Justia Contracts Opinion SummariesArticles Posted in Zoning, Planning & Land Use
Village of Kirkland v. Kirkland Properties Holdings Co., LLC I
The Village alleged that the defendants breached a 2003 recorded annexation agreement executed by the Trustee that was then the legal owner of the property, which now consists of an annexed 114-acre subdivision. The Village alleged that the defendants were subject to the annexation agreement as successors to the Trustee when they purchased undeveloped portions of the property from Plank, which had acquired the property from the Trustee. The Village alleged that the defendants refused its request for a letter of credit in the amount proportionate to the number of lots the defendants owned in the subdivision, to secure the completion of roads in the subdivision.The defendants argued that, although the annexation agreement was a covenant that ran with the land, it did not confer successor status to an entity that purchased only a portion of the property subject to annexation, as opposed to the whole of the property. The Appellate Court reversed the dismissal of the action. The Illinois Supreme Court affirmed. Reading the annexation agreement as a whole, the court found that its plain language required its provisions to be binding and enforceable on the parties’ successors. Defendants are successors in title to the landowner who agreed to those obligations. The obligations imposed upon any particular purchaser depend upon the obligations of the original developer that remain unsatisfied with respect to the specific parcel sold. View "Village of Kirkland v. Kirkland Properties Holdings Co., LLC I" on Justia Law
Suffolk Construction Co. v. Los Angeles Unified School Dist.
This appeal arises from litigation involving a public construction project to build the Central Region 9th Street Span K-8 school in downtown Los Angeles. The Los Angeles Unified School District (LAUSD or District) and Suffolk Construction Company, Inc. (Suffolk), entered into a development and construction agreement (contract), for the development and building of the school. Suffolk later entered into subcontracts with various subcontractors, including R.J. Daum Construction Company (Daum) and Fisk Electric Company (Fisk). Throughout the project, various problems arose, which caused delay and disruption and resulted in increased costs to Suffolk, Daum and Fisk. Suffolk sued LAUSD, alleging breach of the contract, implied contractual indemnity, and seeking declaratory relief. The jury found that Suffolk substantially performed its contract and that LAUSD breached the implied warranty of correctness by providing plans and/or specifications for the concrete footing design that was not correct. Further, the jury determined Suffolk’s damages for the concrete issue decided in phase 1 (TIA 5). The Second Appellate District found that the phase 1 verdict must be reversed and remanded for retrial on the ground that the special jury instruction based on Public Contract Code section 1104 was improper. The reversal of the phase 1 liability verdict requires that the phase 2 trial of damages for TIA 5 (related to the concrete cracking issue) must also be reversed and remanded for retrial. Finally, the court held that the trial court erred in granting JNOV on the phase 2 jury verdict. Thus, the decision granting the JNOV is reversed with direction to reinstate the jury verdict on that issue. View "Suffolk Construction Co. v. Los Angeles Unified School Dist." on Justia Law
Hanover Ins v. Binnacle Development
This dispute involves three construction projects (the “Projects”) in Galveston County, Texas. Defendants, Binnacle Development, Lone Trail Development, and SSLT, are land developers. Each developer contracted with R. Hassell Properties, Inc. to complete paving and infrastructure projects in Galveston County Municipal Utility District (“MUD”) No. 31. The three Hassell contracts were form MUD contracts created by MUD attorneys. Each contract stated that it was “for Galveston County Municipal Utility District No. 31.” Hanover subsequently sued the developers in federal court to recover the contract balances on the Projects. The liquidated-damages clause would, if enforced, amount to an offset of $900,000. Both parties moved for summary judgment. The district court concluded that because no district is a party to the contracts at issue, the economic disincentive provision from the Water Code does not apply. On the second issue, the district court found that the damages clauses in the contracts constitute an unenforceable penalty. The court granted summary judgment for Hanover. The Fifth Circuit affirmed. The court held that Section 49.271 allows “economic disincentive” clauses only in contracts where a district is a contracting party. Because no district is party to the Hassell contracts, they cannot incorporate “economic disincentive” clauses permitted under the Texas Water Code. The court also wrote it would not disturb the district court’s finding that the clause is an unenforceable penalty under Texas law. View "Hanover Ins v. Binnacle Development" on Justia Law
Award Homes, Inc. v. County of San Benito
