Justia Contracts Opinion Summaries

In January 2019, Raymond Robinson and his son sued Emerald Homes, L.L.C., and 21st Mortgage Corporation in the Baldwin Circuit Court. Robinson had contracted with Emerald to purchase a mobile home, financed by a loan from 21st Mortgage. After tearing down his existing house in preparation for the new mobile home, the loan was not completed, allegedly due to Emerald and/or 21st Mortgage's refusal to finalize the transaction. The complaint included claims of breach of contract, misrepresentation, suppression, and negligence, seeking compensatory and punitive damages.The trial court compelled arbitration for claims against Emerald and granted summary judgment in favor of 21st Mortgage on Raymond's claims. The case proceeded to a jury trial on Robinson's claims against 21st Mortgage. The jury found in favor of Robinson on promissory fraud and the tort of outrage, awarding him $2,980,000 in total damages. 21st Mortgage's post-trial motions, including for judgment as a matter of law (JML), were denied.The Supreme Court of Alabama reviewed the case. It held that Robinson did not present substantial evidence of promissory fraud, as he failed to prove that 21st Mortgage had no intention to perform the loan promise at the time it was made or intended to deceive him. The court also found that Robinson did not meet all the conditions required for the loan, and the failure to close the loan was not due to any fraudulent intent by 21st Mortgage.Regarding the tort of outrage, the court held that the conduct of 21st Mortgage did not meet the extreme and outrageous standard required for such a claim. The court reversed the trial court's judgment and remanded the case for further proceedings consistent with its opinion. View "21st Mortgage Corporation v. Robinson" on Justia Law

In January 2023, the Keenums and Karibu Home Builders, LLC entered into a real-estate sales contract where the Keenums agreed to sell seven lots and construct a paved road before the closing date. The contract included dispute-resolution provisions for mediation and arbitration. The Keenums did not complete the road or appear for the closing. Karibu sued for specific performance and damages, claiming the Keenums breached the contract. The Keenums argued the contract was void due to Karibu's failure to meet obligations and the requirement for mediation and arbitration.The Colbert Circuit Court granted summary judgment in favor of the Keenums, dismissing the case with prejudice. The court concluded it lacked subject-matter jurisdiction due to the contract's mediation and arbitration provision, implying Karibu should have filed directly with the American Arbitration Association.The Supreme Court of Alabama reviewed the case de novo and found that the trial court erred in concluding it lacked jurisdiction. The court held that the trial court had the authority to determine whether the mediation and arbitration provision applied and should have compelled arbitration rather than dismissing the case. The summary judgment was reversed, and the case was remanded for further proceedings consistent with the opinion. View "Karibu Home Builders, LLC v. Keenum" on Justia Law

In May 2022, Jerry & John Woods Construction, Inc. ("Woods Construction") entered into a contract with John David Jordan and Carol S. Jordan to construct a house and a metal building. Woods Construction claimed the Jordans failed to pay for the work performed, leading the company to sue them in the Dallas Circuit Court for breach of contract and unjust enrichment. The Jordans moved to dismiss or for summary judgment, arguing that Woods Construction's lack of a required residential-home-builder's license barred the company from bringing civil claims. They also filed counterclaims alleging improper and negligent work by Woods Construction.The Dallas Circuit Court denied the Jordans' motion to dismiss but later granted their motion for summary judgment, finding that Woods Construction, as an unlicensed residential home builder, was barred from enforcing the construction contract under § 34-14A-14(d) of the Alabama Code. The court also declared Woods Construction's "Notice of Lis Pendens/Lien" null and void. The court certified its judgment as final under Rule 54(b), despite the Jordans' counterclaims remaining pending.The Supreme Court of Alabama reviewed the case and determined that the Rule 54(b) certification was improper. The court noted that the claims and counterclaims were closely intertwined, as both concerned the same contract and construction work. Additionally, the resolution of the Jordans' counterclaims could potentially moot Woods Construction's claims. Therefore, the court concluded that the circuit court exceeded its discretion in certifying the judgment as final and dismissed the appeal for lack of a final judgment. View "Jerry & John Woods Construction, Inc. v. Jordan" on Justia Law

