Justia Contracts Opinion Summaries

Articles Posted in Supreme Court of Indiana
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The Supreme Court affirmed the judgment of the trial court in favor of Seneca Mortgage Services after finding that Neal Bruder breached the parties' consulting agreement by failing to pay the consultant's fee, holding that there was no error.The court of appeals reversed the judgment of the trial court, finding that Seneca's recovery of the fee would sanction the requirement of an illegal act as a condition of the loan Seneca obtained to Bruder. The Supreme Court granted transfer, vacated the court of appeals' opinion, and affirmed the trial court's judgment, holding (1) the record lacked support for the conclusion that Bruder was required, or even asked, to commit an illegal act; and (2) the parties' agreement provided for the consultant's fee to be paid regardless of whether a particular financing offer was accepted. View "Bruder v. Seneca Mortgage Services, LLC" on Justia Law

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The Supreme Court held that a breach of contract claim for failure to indemnify need not follow the procedures contained in the Medical Malpractice Act (MMA).While Joseph Shaughnessy was a patient at Franciscan Alliance, Inc., Lake Imaging LLC interpreted two CT scans performed on Joseph. Joseph subsequently died. Joseph's sons filed with the Department of Insurance (DOI) a proposed medical-malpractice complaint against Franciscan without naming Lake Imaging. The DOI served the proposed complaint on Franciscan, which settled with the Shaughnessys. Franciscan then filed suit against Lake Imaging, alleging breach of contract. The trial court dismissed the claim. The court of appeals affirmed, concluding that because Franciscan's claim rested on Lake Imaging's alleged medical negligence, the MMA's two-year statute of limitations applied, and thus the complaint was untimely filed. See Ind. Code § 34-18- 7-1(b). The Supreme Court reversed, holding that the MMA did not apply in this case, and therefore, the trial court had subject matter jurisdiction and the MMA's statute of limitations did not apply. View "Lake Imaging LLC v. Franciscan Alliance, Inc." on Justia Law

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The Supreme Court reversed the decision of the trial court granting summary judgment to Plaintiffs in this dispute over whether a board policy created a binding contract with the former directors of the board of a county rural electric membership cooperative (REMC), holding that there was no contract.Plaintiffs, former directors of Clark County REMC, sued Clark RMEC after the board changed a series of board policies that allowed former directors who met certain requirements to receive health-insurance benefits, alleging breach of contract. The trial court granted summary judgment on Plaintiffs' partial summary judgment motion on liability and resolved all other claims in a settlement agreement. The court of appeals affirmed. The Supreme Court reversed, holding that there was not a contract because the policy was not an offer. View "Clark County REMC v. Reis" on Justia Law

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The Supreme Court reversed the trial court's grant of summary judgment in favor of Continental Western Insurance Company and dismissing G&G Oil Company of Indiana's claim for losses from a ransomware attack, holding that neither party demonstrated that it was entitled to summary judgment.G&G Oil purchased an insurance policy from Continental. One provision of the policy - the "Computer Fraud" provision - covered loss "resulting directly from the use of any computer to fraudulently cause a transfer of money." G&G Oil was the target of a ransomware attack and submitted a claim for coverage of its losses under the "Commercial Crime" provision of the policy. Continental denied the claim. G&G Oil then brought this complaint. The trial court granted summary judgment for Continental. The Supreme Court affirmed, holding that, although G&G Oil's losses "resulted directly from the use of a computer," neither party was entitled to summary judgment. View "G&G Oil Co. of Indiana v. Continental Western Insurance Co." on Justia Law

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In this case involving an agreement to arbitrate, the Supreme Court reiterated the elements of equitable estoppel required for an outside party not contemplated by the agreement to enforce an arbitration clause against a signatory and reversed the trial court's determination that a third party could compel arbitration, holding that none of the traditional elements of equitable estoppel were satisfied.Jane Doe's legal guardian (Guardian) arranged for Jane to live at Carmel Senior Living (CSL) and initialed an arbitration agreement. Guardian later filed a complaint against CSL; its management company, Spectrum; and one of its employees, claiming that the employee had sexually abused Jane and that CSL and Spectrum (together, CSL) were vicariously liable. Guardian later amended the complaint to add Certiphi Screening, the company CSL had hired to run background checks on new employees. The defendants demanded arbitration. The trial court granted the motions to compel arbitration, concluding that the agreement covered CSL and that equitable estoppel mandated arbitration of Guardian's claims against Certiphi. The Supreme Court reversed in part, holding that Certiphi did not meet the requirements of equitable estoppel. View "Doe v. Carmel Operator, LLC" on Justia Law

