Justia Contracts Opinion Summaries

Golden View Ready-Mix, LLC (Golden View) supplied concrete to Grangaard Construction, Inc. (Grangaard) for a bridge project. Golden View alleged that Grangaard failed to pay for the concrete, breached the implied obligation of good faith and fair dealing, and committed fraud. A jury found in favor of Golden View on the breach of contract and good faith claims, awarding damages and punitive damages, but found no liability for fraud. Grangaard appealed the punitive damages award and the decision to submit the fraud issue to the jury.The Circuit Court of the First Judicial Circuit, McCook County, South Dakota, presided over the case. Grangaard moved for partial summary judgment on the fraud claim, arguing there was no independent tort duty outside the contract. The court denied this motion, allowing the fraud claim to proceed. During the trial, the court permitted the jury to consider punitive damages based on the breach of the implied obligation of good faith, despite Grangaard's objections.The Supreme Court of the State of South Dakota reviewed the case. The court determined that punitive damages are only recoverable for breaches of obligations not arising from a contract, as per SDCL 21-3-2. The court found that the implied obligation of good faith arises from the contract itself and does not constitute an independent tort that could support punitive damages. Consequently, the court vacated the punitive damages award. However, the court affirmed the lower court's judgment in all other respects, concluding that the error regarding punitive damages did not affect the jury's decision on the breach of contract and good faith claims. View "Goldenview Ready-Mix, LLC v. Grangaard Construction, Inc." on Justia Law

A wholesale food supplier, Vista Food Exchange, Inc. ("Vista"), sued Comercial De Alimentos Sanchez S De R L De C.V. ("Sanchez") for breach of contract, alleging that Sanchez failed to pay for over $750,000 worth of meat products. Vista claimed that Sanchez was required to make payments to Vista's headquarters in New York, but Sanchez contended it had paid the invoices in cash to Vista's salesman, Eduardo Andujo Rascón, in Tijuana, Mexico. Sanchez supported its claim with declarations and documents, including an affidavit from Rascón stating he received the cash payments.The United States District Court for the Southern District of New York granted summary judgment in favor of Sanchez, dismissing Vista's breach-of-contract claim. The court found that Sanchez provided unrefuted evidence of cash payments to Rascón, fulfilling its contractual obligations. It also ruled that even if paying Rascón in cash breached the contract, Vista could not show that its damages were proximately caused by the breach because Rascón's theft of the money was unforeseeable. The court dismissed Vista's other claims for breach of implied contract, promissory estoppel, and unjust enrichment, citing New York law that forecloses such claims when an enforceable contract exists.On appeal, the United States Court of Appeals for the Second Circuit found that genuine disputes of material fact existed regarding Sanchez's claimed performance, the modification of the contract, and the foreseeability of damages. The appellate court vacated the district court's judgment dismissing Vista's claims for breach of contract and unjust enrichment and remanded the case for trial on those claims. The appellate court affirmed the dismissal of Vista's claims for implied contract and promissory estoppel. View "Vista Food Exchange, Inc. v. Comercial de Alimentos Sanchez" on Justia Law

Lezah Roberts entered into a fixed-price contract with Advanced Building Design, a Maryland-based firm, to build a handicap-accessible addition to her home in the District of Columbia. The project, which began in 2017 and was expected to take six months, remained unfinished nearly two years later. The project went over budget due to price increases and change orders, and Advanced sought to recoup these overages from Roberts. After initially agreeing to cover some additional costs, Roberts eventually refused to pay further increases, leading Advanced to cease work on the project. Roberts then filed a complaint in the Superior Court of the District of Columbia, alleging breach of contract, fraudulent misrepresentation, breach of the implied covenant of good faith and fair dealing, and a claim under the D.C. Consumer Protection Procedures Act (CPPA) for unfair trade practices.The Superior Court granted Advanced’s motion to dismiss Roberts’s suit, citing a mandatory forum selection clause in the contract that designated Maryland as the exclusive forum for litigation. Roberts appealed, arguing that the forum selection clause was unenforceable because it conflicted with the CPPA and was unconscionable.The District of Columbia Court of Appeals reviewed the case and disagreed with Roberts on both counts. The court held that the CPPA does not preclude parties from selecting their preferred forum and that the forum selection clause did not contravene public policy or demonstrate procedural or substantive unconscionability. Consequently, the court affirmed the Superior Court’s dismissal of Roberts’s complaint. View "Roberts v. Advanced Building Design" on Justia Law

In this case, the husband filed for an absolute divorce, and the wife counterclaimed. The parties attempted mediation but did not reach a settlement. The wife’s counsel later sent a settlement package to the husband’s counsel, which included a Voluntary Separation and Property Settlement Agreement, a promissory note, and a guaranty. The cover letter specified that the husband needed to sign the agreement and note by the end of the day on September 25, 2020. The husband signed the documents on September 28, 2020, and filed an amended complaint for divorce based on mutual consent, incorporating the agreement.The Circuit Court for Anne Arundel County found that the husband had timely accepted the wife’s offer and that a binding settlement agreement was formed. The court granted the husband’s motion to enforce the settlement agreement and entered a judgment for absolute divorce based on mutual consent, incorporating but not merging the agreement into the judgment. The wife appealed, and the Appellate Court of Maryland reversed the circuit court’s judgment, finding that the husband had not timely accepted the wife’s offer and that no contract was formed.The Supreme Court of Maryland reviewed the case and affirmed the Appellate Court’s judgment. The court held that the wife’s offer was conditioned on the husband signing the agreement and note by September 25, 2020, and that the husband’s failure to meet this deadline meant that no contract was formed. The court also found no evidence that the wife had waived the deadline. The court concluded that the husband’s signing of the documents on September 28, 2020, constituted a counteroffer, which the wife was not obligated to accept. View "Pattison v. Pattison" on Justia Law