Hudgen LeBlanc and Jodi LeBlanc filed a complaint against Residence Doctor Home Inspection, LLC, and its owner-operator, Terry J. Holder, alleging negligence, wantonness, gross negligence, fraudulent/innocent misrepresentation, suppression, and breach of contract. The claims arose from a pre-purchase home inspection performed by Holder, which the LeBlancs claimed failed to report structural issues with the flooring of the home they purchased. Instead, the report only mentioned "microbial growth" on the floor joists and recommended hiring a mold-remediation specialist. After purchasing the home, the LeBlancs hired a mold-remediation specialist who discovered rotten floor joists, costing nearly $40,000 to repair.The St. Clair Circuit Court granted summary judgment in favor of the inspection company and Holder on the negligence and breach-of-contract claims and dismissed the fraud, suppression, and wantonness claims with prejudice. The court found that the LeBlancs failed to provide expert testimony to establish the applicable standard of care or Holder's breach of that standard, which was necessary to prove their claims.The Supreme Court of Alabama reviewed the case de novo. The court held that expert testimony is required to establish a home inspector's breach of the applicable standard of care, similar to other professionals such as real-estate appraisers, engineers, and architects. The LeBlancs did not present expert testimony or establish that the breach was so obvious that it did not require expert testimony. Consequently, the Supreme Court of Alabama affirmed the trial court's summary judgment in favor of the inspection company and Holder. View "LeBlanc v. Residence Doctor Home Inspection, LLC" on Justia Law

Shymikka Griggs filed a data-breach action against NHS Management, LLC, a consulting firm providing management services for nursing homes and physical-rehabilitation facilities. NHS collects sensitive personal and health information from employees, patients, and vendors. In May 2021, NHS discovered a cyberattack on its network, which lasted 80 days. NHS notified affected individuals, including Griggs, in March 2022. Griggs, a former NHS employee, claimed her personal information was found on the dark web, leading to credit issues, spam communications, and fraudulent activities.Griggs initially filed a class-action complaint in the United States District Court for the Northern District of Alabama but later dismissed it. She then filed a class-action complaint in the Jefferson Circuit Court in June 2023, alleging negligence, negligence per se, breach of contract, invasion of privacy, unjust enrichment, breach of confidence, breach of fiduciary duty, and violation of the Alabama Deceptive Trade Practices Act. NHS moved to dismiss the complaint, arguing lack of standing and failure to state a claim. The Jefferson Circuit Court dismissed Griggs's complaint with prejudice.The Supreme Court of Alabama reviewed the case and affirmed the circuit court's judgment. The court held that Griggs failed to sufficiently plead her claims. Specifically, she did not demonstrate that NHS owed her a duty under Alabama law, failed to establish proximate cause for her negligence per se claim, did not allege intentional conduct for her invasion-of-privacy claim, and did not show that she conferred a benefit on NHS for her unjust-enrichment claim. Additionally, the court found that breach of confidence is not a recognized cause of action in Alabama and that Griggs did not establish a fiduciary relationship between her and NHS. View "Griggs v. NHS Management, LLC" on Justia Law

John A. Daugherty, an attorney, filed a breach-of-contract claim against his former client, Molly Chew Baker, in the Jefferson Circuit Court. Daugherty and Molly had an agreement where Daugherty would help Molly collect alimony arrears from her ex-husband, Christopher, on a contingency-fee basis. Daugherty later agreed to represent Molly in additional matters related to her divorce, including a petition to modify alimony payments filed by Christopher. Molly eventually terminated Daugherty's services, and Daugherty sought to recover his fees through the court.The Jefferson Circuit Court dismissed Daugherty's complaint, concluding that the contingency-fee arrangement in the contract was against public policy under Rule 1.5(d)(1) of the Alabama Rules of Professional Conduct, which prohibits contingency fees in domestic relations matters involving alimony or support. The court also noted that the contract did not provide for compensation in the event of a settlement, which occurred when Molly and Christopher jointly dismissed their respective petitions.Daugherty appealed to the Supreme Court of Alabama, arguing that the contingency-fee arrangement was permissible under an exception for collecting alimony arrears after a completed divorce. However, the Supreme Court affirmed the lower court's decision, noting that Daugherty's representation extended beyond collecting arrears to include ongoing alimony matters, which did not fall under the exception. Additionally, Daugherty's claim for quantum meruit was not properly pleaded in the lower court and was inconsistent with his breach-of-contract claim. The Supreme Court concluded that the circuit court's judgment was correct and affirmed the dismissal of Daugherty's complaint. View "Daugherty v. Baker" on Justia Law

Hexagon US Federal, Inc. ("HexFed") leased a portion of a building from Intergraph Unimproved Properties, LLC in 2015. The lease included two bays with different terms and renewal options. In 2016, the lease was amended to provide a five-year term for both bays. CBS Holdings, LLC later acquired the building and the lease. A dispute arose over whether HexFed had validly renewed the lease, leading HexFed to file a lawsuit against CBS Holdings for breach of the lease agreement.The Madison Circuit Court held a bench trial and ruled in favor of HexFed, finding that CBS Holdings had waived its right to argue that the lease for one of the bays had expired after 12 months. The court also reformed the lease to correct a mutual mistake, establishing that the maximum monthly rent for the bay did not expire after one year. The court declared that HexFed had properly exercised its renewal option and awarded HexFed costs and attorneys' fees.The Supreme Court of Alabama reviewed the case and affirmed the lower court's judgment. The court held that CBS Holdings had waived its argument about the lease term by accepting rent without objection and by executing a lease amendment without changing the lease term. The court also upheld the reformation of the lease, finding clear evidence of a mutual mistake. Additionally, the court agreed that HexFed had validly renewed the lease by providing timely written notice, despite an error in the rent calculation. Finally, the court affirmed the award of costs and attorneys' fees to HexFed, as it was forced to file the action to enforce the lease. View "CBS Holdings, LLC v. Hexagon US Federal, Inc." on Justia Law

