Justia Contracts Opinion Summaries

Comcast of Utah II, Inc. (Comcast) appealed from the district court's grant of partial summary judgment in favor of Commercial Real Estate Investment, LC (CRE). The district court awarded CRE approximately $1.7 million in liquidated damages, plus approximately $2 million in interest, based on Comcast's breach of contract. On appeal, Comcast challenged the enforceability of the liquidated damages clause in its contract with CRE. At issue on appeal was what law governed review of the enforceability of liquidated damages clauses. The Supreme Court affirmed, holding (1) liquidated damages clauses are not subject to heightened judicial scrutiny but instead are treated like any other contractual provision; and (2) the liquidated damages clause in this contract were not unconscionable, and CRE did not breach its duty to mitigate its damages. View "Commercial Real Estate Inv., LC v. Comcast of Utah II, LLC" on Justia Law

Plaintiffs purchased a house from Defendant, who built the house. Plaintiffs later discovered mold in some of the windows and walls and sued Defendant. The jury found in favor of Plaintiffs on their negligence claim but found in favor of Defendant on Plaintiffs' negligent misrepresentation claim. The jury also found that Plaintiffs failed to perform all, or substantially all, of the things the contract required them to do and therefore the jury did not reach the question of whether Defendant breached the contract. The Supreme Court held (1) the economic loss rule prevented recovery of economic damages within the scope of the parties' contract but allowed for recovery of damages to other property or for bodily injury; (2) the trial court did not err when it permitted Dr. Eugene Cole to testify as an expert witness; (3) because Defendant prevailed in his claims under the contract, which provided the only basis for awarding attorney fees, he was entitled to recover attorney fees for the breach of contract suit; and (4) the trial court did not err when it denied Plaintiffs' motion for judgment notwithstanding the verdict. Remanded.

Roger Hooban sued Unicity International for breach of a distribution agreement. The district court entered summary judgment for Unicity, holding that Hooban was not a party to the agreement and lacked standing to sue for its enforcement. Unicity then filed a motion for attorney fees under Utah's reciprocal attorney fees statute, Utah Code 78B-5-826. The district court denied the motion on the ground that section 826 was inapplicable given that Hooban was not a party to the underlying contract. The court of appeals reversed, interpreting the Supreme Court's decision in Bilanzich v. Lonetti to dictate a fee award in litigation that is based on a written contract where the contract allows at least one party to the litigation to recover fees. The Supreme Court affirmed, holding (1) section 826 applied in this case; and (2) the statute thus authorized the court to award fees to Unicity.

Petitioner Jones & Trevor Marketing appealed the dismissal of its suit against the owners of Financial Development Services, Jonathan Lowry and Nathan Kinsella, alleging various contract and tort claims based on an alter ego theory of liability. The district court held that Petitioner had not demonstrated sufficient facts to support its alter ego theory and therefore granted summary judgment against Petitioner on its tort and contract claims that rested on its alter ego theory. The court of appeals affirmed. The Supreme Court affirmed, holding that Petitioner failed to provide affirmative evidence establishing a genuine material dispute on its alter ego theory.

This dispute centered around two roads owned by the Maceys, their company Family Link, and the remaining defendants (Defendants). Petitioner Nadine Gillmor previously brought suit against the Maceys seeking to interpret and enforce the terms of a settlement agreement purporting to give the Gillmors a limited private easement over one road and limited access over the other road. The court of appeals held that Gillmor had a limited private easement over the roads but that the easement would not pass on to her children from a prior marriage. Gillmor later brought two claims for access over the roads, asserting that the roads were subject to condemnation for a public access easement and that the roads had been continuously used as public thoroughfares for a period of ten years and were thus dedicated to public use as a "highway by use" under Utah Code 72-5-104. The district court dismissed the complaint based on res judicata and imposed sanctions on Gillmor's attorney for filing a claim without a basis in law. The Supreme Court (1) held that Gillmor's claims were not barred by res judiciata; and (2) vacated the imposition of sanctions. Remanded for adjudication of Gillmor's suit on the merits.

