Justia Contracts Opinion Summaries

In this tort and breach-of-contract lawsuit, the Supreme Court affirmed in part and reversed in part the trial court's take-nothing summary judgment entered on the claim brought by several affiliated retailers (the Retailers), holding that the trial court erred in part.The Retailers in this case sought to recoup millions of dollars in disallowed reimbursements for purchases their customers made under the federally-funded Supplemental Nutrition Assistance Program (SNAP) after a lengthy outage in a third-party contractor's Electronic Benefit Transfer (EBT) system. The Retailers had permitted their SNAP customers to make purchases during the system outage, as authorized by a federal regulation, but held the EBT transactions in abeyance until they could be submitted and the Retailers reimbursed. The EBT contractor, however, later declined reimbursement for nearly 90,000 transactions. The trial court rendered a final take-nothing judgment against the Retailers, and the court of appeals affirmed. The Supreme Court affirmed the judgment on the Retailers' breach of contract claim but reversed the judgment as to losses from certain transactions and the Retailers' tort claims, holding that the court relied on an erroneous construction of 7 C.F.R. 274.8(e)(1). View "Wal-Mart Stores, Inc. v. Xerox State & Local Solutions, Inc." on Justia Law

The Supreme Court affirmed the summary judgment in favor of Landowners in this oil-and-gas dispute over how to calculate Landowners' royalty under the terms of a mineral lease with Producers, holding that there was no error in the proceedings below.At issue in a declaratory judgment action was whether, based on language in the subject leases, Landowners' royalty was payable not only on gross proceeds but also on an unaffiliated buyer's post-sale postproduction costs if the producers' sales contracts stated that the sales price had been derived by deducting such costs from published index prices downstream from the point of sale. The trial court granted summary judgment for Landowners as to these types of marketing arrangements. The Supreme Court affirmed, holding that the broad language of the lease unambiguously contemplated such a royalty base. View "Devon Energy Production Co., L.P. v. Sheppard" on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the judgment of the district court denying Borrower's motion for a new trial in this appeal arising from a suit on a note and guaranty after Borrower allegedly defaulted on a loan, holding that Borrower was entitled to a new trial.After Lender moved for summary judgment and set the motion for an oral hearing the COVID-19 pandemic resulted in the hearing the hearing being canceled. The trial court unilaterally moved the hearing to its submission docket and, without further notice, went forward on the date of the originally scheduled oral hearing. The trial court granted summary judgment to Lender. Borrower moved for a new trial on the grounds that he had not received an amended notice of the hearing date after the original hearing was canceled. The trial court denied the motion, and the court of appeals affirmed. The Supreme Court reversed, holding that because Borrower did not receive the adequate notice as required the trial court erred in granting summary judgment and in refusing to grant a new trial upon Borrower's request. View "Price v. Series 1 - Virage Master LP" on Justia Law

In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Tony and Michelle Ha, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. The Has sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for negligent construction and other claims, alleging the home developed significant mold problems due to construction defects. Plaintiffs' second amended petition named both Tony and Michelle and their three children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to Michelle and the children. The court of appeals affirmed. The Supreme Court reversed, holding that when a family unit resides in a home and files suit for factually intertwined construction-defect claims concerning the home, a nonsignatory spouse and minor children have accepted direct benefits under the signatory spouse’s purchase agreement such that they may be compelled to arbitrate through direct-benefits estoppel. View "Taylor Morrison of Texas, Inc. v. Ha" on Justia Law

In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Jack and Erin Skufca, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. Plaintiffs sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for construction defects and fraud, alleging that less than a year after they moved in, the home developed mold issues that caused their minor children to be ill. The petition listed Jack and Erin as plaintiffs individually, as well as Erin as next friend of the couple's children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to the children. The court of appeals affirmed. The Supreme Court reversed, holding that the minor children sued based on the contract and were subject to its terms, including the arbitration clause. View "Taylor Morrison of Texas, Inc. v. Skufca" on Justia Law

