Justia Contracts Opinion Summaries

Zurich American Insurance Company issued a builder’s risk insurance policy for the construction of an academic building for City Colleges of Chicago. Infrastructure Engineering, Inc. (IEI), a subcontractor, designed a rainwater collection system for the project. During construction, a rainstorm caused significant flooding and damage to the building. Zurich paid the claim to CMO, the general contractor, and then sued IEI for breach of contract, alleging that IEI’s design caused the damage.The Cook County circuit court granted summary judgment in favor of IEI, agreeing with IEI’s argument that Zurich was not entitled to subrogation because the payment was made to CMO, not City Colleges, and CMO repaired the damage. Zurich appealed, and the appellate court reversed the circuit court’s decision, holding that Zurich was entitled to subrogation under the policy’s provisions, which allowed Zurich to step into City Colleges’ shoes.The Supreme Court of Illinois reviewed the case and affirmed the appellate court’s judgment. The court held that City Colleges, as the owner of the damaged property, had an insurable interest and sustained a loss when the building was damaged. The court found that Zurich, having paid for the repairs through CMO, was entitled to subrogation rights under the clear terms of the builder’s risk policy. The court rejected IEI’s argument that City Colleges did not sustain a loss or receive payment, emphasizing that CMO acted as City Colleges’ agent in handling the claim and repairs. The case was remanded for further proceedings consistent with this opinion. View "Zurich American Insurance Co. v. Infrastructure Engineering, Inc." on Justia Law

Plaintiffs, two law firms, provided legal services to defendants regarding the estate of Daniel P. O’Brien Sr. and Mary D. O’Brien. The attorney-client agreement stipulated a contingency fee structure, but defendants terminated the agreement without cause after 19 months. Plaintiffs sought compensation for their services based on quantum meruit, claiming their efforts significantly contributed to a favorable settlement for defendants.The Cook County Circuit Court found that plaintiffs had proven the elements of a quantum meruit claim, including the benefit conferred upon defendants. The court determined the reasonable value of plaintiffs’ services using the contingency fee structure from the attorney-client agreement, awarding plaintiffs $1,692,390.60 after deducting fees paid to subsequent attorneys.The Appellate Court affirmed the entitlement to quantum meruit recovery but reversed the amount awarded, ruling that the attorney-client agreement was void due to a violation of Rule 1.5(e) of the Illinois Rules of Professional Conduct, which requires a written fee-splitting agreement and client consent. The appellate court remanded the case for a new determination of the reasonable value of services.The Illinois Supreme Court reviewed the case and agreed that plaintiffs were entitled to quantum meruit recovery. However, it found that the appellate court erred in reversing the circuit court’s judgment on the reasonable value of services. The Supreme Court held that the attorney-client agreement was not void ab initio and that the circuit court did not commit reversible error in using the contingency fee structure as evidence of value. Consequently, the Supreme Court affirmed the circuit court’s judgment, awarding plaintiffs $1,692,390.60. View "Andrew W. Levenfeld & Associates, Ltd. v. O'Brien" on Justia Law

The case involves a dispute over the interpretation of a multi-vehicle insurance policy. The appellants, Mark and Karen Kuhn, were involved in a fatal accident with a semi-truck insured by the appellee, Owners Insurance Company. The Kuhns sought a declaration that the $1 million liability limits for each of the seven vehicles covered under the policy could be aggregated or "stacked" for a total of $7 million in coverage for the accident, despite an "anti-stacking" provision in the policy.The trial court ruled in favor of the Kuhns, finding the policy ambiguous and thus allowing for the stacking of the liability limits. However, the appellate court reversed this decision, holding that the policy's anti-stacking clause was unambiguous and should be enforced as written.The Supreme Court of the State of Illinois affirmed the appellate court's judgment. The court found that the insurance policy, when read as a whole, unambiguously provided a $1 million per accident liability limit and prohibited stacking the liability limits of each insured vehicle. The court rejected the Kuhns' argument that the policy was ambiguous due to the separate listing of liability limits for each vehicle insured. The court held that the policy's anti-stacking provision, in conjunction with the declarations pages, clearly indicated that the limits could not be aggregated. View "Kuhn v. Owners Insurance Co." on Justia Law

