Justia Contracts Opinion Summaries

In this case, a purchase agreement provided provided that the parties were obligated to close a real-estate sale unless the buyer -- Lafayette Land Acquisitions II, LLC ("Lafayette Land") -- rejected the deal in writing before the end of the due-diligence period. Although the parties disputed when that period began, and how long it lasted, it was undisputed that Lafayette Land never rejected the deal. Therefore, the Alabama Supreme Court concluded the parties were obligated to close. Because the Circuit Court held otherwise, judgment was reversed and remanded. View "Lafayette Land Acquisitions II, LLC v. Walls" on Justia Law

Mobile Infirmary Association d/b/a Mobile Infirmary Medical Center ("Mobile Infirmary") appealed the grant of summary judgment in favor of Quest Diagnostics Clinical Laboratories, Inc. ("Quest"). Quest and Mobile Infirmary entered into a Laboratory Management Agreement ("the LMA"), in which Quest agreed to manage Mobile Infirmary's onsite clinical laboratory facilities and to provide clinical testing services used by Mobile Infirmary's medical staff to diagnose and treat patients. The LMA also contained indemnity provisions. In 2015, James Ward went to Mobile Infirmary's emergency room after suffering weakness, dizziness, loss of fluids, a mild cough, and severe body aches. Ward was eventually diagnosed with diabetic ketoacidosis. When his condition did not improve, Ward was moved into the intensive-care unit, at which point his doctor ordered him to undergo glucose finger-sticks and a basic metabolic panel every four hours to help monitor his serum glucose, kidney function, acid/base status, and electrolytes. According to Mobile Infirmary, those basic metabolic panels were supposed to be performed by Quest, but they were allegedly canceled by one of Quest's employees. At some point, he suffered an "anoxic brain injury" and later died "as a result of multisystem organ failure secondary to severe sepsis and septic shock." Ingrid Mia Ward ("Mia"), Ward's wife and the personal representative of his estate, commenced a wrongful-death action against Mobile Infirmary and other defendants responsible for Ward's treatment and care. Quest was not named as a party to Mia's action. Mobile Infirmary informed Quest of the action and, as the case progressed, apprised Quest of the status of the proceedings, including its negotiations with Mia for potential settlement of the lawsuit. Mia and Mobile Infirmary ultimately settled the wrongful-death action. Before Mia's claims against Mobile Infirmary were dismissed pursuant to a joint motion of those parties, Mobile Infirmary filed a third-party complaint against Quest in which it sought contractual and equitable indemnity related to its defense and settlement of Mia's action. Quest filed a motion to dismiss, which the trial court granted in part by dismissing Mobile Infirmary's equitable- indemnity claim. The Alabama Supreme Court found that nowhere in the LMA did the parties expressly agree or clearly provide a formula that, in the event there was a claim that arises out of partial liability or concurrent acts by both parties, indemnification will be required for a proportionate share. Accordingly, judgment was affirmed. View "Mobile Infirmary Association v. Quest Diagnostics Clinical Laboratories, Inc." on Justia Law

Ed Davis sued the City of Montevallo ("the City") claiming that the City was in breach of contract because, in terminating his employment with the City, it failed to follow certain discharge procedures set out in an employee handbook it had issued to him. The City responded by arguing it was not required to follow the handbook's procedures because Davis was an at-will employee. After entertaining motions for summary judgment from both sides, the trial court ruled in favor of the City. Davis appealed. The Alabama Supreme Court reversed the trial court's summary judgment in favor of the City. "The Handbook was an offer for a unilateral contract, which Davis accepted by continuing his employment with the City. Because the Handbook constitutes a unilateral contract, we reverse the trial court's denial of Davis's motion for partial summary judgment and direct the trial court on remand to determine whether, in fact, the City violated the Handbook's terms." View "Davis v. Montevallo" on Justia Law

