Justia Contracts Opinion Summaries

Garret Hirchak, Manufacturing Solutions, Inc., and Sunrise Development LLC (plaintiffs) appealed a trial court's order dissociating Garret from Hirchak Brothers LLC and Hirchak Group LLC (defendants) and requiring the LLCs to pay over $900,000 in equity interest, unpaid compensation, and reimbursements. Plaintiffs argued that the trial court erred in not recognizing oppression by the majority members of the LLCs, treating a $300,000 down payment made by Garret as gratuitous, declining to order reimbursements for certain services and cash advances, and refusing to assess prejudgment interest on any of the reimbursements. Defendants cross-appealed, arguing that the court erred in awarding compensation to Garret after he breached his fiduciary duties.The Superior Court, Lamoille Unit, Civil Division, found that Garret had breached his fiduciary duties by failing to make explicit agreements on service rates and withholding financial records. The court ordered Garret's dissociation from the LLCs and required the LLCs to pay Garret $375,000 for his equity interest, $215,430 for cash advances made before March 2020, and $213,591.84 for unpaid compensation from October 2019 to January 2021. The court also ordered reimbursement of $71,537.64 and $50,214.57 for unpaid invoices from MSI and Sunrise, respectively, before March 2020. The court denied prejudgment interest on any reimbursements and rejected Garret's claim for the $300,000 down payment.The Vermont Supreme Court affirmed the trial court's decision, agreeing that Garret was not entitled to reimbursement for the $300,000 down payment or for cash advances and invoices after March 2020 due to his breach of fiduciary duties. The court also upheld the denial of prejudgment interest, finding it was within the trial court's discretion. However, the Supreme Court reversed the trial court's award of compensation to Garret after March 2020, concluding that his breach of fiduciary duties forfeited his right to compensation during that period. The case was remanded for a recalculation of the compensation due to Garret. View "Hirchak v. Hirchak" on Justia Law

Plaintiff and her partner, owners of Health Hero Farm LLC, sought to buy out a local farming family from their partnership. During this period, they befriended the defendant, a local auto-repair shop owner with a small farm. They discussed forming a partnership with him, and plaintiff represented to the Vermont Land Trust that they were partnering with the defendant to secure approval for the buyout. Plaintiff and defendant agreed to purchase Galloway cattle, with plaintiff advancing the funds. Plaintiff insisted on a written agreement, but defendant preferred a handshake deal. Eventually, defendant signed a promissory note without reading it, which included an attorney’s-fees provision.The Superior Court, Grand Isle Unit, Civil Division, held a bench trial and concluded that the promissory note did not accurately reflect an agreement between the parties. The court found that the note was a contract of adhesion and awarded plaintiff damages and prejudgment interest under a theory of unjust enrichment, rather than enforcing the promissory note.The Vermont Supreme Court reviewed the case and held that the promissory note was unambiguous and enforceable according to its terms. The court found that defendant’s failure to read the note before signing it did not constitute a defense to enforcement. The court also determined that the note was not a contract of adhesion and was not unconscionable. The Supreme Court reversed the trial court’s decision and remanded the case for further proceedings consistent with its opinion. View "Falcao v. Richardson" on Justia Law

Susan McHugo Inouye sought damages and equitable remedies against Gregory McHugo, Nancy McHugo, and the estate of Patricia Bixby McHugo, alleging that Patricia breached a contract for mutual wills made with Susan’s father, John McHugo, under which Susan was a beneficiary. The trial court dismissed Susan’s claims, concluding that Patricia’s notice of intent to revoke her will during John’s life meant there was no detrimental reliance and thus no enforceable contract. Alternatively, the court found that John consented to rescission of the mutual-wills contract.The Superior Court, Windsor Unit, Civil Division, initially reviewed the case. The court found that John had notice of Patricia’s intention to change her will and did not alter his own estate plan in response. The court concluded that there was no detrimental reliance by John and that mutual consent was not required to revoke the contract. The court also suggested that John’s inaction indicated his consent to rescind the contract. Susan appealed the decision.The Vermont Supreme Court reviewed the case and concluded that the mutual-wills contract was enforceable on its own terms and that unilateral notice of intent to revoke was insufficient to rescind the contract. The court held that mutual consent was required to revoke the contract, as explicitly stated in the contract. The court found that the trial court’s conclusion that John consented to rescission was inadequately supported by the record, as mere inaction did not constitute consent. The Vermont Supreme Court reversed the trial court’s decision and remanded the case for further proceedings consistent with its opinion. View "Inouye v. Estate of McHugo" on Justia Law

