Justia Contracts Opinion Summaries

The case involves property owners Brenda and Ray von Wandruszka and Robert R. Davis, who sued the City of Moscow after the city adopted a resolution in 2021 revising its utility billing process. The new policy required property owners to sign contracts making them responsible for tenants' unpaid water bills, under threat of water service termination. The plaintiffs signed the contracts under protest and claimed they were unenforceable adhesion contracts signed under duress.The District Court of the Second Judicial District of Idaho reviewed cross-motions for summary judgment. The court ruled that the city was not authorized to recover tenants' unpaid utility charges from property owners, citing City of Grangeville v. Haskin. However, it also ruled that the city could require owner-occupied properties to enter agreements to pay for water consumed. Both parties appealed the split decision.The Supreme Court of Idaho reviewed the case and clarified that City of Grangeville does not prohibit municipalities from collecting tenants' unpaid utilities from property owners if there is a contractual basis. The court found that the utility billing agreements were not secured under duress, as the city's actions were not coercive. However, the court determined that the lien provisions in the agreements were too vague and indefinite to be enforceable, rendering the contracts invalid.The Supreme Court of Idaho affirmed the district court's summary judgment in favor of the plaintiffs regarding tenant-occupied properties but reversed the summary judgment in favor of the city concerning owner-occupied properties. The case was remanded for further proceedings consistent with the opinion. The plaintiffs were awarded costs as the prevailing party, but no attorney fees were granted to either side. View "Von Wandruszka v. City of Moscow" on Justia Law

The case involves North Farm Home Owners Association, Inc. (North Farm) and the Bristol County Water Authority (BCWA). North Farm, a multi-building condominium complex in Bristol, Rhode Island, had granted several easements to BCWA, a public utility responsible for providing water to residential and commercial customers in Bristol County. From 1975 to 1995, BCWA measured water service to each condominium unit individually. However, between 1993 and 1995, representatives of the parties discussed converting the individual meter system to a centralized, master meter system. This correspondence is at the heart of the dispute.The Superior Court entered partial summary judgment in favor of BCWA on counts three and four of North Farm's third amended complaint. North Farm appealed, arguing that a valid contract was formed through their 1993–1995 correspondence, that the hearing justice ignored allegations that the 2019 pass-through rate was illegal, and that the hearing justice denied North Farm’s motion to amend without a finding of prejudice.The Supreme Court of Rhode Island affirmed the judgment of the Superior Court. The court found that the 1993–1995 correspondence did not establish the existence of a contract as a matter of law. The court held that the letters did not show the parties’ mutual assent to the material contract terms by means of offer and acceptance. The court also found that North Farm failed to produce sufficient evidence that a valid contract for the material terms existed. Therefore, the hearing justice’s grant of summary judgment on count three of the third amended complaint was proper. The court also affirmed the hearing justice's grant of summary judgment on count four, as North Farm did not properly plead any basis for granting injunctive or compensatory relief due to BCWA’s purported unlawful discrimination. View "North Farm Home Owners Association, Inc. v. Bristol County Water Authority" on Justia Law

In this case, Fred Zackery sought access to confidential settlement agreements between the Water Works and Sewer Board of the City of Gadsden ("the Board") and various carpet and chemical manufacturers. Zackery requested these agreements under the Open Records Act. The Board had sued the manufacturers, alleging they contaminated the Board's raw water intake. The Board settled with all the manufacturers and planned to use the settlement funds to build and maintain a new water-treatment facility.Zackery, a citizen of Gadsden and a local radio station manager, intervened in the lawsuit specifically to request disclosure of the settlement agreements. The trial court granted his intervention but ruled that the Board didn't have to disclose the agreements until it had accepted a bid for the construction of the water-treatment facility. This decision was grounded in Alabama's Competitive Bid Law, which is designed to guard against corruption and favoritism in awarding contracts for public projects.The Supreme Court of Alabama upheld the trial court's decision, affirming that the immediate disclosure of the settlements could interfere with the competitive bid process, potentially driving bids upwards and leaving fewer funds for the long-term operation and maintenance of the new facility. This situation, the court reasoned, could cause rate hikes for the Board's customers. Therefore, the court concluded that an exception to the Open Records Act justified nondisclosure of the settlement agreements until the competitive-bid process was complete. View "Zackery v. Water Works and Sewer Board of the City of Gadsden" on Justia Law

