Justia Contracts Opinion Summaries

The Tenth Circuit Court of Appeals certified a question of Oklahoma law to the Oklahoma Supreme Court. In April 2008, plaintiffs Shannon and Eric Walker requested several samples of hardwood flooring from BuildDirect.com Technologies, Inc., a Canadian corporation, through BuildDirect's website. The next month they arranged, over the telephone, to purchase 113 boxes of flooring from BuildDirect. BuildDirect emailed a two-page written Contract entitled "Quotation" to Ms. Walker, who signed and dated the Contract and returned it to BuildDirect via fax. The Contract described the type, amount, and price of the flooring purchased by the Walkers. And, it included 14 bullet points setting forth additional terms. The sixth bullet point stated: "All orders are subject to BuildDirect's 'Terms of Sale.'" The Walkers alleged that after they installed the flooring, they discovered that their home was infested with nonindigenous wood-boring insects. According to the Walkers, the insects severely damaged the home, and caused the home to be subject to quarantine and possible destruction by the United States Department of Agriculture. The question the federal appeals court posed to the Oklahoma Supreme Court was whether a written consumer contract for the sale of goods incorporated by reference a separate document entitled "Terms of Sale" available on the seller's website, when the contract stated that it was "subject to" the seller's "Terms of Sale" but did not specifically reference the website. In response, the Oklahoma Court held that Oklahoma law did not recognize a "vague attempt at incorporation by reference" as demonstrated in this case. Under the Oklahoma law of contracts, parties may incorporate by reference separate writings, or portions thereof, together into one agreement where: (1) the underlying contract makes clear reference to the extrinsic document; (2) the identity and location of the extrinsic document may be ascertained beyond doubt; and (3) the parties to the agreement had knowledge of and assented to its incorporation. View "Walker v. BuildDirect.com Technologies, Inc." on Justia Law

Plaintiff donated 159 acres of land to the Nebraska National Trails Museum Foundation (NNTM). At the time of the donation, NNTM leased the land back to Plaintiff and allowed him to farm the land. Plaintiff’s subsequent upgrades to the land caused the number of certified irrigated acres (CIAs) assigned to the land to almost double. Plaintiff filed a complaint alleging that NNTM would be unjustly enriched if it were allowed to maintain possession of the CIAs. The district court entered judgment in favor of NNTM. The Supreme Court affirmed, holding (1) the district court did not err in determining that Plaintiff was not entitled to the CIAs; and (2) the district judge who heard the case did not err in not recusing himself from the proceedings after the judge had a conversation with the manager of another natural resources district regarding Plaintiff. View "Kalkowski v. Neb. Nat’l Trails Museum Found., Inc." on Justia Law

Owner and developer, Stratton Corporation and Intrawest Stratton Development Corporation, sued a condominium construction project's general contractor Engelberth Construction, Inc., who in turn filed a third-party claim against subcontractor Evergreen Roofing Company. A jury found that Engelberth Construction breached its contract with developer and breached an express warranty, which proximately caused developer to sustain damages related to roof repairs. The jury also found that Evergreen Roofing breached its subcontract with Engelberth Construction, and that Evergreen Roofing was obligated to indemnify Engelberth Construction. Evergreen Roofing appealed, arguing that the court erred in denying a pretrial motion for summary judgment filed by Engelberth Construction on various issues, including the scope of the contract between developer and Engelberth Construction and whether proof of non-insurance or lack of availability of insurance coverage was a prerequisite to developer's recovery against Engelberth. The Supreme Court affirmed, finding that Evergreen Roofing failed to preserve its argument. View "Stratton Corp. v. Engleberth Construction, Inc." on Justia Law

Since 1993, Defendant claimed lawful ownership of a property that was fraudulently transferred to him as part of a conspiracy to prevent Plaintiffs from collecting on a judgment. After two remands, a third jury found that the transfer of certain property was fraudulent and awarded $253,000 in special damages and $1,642,857 in punitive damages. Defendant appealed, arguing that the punitive damages award was grossly excessive and in violation of his rights under the Fourteenth Amendment. The intermediate court of appeals (ICA) vacated the punitive damages award. The Supreme Court vacated the ICA’s judgment, holding that the punitive damages awarded by the third jury was justified and did not violate Defendant’s federal due process rights. View "Kekona v. Bornemann" on Justia Law

