Justia Contracts Opinion Summaries

Articles Posted in Supreme Court of Ohio
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The Supreme Court held that an action seeking a determination that an oil and gas lease has expired by its own terms is a controversy "involving the title to or the possession of real estate" so that the action is exempt from arbitration under Ohio Rev. Code 2711.01(B)(1).Appellants brought an action for declaratory judgment alleging that oil and gas leases between the parties had terminated because Appellee failed to produce oil or gas or to commence drilling operations within the terms of the lease. Appellee moved to stay pending arbitration. The trial court denied the request, concluding that Appellants' claims involved the title to or the possession of real property, and therefore, were exempt from arbitration under Ohio Rev. Code 2711.01(B)(1). The court of appeals reversed. The Supreme Court reversed, holding the trial court correctly declined to stay the action in this case pending arbitration. View "French v. Ascent Resources-Utica, LLC" on Justia Law

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The Supreme Court affirmed the decision of the court of appeals reversing the judgment of the trial court ruling that an umbrella insurance policy between Motorists Mutual Insurance Company (Motorists)and Owens-Brockway Glass container, Inc. (Owens) did not apply to claims made against Ironics, Inc. by Owens, holding that the court of appeals did not err.Owens asserted claims against Ironics for, among other claims, breach of contract. Ironics asked its insurer, Motorists, to defend and indemnify it against Owens's claims under a commercial general-liability policy and a commercial umbrella policy with Motorists. The trial court concluded that neither policy covered Owens's claims and granted summary judgment for Motorists. The court of appeals reversed in part, holding that Ironics was entitled to coverage under the umbrella policy. The Supreme Court affirmed, holding that Owens's claims arose out of an accident that resulted in "property damage" under Ironic's umbrella policy with Motorists and that none of the policy's exclusions applied. View "Motorists Mutual Insurance Co. v. Ironics, Inc." on Justia Law

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The Supreme Court held that a provision found in just about every commercial and personal-property insurance policy issued in Ohio that bars coverage for damage caused by "water that backs up or overflows from a sewer" includes damage caused by sewage carried into an insured property by a backup or overflow event.Sewage from the local sewer system backed up into the Bank Nightclub, a bar that was insured at the time by United Specialty Insurance Company. The bar subsequently hired Cleantech to clean up the site and submitted a claim to its insurer. United Specialty denied the claim, citing an exclusion in the bar's policy for damage caused by water that backs up or overflows from a sewer. The bar assigned AKC any claims it might have against United Specialty, and AKC then brought this breach of contract claim. The trial court granted summary judgment in favor of United Specialty. The court of appeals reversed. The Supreme Court reversed, holding that the water-backup exclusion in the policy included damage caused by the sewage. View "AKC, Inc. v. United Specialty Insurance Co." on Justia Law

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The Supreme Court held that the common-law requirements set out in Globe Indemnity Co. v. Schmitt, 53 N.E.2d 790 (Ohio 1944), for determining whether and indemnitee may recover against an indemnitor when the indemnitee has settled a claim without the indemnitor's involvement, do not apply when the parties express a clear intent to abrogate those common-law requirements.The court of appeals in this breach of contract action concluded that the Globe Indemnity Co. requirements apply regardless of the terms of the parties' contract. The Supreme Court reversed, holding that the court of appeals erred by applying the common-law requirements set out in Globe Indemnity Co. without considering whether the parties abrogated those requirements in their contract. The Court remanded this matter to the trial court for further proceedings. View "Wildcat Drilling, LLC v. Discovery Oil & Gas, LLC" on Justia Law

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In this breach of contract action, the Supreme Court reversed the judgment of the court of appeals applying the common-law requirements set out in Globe Indemnity Co. v. Schmitt, 53 N.E.2d 790 (Ohio 1944), without considering whether the parties intended to abrogate those requirements, holding that the Globe Indemnity Co. requirements do not apply when the parties express a clear intent to abrogate those common-law requirements in their contract.On appeal, Appellant argued that the common-law requirements set out in Globe Indemnity Co. for determining whether an indemnitee may recover against an indemnitor when the indemnitee has settled a claim without the indemnitor's involvement do not apply when the parties express a clear intent to abrogate those requirements in their contract. The Supreme Court agreed and reversed the court of appeals' judgment, holding (1) the requirements set forth in Globe Indemnity Co. do not apply when the parties express a clear intent to abrogate those common-law requirements in their contract; and (2) the lower courts erred by failing ascertain whether the parties intended to abrogate the common-law requirements for indemnification. View "Total Quality Logistics, LLC v. JK & R Express, LLC" on Justia Law