Tax sharing agreements between the County of San Benito and the City of Hollister require the city to pay the county a fixed fee (the “Additional Amount”) for each residential unit constructed on land that is annexed into the city from the county. Plaintiff entered into development agreements with the city to build residential units on land subject to the city-county tax sharing agreements, and agreed to satisfy certain obligations from the tax sharing agreements, but sued the city and the county seeking a declaration that payment of the Additional Amount is not among plaintiff’s obligations.The court of appeal affirmed a defense judgment. The plaintiff agreed to pay the city the Additional Amount fees as part of the development agreements. Nothing in the tax sharing agreement suggests that obligations created by it would cease to exist merely because a project annexed during its effective period was not constructed until after the agreement expired. The court rejected the plaintiff’s argument that because the Additional Amount is an obligation of the city to the county under the tax sharing agreement, it cannot be a “Developer’s obligation.” The reference to “Developer’s obligations” in the development agreement did not mean only the capital improvement and drainage fees discussed in the tax sharing agreement; the term includes the Additional Amount. View "Award Homes, Inc. v. County of San Benito" on Justia Law
BMC Promise Way, LLC v. County of San Benito
A tax-sharing agreement between the County of San Benito and the City of Hollister requires the city to pay the county a fixed fee (Additional Amount) per residential unit constructed on land annexed into the city from the county during the period covered by that agreement. Plaintiff’s predecessor entered into an annexation agreement with the city, agreeing to comply with “all applicable provisions” of that tax sharing agreement. When the plaintiff purchased the annexed land and sought to develop it into subdivisions, the city informed the plaintiff that it was liable for the Additional Amount fees. Plaintiff paid the fees under protest, then sued, seeking a declaration of its rights and duties under various written instruments.The court of appeal affirmed a defense judgment. Plaintiff is contractually liable for the Additional Amount by the terms of the annexation agreement. Any challenge to the calculation of the Additional Amount is beyond the scope of a declaratory relief action and time-barred. The court rejected the plaintiff’s arguments that neither the annexation agreement nor the tax sharing agreement requires the plaintiff to pay the Additional Amount and that the fees violate the Mitigation Fee Act and federal constitutional constraints on development fees as monetary exactions. View "BMC Promise Way, LLC v. County of San Benito" on Justia Law
Munden v. Stewart Title Guaranty Co.
The Mundens own ranching property in Bannock County, Idaho. They purchased 768 acres in 2012 and 660 acres in 2014 and purchased title insurance for the first purchase through Stewart and for the second purchase through Chicago Title. The property contains a gravel road. A 2019 ordinance amended a 2006 ordinance that closed specified snowmobile trails, including that gravel road, to motor vehicles except snowmobiles and snow-trail-grooming equipment during winter months. The 2019 ordinance deleted the December-to-April closure, giving the County Public Works Director the discretion to determine when to close specified snowmobile trails, and increased the maximum fine for violations. The Mundens sought an injunction. The county asserted that the road had been listed as a public road on county maps since 1963 and that the Mundens purchased their property expressly subject to easements and rights of way apparent or of record.The Mundens filed a federal complaint, seeking declaratory relief, indemnification, and damages. The district court granted the insurance companies summary judgment. The Ninth Circuit reversed as to Chicago Title, finding that the county road map is a “public record” within the meaning of its policy so that coverage applied. Stewart has no duty to indemnify or defend; its policy disclaims coverage for damages “aris[ing] by reason of . . . [r]ight, title and interest of the public in and to those portions of the above-described premises falling within the bounds of roads or highways.” View "Munden v. Stewart Title Guaranty Co." on Justia Law
R & F Financial Services v. North American Building Solutions, et al.
R & F Financial Services, LLC, appealed a district court order dismissing its claims against Cudd Pressure Control, Inc., and RPC, Inc., and granting Cudd’s and RPC’s counterclaims and cross claims. North American Building Solutions, LLC (“NABS”) and Cudd Pressure Control, Inc. (“Cudd”) entered into an agreement where Cudd would lease from NABS 60 temporary housing modules for employee housing. The terms of the Lease required Cudd, at its sole expense, to obtain any conditional use permits, variances or zoning approvals “required by any local, city, township, county or state authorities, which are necessary for the installation and construction of the modules upon the Real Property.” The Lease was set to commence following substantial completion of the installation of all the modules and was to expire 60 months following the commencement date. NABS assigned its interest in 28 modules under lease to R & F; NABS sold the modules to R & F by bill of sale. Cudd accepted the final 32 modules from NABS, to which R & F was not a party. RPC, as the parent company of Cudd, guaranteed Cudd’s performance of payment obligations to R & F under the Lease. The Lease was for a set term and did not contain an option for Cudd to purchase the modules at the expiration of that set term. At the time R & F purchased NABS’s interest in the Lease, it understood the purpose of the Lease was to fulfill Cudd’s need for employee housing. The County required a conditional use permit for workforce housing, and Cudd had been issued a permit allowing for the use of the modules as workforce housing. The City of Williston annexed the Property within its corporate limits. Thereafter, the City adopted a resolution that declared