Justia Contracts Opinion Summaries

AIDG Properties, LLC, a real-estate holding company managed by Anjan Dutta-Gupta, purchased property. AIDG obtained loans from BankNewport (Defendant) to finance the purchase and to perform improvements. Dutta-Gupta personally guaranteed the loans. Emond Plumbing & Heating, Inc. and Tecta America New England, LLC (collectively, Plaintiffs) served as subcontractors on the project. Plaintiffs substantially completed the renovations, and BankNewport deposited the loan proceeds into AIDG’s account. After Dutta-Gupta was arrested, Defendant declared Dutta-Gupta to be in default and accelerated the loans. Defendant then set off the deposit it made previously by reversing it. As a result, AIDG was unable to pay Plaintiffs for the work they had performed. Defendant, who was granted possession of the property, later foreclosed. Plaintiffs filed a complaint seeking to recover compensation for their work under the theory of unjust enrichment. The superior court granted summary judgment for Defendant. The Supreme Court affirmed, holding that due to the absence of a relationship between Plaintiffs and Defendant and the lack of any allegation that Defendant engaged in any type of misconduct or fraud, Defendant’s retention of the property, including the improvements, was not inequitable under the Court’s jurisprudence on unjust enrichment. View "Emond Plumbing & Heating, Inc. v. BankNewport" on Justia Law

Tender Care Veterinary Hospital, Inc. ("TCVH"), appealed the grant of summary judgment entered in favor of First Tuskegee Bank on breach-of-fiduciary-duty and fraud claims stemming from a construction loan TCVH received from First Tuskegee in September 2004. The gravamen of those claims was that TCVH was injured by First Tuskegee's alleged insistence that TCVH use PJ Construction as the general contractor on the project although PJ Construction was not licensed as a general contractor in Alabama, that PJ Construction's work product was below what one would expect from a properly licensed general contractor, and that using PJ Construction resulted in delays, cost overruns, and, TCVH argued, the ultimate failure of its business. However, because TCVH's claims accrued in approximately July 2005 and TCVH did not formally assert them until after it initiated this action in April 2009, those claims were barred by the two-year statute of limitations that governed them. Accordingly, the summary judgment entered by the trial court in favor of First Tuskegee was affirmed. View "Tender Care Veterinary Hospital, Inc. v. First Tuskegee Bank " on Justia Law

With the threat of foreclosure looming on his home, Plaintiff sued Bank for failing to consider him for a mortgage loan modification, which a California class action settlement agreement required Bank to do before attempting to foreclose on Plaintiff’s home. The complaint alleged breach of contract, violation of Mass. Gen. Laws ch. 244, 35A and 35B, violation of Mass. Gen. Laws ch. 93A, and breach of the implied covenant of good faith and fair dealing. The district court dismissed the complaint in its entirety. The First Circuit vacated in part and remanded Plaintiff’s claims for breach of contract and breach of the implied covenant of good faith and fair dealing, holding (1) Plaintiff’s statutory causes of action fell short of stating a cognizable claim; but (2) the district court improperly converted Bank’s motion to dismiss Plaintiff’s contract-based claims into a motion for summary judgment, warranting a remand of those claims. View "Foley v. Wells Fargo Bank, N.A." on Justia Law

DHRI, Inc. entered into a contract to purchase a parcel of land from William Hanback. DHRI later sued Defendant for specific performance of the land purchase contract. On June 9, 2004, the trial court entered a decree providing that Hanback should sell the property to DHRI and DHRI should pay to Hancock certain sums. On November 21, 2012, Hancock filed a petition for rule to show cause, asserting that after closing on the property, DHRI refused to pay funds owed him under the June 9, 2004 order. After a hearing, the circuit court issued a rule to show cause to DHRI. The court then determined that DHRI had not paid Hancock the required amount of $350,000, found DHRI in contempt of the June 9, 2004 order, and entered judgment for Defendant against Plaintiff in the amount of $350,000. The Supreme Court reversed and dismissed the rule to show cause, holding that the circuit court abused its discretion because the June 9, 2004 order did not contain definite terms as to the total amount DRHI was required to pay and when such payment was due.View "DRHI, Inc. v. Hanback" on Justia Law

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