Justia Contracts Opinion Summaries

Articles Posted in Texas Supreme Court
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James Olis, a former officer of Dynegy, Inc., was indicted on multiple counts of securities fraud, wire fraud, and conspiracy. Olis hired attorney Terry Yates to defend him in the federal criminal investigation and a civil investigation conducted by the SEC. Olis told Yates that Dynegy would be paying his legal fees. Dynegy's legal department orally confirmed that Dynegy would pay Olis's legal fees. Yates later filed suit against Dynegy to recover his unpaid attorney's fees, asserting claims for breach of contract and fraudulent inducement. The jury returned a verdict for Yates. At issue on appeal was whether Dynegy was entitled to judgment in its favor based on its affirmative defense of statute of frauds. The court of appeals reversed. The Supreme Court reversed and rendered a take-nothing judgment in favor of Dynegy, holding (1) the statute of frauds rendered the oral agreement between Dynegy and Yates unenforceable, and therefore, Yates could not recover under his breach of contract claim; and (2) Yates's claim for benefit-of-the-bargain damages pursuant to his alternative fraudulent inducement action was barred. View "Dynegy, Inc. v. Yates " on Justia Law

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Respondent was employed by the Canutillo Independent School District as executive director of facilities and transportation. After reporting alleged financial improprieties to the District authorities, Respondent was fired for allegedly making threatening personal phone calls to another man during work hours. Respondent subsequently sued the District for violation of the Texas Whistleblower Act and for breach of contract. The trial court granted Respondent's plea to the jurisdiction. The court of appeals held that the trial court erred in granting the plea as it related to Respondent's whistleblower claim but otherwise affirmed. The Supreme Court affirmed in part and reversed in part the court of appeals' judgment, holding that the trial court properly granted the plea to the jurisdiction, holding (1) Respondent's complaints to District authorities were not good-faith complaints of a violation of law to a "law enforcement authority" under the Whistleblower Act, and thus, the plea to the jurisdiction was well taken; and (2) Respondent's breach of contract claim failed because Respondent failed to exhaust his administrative remedies. View "Canutillo Indep. Sch. Dist. v. Farran" on Justia Law

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Seller and Buyers entered into a contract for a deed. Buyers made payments to Seller for almost three years. Because Seller did not provide Buyers with all information required by Tex. Prop. Code 5(D), Buyers later told Seller they were exercising their statutory right to cancel and rescind the contract for deed. Seller sued Buyers for breach of contract. Buyers counterclaimed for violations under the Property Code, among other statutory violations. Seller, in turn, alleged he was entitled to a setoff in the amount of the fair market rental value of the property for the time Buyers occupied the house. The trial court entered judgment in favor of Buyers, awarding actual damages for cancellation and rescission of the contract for deed, among other damages. The Court reversed the trial court's awards of actual damages for cancellation and rescission, holding (1) subchapter D's cancellation-and-rescission remedy contemplates mutual restitution of benefits among the parties; and (2) thus, Buyers were required to restore to Seller supplemental enrichment in the form of rent for their interim occupation of the property upon cancellation and rescission of the contract for deed. Remanded. View "Morton v. Nguyen" on Justia Law

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Respondents were successors-in-interest to 380 acres of land once owned by Baker, now deceased. Petitioners entered into a lease agreement with Baker that contained an option allowing Petitioners to buy the land if Baker decided to sell it. Petitioners and Baker subsequently agreed that Petitioners would purchase the 380 acres for $470,000. Petitioners attempted to exercise their right to buy the property under the agreement, but Respondents brought a declaratory judgment action to void the agreement. The trial court rendered a final judgment for Petitioners. The court of appeals reversed, concluding (1) the agreement was ambiguous as to whether it was a presently binding contract or merely an agreement to agree, and (2) therefore, the agreement's enforceability was a fact issue that should not have been determined by summary judgment. The Supreme Court reversed, holding that the agreement contained all material terms and was an enforceable contract as a matter of law. Remanded. View "McCalla v. Baker's Campground, Inc." on Justia Law

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Homes built with an exterior insulation and finish system (EIFS) suffer serious water damage that worsens over time. Homebuilder began a remediation program in which it offered to homeowners to remove exterior EIFS from the homes it had built and to replace it with conventional stucco. Almost all the homeowners accepted Homebuilder's offer of remediation. Homebuilder sought indemnification for the costs from its insurers (Insurers). Insurers denied coverage, preferring instead to wait until the homeowners sued. This litigation ensued. Now, only one insurer remained. The court of appeals reversed the trial court's judgment in favor of Homebuilder, finding (1) Homebuilder failed to establish its legal liability to the homeowners to trigger Insurer's coverage; and (2) Homebuilder failed to offer evidence of damages covered by the policy. The Supreme Court reversed, holding (1) Homebuilder's settlements with the homeowners established both Insurer's legal liability for the property damages and the basis for determining the amount of loss; and (2) Insurer's policy covered Homebuilder's entire remediation costs for damaged homes. View "Lennar Corp. v. Markel Am. Ins. Co." on Justia Law

