Justia Contracts Opinion Summaries

AllianceOne Receivables Management Inc. instituted a collections action against William Carl Lewis Jr. and then voluntarily dismissed it. Lewis claimed he was entitled to attorney fees as the "prevailing party" under RCW 4.84.250 and .270 since under RCW 4.84.270 a defendant is a prevailing party when the plaintiff "recovers nothing." The district court denied Lewis' fee request, holding that there is no prevailing party for the purposes of an award of attorney fees when the plaintiff voluntarily dismisses the action. Finding no reversible error, the Supreme Court affirmed. View "AllianceOne Receivables Mgmt., Inc. v. Lewis" on Justia Law

Desperate to save his home from foreclosure, Lawrence Jametsky sought help securing a loan. Through a series of connections, he was introduced to mortgage broker Matthew Flynn. Flynn made Jametsky an offer for a $100,000 loan that would cover Jametsky's debts, save his house, and allow him to regain financial solvency. Instead of receiving a loan, Jametsky deeded his house to Rodney Olsen for $100,000 and entered into an 18-month lease with a buy-back option. After J ametsky realized what had happened months after the fact, he sought relief under the distressed property conveyances act (DPCA), among other things. His suit was dismissed at summary judgment. The Court of Appeals affirmed, finding that Jametsky's property was not distressed at the time of the sale because no certificate of delinquency had been issued by King County. The Supreme Court reversed and remanded: a property can be distressed under RCW 61.34.020(2)(a) before a certificate of delinquency is issued and instruct the trial court to consider a variety of factors in making this factual determination. View "Jametsky v. Olsen" on Justia Law

Petitioner Albert Boogaard argued that the comprehensive marine liability insurance policy he purchased from International Marine Underwriters (IMU) for his general partnership, ABCD Marine, covered bodily injuries he suffered while working as an independent contractor for Northland Services Inc. (NSI). Specifically, petitioner claimed that even as a general partner he qualified and was covered as a third party under the "insured contract" provision of the policy. IMU contended that as a general partner and insured, Boogaard was not a third party under the insured contract provision. The Supreme Court affirmed summary judgment in favor of IMU. As a general partner, Boogaard did not qualify as a third party under the "insured contract" provision in accordance with Washington partnership law. View "Int'l Marine Underwriters v. ABCD Marine, LLC" on Justia Law

Steve and Karen Donatelli hired D.R. Strong Consulting Engineers Inc. to help the Donatellis develop their real property. Before development could be completed, the Donatellis suffered substantial financial losses and lost the property in foreclosure. The Donatellis sued D.R. Strong for breach of contract, violation of the Consumer Protection Act (CPA), negligence, and negligent misrepresentation. D.R. Strong moved for partial summary judgment on the CPA and negligence claims. D.R. Strong argued that the negligence claims should have been dismissed under the economic loss rule because the relationship between the parties was governed by contract and the damages claimed by the Donatellis were purely economic. The trial court and Court of Appeals held that as a matter of law, the Donatellis' negligence claims were not barred. Finding no error in that analysis, the Supreme Court affirmed. View "Donatelli v. D.R. Strong Consulting Eng'rs, Inc." on Justia Law

At issue before the Supreme Court in this matter was the narrow question of whether an arbitration agreement signed by respondents was unconscionable and therefore unenforceable under California law. Upon review, the Washington Supreme Court concluded that the forum selection and punitive damages clauses at issue were not unconscionable, but that the arbitrator selection, statute of limitations and fee shifting provisions were. Therefore, because the agreement was "permeated with unconscionability," it was unenforceable. View "Brown v. MHN Gov't Servs., Inc." on Justia Law

Petitioner Patrick Kofmehl bought a piece of land from Baseline Lake, LLC. By closing, the parties disputed the amount of land to be covered by their sales contract. Petitioner was willing to close only if the disputed parcel was included; the sale ultimately failed to close. The trial court invalidated the contract for failing to comply with the statute of frauds and denied specific performance to either party. The issue on appeal to the Supreme Court was whether Petitioner was entitled to recover his down payment before the dispute arise. Upon review, the Court concluded that because neither party breached the contract. The Court affirmed the appellate court which reversed the grant of summary judgment that granted restitution. View "Kofmehl v. Baseline Lake, LLC" on Justia Law

