgment against the Leonhardts, concluding that no credible evidence existed to support the existence of a lifetime lease or right of first refusal. The Supreme Court affirmed, holding that the circuit court did not clearly err when it ruled that the Leonhardts failed to meet their burden of proof that a lifetime lease and right of first refusal existed. View "Leonhardt v. Leonhardt" on Justia Law