Jansen was a resident at a skilled nursing facility. Kotalik, with Jansen’s power of attorney for healthcare, signed a “Contract Between Resident and Facility” that provides all civil claims shall be resolved exclusively through mandatory mediation, and, if such mediation does not resolve the dispute, through binding arbitration. The contract waived claims for punitive damages and included a “termination upon death” provision. Jansen suffered several falls, resulting in injuries that contributed to or caused Jansen’s death. Her estate sued, arguing that the defendants had waived their right to mediate and/or arbitrate by participating in litigation for nearly a year, that the arbitration clause was procedurally and substantively unconscionable, and that Kotalik, as Jansen’s POA for healthcare, lacked the authority to execute an arbitration clause on Jansen’s behalf.The Illinois Supreme Court affirmed the denial of the motion. By the express terms of the contract, once the resident died, the contract ceased to exist, including the forum provision. The court did not address the other arguments. View "Clanton v. Oakbrook Healthcare Centre, Ltd." on Justia Law

The Supreme Court reversed in part the decision of the appellate court reversing the judgment of the circuit court in favor of PML Development LLC on its action against the Village of Hawthorn Woods for breach of a development agreement between the parties and against the Village on its counterclaim for breach of the agreement, holding that the circuit court erred in granting judgment in favor of PML on the Village's breach of contract counterclaims.Following a bench trial, the circuit court found that both parties materially breached the agreement at issue but that the Village's first material breach excused PML from performing its contractual obligations. The appellate court reversed, concluding that neither the Village or PML could recover damages because each party materially breached the agreement. The Supreme Court reversed in part, holding (1) the circuit court correctly entered judgment in favor of PML on its breach of contract claims; and (2) the circuit court erred in granting judgment in favor of PML on the Village's breach of contract counterclaims. View "PML Development LLC v. Village of Hawthorn Woods" on Justia Law

The Village alleged that the defendants breached a 2003 recorded annexation agreement executed by the Trustee that was then the legal owner of the property, which now consists of an annexed 114-acre subdivision. The Village alleged that the defendants were subject to the annexation agreement as successors to the Trustee when they purchased undeveloped portions of the property from Plank, which had acquired the property from the Trustee. The Village alleged that the defendants refused its request for a letter of credit in the amount proportionate to the number of lots the defendants owned in the subdivision, to secure the completion of roads in the subdivision.The defendants argued that, although the annexation agreement was a covenant that ran with the land, it did not confer successor status to an entity that purchased only a portion of the property subject to annexation, as opposed to the whole of the property. The Appellate Court reversed the dismissal of the action. The Illinois Supreme Court affirmed. Reading the annexation agreement as a whole, the court found that its plain language required its provisions to be binding and enforceable on the parties’ successors. Defendants are successors in title to the landowner who agreed to those obligations. The obligations imposed upon any particular purchaser depend upon the obligations of the original developer that remain unsatisfied with respect to the specific parcel sold. View "Village of Kirkland v. Kirkland Properties Holdings Co., LLC I" on Justia Law

TURSS provided background and credit screening services to property management professionals and landlords through its online platforms and undertook to build an online platform to sell customizable electronic lease forms. TURSS sent Helix a letter of intent that the platform would be completed in 2009. The companies entered into a five-year marketing agreement that required TURSS to provide the platform and Helix to provide the product. TURSS would receive 35% of the revenue generated from sales and Helix would receive 65%. The agreement was not exclusive. Helix provided electronic forms and supporting materials to TURSS but the platform was still not completed in 2015.Helix sued TURSS for“willful and intentional” breach of contract, fraud, negligent misrepresentation, and promissory estoppel. The court ultimately granted TURSS summary judgment. The appellate court and Illinois Supreme Court reversed, finding that Helix failed to present proof of its damages with reasonable certainty. Helix did not present evidence of revenues of a similar product or a similar business in a similar market. Where a plaintiff seeks lost profits for a new company, "without a track record of profit, attempting to sell a new and untested product to a new market,” the specter of impermissible speculation arises. View "Ivey v. Transunion Rental Screening Solutions Inc." on Justia Law