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The Supreme Court reversed the judgment of the court of appeals concluding that a cognovit promissory note signed by debtors was defective, holding that the contract, viewed as a whole, put the debtors on notice of the rights they were relinquishing by signing the note.Progressive Polymers, LLC and Darin Bay obtained a loan from Sutton Bank secured by a cognovit promissory note. The note included a confession-of-judgment clause containing a warrant of attorney by which Progressive Polymers and Bay agreed that if they defaulted on the note an attorney could confess judgment against them. Sutton Bank later filed a complaint for a cognovit judgment against Progressive Polymers and Bay, alleging default. The trial court ruled in favor of Sutton Bank and issued the cognovit judgment. The court of appeals vacated the cognovit judgment, concluding that the note did not meet the strict requirements of Ohio Rev. Code 2323.13(D) and was therefore not a valid cognovit note upon which judgment could be entered. The Supreme Court reversed, holding that although cognovit clauses are construed strictly against those seeking to enforce them, courts must still give effect to the clear intent of the parties when interpreting them. View "Sutton Bank v. Progressive Polymers, LLC" on Justia Law

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The Supreme Court reversed the judgment of the court of appeals concluding that B.E.B. Properties reserved the right to receive future rental payments for leased land underneath a cell tower when it conveyed the property, holding that the deed did not contain such a reservation.B.E.B. Properties leased a portion of commercial property it owned to a cellular telephone company, and a cellular tower was erected on the site. B.E.B. subsequently sold the property to Keith Baker and Joseph Cyvas. Thereafter, two of the general partners in B.E.B. sold their interests in the partnership to Bruce and Sheila Bird, who believed this transaction included the assignment of the right to receive rental payments for the tower. When LRC Realty, Inc. acquired the property it sought a declaratory judgment that it was entitled to the annual rental payments. The trial court granted summary judgment for LRC Realty. The court of appeals reversed, concluding that the Birds were entitled to rental payments based on the language contained in the deed transferring the property from B.E.B. to Baker and Cyvas. The Supreme Court reversed, holding (1) absent a reservation in the deed conveying the property, the right to receive rents runs with the land; and (2) the deed here did not create such a reservation. View "LRC Realty, Inc. v. B.E.B. Properties" on Justia Law

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The Supreme Court reversed the judgment of the court of appeals affirming the trial court's judgment dismissing Plaintiffs' claims for quiet title and declaratory judgment based on their contention that an oil and gas lease had terminated by its terms due to lack of production, holding that the twenty-one-year limitations period in Ohio Rev. Code. 2305.04 applied.In their complaint Plaintiffs alleged that the well at issue did not produce any oil or gas from its inception until 1999 and that the well had been inoperative for enough time to terminate the lease. Defendants asserted a statute of limitations defense to Plaintiffs' claims. The trial court held that Plaintiffs had not presented any evidence to satisfy their burden of proving that the well was no longer profitable and that Plaintiffs' claims were subject to a fifteen-year statute of limitations. Plaintiffs appealed, arguing that the correct limitations period was the twenty-one-year period under Ohio Rev. Code 2305.04. The court of appeals rejected the argument and affirmed the trial court's summary judgment for Defendants. The Supreme Court reversed, holding that the twenty-one-year statute of limitations period applied and that evidence of lack of production prior to 1999 was not irrelevant. View "Browne v. Artex Oil Co." on Justia Law

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In this dispute over credit provisions in a real estate purchase agreement, the Supreme Court reversed the decision of the court of appeals reversing the trial court's grant of summary judgment in favor of Plaintiff, the buyer of a franchise business and the real property on which it sat, holding that the court of appeals erred.The parties in this case structured the agreement for the sale of the real property to include adjustments that would be made to the overall purchase price based on circumstances present at the time of the closing. At closing, the parties disagreed how one of the credit provisions - the Rents Credit - should be interpreted. The trial court granted summary judgment to Plaintiff as to its request for declaratory judgment interpreting the Rents Credit clause. The court of appeals ultimately reversed, concluding that the plain language of the Rents Credit clause led to a "manifestly absurd result." The Supreme Court reversed, holding (1) the language of the Rents Credit is plain and unambiguous and supports only the interpretation asserted by Plaintiff; and (2) there is no basis on which to conclude that the plain language of the Rents Credit results in a manifest absurdity. View "Beverage Holdings, LLC v. 5701 Lombardo, LLC" on Justia Law

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The Supreme Court denied the writ of mandamus sought by Alex Penland, an inmate at the Toledo Correctional Institution (TCI), to compel Respondents to make available for inspection the contract under which a vendor was permitted to sell food to inmates confined in Ohio prisons, holding that Penland failed to establish that he was entitled to the writ.Penland brought his complaint against Respondents, the Ohio Department of Rehabilitation and Correction and Sonrisa Sehlmeyer, alleging that he made a public-records request to Sehlmeyer asking to review the contract but did not immediately receive a response to his request. When the subsequent inmate grievance process brought by Penland was not resolved to his satisfaction Penland filed this original action. The Supreme Court denied the writ, holding that Penland did not show that Respondents had a clear legal duty to deliver the contract to TCI for Penland's inspection at no cost to him. The Court further denied Penland's request for statutory damages because Penland did not deliver his request to Sehlmeyer by hand or by certified mail. View "State ex rel. Penland v. Ohio Department of Rehabilitation & Correction" on Justia Law