Dentist purchased dental practice management software from Company to aid his patient data requirement. The contract between Dentist and Company limited Dentist's remedies for damages in tort caused by defects in the Company's software. Although Company warned Dentist to back up his patient data, Dentist's patient data was lost when installing the software. Dentist sued Company under several theories, and the district court granted Company's motion for summary judgment. Dentist appealed only the order granting summary judgment on his tort claims. The Supreme Court affirmed, concluding that the limitation of liabilities clause in the contract was enforceable, as provisions in software contracts allocating the risk of such a loss to the consumer are enforceable.

The State appealed the dismissal of its complaint against seventeen pharmaceutical companies, which the State alleged defrauded Utah's Medicaid program by reporting inflated drug prices. In its complaint, the State pursued two causes of action, violation of the Utah False Claims Act (UFCA) and fraudulent misrepresentation. The district court dismissed the claims based on three alternative grounds. The Supreme Court reversed in part and affirmed in part, holding (1) although the State's complaint was insufficiently particular under the appropriate Utah R. Civ. P. 9(b) standard for claims alleging a widespread scheme to commit fraud and submit false claims, it was in the interest of justice to grant the State leave to amend its complaint under the new standard; (2) the district court erred in dismissing the State's claims under Utah R. Civ. P. 12(b)(6) because the State alleged all the elements of its causes of action; and (3) the district court properly applied the one-year statute of limitations to the State's UFCA cause of action and its dismissal of those claims alleged to have arises before April 30, 2006. Remanded.

A group of residential tenants (collectively, Tenants) alleged claims of negligence against Canyon Cover Properties, LLC and Apartment Management Consultants, LLC (collectively, AMC). AMC argued that it was relieved from liability because Tenants signed a residential lease agreement (Agreement) that included a limited liability provision (Exculpatory Clause) waiving the right to bring an action for negligence against AMC. The district court concluded that the Agreement and Exculpatory Clause did not violate public policy and were therefore valid and enforceable, and accordingly, granted summary judgment for AMC. The Supreme Court reversed, holding that because AMC failed to respond meaningfully to Tenants' claim that the Exculpatory Clause was unenforceable because it violated public policy, AMC's brief was rejected and Tenants' claim was accepted that the Exculpatory Clause in the Agreement was unenforceable. Remanded.

Plaintiff's son, Hayden, was involved in a near-drowning accident in which he suffered severe permanent injuries. Plaintiff subsequently sought coverage for the cost of his treatment from Wasatch Crest Mutual Insurance, under which Hayden was insured. Wasatch Crest was later declared insolvent, and Plaintiff filed a claim against the Wasatch Crest estate. The liquidator of the estate denied Plaintiff's claim, concluding that Wasatch Crest had properly terminated coverage under the language of the plan. The Supreme Court reversed, interpreting the plan in favor of coverage. Plaintiff resubmitted her claim for medical expenses to the liquidator for payment under the Utah Insurers Rehabilitation and Liquidation Act. One year later, Plaintiff filed a motion for summary judgment with the district court. The liquidator subsequently issued a second amended notice of determination denying Plaintiff's claim on the merits. The district court then denied Plaintiff's motion for summary judgment, as Plaintiff had not yet challenged the second amended notice of determination and could do so under the Liquidation Act. Plaintiff appealed the district court's order. The Supreme Court dismissed the appeal because Plaintiff did not appeal from a final judgment and had not satisfied any of the exceptions to the final judgment rule.

After sustaining injuries in an auto accident, Tavis McArthur filed this suit in federal district court to recover underinsured motorist (UIM) benefits under his State Farm automobile insurance policy. The district court granted summary judgment in favor of State Farm, concluding that McArthur had failed to exhaust the liability limits of the tortfeasor's insurance, a precondition of his UIM benefits policy. On appeal, the Tenth Circuit Court of Appeals certified two questions to the Utah Supreme Court. The Supreme Court held (1) exhaustion clauses that require the liability insurer to pay out its full policy limits before permitting payment of UIM benefits are generally enforceable in the State of Utah; and (2) because UIM exhaustion provisions are conditions precedent and not covenants capable of being breached, no showing of prejudice is required to sustain their invocation.