Realtor Willis planned Southgate, involving the purchase of 68 acres on St. Croix, re-zoning, subdivision, building infrastructure, and selling individual lots. Willis worked with defendants Cheng and Dubois and their entities (OMEI, Ocean View) for financing, but the defendants did not actually intend to develop the property. Pollara, a 47-year veteran of the construction industry, was hired to create the subdivision’s entrance. Ultimately Cheng and Dubois stopped paying Pollara and locked him out of his site office. Pollara was never paid for repair work to the roadway after flooding. Defendants, standing on both sides of the financing, refused any extension of the financing terms; they withheld their consent to selling the land at a profit to a buyer whom Willis had found. They caused Ocean View to foreclose, acquiring the property free of Willis’s and Pollara’s interests. The jury found that Ocean View and Cheng had made intentional misrepresentations and that OMEI had made negligent misrepresentations and that Dubois had made negligent misrepresentations with respect to the building permit and proposals for the development plan, and intentional misrepresentations as to the other three subjects. The jury awarded Pollara compensatory damages of $391,626 from all of the defendants and punitive damages of $90,000 against Cheng. The Third Circuit affirmed. View "Frank C Pollara Grp. LLC v. Ocean View Inv. Holding, LLC" on Justia Law

Paul R. Steinfurth and Paul C. Steinfurth (collectively, "the guarantors") appealed the denial of their postjudgment motion requesting that a judgment entered against them and in favor of Ski Lodge Apartments, LLC, be amended insofar as the judgment held that the guarantors had waived their personal exemptions under 6-10-123, Ala. Code 1975. On or about February 13, 2009, Styles Manager, LLC purchased from Vintage Pointe Apartments, LLC an interest in an apartment complex located in Montgomery. As part of this transaction, Styles Manager executed a promissory note promising to pay Vintage Pointe $800,000. Paul C. signed the promissory note in his official capacity as "manager" of Styles Manager. As security for the performance of the payment of the promissory note, the guarantors, in their individual capacities, executed a "guaranty of payment and performance" of the promissory note. Styles Manager defaulted on the promissory note in 2011. Pursuant to the note, the entire principal amount and all accrued interest was then due on February 13, 2011. Neither Styles Manager nor the guarantors cured the default. Accordingly, on September 27, 2012, Ski Lodge sued the guarantors, alleging breach of the guaranty agreement, in order to collect the outstanding debt on the promissory note. Ski Lodge requested $804,333.36, together with additional accrued interest, in damages. In its complaint, Ski Lodge did not expressly allege that the guarantors had waived their right to a personal exemption. However, Ski Lodge did attach to its complaint copies of the loan documents, which included the promissory note and the guaranty agreement, and stated that each was "incorporated herein by reference." The guarantors filed an answer and counterclaims against Ski Lodge alleging misrepresentation and suppression. The guarantors moved to dismiss Ski Lodge's suit against them, then filed a Rule 59(e), Ala. R. Civ. P., motion to alter, amend, or vacate the circuit court's judgment insofar as the circuit court held that the "judgment is entered pursuant to Alabama law with a waiver of exemptions, according to the terms expressed in the [p]romissory [n]ote and [the] [g]uaranty [agreement] which are the subject matter of this action, as the same were incorporated and adopted into the complaint." The guarantors argued that "waiver was not properly [pleaded]" and that the guaranty agreement did "not provide for waiver of exemptions by" the guarantors. The circuit court ultimately denied the guarantors' postjudgment motion, leading to this appeal to the Alabama Supreme Court. After review, the Supreme Court concluded the circuit court's holding that the guarantors waived their personal exemptions was in error. Accordingly, the Court reversed the circuit court's judgment and remanded the matter for further proceedings. View "Steinfurth v. Ski Lodge Apartments, LLC" on Justia Law