Walworth, a former stockholder, sued Mu Sigma, a privately held data analytics company, and Rajaram, the company’s founder, CEO, and board chairman, alleging that after reaping the benefits of Walworth’s $1.5 million investment and reputational capital, the defendants embarked on a fraudulent scheme to oust Walworth of its substantial ownership interest in the company.The Cook County circuit court dismissed the complaint, citing the stock repurchase agreement (SRA), which included anti-reliance and general release provisions. The appellate court reversed, holding that the anti-reliance language was ambiguous. The Illinois Supreme Court reinstated the dismissal, stating that “the broad and comprehensive release agreed to by [Walworth], a sophisticated party represented by experienced counsel, unambiguously encompasses” the unjust enrichment and breach of contract claims. The bargained-for anti-reliance provisions reflected the understanding that there may be undisclosed information but that Walworth was satisfied by the information provided. Walworth had direct access to Rajaram to negotiate the arm’s-length transaction at issue and Rajaram was not acting as a fiduciary for Walworth. A corporation owes no fiduciary duty to its shareholder and Delaware law does not impose “an affirmative fiduciary duty of disclosure for individual transactions.” View "Walworth Investments-LG, LLC v. Mu Sigma, Inc." on Justia Law

Dent and RLD (Petitioners) had several supply and marketing contracts with energy companies (Respondents). Respondents terminated the Petitioners' at-will consulting agreements. Petitioners filed an Illinois Supreme Court Rule 224 petition seeking disclosure from Respondents of the names and addresses of three unidentified individuals who might be responsible in damages to Petitioners, alleging that those individuals publicized false and defamatory statements about Dent that caused respondents to terminate their contractual relationships. Petitioners alleged that the unnamed individuals accused Dent of drunken conduct and of sexual misconduct. The appellate court reversed the dismissal of the petition, stating that the circuit court abused its discretion when it sua sponte dismissed the petition based upon its determination that Petitioners knew the identity of Respondents and their attorneys; Respondents and their attorneys were not potential defendants responsible in damages for defamation or breach of contract.The Illinois Supreme Court reinstated the dismissal. The appellate court erred in holding that a section 2-615 motion to dismiss cannot consider affirmative defenses apparent on the face of the petition, such as the existence of qualified privilege. The existence of qualified privilege on the part of the unidentified individuals was apparent from the face of the petition. Respondents, having raised nothing more than a conclusory denial, failed to sufficiently allege abuse of that privilege. View "Dent v. Constellation NewEnergy, Inc." on Justia Law

Restore was asked to mitigate and repair significant fire damage at Proviso East High School, having provided similar service to the District in the past. The District’s customary practice when contracting for repair and payment of losses covered by insurance was to proceed without a recorded vote of its Board. The fire loss was covered by insurance. The District’s superintendent executed contracts with Restore.The District was subject to the School District Financial Oversight Panel (FOP) and Emergency Financial Assistance Law (105 ILCS 5/1B-1) and the Financial Oversight Panel Law (105 ILCS 5/1H-1). The FOP’s chief fiscal officer attended construction meetings and approved numerous subcontracts, quotations, bids, sales orders, change orders, and invoices. Although there was no recorded vote, “a majority of the Proviso Board knew and informally approved" the work. Restore was paid by the insurers for all but $1,428,000. Restore sued, seeking recovery from the District based on quantum meruit. The District argued that it had no obligation to pay because the contracts had not been let out for bid and approved by a majority vote as required by the School Code (105 ILCS 5/1-1).The Illinois Supreme Court affirmed the reinstatement of the case following dismissal. The failure of a governmental unit to comply with required contracting methods is not fatal to a plaintiff’s right to recover based on quasi-contract or implied contract principles. The Board was subject to the FOP; the FOP was fully apprised of and approved the work. Any misconduct was on the part of the Board; allowing Restore to recover presents no “risk of a raid on the public treasury.” View "Restore Construction Co., Inc. v. Board of Education of Proviso Township High Schools District 209" on Justia Law