Justia Contracts Opinion Summaries

The Utilities Board of the City of Opp appealed a circuit court's order that denied its motion to dismiss a third-party complaint filed by Shuler Brothers, Inc. The Alabama Electric Company (AEC) had filed suit against Shuler Brothers seeking recovery for services performed and for breach of contract when Shuler Brothers refused to pay an invoice for repairs AEC made to some equipment. Shuler Brothers argued that the repairs did not solve its equipment issue. Shuler Brothers alleged the Utilities Board was negligent in maintaining power lines going to its facility that was part of its equipment troubles. In its motion to dismiss, the Utilities Board argued that a two-year statute of limitations applied to Shuler Brothers' claim, and that the alleged negligence was not discovered until AEC served Shuler Brothers with its complaint. Upon review of the matter, the Supreme Court affirmed the circuit court's judgment to deny the Utilities Board's motion to dismiss; reversed the circuit court's decision denying Shuler Brothers' breach-of-contract claim; and reversed the circuit court's denial of the Board's motion to dismiss Shuler Brothers' negligence claim. View "Utilities Board of the City of Opp v. Shuler Brothers, Inc. " on Justia Law

Wabash is a power generation cooperative. Northeastern purchases electricity from Wabash and resells it. In 1977, they entered into a contract: Northeastern agreed to purchase electricity from Wabash for 40 years at rates to be set by the Wabash board of directors “[s]ubject to the approval of the Public Service Commission of Indiana.” Revised rates would not be effective unless approved by the “applicable regulatory authorities,” and the federal Rural Electrification Administration. In 2012 Northeastern sought a state court declaratory judgment that Wabash breached the contract by taking action in 2004 that had the effect of transferring regulation of its rates from the Indiana Commission to the Federal Energy Regulatory Commission. Wabash removed the case under 28 U.S.C. § 1441(a), arguing that the claim arises under the Federal Power Act, 16 U.S.C. 791a. The district court denied remand and granted a preliminary injunction. The Seventh Circuit vacated, holding that federal courts lack subject matter jurisdiction. Northeastern’s claim is limited to construction of the contract and does not necessarily raise a question of federal law. While Northeastern may eventually use a favorable state court judgment to seek permission to terminate its obligations under the tariff filed with FERC,that cannot be achieved in this suit View "NE Rural Elec. Membership Corp. v. Wabash Valley Power Assoc." on Justia Law

Two public utilities (the companies) were wholly owned subsidiaries of appellant FirstEnergy Corporation. Appellees were residential customers of the companies. The customers filed a class-action complaint against FirstEnergy and the companies in the county court of common pleas. The complaint raised four causes of action: declaratory judgment, breach of contract, fraud, and injunctive relief. The trial court granted FirstEnergy's motion to dismiss the complaint for lack of jurisdiction, finding that the Public Utilities Commission of Ohio (PUCO) had exclusive jurisdiction over the allegations in the complaint. The court of appeals affirmed in all respects except with regard to the customers' fraud claim. The appellate court determined on two separate grounds that the trial court had jurisdiction over the fraud claim and remanded that claim to the trial court. The Supreme Court reversed the appellate court, holding (1) the customers' fraud claim was not a pure tort action, but rather, was a claim that the companies were overcharging the customers for electric service; and (2) because the complaint was challenging the rates charged for utility service, it fell within the exclusive jurisdiction of the PUCO. View "DiFranco v. FirstEnergy Corp." on Justia Law