Defendant-petitioner Sunset Digital Communications, Inc. ("Sunset") sought a writ of mandamus to direct an Alabama circuit court vacate its order denying a motion to dismiss the complaint filed by plaintiffs Point Broadband, LLC ("Point Broadband"), and Point Broadband Fiber Holding, LLC ("PBFH") (collectively, "plaintiffs"). In 2018, Sunset and Sunset Fiber, LLC, entered into a "First Amended and Restated Asset Purchase Agreement" ("the APA") with PBFH, which was then known as Sunset Digital Holding, LLC. In 2021, plaintiffs filed a complaint against Sunset seeking a judgment declaring that PBFH was not liable for certain unpaid taxes and penalties; that PBFH did not owe defense or indemnity obligations to Sunset relating to those unpaid taxes; that PBFH did not owe legal fees in connection with any audits or other investigations relating to Sunset's tax liability; and that Sunset owed PBFH defense and indemnity obligations in the event a third party sought to bring a claim or attempted to collect any unpaid taxes from PBFH. Sunset moved to dismiss the complaint pursuant to Rule 12(b), Ala. R. Civ. P., in which it alleged, among other things, that the APA included a mandatory outbound-forum selection clause that "requires the parties to submit exclusively to the jurisdiction of the United States federal courts or the Virginia state courts located in Bristol, Virginia." In its order denying the motion to dismiss, the trial court stated, in pertinent part: "At issue is if the language ('may') creates a mandatory forum selection clause or clause that consents to jurisdiction. Language such as 'shall' or 'must' would be used in cases where the clause was to be considered mandatory. As this is a consent to jurisdiction clause and not a mandatory one, Alabama Courts have held that imperative language such as 'shall' or 'must' are required to find that the clause is a mandatory one. However, the word 'may' results in language that is much more permissive or rather a 'consent to jurisdiction' clause." Sunset argued the trial court erroneously found that the forum-selection clause in the APA was permissive rather than mandatory. Specifically, it asserted that the trial court "wholly ignored the 'exclusive jurisdiction' language of the forum selection clause." To this the Alabama Supreme Court concurred, granted the writ and directed the trial court to vacate its February 2022 order denying Sunset's motion to dismiss. View "Ex parte Sunset Digital Communications, Inc." on Justia Law

Milton Turner died on July 25, 2018. On September 20, 2018, Mildred Williamson petitioned for letters of administration of Turner's estate in the probate court. In her petition, Williamson asserted that Turner had died intestate and that Williamson was Turner's only surviving heir. In 2019, Williamson, individually and in her capacity as the personal representative of Turner's estate, entered into a contract agreeing to sell to Matthew Drinkard and Jefferson Dolbare ("the purchasers") real property belonging to the estate for $880,650. The real-estate sales contract specified that the closing of the sale was to occur on or before May 31, 2019. On February 7, 2019, Williamson, individually and in her capacity as personal representative of Turner's estate, executed a deed conveying other real property that was part of Turner's estate to Marcus Hester. On February 13, 2019, Callway Sargent, alleging to be an heir of Turner's, filed a claim of heirship in Turner's estate. Sargent also moved for injunctive relief in which he acknowledged the February 7, 2019, deed, but asserted that Williamson had agreed to sell and had conveyed real property belonging to Turner's estate without the approval of the probate court, and requested that the probate court enjoin "Williamson from engaging in any further administration of [Turner's] estate until so ordered by [the probate court]." Williamson petitioned to have the case removed fro probate to the circuit court. From February 28, 2019, to March 18, 2019, a number of individuals came forward, all claiming to be Turner's heirs. Williamson moved to have the circuit court approve the pending property sales. Williamson and the purchasers did not close on the sale of the property that was the subject of their real-estate sales contract by May 31, 2019, as required by the contract. Some of the purported heirs petitioned the circuit court to stay or vacate the order approving the purchasers contact until matters regarding the heirs was resolved. Drinkard and Dolbare filed a motion to intervene in the proceedings regarding the administration of Turner's estate, but the circuit court denied the motion. The Alabama Supreme Court affirmed the circuit court's denial of the purchasers' motion to intervene in the administration of Turner's estate. View "Drinkard, et al. v. Perry, et al." on Justia Law

