Justia Contracts Opinion Summaries

Construction Manager subcontracted with Subcontractor to do work on a construction project. After the project was substantially complete, Subcontractor recorded a mechanic’s lien for unpaid work on the project. Subcontractor then filed a complaint against Construction Manager as the general contractor of the project, the owner of the property (Landowner), and the bank that financed the project (Bank) to enforce its mechanic’s lien. Construction Manager did not enter an appearance in the case. The circuit court subsequently granted an application filed by Landowner and Bank and released the real estate that had been subject to Subcontractor’s mechanic’s lien. Bank filed a motion to dismiss the mechanic’s lien claim on the basis that Subcontractor failed to timely serve Construction Manager, who it alleged to be a necessary party to the mechanic’s lien enforcement action. The circuit court agreed and dismissed the mechanic’s lien claim with prejudice. The Supreme Court reversed, holding that Construction Manager, as the general contractor, was not a necessary party to Subcontractor’s mechanic’s lien enforcement action. Remanded.View "Synchronized Constr. Servs., Inc. v. Prav Lodging, LLC" on Justia Law

RNT appealed the trial court's grant of summary judgment on its claim for breach of insurance contract against RNT, arguing that the trial court erroneously determined that the claim failed in light of the terms of RNT's policy. The court concluded that summary judgment on RNT's claim for breach of insurance contract was properly granted on the basis of the undisputed facts; condition 10(b) of the policy, which terminates an insurer's liability when the loan is paid off or the related mortgage is released; and exclusion 3(a) of the policy, which precludes coverage for defects, liens, encumbrances, adverse claims or other matters created, suffered, assumed, or agreed to by RNT. Accordingly, the court affirmed the judgment.View "RNT Holdings v. United Gen. Title Ins." on Justia Law

America's Home Place, Inc. ("AHP") appealed a Circuit Court order denying AHP's motion to compel arbitration of the claims brought by the plaintiff below, Gregory Rampey. In August 2012, Rampey and AHP entered into a contract, the terms of which provided that AHP would construct a house for Rampey in Chambers County. AHP constructed the house; however, after he took possession of the house, Rampey began to notice "settlement and sinking of the foundation," which, according to Rampey, resulted in significant structural and other damage to the house. AHP attempted to stabilize the foundation and to repair the damage to the house that had occurred as a result of the unstable foundation; those efforts were unsuccessful. Upon review of the parties' arguments on appeal, the Supreme Court concluded the trial court erred in denying AHP's motion to compel arbitration. Therefore, the Court reversed the trial court's order and remanded the case with instructions to vacate the order denying the motion to compel arbitration and to enter an order granting AHP's motion to compel arbitration.View "America's Home Place, Inc. v. Rampey" on Justia Law

Richard Giesler and Idaho Trust Deeds, LLC appealed a district court's judgment declaring the rights and obligations on a contract. This case arose out of several oral and written agreements between Giesler and Gregory Hull that related to purchasing and subdividing property. After a bench trial, the court found that Hull sold the property to Giesler, but the parties had a later oral contract where Hull promised to pay off Giesler's loans in exchange for half of the subdivision's net profits. The court held that neither party materially breached the contract and ordered Hull to timely pay Giesler's loans and Giesler to complete the subdivision within certain deadlines. On appeal, Giesler argued Hull failed to prove damages and the district court's remedies were erroneous. Upon review, the Supreme Court affirmed the district court in part, vacated in part, and remanded the case for further proceedings. The Supreme Court found that substantial and competent evidence supported the district court's findings of fact, but that the district court erred in its remedies. The Court vacated the portions of the district court's decision regarding: (1) the conversion payment of half the irrigation equipment's value; (2) the deadlines for completing Parcels 2 and 3; and (3) the provisions that order consequences to encourage performance under the contract.View "Hull v. Giesler" on Justia Law