Newman Park, LLC was formed for the sole purpose of developing a piece of property. In 2004, it took out a loan to purchase the property at issue in this suit. In 2008, without knowledge of the other owners in Newman Park, one member went to Columbia Community Bank and requested a loan for his 95%-owned company, Trinity. Trinity had nothing to do with Newman Park, but the Bank's loan to Trinity was secured by a second deed of trust on the Newman Park property. The issue before the Supreme Court in this case was whether the Bank, who was tricked into refinancing the property that the borrower lacked authority to pledge as security, could benefit from equitable subrogation when that Bank had no preexisting interest in the property. The property-owner/debtor argued that the Bank's lack of the preexisting interest barred it from equitable subrogation because of the "volunteer rule" which would characterize it as an intermeddler. The Court rejected the volunteer rule as a bar to equitable subrogation. The Court affirmed the appellate court which held that the defrauded Bank was entitled to be equitably subrogated as first priority lienholder. View "Columbia Cmty. Bank v. Newman Park, LLC" on Justia Law

In open court, Appellant Vanessa Condon and Respondent Fely Condon entered into a stipulated settlement and dismissal with prejudice of Vanessa's claims against Fely, stemming from an automobile accident. Before payment, Fely requested that Vanessa sign a release agreement, which the parties had not discussed nor placed on the record. Vanessa refused to sign, and Fely made a motion to enforce the settlement and release. The trial court deemed the release signed, and Vanessa appealed the trial court's order. On appeal, she argued that the trial court lacked jurisdiction to enforce release terms that were not a part of the original agreement. Fely argued that Vanessa waived her right to appeal by accepting the settlement check. Upon review, the Supreme Court held that Vanessa did not waive her right to appeal, and that the trial court improperly added implied terms to the agreement. Accordingly, the Supreme Court reversed and remanded for further proceedings. View "Condon v. Condon" on Justia Law

In Washington, a liability insurer unclear of its obligation to defend an insured may invoke a "reservation of rights" defense while it seeks a declaration regarding coverage. The issue before the Supreme Court in this case centered on whether the insurer may unilaterally condition its reservation on making the insured absorb defense costs if a court ultimately determines there is no coverage. The Supreme Court responded in the negative: "we recognize…that an insurer may avoid or minimize its responsibility for defense costs when an insured belatedly tenders a claim and the insurer demonstrates actual and substantial prejudice as a result." View "Nat'l Sur. Corp. v. Immunex Corp." on Justia Law

Petitioner Bruce Cedell lost his home in a fire. After hearing nothing from his insurer for several months, the company threatened to deny coverage and issued an ultimatum to Petitioner to accept one quarter of what the trial court eventually found Petitioner's claims to be worth. Petitioner brought suit alleging bad faith. The company resisted disclosing its claims file, among other things, and Petitioner moved to compel production. After a hearing and a review of the claims file in camera, the trial court granted Petitioner's motion. On interlocutory review, the Court of Appeals held that the attorney-client privilege applied to a bad faith claim by a first party insured, that the fraud exception to the attorney-client privilege required a showing of actual fraud, and that the trial court erred in reviewing Petitioner's claims file in camera because Petitioner had not made a sufficient prima facie showing of fraud. Upon review, the Supreme Court affirmed in part, reversed in part, and remanded to the trial for further proceedings. "In first party insurance claims by insured's claiming bad faith in the handling and processing of claims, other than UIM claims, there is a presumption of no attorney-client privilege. However, the insurer may assert an attorney-client privilege upon a showing in camera that the attorney was providing counsel to the insurer and not engaged in a quasi-fiduciary function. Upon such a showing, the insured may be entitled to pierce the attorney-client privilege. If the civil fraud exception is asserted, the court must engage in a two-step process. First, upon a showing that a reasonable person would have a reasonable belief that an act of bad faith has occurred, the trial court will perform an in camera review of the claimed privileged materials. Second, after in camera review and upon a finding there is a foundation to permit a claim of bad faith to proceed, the attorney-client privilege shall be deemed to be waived. . . . Cedell is entitled to broad discovery, including, presumptively the entire claims file. The insurer may overcome this presumption by showing in camera its attorney was not engaged in the quasi-fiduciary tasks of investigating and evaluating the claim." View "Cedell v. Farmers Ins. Co. of Wash." on Justia Law