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The Supreme Court reversed the determination of the trial court that Jane Doe could compel her legal guardian (Guardian) to arbitrate her claims against it and affirmed the trial court's order compelling Guardian to arbitrate as to the remaining defendants, holding that this Court declines to adopt any alternative theories to the doctrine of equitable estoppel.After Jane had been living at Carmel Senior Living (CSL) for a few months, Guardian filed a complaint against CSL, CSL's management company and one of its employees, and Certiphi Screening, the company CSL had hired to run background checks on new employees, alleging that Jane had been sexually abused. The trial court granted CSL's and Certiphi's motions to compel arbitration under the arbitration agreement in the residency contract, determining that the agreement covered CSL under and agency theory and that equitable estoppel mandated arbitration of Guardian's claims against Certiphi. The Supreme Court reversed in part, holding (1) Certiphi was not one of the third-party beneficiaries provided for in the arbitration agreement and could not meet the requirements of equitable estoppel; and (2) this Court declines to endorse any alternative equitable estoppel theories. View "Doe v. Carmel Operator, LLC" on Justia Law

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In this dispute over the ownership of a criminal justice center the Supreme Court affirmed the judgment of the trial court ordering that the title of the center be given to Floyd County, holding that the turn-over provision in the lease between the County and the Building Authority was valid and enforceable.In 1991, the New Albany, Floyd County Indiana Building Authority issued bonds to finance a criminal justice center (the Center). Pursuant to an inter-local agreement, the Building Authority would own the Center, the County would lease it, and the City of New Albany would sublease space from the County. In 1992, the County and the Building Authority executed a lease with a fifteen-year term. The lease included a turn-over provision providing that if the County did not exercise its option to purchase the Center and to renew the lease then upon expiration of the lease the Center should become property of the County. After the lease expired the Building Authority declined to transfer title. The County filed suit seeking declaratory judgment and specific performance. The Supreme Court held that the turn-over provision in the lease was valid and required that title be given to the County. View "City of New Albany v. Board of Commissioners of County of Floyd" on Justia Law

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The Supreme Court affirmed the trial court's judgment in this action by an employer against several of its former employees and their new employer for alleged violations of the former employees' noncompetition and non-solicitation agreements, holding that the liquidated damages provisions in the employees' contracts were unenforceable and that there remained an issue of material fact precluding summary judgment as to the employer's tortious interference claims.The employer in this case brought claims against its former employees, including tortious interference with a contractual relationship and breach of contract claims. The trial court (1) granted summary judgment for the former employees on the issue of liquidated damages, finding that the liquidated damages provisions in the employees' contracts were unenforceable as a matter of law; and (2) found that there were issues of material fact regarding precluding summary judgment on the breach of contract claim. The Supreme Court affirmed, holding (1) the liquidated damages provisions were unenforceable penalties; and (2) an issue of material fact remained as to the employer's tortious interference with a contractual relationship claim. View "American Consulting, Inc. v. Hannum Wagle & Cline Engineering, Inc." on Justia Law

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The Supreme Court vacated the section of the trial court's preliminary injunction purporting to enforce an unreasonable restrictive covenant in a noncompetition agreement, holding that parties to noncompetition agreements cannot use a reformation clause to contract around the principle that reviewing courts may delete, but not add, language to revise unreasonable restrictive covenants under Indiana's "blue pencil doctrine."Under the blue pencil doctrine, courts can make overbroad covenants reasonable by deleting language, but they may not add terms. The noncompetition agreement in this case contained an overbroad nonsolicitation covenant that contained a reformation clause authorizing the court to modify unenforceable provisions. The trial court granted a preliminary injunction enforcing the covenant. The court of appeals concluded that the nonsolicitation covenant was overbroad but revised the covenant to make it reasonable under the reformation clause. The Supreme Court granted transfer and held that since the nonsolicitation covenant could not be blue penciled, but rather required additional language to limit the scope of its restrictive covenants, it could not be enforced despite its reformation clause. View "Heraeus Medical, LLC v. Zimmer, Inc." on Justia Law

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In this litigation arising from a transaction in goods governed by the Uniform Commercial Code (UCC) the Supreme Court affirmed the trial court order denying summary judgment, holding that there remained genuine issues of material fact precluding summary judgment.An agreement governing the sale of forty dump trucks contained a warranty and a one-year limitations period for filing a breach of contract suit. Buyers sued for breach of warranty several years later. The Supreme Court held (1) under the express terms of their agreement, the parties contracted for a future-performance warranty, and any breach of warranty claims did not accrue until the buyers knew, or should have known, of the breach; (2) under the equitable estoppel doctrine, a party's conduct may toll a contractually agreed-upon limitations period; and (3) in the instant case, genuine issues of material fact remained relating to the above two issues, precluding summary judgment. View "Kenworth of Indianapolis, Inc. v. Seventy-Seven Limited" on Justia Law