Plaintiff, the named Defendant in this action, and others formed a limited liability company (the LLC) to purchase and redevelop certain property. After the LLC acquired the property, Plaintiff guaranteed the payment of two loans from a Bank. In the meantime, Plaintiff, Defendant, and others entered into backstop guarantee agreements that provided protection to Plaintiff in the event he was required to honor his personal guarantees to the Bank. The Bank later commenced foreclosure proceedings against the LLC and Plaintiff as guarantor. The court rendered a judgment of strict foreclosure, and the Bank sought a deficiency judgment against the Plaintiff. The Bank and Plaintiff entered into a settlement agreement. Thereafter, Plaintiff commenced the present action against Defendants to enforce the backstop guarantee agreements. The trial court concluded that the backstop guarantee agreements were unenforceable. The Appellate Court reversed. Defendant appealed, claiming that Plaintiff’s tax treatment of the debt that Defendant guaranteed effectively divested Plaintiff of his interest in the debt, and therefore, Plaintiff had no standing to enforce the backstop guarantee agreement. The Supreme Court affirmed, holding that Plaintiff had standing to enforce the agreement.View "One Country, LLC v. Johnson" on Justia Law

In 2006, Richard Myers owned the property at issue in this case. At the time, the property was subject to a deed of trust in favor of First Horizon Home Loans. Myers enlisted Michael Horn and his company, Frontier Development Group (FDG) to build a residence on the property, which First Horizon financed. However, in April of 2007, Myers filed for bankruptcy, and First Horizon rescinded the construction loan and instructed FDG to halt construction when the project was only fifty percent complete. The structure was left exposed to the elements for fourteen months. Following Myers' bankruptcy, foreclosure proceedings were initiated, and Myers hired Kathleen Horn (Michael Horn's wife), of Windermere Real Estate/Teton Valley to list the property for sale. The Caravellas, who were Ohio residents, looking for property in the Teton Valley, contacted their real estate agent who put them in touch with Kathleen Horn who provided them with information on the stalled Myers project. Kathleen Horn eventually put the Caravellas in touch with Michael Horn. The Caravellas traveled to Idaho, met with Kathleen Horn, and spent two days inspecting the property. The Caravellas testified that Kathleen Horn minimized issues with the house, telling them that it was "in good shape,""structurally sound,"and a "great house."The Caravellas chose not to have a professional inspection performed and closed on May 5, 2008. After closing, the Caravellas and Michael Horn agreed that Horn would complete construction on the house in accordance with Myers' original plans. In reaching this agreement, the Caravellas testified that they believed they were dealing with Horn as an individual. The total contract price for the first phase of work that the Caravellas authorized was $88,500. However, the Caravellas paid FDG $138,097.24 for the first phase before refusing to pay any more. Much of the money that the Caravellas paid to FDG was for unauthorized work or work that was completed in a nonconforming or substandard manner. The Caravellas hired a second builder to complete the first phase and to remedy the substandard work. FDG initiated this action by filing a complaint to foreclose on a lien for construction services and building materials provided to, but not paid for by, the Caravellas. The Caravellas filed an amended counterclaim alleging that FDG and Horn: (1) breached the parties' contract; (2) breached the duty of good faith and fair dealing; (3) violated the Idaho Consumer Protection Act; (4) breached the implied warranty of habitability; (5) committed slander of title; (6) committed fraud and misrepresentation; (7) engaged in a civil conspiracy; and (8) acted negligently. The district court held that FDG's lien was defective and dismissed it. The district court also held that FDG breached its contract with the Caravellas by: (1) failing to complete agreed upon work in conformity with the plans and in a workmanlike manner; (2) charging the Caravellas for unauthorized and defective work; and (3) substantially overbilling the Caravellas for work and materials that were not authorized and never provided. As to the Caravellas' fraud counterclaim, the district court concluded that the Caravellas failed to establish all nine elements of fraud and dismissed the claim. The district court also concluded that Horn was not personally liable. The district court awarded the Caravellas $113,775.45 in attorney fees, $5,484.83 in costs as a matter of right, and $200.00 in discretionary costs. The Caravellas timely appealed. Upon review, the Supreme Court concluded the district court erred by applying the incorrect evidentiary standard to the Caravellas' fraud counterclaim, but that error was harmless. The Court affirmed that portion of the district court's judgment dismissing the Caravellas' fraud claim, and reversed that portion of the judgment dismissing the Caravellas' claims against Michael Horn personally. In all other respects, the Supreme Court affirmed the district court's decision.View "Frontier Development Grp v. Caravella" on Justia Law