In this case, Universal Development Corporation ("Universal"), Hatti Group RE, LLC ("Hatti Group"), and Harsha Hatti separately appealed judgments entered by the Jefferson Circuit Court in favor of Robbie Dellinger following a jury trial. The trial involved consolidated cases with claims asserted by Hatti, the Hatti Group, and Dellinger.The Jefferson Circuit Court had previously dismissed Universal from Dellinger's initial action against Hatti and the Hatti Group. However, Universal was later brought back into the litigation when Hatti and the Hatti Group filed a separate action against Dellinger, Universal, and others. The cases were consolidated, and Dellinger asserted a breach-of-contract cross-claim against Universal. The jury found in favor of Dellinger on his claims against Universal and Hatti, awarding him compensatory and punitive damages.The Supreme Court of Alabama reviewed the appeals. It dismissed the appeals of Hatti Group and Hatti, noting that Hatti's appeal in Hatti v. Universal was invalid because no adverse judgment was entered against Hatti in that case. Hatti's appeal in Dellinger v. Hatti was dismissed as untimely because it was filed more than 42 days after the final judgment.Regarding Universal's appeal, the court reversed the judgment against Universal and rendered a judgment in its favor. The court held that Dellinger's breach-of-contract claim against Universal was void because it was based on work performed without a general contractor's license, violating Alabama's licensure statutes. The court concluded that Dellinger acted as a general contractor under the Personal Services Agreement with Hatti, and since Dellinger was unlicensed, the contract was void as a matter of public policy. Consequently, Universal had no legal obligation to support Dellinger in seeking payments under an unenforceable contract. View "Universal Development Corporation v. Dellinger" on Justia Law

In February 2019, the Colberts entered into a real-estate sales contract with A & W Contractors, LLC to purchase a remodeled 54-year-old house. A home inspection revealed issues with the plumbing, septic system, and electrical wiring. The parties amended the contract to address these issues, and A&W claimed to have made the necessary repairs. Despite lingering concerns, the Colberts proceeded with the purchase after A&W's real-estate agent allegedly offered a three-month builder's warranty. After moving in, the Colberts experienced significant problems with the house's systems and spent approximately $90,000 on repairs.The Colberts sued A&W, and the case went to trial in the Jefferson Circuit Court. The jury found in favor of the Colberts on their breach-of-contract and fraud claims, awarding them compensatory and punitive damages. The trial court entered a judgment on the jury's verdict and denied A&W's post-trial motions to alter, amend, or vacate the judgment or for a new trial.The Supreme Court of Alabama reviewed the case. It held that the trial court erred in granting a judgment as a matter of law (JML) in favor of the Colberts on their breach-of-contract claim, as there was conflicting evidence that should have been resolved by the jury. However, the Supreme Court affirmed the jury's verdict on the fraudulent misrepresentation and fraudulent suppression claims, noting that A&W had failed to preserve certain evidentiary and sufficiency-of-the-evidence arguments for appellate review. The case was affirmed in part, reversed in part, and remanded for further proceedings consistent with the opinion. View "A & W Contractors, LLC v. Colbert" on Justia Law

In 2014, several homeowners' associations sued Baldwin County Sewer Service, LLC (BCSS), alleging that a rate increase violated a 1991 agreement between a real-estate developer and BCSS. The plaintiffs sought a declaratory judgment and specific performance of the agreement. The case has been brought before the Supreme Court of Alabama multiple times, with BCSS repeatedly questioning whether the plaintiffs are successors in interest to the original contract party.The Baldwin Circuit Court initially granted summary judgment in favor of BCSS, stating that the plaintiffs lacked standing. However, the Supreme Court of Alabama reversed this decision in 2016, clarifying that the issue was not one of standing but whether the plaintiffs were real parties in interest. On remand, BCSS continued to challenge the plaintiffs' status, leading to multiple nonfinal rulings and additional appellate proceedings. The circuit court denied BCSS's summary judgment motions on this issue multiple times, including in August 2023.The Supreme Court of Alabama reviewed BCSS's petition for a writ of mandamus, which sought to compel the circuit court to grant summary judgment in its favor. The Court clarified that the real-party-in-interest question does not implicate the trial court's subject-matter jurisdiction and is not appropriate for mandamus review. The Court emphasized that such issues should be resolved through a final judgment by the trial court. Consequently, the Supreme Court of Alabama denied BCSS's petition for a writ of mandamus. View "Ex parte Baldwin County Sewer Service, LLC" on Justia Law