Justia Contracts Opinion Summaries

Hoover General Contractors – Homewood, Inc. ("HGCH"), appealed a circuit court order denying its motion to compel arbitration of its dispute with Gary Key regarding work performed by HGCH on Key's house in Jasper after that house was damaged by a fire. Six months after Key sued HGCH asserting claims stemming from HGCH's work rebuilding Key's house after a fire, HGCH moved the trial court to compel Key to arbitrate those claims pursuant to an arbitration clause in the contract Key had entered into with HGCH. The trial court denied HGCH's motion to compel; however, that denial was error because Key failed to establish through substantial evidence that HGCH had waived its right to arbitration by substantially invoking the litigation process. Accordingly, the order entered by the trial court denying HGCH's motion to compel arbitration was reversed by the Supreme Court and the case remanded for the trial court to enter a new order compelling Key to arbitrate his claims ursuant to the terms of his contract with HGCH. View "Hoover General Contractors - Homewood, Inc. v. Key" on Justia Law

Plaintiffs James Jordan, Sara Jordan Muschamp, and William Jordan (as representative of the estate of Emma K. Jordan, deceased) sued the Thomas Jefferson Foundation, Inc. ("TJF") for: (1) misrepresentation; (2) "slander, libel, and trade infringement"; (3) fraud; (4) wantonness; (5) suppression; (6) negligence; (7) breach of contract; and (8) tortious interference with business relations. TJF was a nonprofit organization that owned and curated a museum in Monticello, the historic home of Thomas Jefferson. In 1957, Juliet Cantrell lent TJF a "filing press" for display at Monticello. Cantrell passed away in 1976 and bequeathed the filing press, which was then on loan to TJF, and the dressing table to Emma. In 1977, Emma lent TJF the dressing table for use in the museum. Certain "loan agreements" were executed with TJF when the furniture was lent to TJF, and there were subsequent loan agreements executed by Emma, James, and Sara. The loan agreements were silent as to whether TJF had the authority to perform any "conservation" work on the furniture without first obtaining permission from plaintiffs. In November 2007, plaintiffs removed the furniture from Monticello and shipped it to Sotheby's in New York with the intent to sell it. Sotheby's "research consultants" questioned the authenticity of the dressing table, and determined that the filing press was not in sufficiently original condition to be offered for bid. Sotheby's declined to place either piece of furniture for sale at auction; according to plaintiffs, Sotheby's found that the value of the dressing table had been "destroyed" and that the filing press then had a market value of $20,000 to $30,000, whereas "its fair market value would be around $4 million" had TFJ not performed conversation work on it. Only the claims (6), (7), and (8) above were presented to the jury; the remaining claims were disposed of before the case went to the jury. The jury returned a verdict in favor of TJF on all three counts, and the trial court entered a judgment on the jury's verdict. Plaintiffs filed a motion for a new trial, arguing, in pertinent part, that TJF did not disclose that it had insurance and that, therefore, "the venire was not properly qualified as to insurance." The trial court granted plaintiffs' motion. TJF appealed, arguing, among other things, that the trial court erred in granting plaintiffs' motion for a new trial. After review, the Alabama Supreme Court reversed the trial court's judgment insofar as it granted the plaintiffs' motion for a new trial, and affirmed the trial court's judgment insofar as it granted TJF's motion for a JML on the plaintiffs' suppression claim. View "Thomas Jefferson Foundation, Inc. v. Jordan" on Justia Law

Dannelly Enterprises, LLC ("Dannelly"), appealed a circuit court order granting a motion to compel arbitration filed by Palm Beach Grading, Inc. ("PBG"). In the fall of 2006, PBG entered into negotiations with Corvias Military Living, LLC, f/k/a Picerne Military Housing LLC; Picerne Construction/FRK, LLC; Rucker-Picerne Partners, LLC; and Rucker Communities, LLC (collectively, "the contractors"), to perform work on a project known as the Ft. Rucker RCI Family Housing, Munson Heights, Phase 1A, at Fort Rucker, Alabama. Apparently, in preparing to bid on the project, PBG contacted various subcontractors, including Dannelly, to get bids for various aspects of the project that PBG would be responsible for if it entered into an agreement with the contractors to complete the project. Although the work order issued by PBG stated that "[a] Sub-contract will be created by PBG for billing purposes," neither party submitted into evidence such a contract between PBG and Dannelly. PBG argued that Donnelly accepted benefits under existing contracts because Dannelly was hired by PBG to perform work on the project and was paid for the work it completed. The Supreme Court found, however, that PBG did not present any argument as to why it believed Dannelly was not simply operating under and benefiting from the agreement between PBG and Dannelly, which was memorialized by PBG's work order. The Court concluded that PBG failed to demonstrate that the arbitration provision in the master subcontract agreement applied to the third-party claims it asserted against Dannelly. Furthermore, there was a genuine issue of material fact as to whether Dannelly and PBG entered into PBG's standard subcontract agreement. The case was reversed and remanded to the circuit court for further proceedings. View "Dannelly Enterprises, LLC v. Palm Beach Grading, Inc." on Justia Law