In 2011, Gerald Collins granted Garrett Prestenbach a one-year option to purchase about 150 acres of Collins's farm and pasture land for $500,000. Prestenbach agreed to make a $25,000 down payment on the property and finance the remaining $475,000 through a combination of a $225,000 USDA loan and $250,000 financing agreement with Collins. The option contract included the following details: (1) a recital of $100 consideration; (2) a township-and-range description of the property; (3) a reference to the buyer's intent to obtain a USDA loan; (4) the total purchase price; and (5) a recital that the option was irrevocable for the first three months and, after three months, the option could be revoked by giving ten days' written notice. The parties also agreed that Collins would allow the USDA to inspect the property before closing. About a month after giving Prestenbach the option to purchase his land, another buyer offered to buy Collins's property immediately. Collins attempted to persuade Prestenbach to give up his option so he could sell to the other party, but Prestenbach refused and quickly recorded the option contract to prevent the sale. By early December, relations between Collins and Prestenbach had deteriorated. Collins's attorney sent Prestenbach a letter attempting to terminate the one-year option "upon the latter to occur of December 15th, its date of expiration, or ten (10) days after receipt of this notice." Prestenbach responded by hand-delivering a letter exercising his option to purchase. At that time, the USDA loan process was nearly complete, and on December 22, 2011, the USDA conditionally approved Prestenbach's loan. Prestenbach tried to set a closing date for the loan, but Collins refused to move forward with the closing. Claiming that the option to purchase had been terminated, Collins denied the USDA's request to inspect the property. He then filed a quiet-title action against Prestenbach. Prestenbach filed an answer and a counterclaim for specific performance, stating he was "ready, willing, and able" to close the deal. Both parties filed motions for summary judgment. The chancellor granted Collins's motion for summary judgment and denied Prestenbach's motion, finding that Prestenbach was not entitled to specific performance because, at the time he exercised his option, he could not pay the entire purchase price. Prestenbach appealed. The Supreme Court granted certiorari in this case "to correct a fundamental misunderstanding of the law on option contracts and specific performance." The option holder timely exercised his option to purchase and is entitled to specific performance, so the Court reversed and remanded.View "Prestenbach, Jr. v. Collins" on Justia Law

This case arose when defendant entered into a settlement agreement to sell her property to Blueberry and then refused to consummate the sale. The trial court entered judgment pursuant to the terms of the agreement and ordered defendant to complete the sale. On appeal, defendant challenged the trial court's post-judgment order appointing the clerk of the court as an elisor to execute the escrow agreement on behalf of defendant. The court affirmed the judgment of the trial court, concluding that the trial court's order was proper under Code of Civil Procedure section 128, subdivision (a)(4), which empowers the court to compel obedience to its judgments.View "Blueberry Properties v. Chow" on Justia Law