Alicia Cochran appealed a circuit court order that granted her former employer, CIS Financial Services' motion for a preliminary injunction. CIS was engaged in the mortgage-origination business and employed Cochran as a branch loan originator. In June 2021, Cochran's supervisor at CIS, Randy Lowery, left his employment at CIS to accept a position with Movement Mortgage, LLC ("Movement"). Another CIS employee, Geremy Reese, also left CIS to work for Movement. CIS thereafter filed suit against Lowery and Reese. Among other things, CIS requested in its complaint injunctive relief against Lowery and Reese. Additionally, CIS filed that same day a motion for a preliminary injunction against Lowery and Reese. On August 31, 2021, Cochran resigned her position with CIS. CIS then amended its complaint to include Cochran and Movement as defendants. The only specific count that CIS asserted against Cochran in the amended complaint was one alleging breach of contract. Then CIS moved for the preliminary injunction against Cochran at issue here. On appeal, Cochran challenged the propriety of the circuit court's order granting CIS's motion for a preliminary injunction, arguing that the respective restraining provisions of her compensation agreement and nonsolicitation agreement were not enforceable against her. However, CIS moved to dismiss Cochran's appeal as moot, noting that, by its terms, the preliminary injunction expired after August 31, 2022. CIS argued that this appeal no longer presented a justiciable controversy and that the Alabama Supreme Court, therefore, lacked jurisdiction over the appeal. The Supreme Court found the preliminary injunction challenged in Cochran's appeal expired by its own terms. Consequently, the Supreme Court lacked the power to grant Cochran relief from the preliminary injunction; therefore, this appeal was no longer justiciable and has become moot. The appeal was therefore dismissed. View "Cochran v. CIS Financial Services, Inc." on Justia Law

This appeal and cross-appeal involved a residential lease agreement with an option to purchase executed by Tony Hiett, Sr., and his wife Kelly Hiett ("the tenants") and Beverlye Brady ("the landlord"). According to the tenants, they accepted the first option to purchase the property presented in the landlord's email and began making monthly holdover rental payments of $2,500. And, in April 2017, they informed the landlord that they had obtained financing and were ready to close on the property by April 30, 2017. The landlord, however, refused to convey title to the property because, she claimed, the tenants had never responded to her email; thus, according to the landlord, the option to purchase had expired. The tenants thereafter stopped paying rent under the lease agreement, but continued to occupy the property, and sued the landlord, seeking specific performance of the option to purchase. The landlord counterclaimed, asserting a claim for ejectment and a claim of breach of contract, based on unpaid rent and late fees owed under the lease agreement. The Alabama Supreme Court affirmed the judgment entered on the jury's verdict in favor of the tenants on their specific-performance claim and against the landlord on her ejectment claim. The Supreme Court reversed the judgment entered on the jury's verdict in favor of the landlord on her breach-of-contract claim based on the inadequacy of damages awarded, and the Court remanded the case with directions to the trial court to grant a new trial as to only that claim, unless the tenants consented to an additur. View "Hiett v. Brady" on Justia Law

This appeal and cross-appeal involved a residential lease agreement with an option to purchase executed by Tony Hiett, Sr., and his wife Kelly ("the tenants") and Beverlye Brady ("the landlord"). The landlord leased to the tenants a house ("the property") located in Auburn for a term of five years, beginning September 1, 2011, and ending August 31, 2016, for $2,000 per month. By letter dated August 29, 2016, the tenants informed the landlord that they were exercising their option to purchase the property. According to the tenants, they accepted the first option to purchase the property presented in an email from the landlord and began making monthly holdover rental payments of $2,500. In April 2017, they informed the landlord that they had obtained financing and were ready to close on the property by April 30, 2017. The landlord, however, refused to convey title to the property because, she claimed, the tenants had never responded to her email; thus, according to the landlord, the option to purchase had expired. The tenants thereafter stopped paying rent under the lease agreement, but continued to occupy the property, and sued the landlord, seeking specific performance of the option to purchase. The landlord counterclaimed, asserting a claim for ejectment and a claim of breach of contract, based on unpaid rent and late fees owed under the lease agreement. The Alabama Supreme Court affirmed judgment on a jury’s verdict in favor of the tenants on their specific performance claim, and against the landlord on her ejectment claim. The Supreme Court reversed judgment entered on the jury’s verdict in favor of the landlord on her breach-of-contract claim based on the inadequacy of damages awarded, and the Court remanded the case with directions to the trial court to grant a new trial only as to that claim unless the tenants consented to an additur. View "Brady v. Hiett" on Justia Law

