Justia Contracts Opinion Summaries

This case involves a dispute between two neighboring landowners, David W. Axelrod, as Trustee of the David W. Axelrod Family Trust, and Reid Limited Partnership (RLP) and Michael Reid, an individual. The dispute arose from a settlement agreement concerning the real property and easement rights of the two parties. Axelrod purchased a property in Teton County in 2003, which was not accessible by road. Reid, who owned and operated an organic dairy farm nearby, preferred Axelrod to build onto an existing dirt road on Reid's property rather than using two easements provided in Axelrod's deed. In 2004, Axelrod built onto the existing dirt road, referred to as the "RLP Easement." However, the relationship between Axelrod and Reid began to sour in 2011, leading to a series of disputes and legal actions.The district court initially concluded that Axelrod did not have an express easement for use of the RLP Easement, but he did have an easement by estoppel. The parties then executed a settlement agreement and stipulated to dismiss the suit. However, disagreements over the implementation of the settlement agreement led to further litigation. The district court granted Axelrod's motion for summary judgment, concluding that Reid had failed to properly support any assertion of fact or address the assertions of fact in Axelrod's motion for summary judgment.On appeal, the Supreme Court of the State of Idaho affirmed in part, vacated in part, and remanded the case for further proceedings. The court affirmed the grant of summary judgment against Reid individually and affirmed the district court's judgment dismissing RLP's counterclaims for conversion and violation of the implied covenant of good faith and fair dealing. The court also affirmed the judgment of the district court on Axelrod's breach of contract claim and the judgment of the district court refusing to allow amendment of the pleadings to add RFLP as a party. However, the court vacated the judgment of the district court dismissing RLP's trespass claim. The court also vacated the attorney fee award as against RLP and remanded for further proceedings consistent with this opinion. View "Axelrod v. Reid Limited Partnership" on Justia Law

This case involves a dispute over a real estate and construction contract. The plaintiffs, Myles Davis and Janelle Dahl, sued their homebuilder, Blast Properties, Inc., and Tyler Bosier, alleging breach of contract, fraud, and violations of the Idaho Consumer Protection Act. The plaintiffs sought to amend their complaint to include a prayer for relief seeking punitive damages. The U.S. District Court granted the plaintiffs' motion to amend their complaint, but certified a question to the Supreme Court of the State of Idaho due to inconsistencies in the interpretation of Idaho Code section 6-1604(2), which prohibits claimants from including a prayer for relief seeking punitive damages in their initial pleading.The U.S. District Court asked the Supreme Court of the State of Idaho to determine the proper means a trial court must apply when considering a motion to amend a pleading to include a prayer for relief seeking punitive damages pursuant to Idaho Code section 6-1604(2). The Supreme Court of the State of Idaho rephrased the question to clarify the obligations of a trial court under Idaho Code section 6-1604(2) when ruling upon a motion to amend a complaint or counterclaim to include a prayer for relief seeking punitive damages.The Supreme Court of the State of Idaho held that section 6-1604(2) requires the trial court to conduct a careful examination of the evidence submitted by the moving party in support of its motion to amend and the arguments made to determine whether there is a "reasonable probability" that the evidence submitted is: (1) admissible at trial; and (2) "sufficient" to support an award of punitive damages. The word "sufficient" means that the claim giving rise to the request for punitive damages must be legally cognizable and the evidence presented must be substantial. The court clarified that the clear and convincing evidentiary standard is the standard for a jury, not the trial court when it is ruling on a motion to amend a pleading to include a prayer for relief seeking punitive damages. View "Davis v. Blast" on Justia Law

The case involves Hahnenkamm, LLC and the United States Forest Service. Hahnenkamm sold a parcel of land to the Forest Service. The purchase price was based on an appraisal that was supposed to comply with the Uniform Appraisal Standards for Federal Land Acquisitions, also known as the Yellow Book. Hahnenkamm later sued the Forest Service, claiming that the appraisal did not comply with the Yellow Book and was not independent, thus breaching the purchase agreement.The United States Court of Federal Claims found in favor of Hahnenkamm, ruling that the Forest Service had breached the agreement by not supporting the purchase price with an independent, Yellow Book-compliant appraisal. The court rejected the government's defenses of waiver and equitable estoppel and awarded damages to Hahnenkamm.The United States Court of Appeals for the Federal Circuit partially reversed the lower court's decision. The appellate court found that Hahnenkamm could not have reasonably relied on the contractual representation that the appraisal was independent. However, the court remanded the case back to the lower court for further proceedings to determine whether Hahnenkamm reasonably relied on the representation that the appraisal was Yellow Book-compliant. The court also remanded the lower court's rejection of the equitable estoppel defense.On cross-appeal, Hahnenkamm argued that the lower court erred in its damages determination. The appellate court affirmed the lower court's damages determination, finding no abuse of discretion in its analysis. View "HAHNENKAMM, LLC v. US " on Justia Law