The Supreme Court reversed the judgment of the court of appeals reversing the trial court's dismissal of the complaint and reinstated the judgment of the trial court dismissing all of Petitioner's claims against Respondents for breach of contract, fraud, and related torts, holding that the discovery rule did not defer accrual of Petitioner's cause of action until it knew that Respondents caused its injury.The trial court granted summary judgment in favor of Petitioner on the grounds that Respondents' claims were time-barred. The appellate court reversed, concluding that the discovery rule deferred accrual of Respondents' cause of action until it knew that Petitioner caused its injury. The Supreme Court reversed and reinstated the dismissal of all claims, holding that summary judgment was appropriate because, at the time of the breach of contract at issue, Respondent learned of facts that, if pursued, would have led to the discovery of Petitioner's alleged misrepresentations. View "Marcus & Millichap Real Estate Investment Services of Nev. v. Triex Texas Holdings, LLC" on Justia Law

The Supreme Court conditionally granted mandamus relief in this case concerning a premarital agreement to resolve disputes by binding arbitration under religious law, holding that the trial court was statutorily required to hear and determine Wife's challenges to the agreement's validity and enforceability before referring the parties' disputes to arbitration.When the parties in this case married they signed an "Islamic Pre-Nuptial Agreement" providing that "[a]ny conflict which may arise between the husband and the wife will be resolved according to the Qur'an, Sunnah, and Islamic Law in a Muslim court, or in [its] absence by a Fiqh Panel." When Wife sued for divorce, Husband moved to enforce the agreement. After a hearing on whether the reference to Islamic law was sufficiently ambiguous to render the agreement unenforceable the trial court ordered the parties to arbitrate under the agreement. Wife moved for mandamus relief. The Supreme Court conditionally granted relief, holding that the trial court erred in compelling the parties to arbitrate. View "In re Mariam Ayad" on Justia Law

The Supreme Court conditionally granted relief in this mandamus proceeding concerning a premarital agreement to resolve disputes by binding arbitration under religious law, holding that the trial court erred by ordering arbitration before determining whether the agreement was valid and enforceable, as required by Tex. Fam. Code 6.6015 and 153.00715.In 2008 the parties married. In connection with their marriage, they signed a document entitled "Islamic Pre-Nuptial Agreement" providing that conflicts arising between the parties would be resolved according to Islamic law in a Muslim court or a three-person panel. After Wife sued for divorce, Husband moved to enforce the agreement. The trial court stayed proceedings pending arbitration, and the court of appeals denied Wife's request for mandamus relief. The Supreme Court conditionally granted relief, holding that the trial court erred in ordering arbitration without first determining the validity and enforceability of the agreement. View "In re Ayad" on Justia Law

The Supreme Court held that the application the Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act, Tex. Bus. & Com. Code 57.001-.402, in this case did not violate the constitutional prohibition against retroactive laws in Tex. Const. art. I, 16.In the 1990s, Fire Protection Service, Inc. (FPS), orally agreed to be an authorized dealer and servicer of the life rafts manufactured by Survitec Survival Products, Inc. Nearly six years after the promulgation of the Act, which prohibits a supplier from terminating a dealer agreement without good cause, Survitec notified FPS that it was terminating their relationship. FPS sued for a violation of the Act. The district court entered judgment for Survitec. On appeal, the Fifth Circuit certified a question to the Supreme Court. The Supreme Court answered that the application of the Act to the parties' agreement does not violate the retroactivity clause in article I, section 16. View "Fire Protection Service, Inc. v. Survitec Survival Products, Inc." on Justia Law

The Supreme Court reversed the judgment of the court of appeals concluding that the "procuring-cause doctrine" did not apply to the facts of this case, holding that the procuring-cause doctrine applied to the parties' contractual relationship.If a seller agrees to pay sales commissions to a broker or other agent and their contract says nothing more than that commissions will be paid for sales, Texas law applies a default rule called the procuring-cause doctrine. When the seller refused to pay the broker in this case commissions on sales that were finalized after his termination, the broker sued the seller for breach of contract. The jury found for the broker. The court of appeals affirmed. The Supreme Court reversed and remanded the case for further proceedings, holding that the procuring-cause doctrine applied to the contractual relationship in this case. View "Pesthuis v. Baylor Miraca Genetics Laboratories, LLC" on Justia Law