Justia Contracts Opinion Summaries

A jury awarded Plaintiff future lost profits based on Defendants’ failure to comply with their covenants not to compete and covenants not to solicit. The jury also awarded Plaintiff exemplary damages and attorney fees. The trial court awarded Plaintiff the full amount of damages. The court of appeals reversed and rendered a take-nothing judgment in part and remanded in part, concluding, inter alia, that the evidence was legally insufficient to support the jury’s award of future lost profits and that the exemplary damages award was unconstitutionally excessive. The Supreme Court affirmed in part and reversed in part, holding (1) the court of appeals did not err in concluding that the evidence of future lost profits was legally insufficient; (2) the court of appeals’ remitted exemplary damages award was unconstitutionally excessive; and (3) the court of appeals properly found that remand of the issue of attorney’s fees was proper. The court remanded the case to the court of appeals so that it may reconsider its suggested remittitur of exemplary damages. View "Horizon Health Corp. v. Acadia Healthcare Co." on Justia Law

Certain minority shareholders filed suit in a Texas court alleging dilution of equity interests. Defendants responded by invoking a forum-selection clause designating Delaware as the proper forum for disputes arising out of a shareholders agreement. The court of appeals reversed the trial court’s grant of Defendants’ motion to dismiss, concluding that the forum-selection clause did not control because the shareholders’ extracontractual claims did not allege noncompliance or interference with any rights or obligations derived from the shareholders agreement. The Supreme Court reversed and dismissed the shareholders’ claims in part, holding (1) the shareholders’ statutory and common-law tort claims evidence a “dispute arising out of” the shareholders agreement; and (2) the shareholders’ noncontractual claims fell within the forum-selection clause’s scope. View "Pinto Technology Ventures, LP v. Sheldon" on Justia Law

Respondent was a party to an oil and gas lease that restricted its use of the surface estate and required it to drill from off-site locations when feasible. Briscoe Ranch, Inc. owed an adjacent surface estate and agreed that Respondent could use horizontal drilling to drill from the surface of the Ranch in order to produce minerals from Respondent’s lease. The lessee of the minerals underlying the Ranch (Petitioner) was not a party to the agreement and sought to enjoin Respondent from drilling on the Ranch and asserted claims for both trespass and tortious interference with a contract. Petitioner claimed that its consent was necessary before Respondent could drill through the Ranch’s subsurface covered by its mineral lease. The district court dismissed the claim. The Supreme Court affirmed, holding (1) the loss of minerals Petitioner will suffer by a well being drilled through its mineral estate is not a sufficient injury to support a claim for trespass; and (2) Respondent’s drilling plans did not tortiously interfere with Petitioner’s contractual lease rights. View "Lightning Oil Co. v. Anadarko E&P Onshore, LLC" on Justia Law

A plaintiff who was not a party to a written contract was not permitted to enforce the agreement as a third-party beneficiary.DTSG, Ltd. filed suit against First Bank. Richard Brumitt intervened as an additional plaintiff, alleging that he was a third-party-creditor beneficiary of an agreement entered into by DTSG and First Bank. The jury found First Bank liable to both DTSG and Brumitt for breach of contract and for negligent and grossly negligent misrepresentation. The trial court entered judgment based on the jury’s verdict. The Supreme Court reversed the court of appeals’ judgment, holding (1) the agreement between DTSG and First Bank was unambiguous and did not make Brumitt a third-party beneficiary; and (2) the trial court erred by submitting that issue to the jury and by instructing the jury that it could consider extrinsic evidence to add a third-party-beneficiary term to the unambiguous written agreement. The court remanded the case for further consideration of Brumitt’s claims alleging negligent and grossly negligent misrepresentations. View "First Bank v. Brumitt" on Justia Law

Waiver of a nonwaiver provision cannot be anchored in the same conduct the parties specifically agreed would not give rise to a waiver of contract rights.The long-term tenant in this forcible-detainer action frequently defaulted on the lease’s rental payment terms. The commercial landlord, however, regularly accepted, without protest, the tenant’s rental payments when tendered. A contractual nonwaiver provision provided that the landlord acceptance of rent past due “shall not be a waiver and shall not estop Landlord from enforcing that provision or any other provision of [the] lease in the future[.]” In this forcible-detainer action, the landlord sought to oust the tenant, claiming a superior right of immediate possession under a lease-extension option. The tenant, in turn, asserted that the landlord’s conduct in accepting late rental payments waived the contractual nonwaiver clause. Thus, the Supreme Court reversed the court of appeals’ judgment rejecting the landlord’s forcible detainer action and rendered judgment in the landlord’s favor because the landlord did not act inconsistently with the contract’s express terms and because the tenant failed to identify any evidence supporting an equitable-estoppel bar to eviction. View "Shields Limited Partnership v. Bradeberry" on Justia Law