Plaintiffs-appellants Earl and Marina Rideau entered into an agreement with condominium developer, Inmobiliaria BGJB de Mexico, S. de R.L. de C.V. (BGJB; not a party to this appeal), to purchase a unit to be constructed in Mexico. The Rideaus deposited funds toward the purchase price with an escrow company, defendant-respondent Stewart Title of California. In the "Sale Escrow Instructions," Stewart Title agreed to receive funds from the Rideaus, to be released at the seller's direction to a fund control company, as specified in the Instructions. The project failed and the Rideaus lost their deposit. In the Rideaus' prior appeal, the Court of Appeal reversed a defense judgment on the basis that the trial court erred in denying their contract claim that Stewart Title had breached the Instructions, when it released their $239,700 deposited funds to entities other than the one specified in the Instructions. On remand, the trial court entered judgment in their favor. This appeal arose from the trial court's denial of the Rideaus' motion for an award of contractual attorney fees and costs, based upon "hold harmless" language found in section IV of the Instructions, "Release of Funds," regarding defense of claims arising from the Instructions. The Rideaus argued a portion of that language should be interpreted as a reciprocal attorney fees clause, and not as an item of recovery specified in an indemnity agreement. After review, the Court of Appeal concluded that the trial court correctly denied the motion and affirmed the order and judgment. View "Rideau v. Stewart Title of California" on Justia Law

Castle Properties, Inc. held a right of first refusal on approximately 2.4 acres of unimproved land owned by the Wasilla Lake Church of the Nazarene (Church). The City of Wasilla offered the Church another parcel of approximately 17 acres in exchange for this property. Having learned of the City’s offer, Castle requested a copy of the purchase and sale agreement memorializing the exchange. The Church, apparently unaware of the right of first refusal, denied this request. Castle then informed the Church that it was exercising its right and submitted a cash offer, which the Church rejected. Castle filed suit, and the superior court found that Castle received adequate notice when it obtained the city ordinance approving the City’s offer and that the Church acted reasonably in rejecting Castle Properties’ competing cash offer. After review, the Supreme Court concluded that the superior court did not clearly err in finding that Castle received adequate notice, that Castle exercised its rights by making a competing offer, and that the Church’s response did not violate the covenant of good faith and fair dealing. View "Castle Properties, Inc. v. Wasilla Lake Church of the Nazarene" on Justia Law

Tenant was the successor lessee to a thirty-year lease on a commercial property in Brattleboro. The lease was executed in 1987. The lease established a basic annual rent of $26,500 in paragraph 8, and then set forth how the rent would increase in subsequent years. Pursuant to the rent-increase provision, each year landlords calculated the annual rent increase and sent a notice to tenant. The increase was calculated as the percentage change in the CPI from the previous year to the current year multiplied by the previous year's rent. This increase was then added to the prior year's rent to arrive at the new annual rent. In March 2007, tenant assumed the lease. From 2008 to 2012, landlords sent rent-increase notices and tenant paid rent annually adjusted for increases, calculated according to this method, without objection. In 2013, landlords sent the annual rent increase notice to tenants. The notice reflected the new 2013 rent as $54,060. Tenant objected to the amount of rent and the calculation method for rental increases. The parties were unable to resolve their dispute, and tenant filed an action seeking both a declaration that its interpretation of the lease language was correct and damages for overpaid rent. Tenant appealed the court's order granting summary judgment in favor of defendant landlords on the parties' dispute concerning a rental-increase provision of the lease. Tenant argued on appeal that the court erred in using extrinsic evidence to interpret a portion of the lease tenant believed was unambiguous, and in reaching an inequitable result. Finding no reversible error, the Supreme Court affirmed. View "B&C Management Vermont, Inc. v. John, Ringey & Beck" on Justia Law

Ram’s Gate bought Sonoma County property from the Roches, intending to build a winery. The sellers agreed in the Purchase Agreement to disclose facts having a “material effect on the value of the ownership or use,” including geological hazards. After escrow closed, Ram’s Gate discovered an active fault trace on the property that substantially increased the cost of development, and sued the Roches for breach of contract. The trial court granted summary adjudication, finding the Purchase Agreement warranties merged with the recording of the deed and did not survive the closing. The court of appeal reversed. The trial court relied on the wrong legal standard in determining that merger extinguished the contractual duty to disclose geotechnical reports allegedly known by the Roches; evidence from Ram’s Gate’s representative raised a triable issue of fact as to whether the parties intended to have this duty of disclosure merge with the deed. Ram’s Gate’s claim for breach of contract accrued at the time of the breach; the Roches’ liability for breach was fixed before escrow closed, even though Ram’s Gate was unaware of its right to sue. Even if merger applied, the collateral obligations exception prevented it from extinguishing the disclosure duty. View "Ram's Gate Winery, LLC v. Roche" on Justia Law