This case arose from a dispute regarding the sewer system serving Sunnyside Industrial Park, LLC. Sunnyside Park Utilities (SPU) provides water and sewer services to the industrial park and Doyle Beck and Kirk Woolf are, respectively, the Secretary and President of SPU. Printcraft Press, Inc. (Printcraft) is a printing business that occupies a building in the industrial park. In 2004, Printcraft entered a ten-year lease for property in the industrial park. The dispute in this case centered on the failure of Beck, Woolf, and SPU to disclose limitations on the sewage system, including the amount of sewage the system could handle and its lack of suitability to dispose of some chemicals used in the printing business. After Printcraft started using the sewage system, SPU disconnected Printcraft from the system in December 2006. Printcraft sued SPU, Beck, and Woolf (collectively, defendants) for breach of contract, fraudulent nondisclosure, and fraud. At trial, the jury found that the defendants owed Printcraft a duty to disclose the limitations of the system and failed to do so. The trial court denied the defendants' motion for judgment notwithstanding the verdict (JNOV) and entered judgment in favor of Printcraft. Defendants timely appealed and Printcraft cross-appealed. However, in 2009, SPU filed a renewed motion for relief from judgment under Idaho Rule of Civil Procedure 60(b), asserting newly discovered evidence regarding whether Printcraft's damages claim was affected by its subsequent connection to the Idaho Falls city sewer system. The district court found that the newly discovered evidence satisfied the requirements of I.R.C.P. 60(b) and granted a new trial on the issue of damages. On appeal, the defendants argued that they had no duty to disclose, that any failure to disclose did not lead Printcraft to believe any fact that was false, that the refusal to give SPU's requested jury instructions was improper, and that the district court erred in denying their motion for JNOV because there was not sufficient evidence to support the jury's determination of damages. In turn, Printcraft's cross-appeal argued that the district court erred in limiting the potential bases for defendants' duty to disclose, that Printcraft's breach of contract claim was improperly dismissed, that the subsequent Rule 60(b) motion was improperly granted, that the issue of punitive damages should have been submitted to the jury, and that the judge erred in denying Printcraft's request for attorney fees. Upon review, the Supreme Court reversed the district court's grant of SPU's motion under 60(b)(2). The Court affirmed the denial of defendants' motion for JNOV as to the existence and breach of a duty to disclose and as to the amount of damages. The Court found that the district court did not abuse its discretion in excluding the jury instructions. And the Court affirmed the district court's decision to deny Printcraft's request to put the question of punitive damages to the jury.

The Regional School District (Mahar), entered into a price watch agreement with Northeast Energy Partners, a licensed broker of energy services based in Connecticut, pursuant to which Northeast would negotiate and secure contracts for the provision of Mahar's electricity from energy suppliers. Mahar did not enter into the agreement to obtain Northeast's services pursuant to the competitive bidding procedures contained in G.L. c. 30B. When Mahar questioned the validity of the agreement, Northeast sought a declaratory judgment that the agreement is valid and enforceable because, under G.L. c. 30B, 1 (b ) (33), the agreement is exempt from the competitive solicitation and bidding procedures set forth in G.L. c. 30B. The Massachusetts Supreme Court ruled in favor of Northeast, holding that a contract between a school district and an energy broker for procurement of contracts for electricity is exempt from the requirements of G.L. [c.] 30B as a contract for 'energy or energy related services' pursuant to G.L. c. 30B, 1 (b ) (33).

In 1983, Congress enacted the Nuclear Waste Policy Act, 42 U.S.C. 10101-10270, authorizing the Department of Energy to enter into contracts with nuclear facilities for the disposal of spent nuclear fuel (SNF) and high-level radioactive waste (HLW). Congress mandated that, under the Standard Contract, DOE dispose of SNF and HLW beginning not later than January 31, 1998. In 1983, DOE entered into a Standard Contract with Consolidated Edison under which DOE agreed to accept SNF stored at the Indian Point facility. Following DOE’s breach, the Claims Court awarded two categories of damages: wet storage costs for continued operation of its Unit 1 spent fuel pool and regulatory fees paid to the U.S. Nuclear Regulatory Commission. The Federal Circuit reversed the awards, affirmed denial of damages for the cost of financing mitigation activities, but reversed denial of damages for indirect overhead costs associated with mitigation. The company had chosen to prioritize removal of Unit 2 SNF and Unit 1 material would not have been removed by the time at issue; the company did not establish that the breach caused an increase in fees to the NRC.