In the case before the United States Court of Appeals for the Sixth Circuit, Brandenburg Telephone Company and Sprint Communications were in disagreement over the interest rate on an award that Sprint Communications conceded it owed to Brandenburg Telephone Company. The $2.2 million award was for unpaid fees that Sprint Communications owed for connecting local telephone calls. The dispute centered on Brandenburg's filed utility tariff which set the interest rate. Sprint argued that the tariff set the rate at 8%, and thus owed $4.3 million in interest, while Brandenburg claimed the tariff imposed a rate of 10.66%, which would result in $7.1 million in interest. The district court ruled in favor of Sprint, and the appeals court affirmed this decision.The court reasoned that the 8% rate set by the Kentucky usury statute was applicable. The court noted that while Brandenburg's tariff offered two alternatives for late payment penalty: (1) the highest interest rate (in decimal value) which may be levied by law for commercial transactions, or (2) a rate of .000292 per day (which works out to an annualized rate of 10.66%); the court interpreted the phrase "levied by law for commercial transactions" to refer to the default rate that Kentucky permits to be collected by law, which is 8%.The court rejected Brandenburg's argument that the 10.66% rate was applicable because the tariff could be viewed as an agreement between the parties and Kentucky law allows for parties to agree on higher interest rates. The court pointed out that tariffs are not freely negotiated contracts, but represent the judgment of regulators about what rates and conditions will prove reasonable and uniform for utility customers. Once regulators approve a tariff, the filed-rate doctrine prevents utilities and their customers from contracting around its terms. In this context, the court determined that the tariff's reference to the maximum rate levied by the General Assembly for general commercial transactions aligned with the filed-rate doctrine, and thus, the 8% default rule of interest applied. View "Brandenburg Telephone Co. v. Sprint Comm'ns Co." on Justia Law

In this review of a decision of the Public Service Commission relating to rates charged by Florida Power & Light Company (FPL) for the provision of electric service, the Supreme Court held that the Commission had not supplied a basis for meaningful judicial review of its conclusion that the settlement agreement provided a reasonable resolution of the issues, established reasonable rates, and was in the public interest.The settlement agreement at issue was between FPL and seven parties that intervened in the matter and permitted FPL to increase its base rates and service charges. After hearing arguments in favor of and against the settlement agreement the Commission concluded that the agreement "provides a reasonable resolution of all issues raised, establishes rates that are fair, just, and reasonable, and is in the public interest." The Supreme Court reversed, holding that remand was required because the Commission failed to perform its duty to explain its reasoning. View "Floridians Against Increased Rates, Inc. v. Clark" on Justia Law

Monterey is an independent public agency responsible for analyzing Monterey County's water resources. Cal-Am is an investor-owned water utility providing water to over 100,000 residents on the Monterey Peninsula. Marina, a public agency, provides water for the City of Marina and neighboring Monterey Peninsula communities. In 1995 the State Water Resources Control Board ordered Cal-Am to stop drawing water from the Carmel River and develop an alternate water supply. In 2009 Marina, Monterey, and Cal-Am agreed to develop and construct a regional desalinization project to extract brackish water from beneath Monterey Bay, purify it, and deliver it to consumers. In 2010-2011, the parties entered into several agreements. The project was never built. The parties engaged in negotiation and mediation, ending in January 2012 without resolution.In September 2012, Cal-Am submitted a claim under the California Government Claims Act. Litigation followed. In 2019, the trial court entered summary adjudication against Monterey, finding that a negligence cause of action was barred by the two-year statute of limitations and against Cal-Am under the Government Claims Act. The court of appeal reversed. The trial court erred in finding that the “harm” accrued in 2010. There were triable issues of fact as to express waiver and as to the applicability of alternatives to the Claims Act. View "California-American Water Co. v. Marina Coast Water Districtw" on Justia Law