all workforce housing was temporary and extension of permits was subject to review. The City modified the expiration date policy and extended all approvals for workforce housing facilities to December 31, 2015, such that all permits would expire the same day. In December 2015, Cudd successfully extended its permit for the maximum time permitted to July 1, 2016. Cudd sent a letter to NABS stating that it viewed the Lease as being terminated by operation of law as of July 1, 2016. R & F argued the trial court erred in finding the Lease was not a finance lease and, in the alternative, that the court erred in finding the doctrines of impossibility of performance and frustration of purpose to be inapplicable. Finding no reversible error, the North Dakota Supreme Court affirmed. View "R & F Financial Services v. North American Building Solutions, et al." on Justia Law
Bliss v. Minidoka Irrigation District
Victor Bliss appealed the grant of summary judgment in favor of the Minidoka Irrigation District (“MID”). Bliss filed a complaint against MID in April 2017, alleging: (1) breach of contract; (2) breach of fiduciary duty; (3) trespass; (4) declaratory relief; and (5) wrongful prosecution/infliction of extreme emotional distress. The complaint encompassed multiple events stemming from his decades-long relationship with MID. The district court granted MID’s motion for summary judgment on all claims, dismissing Bliss’s complaint for lack of notice under the Idaho Tort Claims Act, lack of standing, and failure to produce evidence. Bliss timely appealed, but finding no reversible error, the Idaho Supreme Court affirmed summary judgment. View "Bliss v. Minidoka Irrigation District" on Justia Law
SilverWing v. Bonner County
This appeal stemmed from a dispute between SilverWing at Sandpoint, LLC (“SilverWing”) and Appellant Bonner County, Idaho (the “County”). SilverWing sought to develop a residential hangar and taxiway adjacent to the Sandpoint Airport for residents who wished to park their aircraft in their home garage. SilverWing alleged that “[i]n 2007, the County provided to SilverWing an ALP that reflected the existing location of the Airport’s runway, and made no mention or reference to any plans for the runway to be moved. At the same time, the County promised that there were no plans regarding changes to runway location which would be incompatible with SilverWing’s development.” During the initial stages of engineering for the development, the County informed SilverWing that it needed to move the taxiway from where it was originally planned onto County-owned airport property, to accord with the County’s Airport Layout Plan (ALP). SilverWing proceeded with its development based on the County’s assurances, and built a taxiway and other infrastructure, including streets, to support its development. Once the taxiway was built, SilverWing learned that the placement of the taxiway was not approved by the FAA. After several years of legal maneuvering, SilverWing proceeded against the County in court, ultimately on a theory of promissory estoppel. After trial, a jury returned a verdict in favor of SilverWing. The County filed a motion for judgment notwithstanding the verdict (“JNOV”), which the district court denied. The County appealed. The Idaho Supreme Court reversed the district court’s ruling on the JNOV and vacated its ruling regarding attorney fees. The Court determined the district court erred with respect to JNOV on the claim of promissory estoppel: "SilverWing actually got what it claims the County promised—an FAA approved taxiway in the location where SilverWing built it. SilverWing can now sell its development with no regulatory uncertainty." View "SilverWing v. Bonner County" on Justia Law
City of Idaho Falls v. H-K Contractors
The City of Idaho Falls (“Idaho Falls”) appealed an order dismissing its breach of contract and waste claims against H-K Contractors, Inc. (“H-K”). In 2005, H-K entered into a written contract requiring it to convey a parcel of property to Idaho Falls. The contract required that H-K initially grant Idaho Falls a storm drainage easement “over and across” the parcel. H-K was also required to convey fee title to the parcel at a future date, in no event later than March 1, 2010. H-K failed to convey the property to Idaho Falls as required. In 2016, Idaho Falls sent a letter to H-K requesting conveyance of title. H-K responded by refusing to convey title to the property, claiming that in 2009 a city official had orally informed H-K that Idaho Falls was no longer interested in the property. Based on that alleged representation, H-K decided to invest in the property to make it profitable. Idaho Falls filed a complaint against H-K for breach of contract and waste. H-K moved to dismiss the complaint based on the limitation found in Idaho Code section 5-216, alleging Idaho Falls’ claims were time barred because they were not brought within the five-year statute of limitations governing contract actions. Idaho Falls countered that the statute of limitations did not apply to it as a subdivision of the State of Idaho. On January 3, 2017, the district court dismissed Idaho Falls’ complaint as time barred. Idaho Falls timely appealed, claiming the district court erred in enforcing the five-year limitation set forth in section 5-216. The Idaho Supreme Court vacated the district court's judgment, finding it erred when it determined the term “state” in Idaho Code section 5- 216 did not include Idaho’s municipalities. Because Idaho Falls was the “state,” the district court erred when it found its contract claims against H-K were not “for the benefit of the state.” View "City of Idaho Falls v. H-K Contractors" on Justia Law