Warren Averett Companies, LLC, sought a writ of mandamus to direct a circuit court to vacate its order denying Warren Averett's motion to strike the jury demand asserted by Gerriann Fagan and to enter an order granting the motion to strike the jury demand. The underlying dispute involved a business proposition Warren Averett made to Fagan to to build a human-resources consulting practice. Fagan would wind down the operations of her company, The Prism Group; Fagan would then become a member of Warren Averett, and Warren Averett would purchase The Prism Group's equipment and furniture, assume responsibility for The Prism Group's leases; and that Warren Averett would assume The Prism Group's membership in Career Partners International, LLC. The "Standard Personal Service Agreement" ("the PSA") entered into by Fagan and Warren Averett drafted by Warren Averett included, in pertinent part, a dispute-resolution clause. Fagan resigned from Warren Averett after a salary dispute, and, on February 28, 2019, Fagan filed a demand for arbitration with the American Arbitration Association ("AAA"). The AAA determined that, under its rules, Fagan owed $300 and Warren Averett owed $1,900. The AAA also stated that any dispute regarding the filing fees should be raised before the arbitrator for a determination once all the filing requirements, including payment of the fees, had been satisfied. Warren Averett refused to pay its share of the filing fees as requested by the AAA, and the AAA closed the file in the matter. Thereafter, Fagan sued Warren Averett alleging multiple causes of action. Fagan demanded a jury trial. Warren Averett moved to dismiss the claims, and concurrently moved to compel arbitration. The Alabama Supreme Court determined Fagan did not show prejudice by the almost two-year delay between the filing of Fagan's amended complaint and the filing of Warren Averett's motion to strike the jury demand: "The trial court granted Warren Averett's motion to compel arbitration, and Fagan sought review of that decision. We reversed that decision; on remand, the trial court set a scheduling conference, and Warren Averett filed its motion to strike Fagan's jury demand. Although there was a delay between the time that Fagan demanded a jury and the time that Warren Averett sought to strike that demand, Fagan has not shown that she was prejudiced by that passage of time." Warren Averett's petition was granted and the writ issued. View "Ex parte Warren Averett Companies, LLC." on Justia Law

Plaintiff Terri Anderson appealed the grant of summary judgment entered in favor of the defendants. At issue was an agreement to purchase certain residential property located on Ono Island in Baldwin County, Alabama ("the property") for $1.4 million. In 2012, Robert Bowling III acquired the property and executed a promissory note in favor of Merchants Bank. Merchants Bank subsequently assigned the promissory note and its mortgage interest in the property to Wells Fargo Bank ("Wells Fargo"). In 2018, Bowling conveyed his interest in the property to Robin and Michael Coleman via a vendor's lien deed. The Colemans executed a promissory note evidencing a debt to Bowling. In 2020, the Colemans conveyed a partial interest in the property to their friends, France Frederick and Thomas Sparks. In March 2021, the Colemans, Frederick, and Sparks entered into a purchase agreement regarding the property with Anderson. In April 2021, the sellers decided they had made a mistake by agreeing to sell the property. Robin Coleman eventually sent a communication to Anderson's realtor explaining, in relevant part: "We have voided the contract you sent us and have decided to keep our property." Anderson then initiated this action seeking an injunction prohibiting the sellers from violating the terms of the purchase agreement and a judgment requiring specific performance under the terms of the purchase agreement or, as an alternative to specific performance if the court were to determine that such relief was unavailable, damages for breach of contract. The sellers moved to dismiss Anderson's complaint, arguing that title to the property was unmarketable due to Bowling's and Wells Fargo's respective unsatisfied interests in the property. Accordingly, they contended, the language of the purchase agreement required a refund to Anderson of her earnest-money deposit and an automatic termination of the purchase agreement. The Alabama Supreme Court held only that the sellers could not invoke the marketability requirement of the termination provision set out in the purchase agreement to unilaterally rescind the purchase agreement under the circumstances presented by the record because it appeared that Anderson was willing to waive marketability of the sellers' title to the property to purchase whatever interest they were able to convey and because the sellers have expressly agreed to sell their interest in the property to Anderson, provided that the other pertinent contingencies of the purchase agreement were met. Judgment was reversed and the case remanded for further proceedings. View "Anderson v. Coleman, et al." on Justia Law