Justia Contracts Opinion Summaries

Brian and Lori Peay purchased a home manufactured by Energy Homes, Division of Southern Energy Homes, Inc. (SEHI). At closing, SEHI offered the Peays certain warranties on the home in exchange for the Peays' agreement that any disputes over the home would be submitted to binding arbitration. Brian Peay accepted the warranties and signed the arbitration agreement. After discovering flaws in the home, the Peays filed suit against SEHI, among other defendants. SEHI moved to enforce the arbitration agreement by ordering the parties to arbitrate the dispute. The circuit court denied the motion. The court of appeals affirmed the order denying enforcement of the arbitration agreement. The Supreme Court reversed, holding, contrary to the findings of the court of appeals, (1) the arbitration agreement was not prohibited by the merger and integration clause of the purchase contract; (2) the arbitration agreement was not unconscionable; and (3) Lori Peay was bound to the arbitration agreement even though she did not sign the agreement. Remanded. View "Energy Home, Div. of S. Energy Homes, Inc. v. Peay" on Justia Law

Seller and Buyers entered into a contract for a deed. Buyers made payments to Seller for almost three years. Because Seller did not provide Buyers with all information required by Tex. Prop. Code 5(D), Buyers later told Seller they were exercising their statutory right to cancel and rescind the contract for deed. Seller sued Buyers for breach of contract. Buyers counterclaimed for violations under the Property Code, among other statutory violations. Seller, in turn, alleged he was entitled to a setoff in the amount of the fair market rental value of the property for the time Buyers occupied the house. The trial court entered judgment in favor of Buyers, awarding actual damages for cancellation and rescission of the contract for deed, among other damages. The Court reversed the trial court's awards of actual damages for cancellation and rescission, holding (1) subchapter D's cancellation-and-rescission remedy contemplates mutual restitution of benefits among the parties; and (2) thus, Buyers were required to restore to Seller supplemental enrichment in the form of rent for their interim occupation of the property upon cancellation and rescission of the contract for deed. Remanded. View "Morton v. Nguyen" on Justia Law

Respondents were successors-in-interest to 380 acres of land once owned by Baker, now deceased. Petitioners entered into a lease agreement with Baker that contained an option allowing Petitioners to buy the land if Baker decided to sell it. Petitioners and Baker subsequently agreed that Petitioners would purchase the 380 acres for $470,000. Petitioners attempted to exercise their right to buy the property under the agreement, but Respondents brought a declaratory judgment action to void the agreement. The trial court rendered a final judgment for Petitioners. The court of appeals reversed, concluding (1) the agreement was ambiguous as to whether it was a presently binding contract or merely an agreement to agree, and (2) therefore, the agreement's enforceability was a fact issue that should not have been determined by summary judgment. The Supreme Court reversed, holding that the agreement contained all material terms and was an enforceable contract as a matter of law. Remanded. View "McCalla v. Baker's Campground, Inc." on Justia Law

Homes built with an exterior insulation and finish system (EIFS) suffer serious water damage that worsens over time. Homebuilder began a remediation program in which it offered to homeowners to remove exterior EIFS from the homes it had built and to replace it with conventional stucco. Almost all the homeowners accepted Homebuilder's offer of remediation. Homebuilder sought indemnification for the costs from its insurers (Insurers). Insurers denied coverage, preferring instead to wait until the homeowners sued. This litigation ensued. Now, only one insurer remained. The court of appeals reversed the trial court's judgment in favor of Homebuilder, finding (1) Homebuilder failed to establish its legal liability to the homeowners to trigger Insurer's coverage; and (2) Homebuilder failed to offer evidence of damages covered by the policy. The Supreme Court reversed, holding (1) Homebuilder's settlements with the homeowners established both Insurer's legal liability for the property damages and the basis for determining the amount of loss; and (2) Insurer's policy covered Homebuilder's entire remediation costs for damaged homes. View "Lennar Corp. v. Markel Am. Ins. Co." on Justia Law

The Finnemans owned 17,000 acres of farmland that they deeded to Rock Creek Farms (RCF). RCF funded a series of redemptions of the property, and the Arnoldys purchased existing judgments on the property. Rabo Agrifinance and Rabo AgServices (Rabo) subsequently initiated foreclosure proceedings against the Finnemans, RCF, and all parties who had an interest in the land. The trial court entered a judgment and decree of foreclosure in the Rabo foreclosure proceedings and adjudged RCF as having the final owner's right of redemption as to the entirety of the property. The Arnoldys sought to have the judgment and decree of foreclosure set aside by filing a motion for relief pursuant to S.D. Codified Laws 15-6-60(b). On May 26, the trial court granted the motion and vacated the portion of the judgment recognizing RCF's final redemption rights. RCF and the Finnemans sought relief from the May 26 order by filing separate motions pursuant to Rule 60(b). The trial court denied relief. The Supreme Court affirmed, holding that the circuit court judge correctly determined that a Rule 60(b) motion was not appropriate and denied relief in this case. View "Rabo Agrifinance, Inc. v. Rock Creek Farms" on Justia Law