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The family of a nursing home patient filed this action against the nursing home for, inter alia, medical negligence, negligence per se, breach of contract, and retaliation. Plaintiffs asserted the retaliation claim under the Texas Health & Safety Code, which creates a cause of action against a nursing facility that retaliates against a resident or family member who makes a complaint concerning the facility. Defendants moved to dismiss all of the claims pursuant to the Texas Medical Liability Act (TMLA) because the expert report was deficient. The trial court dismissed all of Plaintiffs' claims except for the retaliation claim, concluding that the claim was not a health care liability claim (HCLC) for which the TMLA requires a supporting expert report. The court of appeals affirmed. The Supreme Court reversed the court of appeals' judgment with respect to the retaliation claim, holding that because the retaliation claim was based on the same factual allegations on which one of Plaintiffs' HCLCs was based, the claim should have been dismissed for lack of a sufficient expert report. View "PM Management-Trinity NC, LLC v. Kumets" on Justia Law

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This suit was filed as a putative class action on behalf of Texas royalty owners alleging that Phillips Petroleum Company underpaid oil and gas royalties. The trial court certified three subclasses of royalty owners. The court of appeals reversed. The Supreme Court affirmed as to two of the subclasses but reversed as to the third subclass, which alleged breach of a uniform express royalty provision contained in gas royalty agreements that amended the class members' leases. On remand, Respondent, class representative of the remaining subclass, amended her petition to add a claim for breach of the implied covenant to market. Phillips unsuccessfully filed various motions contending that there was no class claim for breach of the implied covenant to market. The court of appeals dismissed Phillips' interlocutory appeal for lack of jurisdiction and denied Phillips' petition for writ of mandamus. The Supreme Court reversed, holding (1) the court of appeals erred in dismissing the interlocutory appeal for lack of jurisdiction; and (2) the trial court abused its discretion in allowing the addition of a class claim for breach of the implied covenant to market without requiring Respondent to file an amended motion for class certification or holding a certification hearing. View "Phillips Petroleum Co. v. Yarbrough" on Justia Law

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Law Firm sued Client for breach of contract, alleging that Client failed to pay its legal fees. A jury found that Client breached the agreement and awarded Law Firm damages, $150,000 as reasonable attorney's fees, and pre- and post-judgment interest. To suspend enforcement of the judgment pending appeal, Client deposited a cashier's check with the trial court, including the breach of contract damages and pre- and post-judgment interest. The trial court subsequently ordered Client to supplement the deposit to cover the attorney's fees award. The court of appeals denied Client appellate relief, concluding that attorney's fees are both compensatory damages and costs for the purpose of suspending enforcement of a judgment. The Supreme Court conditionally granted Client mandamus relief, holding that attorney's fees are neither compensatory damages nor costs for purposes of suspending enforcement of a money judgment, and directed the trial court to vacate its order and refund and monies overpaid by Client. View "In re Nalle Plastics Family Ltd. P'ship" on Justia Law

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Several hospitals (Hospitals) sued Aetna, Inc. and Aetna Health, Inc. (collectively Aetna) for allegedly violating the Prompt Pay Statute. Aetna provided a Medicare plan (Plan) through an HMO called NYLCare. It delegated the administration of its Plan to North American Medical Management of Texas (NAMM), a third-party administrator. IPA Management Services (Management Services) provided medical services to Plan enrollees. Management Services entered into contracts with the Hospitals to secure hospital services for the Plan employees. Aetna was not a party to these contracts. The Hospitals submitted hospital bills to NAMM for payment. After NAMM and Management Services became insolvent, Aetna de-delegated NAMM and assumed responsibility for processing and paying claims. However, Aetna instructed the Hospitals to continue submitting their bills to NAMM. The Hospitals argued that Aetna was liable for NAMM's failure to timely pay claims and was responsible for $13 million in outstanding bills. The trial court granted summary judgment for Aetna. The court of appeals affirmed, concluding that because the Hospitals entered into contracts with Management Services and not with Aetna directly, the Hospitals had no viable prompt-pay claim. The Supreme Court affirmed, holding that the lack of privity between the Hospitals and Aetna precluded the Hospitals' suit. View "Christus Health Gulf Coast v. Aetna, Inc." on Justia Law

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Plaintiff hired Defendant to repair foundation problems on her home. The foundation repair contract specified that Defendant would perform the foundation repair in a good and workmanlike manner and adjust the foundation for the life of the home due to settling. In 2006, Plaintiff sued Defendant for, inter alia, breach of an express warranty, breach of the common-law warranty of good and workmanlike repairs, and Deceptive Trade Practices Act (DTPA) claims. The trial court entered judgment for Plaintiff on her breach of implied warranty of good and workmanlike repairs and DTPA claims. The court of appeals reversed, ruling that Plaintiff take nothing. The Supreme Court affirmed, holding (1) parties cannot disclaim but can supersede the implied warranty for good and workmanlike repair of tangible goods or property if the parties' agreement specifically describes the manner, performance, or quality of the services; (2) the express warranty in this case sufficiently described the manner, performance, or quality of the services so as to supersede the implied warranty; and (3) Plaintiff's remaining DTPA claims were time barred. View "Gonzales v. Sw. Olshan Found. Repair Co., LLC" on Justia Law