American Environmental, Inc. (plaintiff) challenged the Burlington School District (defendant) over a contract awarded for the demolition and remediation of Burlington High School, which was closed due to toxic substances. The District sent a Request for Qualifications to fifteen contractors, including the plaintiff and the winning bidder, EnviroVantage. The plaintiff argued that EnviroVantage did not meet the prequalification criteria and that the contract should have been awarded to them.The Superior Court, Chittenden Unit, Civil Division, denied the plaintiff's request for a preliminary injunction, citing potential financial harm to the District and public interest. The court later granted summary judgment to the District, finding the case moot because the project was substantially complete. The court applied factors from Citineighbors Coalition of Historic Carnegie Hill ex rel. Kazickas v. New York City Landmarks Preservation Commission, determining that no effective relief could be granted due to the project's advanced stage.The Vermont Supreme Court took judicial notice of the project's completion, including demolition and soil remediation, based on public records and visual evidence. The court dismissed the appeal as moot, stating that no effective relief could be provided under Rule 75, which does not allow for damages. The court also rejected the plaintiff's argument that the case met the exception for issues capable of repetition yet evading review, noting the plaintiff's delay in seeking expedited relief and the lack of demonstrated probability of encountering the same situation again. View "American Environmental, Inc. v. Burlington School District" on Justia Law

In this case, the plaintiffs, Stowe Aviation, LLC and Stowe Airport Investment, LP, appealed from a denial of their motion to reopen a breach-of-contract case with the Vermont Agency of Commerce and Community Development. The plaintiffs had signed a memorandum of understanding (MOU) with the Agency in 2014, outlining their intention to develop and expand the Morrisville-Stowe State Airport using funds secured through the EB-5 program. However, the Agency later transferred its obligations under the MOU to the Department of Financial Regulation (DFR) without informing the plaintiffs, leading to the failure of the airport project.The plaintiffs filed a complaint against the Agency, alleging that the Agency breached its contract by failing to perform under the MOU and by transferring its obligations to the DFR without notice. The trial court dismissed the claims, and the case was closed. The plaintiffs then moved to reopen the case and amend their complaint, but the trial court denied their motion. The plaintiffs appealed this order.The Supreme Court of Vermont reversed the order and remanded the case, holding that the trial court had abused its discretion in denying the plaintiffs' motion to reopen the case. The Supreme Court reasoned that plaintiffs could potentially obtain relief to cure a pleading deficiency under Vermont Rule of Civil Procedure 59(e), and it was inappropriate for the trial court to deny relief simply because plaintiffs did not request leave to amend in their opposition papers before the court entered judgment. On remand, the plaintiffs must demonstrate a valid basis to vacate the previously entered judgment to prevent manifest injustice before they can file their amended complaint. View "Stowe Aviation, LLC et al. v. Agency of Commerce & Community Development" on Justia Law

Plaintiff Gregg Beldock contracted to purchase four solar assets in development from VWSD, LLC. Following allegations of breach, VWSD sold three of the solar assets to a third party, Green Lantern. Beldock filed a complaint against VWSD alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment, and against Green Lantern and its president alleging tortious interference with contract and unjust enrichment. VWSD counterclaimed for breach of contract. The trial court granted summary judgment in favor of all three defendants on Beldock’s claims and in part in favor of VWSD on its counterclaim. The Vermont Supreme Court agreed with the trial court’s grant of summary judgment regarding all claims against Green Lantern and its president and the implied-covenant claim against VWSD. However, because portions of the contract were ambiguous and a genuine dispute of material facts remained, the Court concluded summary judgment was inappropriate for Beldock’s breach-of-contract and unjust-enrichment claims against VWSD and VWSD’s counterclaim for breach of contract. Accordingly, judgment was reversed and the matter remanded for further proceedings. View "Beldock v. VWSD, LLC et al." on Justia Law

Plaintiff Gary Margolis appealed a trial court’s grant of defendant Daily Direct LLC’s motion to dismiss plaintiff’s complaint. Plaintiff, a resident of Vermont, entered into two contracts with defendant, whose principal place of business was in Milwaukee, Wisconsin. Under the contracts, defendant agreed to transport two motorcycles from Vermont to Las Vegas, Nevada, and then from Salt Lake City, Utah back to Vermont on scheduled dates in July 2021 in exchange for plaintiff’s prepayment. The contracts each contained identical forum-selection clauses, which identified Milwaukee, Wisconsin as the exclusive forum for any litigation under the contract. On May 12, defendant informed plaintiff that it had made a clerical error and would not fulfill its obligations under the contracts. Defendant did not revoke its repudiation and did not perform under the contracts. Plaintiff hired someone else to transport the motorcycles for the dates and locations described in the contracts with defendant for a total cost of $11,512.62. In June 2022, plaintiff sued defendant in Vermont for breach of contract, violation of the Vermont Consumer Protection Act, and unjust enrichment. Defendant moved to dismiss plaintiff’s complaint pursuant to Vermont Rule of Civil Procedure 12(b)(3) for improper venue, arguing that the forum-selection clauses in the contracts were valid and therefore the complaint should be dismissed for plaintiff to refile in an appropriate court in Milwaukee. Plaintiff countered that defendant anticipatorily repudiated the contracts thereby discharging plaintiff of his duty to comply with the forum-selection clauses. The trial court granted defendant’s motion to dismiss without specify the legal basis for the dismissal, concluding merely that dismissal was appropriate because “[p]laintiff, having sued on a contract, [could not] avoid the contract’s forum[-]selection clause.” Finding no reversible error in the trial court's dismissal of plaintiff's complaint, the Vermont Supreme Court affirmed. View "Margolis v. Daily Direct LLC" on Justia Law