Summit Construction filed a lawsuit against Jay Koontz and Jennie L. Kennette for breach of contract and unjust enrichment, alleging nonpayment for work performed on Mr. Koontz’s home based on an oral agreement. The work included an addition to the home and extensive renovations to the existing structure. The District Court rejected both claims, determining that there was no enforceable oral contract between the parties and that Summit did not sufficiently prove its damages for the unjust enrichment claim.The District Court found that the parties had not mutually agreed to sufficiently definite terms for an oral contract. The court noted that the project progressed without a clear understanding of the scope of work, how it would be paid for, and who would be responsible for payment. The court also found that Summit's invoices did not clearly define the terms of the contract. Furthermore, the court concluded that Summit had failed to prove the amount by which Mr. Koontz was unjustly enriched, i.e., its damages.Upon appeal, the Supreme Court of Wyoming affirmed the District Court's decision. The Supreme Court agreed that Summit had failed to show the existence of an enforceable oral contract with either Mr. Koontz or Ms. Kennette. The court also agreed with the lower court's finding that Summit had failed to establish its damages to a reasonable degree of certainty, which is necessary for an unjust enrichment claim. View "Summit Construction v. Koontz" on Justia Law

The Ministry of Defence of the State of Kuwait entered into three contracts with Joseph M. Naffa and his fictitious law firm, Naffa & Associates, LLP, for legal advice and representation in real estate transactions. The Ministry later discovered that Naffa was not authorized to practice law in the United States and that he had kept a credit meant for the Ministry from one of the real estate transactions. The Ministry sued Naffa and his firm for breach of contract and conversion of funds.The United States District Court for the Eastern District of Virginia dismissed the Ministry's claims under Rule 12(b)(1), ruling that the Ministry had not pleaded damages sufficient to meet the amount in controversy requirement for federal court jurisdiction. The court also held that the agreements did not require Naffa to be a licensed attorney and that the Ministry could not show that it did not receive legal advice or that its outcome would have been different if it was represented by a licensed attorney.The United States Court of Appeals for the Fourth Circuit reversed the district court's decision. The appellate court held that the district court erred in dismissing the Ministry's claims for lack of subject matter jurisdiction because the complaint contained sufficient allegations to invoke the court's diversity jurisdiction. The court concluded that the Ministry had pleaded damages of at least $635,000, an amount that substantially exceeds the statutory minimum for federal court jurisdiction. The court vacated all other determinations made by the district court and remanded the case for further proceedings. View "Ministry of Defence of the State of Kuwait v. Naffa" on Justia Law

A general contractor, Graycor Construction Company Inc., was involved in a dispute with a subcontractor, Business Interiors Floor Covering Business Trust, over unpaid invoices for flooring work performed on a movie theater project. Business Interiors submitted three separate applications for periodic payments, which Graycor neither approved nor rejected within the time limit set by the Prompt Pay Act. As a result, the applications were deemed approved under the Act. Business Interiors sued Graycor for breach of contract and other claims in the Superior Court. The Superior Court granted Business Interiors's motion for summary judgment on its breach of contract claim and entered separate and final judgment. Graycor appealed.Graycor argued that the original contract was not a "contract for construction" within the meaning of the Act, and that it had a valid impossibility defense due to its failure to pay. The Supreme Judicial Court held that the Act defines its scope broadly, and the subcontract at issue was a "contract for construction" under the Act. The Court also held that common-law defenses are not precluded by the Act, but a contractor that does not approve or reject an application for payment in compliance with the Act must pay the amount due prior to, or contemporaneous with, the invocation of any common-law defenses in any subsequent proceeding regarding enforcement of the invoices. As Graycor sought to exercise its defenses without ever paying the invoices, it could not pursue the defenses. The Court also vacated and remanded the rule 54 (b) certification to the motion judge for reconsideration. View "Business Interiors Floor Covering Business Trust v. Graycor Construction Company Inc." on Justia Law

The Supreme Court of the State of Colorado was asked to review a case involving a dispute between the City of Aspen and the Burlingame Ranch II Condominium Owners Association, Inc. The dispute centered around alleged construction defects in an affordable housing project overseen by the City of Aspen. The Association claimed that Aspen had breached express and implied warranties, and Aspen argued that the claims were barred by the Colorado Governmental Immunity Act (CGIA), which provides immunity to public entities from claims for injury that lie in tort or could lie in tort.The lower court agreed with Aspen, ruling that the Association's claims sounded in tort, or could sound in tort, and were thus barred by the CGIA. The Association appealed, and the Colorado Court of Appeals reversed the lower court's decision. The appellate court reasoned that the Association's claims could only sound in contract, and thus were not barred by the CGIA. The court relied on the economic loss rule, which generally provides that a party suffering only economic loss from the breach of a contractual duty may not assert a tort claim for such a breach absent an independent duty of care under tort law.The Supreme Court of the State of Colorado reversed the appellate court's decision. The court held that the economic loss rule has no bearing on whether the CGIA bars a plaintiff’s claims. The court clarified that the CGIA bars claims that could arise in both tort and contract, and that the economic loss rule cannot rescue an otherwise CGIA-barred claim. The case was remanded back to the lower court for further proceedings. View "City of Aspen v. Burlingame Ranch II" on Justia Law