Roger and Barbara Stephens owned a parcel of real property consisting of about 270 acres on the west side of the highway and another parcel consisting of about 83 acres on the east side of the highway. They hired a realtor to sell the parcel on the west side of the highway. The realtor asked Northern Title Company of Idaho, Inc., to begin the initial title work for a sale of the property, including preparing a legal description for the sale of the parcel on the west side of the highway. Stephen Cummings noticed a "For Sale" sign on the Stephenses' property. Cummings negotiated to purchase the Stephens' property. He was faxed a copy of the commitment for title insurance issued in connection with the transaction. The legal description in the document included the Stephenses' property on both sides of the highway and two additional parcels they did not own. Based upon the legal description in those documents, Cummings believed that the property being sold included both parcels of the Stephenses' property. Northern Title discovered that the legal description it had prepared for use in the real estate contract and its title commitment for that transaction erroneously included the Stephenses' real property located east of the highway and two parcels of land they did not own. The legal description consisted of five paragraphs, each describing a separate parcel of real property. In an effort to correct that error, Northern Title created a revised legal description by inserting between the first and second paragraphs the words, "Except all of that portion of the following described land lying easterly of U.S. Highway 30." That change excluded the two parcels of property not owned by the Stephenses, but it did not exclude their land lying east of the highway because it was described in the first paragraph. On the date of closing, Northern Title recorded a warranty deed (Original Deed) granting to Cummings the real property described in the revised legal description, which was attached to the deed as Exhibit A. The legal description included the Stephenses' property on the east side of the highway. Mr. Stephens went to the county courthouse to pay the real estate taxes on the 83 acres of land east of the highway and was informed that he no longer owned that property. Cummings filed this action against Mr. Stephens over the erroneous deed. Stephens answered, denying Cummings's claims, and filed a third-party claim against Northern Title. He later dropped his third-party claim in exchange for Northern Title agreeing to indemnify him from any losses. Stephens then filed a motion for summary judgment, contending that there was a mutual mistake or a unilateral mistake in the legal description of the real property being sold. The district court held that there was a genuine issue of fact regarding mutual mistake, but it granted the motion on the ground that the undisputed evidence showed a unilateral mistake. One of the realtors had filed an affidavit stating that prior to the sale he had told Mr. Cummings that only the land west of the highway was being sold, and Mr. Cummings did not deny that fact. Cummings successfully moved for reconsideration, with the district court finding that there was a genuine issue of material fact as to what Cummings had been told about what property he was purchasing. Cummings then amended his complaint, adding Northern Title as a defendant and alleging that by recording the Correction Deed, Stephens and Northern Title breached the warranties of title in the Original Deed, converted the 83 acres lying east of the highway, and slandered Cummings's title to the real property. The district court granted Stephens's motion for involuntary dismissal as to all of the claims against him. And in its written findings of fact and conclusions of law, the district court denied all of Cummings's claims against Northern Title except one. It found that Northern Title acted negligently as a title and abstract company, and it awarded Cummings damages in the sum of $50,000, which was the sum he had paid to obtain an assignment of its contract to purchase the Stephenses' property. The court awarded Mr. Stephens costs and attorney fees against Cummings, and it awarded Mr. Cummings costs and attorney fees against Northern Title. Mr. Cummings appealed and Northern Title cross-appealed. The Supreme Court affirmed the dismissal of Cummings' claims against Stephens, and reversed claims against Northern Title on the ground that it assumed the duty of being an abstractor of title.View "Cummings v. Stephens" on Justia Law

In 1999, Cooper and Robert L. Flowers formed C&F Enterprises, LLC. C&F owned a parcel of property in Huntsville, upon which it built a shopping center known as College Plaza. Pursuant to an "Amended and Restated Operating Agreement," MTA, Inc. became a member of C&F. The operating agreement provided that MTA, Flowers, and Cooper each owned a one-third interest in C&F. C&F borrowed $650,000 from the Southern Development Council, Inc. ("SDC"), a community-development program; that debt was memorialized by a promissory note. On the same day, SDC assigned the note to the Small Business Administration ("the SBA"). Cooper and Flowers personally guaranteed the indebtedness owed under the note. A few years later, C&F received a foreclosure letter with respect to the note. Counsel for MTA sent Cooper a letter informing him of MTA's intent to exercise its right of first refusal pursuant to section 16 of the operating agreement. In 2012, MTA filed a complaint against Cooper and Flowers, alleging multiple issues, but of pertinence for this appeal, the complaint alleged a count of contribution and "demand[ed] judgment in [MTA's] favor and against Cooper in the amount of $270,902.00, and Flowers in the amount of $270,902.00." In the alternative, "[MTA] demand[ed] judgment in its favor and against Cooper and Flowers for their individual pro rata contribution shares as determined at trial." Cooper filed a motion to dismiss; the trial court denied the motion. Cooper then answered the complaint. Thereafter, MTA filed a motion for a summary judgment against Cooper and Flowers. After a hearing, the trial court entered an order granting MTA's summary-judgment motion. Because genuine issues of material fact still remained at the time the trial court granted summary judgment, the Supreme Court concluded the trial court erred in this respect. The trial court's order was reversed, and the case remanded for further proceedings.View "Cooper v. MTA, Inc." on Justia Law