Thomas Konrad accepted a loan from Bob Law upon the advice of attorney Douglas Kettering. Law and Kettering had been partners in at least one of Law's business ventures and had an attorney-client relationship. Thomas's parents (the Konrads) provided their land as collateral for Thomas's loan. Thomas later defaulted on the note. Seven months after Kettering passed away, Law brought suit to enforce the note and mortgage against Thomas and the Konrads. Law settled with Thomas and the Konrads. Law then sought to recover from the Kettering Estate the amounts outstanding on the note, claiming that Kettering's acts - including his conflict of interest with Law and his alleged fraudulent inducement of the Konrads into signing the note and mortgage - voided the note and mortgage, and therefore, the Estate was liable to Law for the interest due on the note. The circuit court granted summary judgment for the Estate. The Supreme Court affirmed, holding (1) the contract between Law and Thomas did not contravene public policy because it was drafted by an attorney who failed to disclose a conflicting attorney-client relationship; and (2) the theory that Kettering fraudulently induced the Konrads into signing the note and mortgage rested on mere speculation. View "Law Capital, Inc. v. Kettering" on Justia Law

Druid Ridge Cemetery Company entered into a contract to sell thirty-six acres of the approximately 200 acres it owned and were a part of its cemetery operation. The intended purchaser entered into the contract to construct residences on portions of the land immediately adjacent to Park Heights Avenue. The Dumbarton Improvement and Long Meadow Neighborhood Associations challenged the sale, claiming that the residential development violated a restrictive covenant contained in the deed conveying the cemetery property to Druid Ridge. The circuit court determined (1) the language of the restrictive covenant was ambiguous, and (2) alternatively, there were radically changed circumstances in the area rendering the restrictive covenant ineffective and unenforceable. The Court of Appeals reversed, holding (1) the language of the restrictive covenant was unambiguous; and (2) the nexus between the changed circumstances and the purpose of the covenant was not sufficient to render the restrictive covenant unenforceable. Remanded. View "Dumbarton Improvement Ass'n v. Druid Ridge Cemetery Co." on Justia Law

In case no. 1111525, M & F Bank ("M & F") appealed a summary judgment entered in favor of First American Title Insurance Company ("FATIC") on negligence, breach-of-contract, and bad-faith-failure-to-pay claims M&F asserted against FATIC related to a title-insurance policy ("the title policy") FATIC issued M & F in connection with a mortgage loan made by M & F to a developer of property in Auburn. In case no. 1111568, FATIC appealed the grant of summary judgment entered in favor of M & F on FATIC's counterclaims asserting abuse of process, conspiracy, breach of contract, and negligence. Upon review of both cases, the Supreme Court affirmed both judgments. View "M & F Bank v. First American Title Insurance Company " on Justia Law

Dorothy Urban's estate (Estate) filed suit against Robert Street, asking the circuit court to declare null and void a deed executed by Urban to Street for a residential property on the grounds that the execution of the deed was procured through fraud. Street subsequently executed a deed of trust for a loan that was secured by the property. The majority of the loan was used to pay off a mortgage on the property placed by Urban. Later, the circuit court directed that the property be conveyed in Street's name to the Estate. The court created a constructive trust on the property without expressly declaring the Urban-to-Street deed void ab initio. Street subsequently defaulted on the deed of trust and Petitioners filed a foreclosure action on the property. The Estate filed a motion to dismiss the foreclosure proceedings, which the circuit court denied. The court of special appeals reversed. The Court of Appeals reversed, holding that although Petitioners were not bona fide purchasers of the property, under the doctrine of equitable subrogation, Petitioners were entitled to priority for the amount loaned to Street used to pay off the balance owed on the preexisting Urban mortgage. View "Fishman v. Murphy" on Justia Law

Aloha Tower Development Corporation filed a petition to expunge a deed restriction on a park requiring that it be preserved as a public park. Scenic Hawaii, Inc. subsequently intervened in the litigation. After a non-jury trial, the land court denied the petition. Scenic Hawaii filed a motion for attorneys' fees and costs under the private attorney general doctrine. The land court granted the request. The intermediate court of appeals (ICA) reversed the award of attorneys' fees. The Supreme Court vacated the judgment of the ICA and affirmed the final judgment of the land court, holding that the land court was correct in awarding attorneys' fees and costs to Scenic Hawaii under the private attorney general doctrine inasmuch as the three prongs of the private attorney general doctrine were satisfied in this case. View "In re Application of Honolulu Constr. & Draying Co., Ltd." on Justia Law