Bartush-Schnitzius Foods Co., a food-product manufacturer, entered into an agreement with Cimco Refrigeration, Inc., a refrigeration contractor, to install a new refrigeration system. When disputes arose over the refrigeration system and payments owed, Cimco sued to recover the balance owed on the contract. The jury found that both parties failed to comply with the terms of the agreement. The trial court, however, rendered judgment solely for Bartush. The court of appeals reversed and remanded for entry of judgment that Bartush take nothing and Cimco recover damages. The Supreme Court reversed, holding that both the trial court and the court of appeals failed to render judgment in accordance with the jury’s verdict. Remanded. View "Bartush-Schnitzius Foods Co. v. Cimco Refrigeration, Inc." on Justia Law

After BP America Production turned of the well valve to a gas well, Red Deer Resources, LLC, the top-lease holder, filed suit, asking the trial court to declare that BP’s lease had terminated. The jury found that the well was incapable of production in paying quantities the day after BP closed the valve and eight days after the last gas was sold or used. Based on these findings, the trial court declared that BP’s lease had lapsed and terminated, thus terminating BP’s lease in its secondary term. The court of appeals affirmed. The Supreme Court reversed the judgment of the court of appeals and rendered a take-nothing judgment in favor of BP, holding that because Red Deer never obtained a finding that the well was incapable of production in paying quantities on the material date under the plain language of the lease, BP’s lease remained valid. View "BP America Production Co. v. Red Deer Resources, LLC" on Justia Law

Respondent, who owned a ranch, sued Petitioner, which produced natural gas on the ranch, for underpayment of royalties and underproduction of its lease. The parties resolved their dispute with two agreements that contained an arbitration provision. Respondent later sued Petitioner for environmental contamination and improper disposal of hazardous materials on the ranch. Before arbitration commenced, Respondent asked the Railroad Commission (RRC) to investigate contamination of the ranch by Petitioner. Meanwhile, an arbitration panel awarded Respondent $15 million for actual damages and $500,000 for exemplary damages. At issue on appeal was whether the RRC had exclusive or primary jurisdiction over Respondent’s claims, precluding the arbitration, and whether the arbitration award should be vacated for the evident partiality of a neutral arbitrator or because the arbitrators exceeded their powers. The Supreme Court answered in the negative, holding (1) because Respondent’s claims were inherently judicial, the doctrine of primary jurisdiction did not apply, and vacatur was not warranted for failure to abate the arbitration hearing; and (2) the arbitrators did not exceed their authority. View "Forest Oil Corp. v. El Rucio Land & Cattle Co." on Justia Law

In 1992, Shields Brothers, Inc. sued the Engelman Irrigation District, a governmental entity, alleging that Engelman had breached a contract to deliver water to Shields. Engelman alleged in its defense that it had governmental immunity. The district court denied the immunity defense, and the case proceeded to trial. A jury found damages for lost profits. The trial court rendered judgment for Shields in the amount of $271,138.80, plus interest and attorney fees. The judgment became final in 1998. The Engelman I judgment went unpaid, however, and the case continued to be litigated. In Engelman III, brought in 2010, Engelman sought a declaratory judgment that the Engelman I judgment was void under Tooke v. City of Mexia, decided by the Supreme Court in 2006. The trial court denied declaratory relief, and the court of appeals affirmed. The Supreme Court affirmed, holding (1) Tooke applies only narrowly to judgments still being challenged on direct appeal and does not apply broadly to all prior final judgments; and (2) therefore, the long-final judgment in this case cannot be upended via collateral attack. View "Engelman Irrigation District v. Shields Brothers, Inc." on Justia Law

In this case the trial court entered judgment terminating a bottom lease based on jury findings that the lease failed to produce in paying quantities over a specified period of time. The court of appeals reversed and remanded for a new trial, concluding (1) the rule against perpetuities did not invalidate the top lease, and (2) the trial court erred in charging the jury on the production-in-paying-quantities question. The Supreme Court affirmed, holding that the court of appeals correctly remanded for a new trial where (1) the top lease did not violate the rule against perpetuities; and (2) the trial court erred in charging the jury on cessation of production in paying quantities. View "BP America Production Co. v. Laddex, Ltd." on Justia Law