Joe Tubwell had been living in a house in DeSoto County, Mississippi, since 2005. In 2016, the mortgage loan on the house went into default, and foreclosure proceedings were initiated. Tubwell filed a complaint against the mortgage companies in an attempt to stop the foreclosure. The case was moved to a federal court where the mortgage companies were granted summary judgment. Tubwell, Morgan Stanley, and Specialized Loan Servicing LLC (SLS) entered settlement negotiations and reached an agreement. Tubwell agreed to vacate the property by April 30, 2020, in exchange for a confidential sum of money. The property was sold to FV-1, Inc., in trust for Morgan Stanley Mortgage Capital Holdings LLC. However, Tubwell refused to vacate the property by the agreed deadline and did not return the settlement funds.The mortgage companies filed a complaint against Tubwell in the DeSoto County Circuit Court to enforce the terms of the settlement agreement. The circuit court granted summary judgment ordering Tubwell to relinquish possession to the plaintiffs and dismissed Tubwell’s counterclaims for lack of jurisdiction. Tubwell appealed the decision to the Court of Appeals, which affirmed the circuit court's decision.The Supreme Court of Mississippi granted Tubwell’s petition for certiorari to address the issue of whether it was error to dismiss his counterclaims for lack of jurisdiction. The Supreme Court found that the circuit court had jurisdiction to entertain Tubwell’s counterclaims and erred when it declined to do so based on a lack of jurisdiction. The Supreme Court reversed the judgments of the circuit court and the Court of Appeals with regard to the dismissal of Tubwell’s counterclaims for lack of jurisdiction and remanded the case to the circuit court for further proceedings. The Supreme Court affirmed the judgments of the circuit court and the Court of Appeals on the remainder of the issues raised. View "Tubwell v. FV-1, Inc." on Justia Law

The case involves a dispute between Mary Roth and Gary Meyer, who were in a long-term relationship but never married. They cohabitated and ran a cattle operation together on a property that had a complex ownership history involving various members of Meyer's family. The couple's relationship ended, and Roth sued Meyer, alleging that he had converted some of her cattle and failed to repay loans she had given him.The District Court of Grant County, South Central Judicial District, found in favor of Roth. It ruled that Meyer had gained title to the disputed property through adverse possession and had transferred it to Roth in 2010. The court also found that Meyer had converted 13 of Roth's cattle and breached oral loan agreements with her, ordering him to pay her $52,500.On appeal, the Supreme Court of North Dakota reversed the lower court's decision. It found that the lower court had erred in its findings on adverse possession, the admissibility of certain evidence, the timing of the alleged conversion of cattle, the valuation of the converted cattle, and the enforceability of the loan contracts. The Supreme Court remanded the case to the lower court for further proceedings, instructing it to make new findings based on the existing record. View "Roth v. Meyer" on Justia Law

In this case, a Delaware statutory trust, NB Taylor Bend, DST (Taylor Bend), borrowed $13 million from Prudential Mortgage Capital Company, LLC (Prudential) to acquire property in Lafayette County, Mississippi. Patrick and Brian Nelson, who were guarantors of the loan, signed an Indemnity and Guaranty Agreement (the Guaranty) in December 2014, personally guaranteeing the loan. After the loan documents were executed, Prudential assigned the loan to Liberty Island Group I, LLC (Liberty), which in turn assigned the loan to North American Savings Bank, FSB (NASB). By May 2020, Taylor Bend struggled to find tenants for the property due to the COVID-19 pandemic and informed NASB of their financial problems. In May 2021, NASB declared Taylor Bend to be in default after the borrower continually failed to make timely loan payments. NASB then filed an action against the Nelsons in the United States District Court for the Northern District of Mississippi, asserting claims for breach of the Guaranty, for recovery of the loan balance, and for declaratory judgment.The district court entered partial summary judgment for NASB, holding the Nelsons “breached the [G]uaranty and thus owe[d] to [NASB] the amount remaining due on the subject loan.” The court determined that the Guaranty was “freely assignable” and that Prudential adequately assigned all of its rights and interests to Liberty, which in turn assigned all of its rights and interests to NASB, including those conferred by the Guaranty. The court also concluded that the defenses raised by the Nelsons were “unavailable given the borrower’s absence from this litigation.” The court also granted Brian’s motion for summary judgment against Patrick, ruling that the indemnity agreement between the brothers was valid and binding and that Patrick was contractually required to indemnify Brian for “any and all obligations arising out of or relating to this litigation.”The United States Court of Appeals for the Fifth Circuit affirmed the district court's decision. The court held that the Guaranty was properly assigned from Prudential to Liberty and from Liberty to NASB. NASB could therefore properly bring its claims for breach of guaranty and declaratory judgment against the Nelsons to recover the loan deficiency. Moreover, under Mississippi law, Patrick may not interpose equitable defenses that were available only to Taylor Bend to defeat his liability under the Guaranty. The court also held that the deficiency judgment awarded to NASB pursuant to the Guaranty need not be reduced by the third-party sale of the Apartments to Kirkland. NASB had no duty to mitigate its damages under either Mississippi law or the terms of the Guaranty. View "North American Savings Bank v. Nelson" on Justia Law