Insured Huntington Ingalls Industries, Inc. and insurer Huntington Ingalls Industries Risk Management LLC seek a declaratory judgment stating there is coverage under a property insurance policy for certain losses incurred by Huntington Ingalls Industries due to the COVID-19 pandemic. The trial court concluded that the complaint did not allege facts that would trigger coverage under the policy and granted judgment on the pleadings in favor of reinsurers. After review, the Vermont Supreme Court disagreed, reversed the trial court. and remanded for further proceedings. View "Huntington Ingalls Industries, Inc. et al. v. Ace American Insurance Company et al." on Justia Law

Plaintiff Sean Kelly appealed the grant of summary judgment to the University of Vermont Medical Center (UVMMC) on employment discrimination and breach-of-contract claims arising from UVMMC’s decision not to extend his one-year medical fellowship. UVMMC selected plaintiff for the 2017-18 fellowship. UVMMC was aware that plaintiff suffered from an adrenal deficiency that had delayed the completion of his residency. In the first five months of the fellowship, plaintiff missed nineteen full days and parts of nine more days for various reasons. By February 2018, after missing several more days and expressing that he felt “frustrated with [his] absences” and “overall inadequate as a fellow,” program personnel became concerned that plaintiff was falling behind in his training. In a March 30 meeting, the program director told plaintiff his performance had “deficiencies and these need[ed] to be addressed.” At some point during this period, the director also told plaintiff he “should plan on extending [his] fellowship due to [his] time out and some minor deficits through August.” Plaintiff emailed other program personnel expressing frustration at the prospect of staying through August to complete his training. On April 14, 2018, plaintiff suffered a stroke, and on April 19th he attempted suicide. He was hospitalized from April 14 through May 3 and was not cleared to return to work until June 1, 2018. In all, plaintiff missed approximately six more weeks of the fellowship. On or about May 31, the director called plaintiff and told him that while UVMMC had determined he needed six more months of training to finish the fellowship, it could not accommodate additional training for that length of time. UVMMC paid plaintiff his remaining salary. Plaintiff filed a grievance under the Graduate Medical Education rules; the grievance committee affirmed UVMMC's decision. Because the decision not to extend his fellowship was an academic decision, there was no employment action and consequently no adverse employment action. The Vermont Supreme Court did not find plaintiff's arguments on appeal persuasive, and affirmed the grant of summary judgment in UVMMC's favor. View "Kelly v. University of Vermont Medical Center" on Justia Law

Masiello Real Estate, Inc. appealed a superior court’s conclusions of law on its breach-of-contract, quantum-meruit, and negligent-misrepresentation claims following a bench trial. Masiello’s claims stemmed from seller Dow Williams’ refusal to pay it a real estate commission under their right-to-market agreement. Seller owned a 276-acre property in Halifax and Guilford, Vermont. In 2013, he executed a one-year, exclusive right-to-market agreement with Chris Long, a real estate broker who worked for Masiello. Seller and broker agreed on a $435,000 asking price and a fixed $25,000 broker commission. The agreement had a one-year “tail” that compelled seller to pay the commission if, within twelve months of the agreement’s expiration, seller sold the property and Masiello was the procuring cause. The listing agreement would be renewed several times after negotiations with prospective buyers failed. Michelle Matteo and Torre Nelson expressed an interest in the property. Nelson, having obtained seller’s contact information from seller’s neighbor, contacted seller directly and asked if he was still selling. Between August and September 2016, Nelson and seller discussed the fact that seller wanted $400,000 for the property and buyers wanted seller to consider a lower price. No offer was made at that time. The tail of a third right-to-market agreement expired on September 30, 2016. Between September and November of that year, Nelson and Matteo looked at other properties with the other realtor and made an unsuccessful offer on one of those other properties. Returning to seller, Nelson, Matteo and seller negotiated until they eventually agreed to terms. Believing that it was improperly cut out of the sale, Masiello sued seller and buyers. The superior court concluded that because the property was not sold during the tail period, and because Masiello was not the procuring cause, no commission was due under the contract. The court further held that there was no negligent misrepresentation and that Masiello was not entitled to recovery under quantum meruit. Finding no reversible error in that judgment, the Vermont Supreme Court affirmed. View "Masiello Real Estate, Inc. v. Matteo, et al." on Justia Law