Federal Insurance Company appealed a circuit court order denying its motion to compel arbitration of the breach-of-contract claim asserted against it by Kert Reedstrom. In 2008, Reedstrom entered into a written employment agreement with Marshall-Jackson Mental Health Board, Inc., d/b/a Mountain Lakes Behavioral Healthcare ("MLBHC"), to begin serving as its executive director in Guntersville. During the course of Reedstrom's employment with MLBHC, MLBHC held an executive-liability, entity-liability, and employment-practices-liability policy issued by Federal Insurance that generally protected certain MLBHC officers and employees described as "insureds" in the policy from loss for actions committed in the course of their employment with MLBHC. It was undisputed that Reedstrom was an "insured" covered by the Federal Insurance policy. The Federal Insurance policy contained an arbitration provision. A separate endorsement to the Federal Insurance policy further highlighted the arbitration provision and explained that its effect was that any disagreement related to coverage would be resolved by arbitration and not in a court of law. In July 2010, MLBHC terminated Reedstrom's employment and, in December 2010, Reedstrom sued MLBHC alleging that his termination constituted a breach of his employment contract. MLBHC asserted various counterclaims against Reedstrom based on his alleged misconduct while serving as executive director. Thereafter, Reedstrom gave Federal Insurance notice of the claims asserted against him and requested coverage under the terms of the Federal Insurance policy. Federal Insurance ultimately denied his claim and refused to provide him with counsel to defend against MLBHC's claims. A jury returned a verdict awarding Reedstrom $150,000 on his claim against MLBHC and awarding MLBHC $60,000 on its claims against Reedstrom. Consistent with its previous denial of his request for coverage, Federal Insurance refused Reedstrom's request to satisfy the judgment entered against him. Reedstrom sued Federal Insurance, asserting one claim of breach of contract and seeking $72,000 in damages ($60,000 for the judgment entered against him and $12,000 for the attorney fees he incurred in defending those claims). The Supreme Court reversed and remanded, finding that the trial court did not articulate its rationale for denying the motion to compel arbitration. The denial was apparently based on the court's resolving at least one of the arbitrability issues raised by Reedstrom in his favor and against Federal Insurance. However, because the subject arbitration provision delegated to the arbitrators the authority to resolve such issues, the trial court erred by considering the waiver and nonsignatory issues raised by Reedstrom instead of granting the motion to compel arbitration and allowing the arbitrators to resolve those issues. View "Federal Insurance Company v. Reedstrom" on Justia Law

U.S. Bank National Association ("USB"), successor in interest to Bank of America, N.A., which was the successor by merger to LaSalle Bank, National Association, as trustee for Structured Asset Investment Loan Trust, Mortgage Pass-Through Certificates, Series 2004-4 ("the Trust"), and Bank of America, N.A. ("BOA"), separately appealed a $3.9 million judgment entered against them on trespass and wantonness claims asserted by Chester and Emily Shepherd. USB also appealed the trial court's judgment in favor of the Shepherds on its claims related to an alleged error in a mortgage executed by the Shepherds upon which the Trust had foreclosed. The Alabama Supreme Court reversed. "'Every single one of these cases . . . rejects the availability of negligence and wantonness claims under Alabama law under comparable circumstances to those identified by the [plaintiffs]. Every one of these cases undercuts the legal viability of [the plaintiffs' negligence and wantonness claims], and rejects the very arguments articulated by the [plaintiffs] in opposing dismissal of those causes of action. ... the mortgage servicing obligations at issue here are a creature of contract, not of tort, and stem from the underlying mortgage and promissory note executed by the parties, rather than a duty of reasonable care generally owed to the public. To the extent that the [plaintiffs] seek to hold defendants liable on theories of negligent or wanton servicing of their mortgage, [those negligence and wantonness claims] fail to state claims upon which relief can be granted.'" View "U.S. Bank National Ass'n v. Shepherd" on Justia Law

Mid-Continent Casualty Company appealed a circuit court judgment declaring that it had a duty to defend its named insured, Advantage Medical Electronics, LLC, in a pending legal action against Advantage. This case centered on Mid-Continent's duty to defend Advantage in a South Carolina litigation. Based upon both the allegations in the complaint and the undisputed facts, the Circuit Court concluded that the policy exclusions did not allow Mid-Continent to evade its obligation to provide a defense under the CGL policy it had issued to Advantage, and it entered a final judgment in favor of Advantage. Finding no reversible error in that judgment, the Supreme Court affirmed. View "Mid-Continent Casualty Company v. Advantage Medical Electronics, LLC" on Justia Law