The City of Dillon entered an agreement with the McNeills allowing them to connect to a water main for their domestic water supply. Later, the City granted permission to the McNeills to activate an existing water service to their property. The Conners bought the McNeills' subdivided lot, and the City billed and collected for the water that was furnished to the Conners. The water main subsequently froze solid, leaving the Conners without water service for weeks. The Conners sued the City for breach of contract and negligence. The district court entered summary judgment for the City, concluding (1) there was no implied contract between the Conners and the City, and therefore, the Conners' water use was unlawful; and (2) the negligence claim was barred by City Ordinance 13.04.150, which provides that the City is not liable for claims from interruption of water service resulting from shutting off the water in its mains. The Supreme Court reversed, holding (1) the City had a legal obligation to provide water to the Conners under an implied contract; and (2) section 13.04.150 did not bar the Conners' claims because the City did not decide to shut off the water service.

Appellee was injured by a falling tree located near, but outside, an easement maintained by Utility Company. Utility Company had hired Service Contractor to inspect trees along its power lines and to remedy any situation in which trees or vegetation might affect the lines. Appellee filed suit against Appellants, Utility Company and Service Contractor, alleging that they were liable for Appellee's injuries based upon their failure to inspect, maintain, and remove the tree or to warn the landowner and the public of the danger raised by the tree. The trial court granted summary judgment in favor of Appellants, concluding that they owed no duty to Appellee and that Appellee was not a third-party beneficiary under the Appellants' contract. The court of appeals reversed, concluding that the contract was ambiguous regarding whether Appellee had enforceable rights as an intended third-party beneficiary. The Supreme Court reversed, holding (1) for an injured party to qualify as an intended third-party beneficiary under a written contract, the contract must indicate an intention to benefit that third party; and (2) because the contract between Appellants did not indicate an intent to benefit Appellee, the trial court properly granted summary judgment to Appellants.

Plaintiff owns 2,485 acres containing Indiana's only antebellum plantation and 2,000 acres of "classified forest," with endangered species habitats. A utility company has a lease for storing and extracting oil and natural gas on portions of the property. The Lease continues so long as "oil or gas is produced in paying quantities" or "the Property continues to be used for the underground storage of gas" and will terminate upon the utility's surrender or failure to make payments. The lease contains provisions to protect historic sites and to calculate damage to trees, requires notice of utility activity, and requires that the utility's use be "as minimally necessary." Plaintiff sought damages and to terminate the lease and evict the utility. The district court entered judgment for the utility, finding that a disagreement about the use of land was not an express reason for termination and that the lease specifically provided that damages were the proper remedy. Plaintiff dismissed the damages claim with prejudice to appeal the ejectment claim. The Seventh Circuit affirmed. Plaintiff did not show that damages are inadequate to compensate for the harm to its property.

In 1983, Congress enacted the Nuclear Waste Policy Act, authorizing contracts with nuclear plant utilities, generators of spent nuclear fuel (SNF) and high-level radioactive waste (HWL) under which the gVovernment would accept and dispose of nuclear waste in return for the generators paying into a Nuclear Waste Fund, 42 U.S.C. 10131. In 1983, the Department of Energy entered into the standard contract with plaintiff to accept SNF and HLW. In 1987, Congress amended the NWPA to specify that the repository would be in Yucca Mountain, Nevada. The government has yet to accept spent fuel. The current estimate is that the government will not begin accepting waste until 2020, if at all. In 2001, plaintiff began constructing dry storage facilities to provide on-site storage for SNF rather than to continue using an outside company (ISFSI project). The Court of Federal Claims awarded $142,394,294 for expenses due to DOEâs breach; 23,657,791 was attributable to indirect overhead costs associated with the ISFSI project. The Federal Circuit affirmed. Breach of the standard contract caused plaintiff to build, staff, and maintain an entirely new facility; the ISFSI facilities had not existed prior to the breach and were necessitated by the breach.