The Supreme Court overruled the decision of the Public Service Commission (PSC) rejecting a proposed development of an eighty-megawatt solar energy facility near Billings, Montana, holding that the PSC violated the requirements of the federal Public Utility Regulatory Policies Act (PURPA) and state law precluding discrimination against solar energy projects.The district court reversed and remanded the PSC's order setting terms and conditions of MTSUN, LLC's proposed eighty megawatt solar project based on findings of violations of due process, PURPA, and Montana's mini-PURPA. The Supreme Court affirmed, holding that the district court (1) did not err in concluding that the PSC's determinations were arbitrary and unlawful; and (2) relied on record evidence in determining the existence of a legally-enforceable agreement and the avoided-cost rates. View "MTSUN, LLC v. Montana Department of Public Service Regulation" on Justia Law

The Supreme Court affirmed the order of the Public Service Commission denying PacifiCorp's application for approval of an agreement between PacifiCorp and Monticello Wind Farm, LLC (MWF) for the purchase of wind energy, holding that the Commission was not obligated to approve the agreement under the circumstances of this case.Under Utah and federal law, PacifiCorp and MWF could set the terms for their agreement in one of two ways by either fixing pricing based on PacifiCorp's avoided costs, which would make the contract one negotiated within the Commission's framework, or negotiating their own pricing terms and contractually limiting the scope of the Commission's review. The Commission reviewed the pricing to ensure consistency with PacifiCorp's avoided costs, but the pricing was based on a methodology the Commission had discontinued. The Commission concluded the pricing could not be deemed consistent with PacifiCorp's avoided costs and denied the application. On appeal, MWF asserted that the parties opted out of the Commission's framework, and therefore, the Commission was obligated to approve the agreement. The Supreme Court disagreed, holding that this was an agreement the Commission could reject if it obligated PacifiCorp to purchase energy at a price higher than its avoided costs. View "Monticello Wind Farm, LLC v. Public Service Commission of Utah" on Justia Law

For decades, regulated, vertically-integrated utilities dominated the U.S. electricity market, generating, transmitting, distributing, and collecting payments for electricity. In Illinois that utility was ComEd; its rates are set by the Illinois Commerce Commission. Illinois restructured its electricity market by the Electric Service Customer Choice and Rate Relief Law of 1997, which allows alternative retail electric suppliers to compete with ComEd, setting their own rates and not regulated by the Illinois Commerce Commission. ComEd and alternative suppliers now serve as middlemen, purchasing electricity wholesale from PJM, a regional transmission organization that controls the electric grid covering northern Illinois and several other states, and reselling it to customers. Sevugan contracted with Direct Energy, an alternative supplier, in 2011. In 2013, Sevugan neither re-enrolled nor canceled service, which triggered a “Renewal Clause” with a variable price per kWh. Sevugan sued in 2017, alleging Direct deceived him (and others) with its four-page form contract. The Seventh Circuit affirmed the dismissal of Sevugan’s breach of contract claim, reasoning that Sevugan did not allege facts showing Direct’s rates were not “based on generally prevailing market prices,” or that its “adder,” a discretionary component of the electricity price, was “unreasonable.” View "Sevugan v. Direct Energy Services, LLC" on Justia Law

The Supreme Court affirmed the district court granting summary judgment to Flathead Electric Cooperative, Inc. (FEC) alleging a violation of the Rural Electric and Telephone Cooperative Act (RETCA), holding that the district court did not err in determining that Plaintiffs’ claims were barred by the statute of limitations.Plaintiffs were former members who received electrical services from FEC, a tax-exempt rural electrical cooperative owned by its members and organized under RETCA, but since moved out of FEC’s area. In this action, Plaintiffs alleged that FEC’s practice of allocating capital credits to each member’s capital account but not actually retiring and refunding the capital credits until sometime in the future violated RETCA. The district court granted summary judgment to FEC, ruling in part that Plaintiffs’ claims were barred by the statute of limitations. The Supreme Court affirmed, holding that Plaintiffs’ claims were barred by the statute of limitations. View "Wolfe v. Flathead Electric Cooperative, Inc." on Justia Law