The City of Fort Collins contracted with Open International, LLC, for software services, which led to mutual breach-of-contract claims. The City also alleged that Open's precontractual statements were negligent or fraudulent misrepresentations. A jury found that Open fraudulently induced the City to enter the contract. The City elected to rescind the contract, and the district court held a bench trial on restitution, ordering a judgment of nearly $20 million against Open.The United States District Court for the District of Colorado denied Open's motions for judgment as a matter of law, which argued that the City’s tort claims were barred by the economic-loss rule and the contract’s merger clause. The court also denied Open's motion to require the City to elect a remedy before trial. The jury found in favor of the City on the fraudulent inducement claim, and the City chose rescission, leading to the dismissal of the jury and a bench trial on restitution.The United States Court of Appeals for the Tenth Circuit reviewed the case and affirmed the district court’s rulings and the jury’s verdict. The court held that the City’s tort claims were not barred by the economic-loss rule or the contract’s merger clause. The court found sufficient evidence to support the jury’s finding of fraud, particularly regarding Open’s grading of the functionality matrix and the use of a different software portal. The court also upheld the finding that the City did not waive its right to rescind the contract, as there was conflicting evidence about when the City discovered the fraud. Finally, the court affirmed the district court’s denial of Open’s Rule 50(b) motion, which argued that Open Investments could not be liable for rescission. View "City of Fort Collins v. Open International" on Justia Law

Lisa Bodenburg, an Apple customer, purchased a 200 GB iCloud data storage plan, expecting it to add to the 5 GB of free storage she already had, resulting in a total of 205 GB. When she discovered that the plan only provided 200 GB in total, she filed a putative class action against Apple, alleging breach of contract and violations of California’s consumer protection laws due to Apple’s allegedly deceptive representations about its iCloud storage plans.The United States District Court for the Northern District of California dismissed Bodenburg’s action with prejudice. The court found that Bodenburg could not state a claim for breach of contract because Apple had fulfilled its contractual obligations by providing the additional storage as described in the iCloud Legal Agreement. The court also found that Bodenburg’s claims under California’s consumer protection laws did not satisfy the “reasonable consumer” test or the heightened pleading standard of Fed. R. Civ. P. 9(b).The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The panel held that Bodenburg could not state a claim for breach of contract because the iCloud Legal Agreement did not promise an additional 200 GB of storage but rather additional storage, which Apple provided. The court also held that Bodenburg’s claims under California’s consumer protection laws failed the reasonable consumer test, as Apple’s statements were not misleading when considered in context. Additionally, the claims did not meet Rule 9(b)’s heightened pleading requirements because Bodenburg could not demonstrate that Apple’s statements were false or deceptive. Thus, the dismissal of Bodenburg’s action was affirmed. View "Bodenburg v. Apple, Inc." on Justia Law

Michael Lindell, a Minnesota entrepreneur, challenged the legitimacy of the 2020 presidential election, claiming to have data proving Chinese interference. Lindell Management LLC (LMC) hosted a "Cyber Symposium" in August 2021, offering a $5 million reward to anyone who could prove the data provided was not from the November 2020 election. Robert Zeidman, a software developer, participated in the challenge, reviewed the data, and concluded it did not contain any information related to the election. The challenge judges disagreed and denied his claim.Zeidman filed for arbitration, and the arbitration panel unanimously found in his favor, ordering LMC to pay the $5 million reward. The panel determined that the contract required participants to prove the data was not related to the election and that Zeidman had met this burden. Zeidman then moved to confirm the arbitration award in the United States District Court for the District of Minnesota, while LMC sought to vacate it. The district court confirmed the panel's decision, finding that the panel had arguably interpreted and applied the contract.The United States Court of Appeals for the Eighth Circuit reviewed the case and concluded that the arbitration panel had exceeded its authority by using extrinsic evidence to interpret the unambiguous contract terms. The court held that the panel effectively amended the contract by requiring the data to be packet capture data, which violated Minnesota contract law and arbitration precedents. Consequently, the Eighth Circuit reversed the district court's decision and remanded the case with directions to grant LMC's motion to vacate the arbitration award. View "Zeidman v. Lindell Management LLC" on Justia Law

Origis USA LLC and Guy Vanderhaegen (the Insureds) appealed a decision by the Superior Court of Delaware, which dismissed their claims against two sets of insurers: the 2021 Insurers and the 2023 Insurers. The Insureds sought coverage for defense costs and potential liabilities arising from an underlying lawsuit filed by former investors in Origis USA’s parent company, alleging fraudulent conduct and breaches of fiduciary duty.The Superior Court dismissed the claims against the 2021 Insurers based on a No Action Clause in the insurance policies, which required a final determination of the Insureds’ liability before any action could be taken against the insurers. The court also dismissed the claims against the 2023 Insurers, concluding that the allegations in the underlying lawsuit did not constitute a separate claim under the 2023 policies and were barred by Prior Acts Exclusions, which excluded coverage for wrongful acts occurring before November 18, 2021.The Delaware Supreme Court affirmed the Superior Court’s decision regarding the 2023 Insurers, agreeing that the allegations did not constitute a separate claim and were excluded by the Prior Acts Exclusions. However, the Supreme Court remanded the case for further consideration regarding the 2021 Insurers. The court noted that the Superior Court needed to more fully analyze the relationship between the No Action Clause, the Advancement and Allocation provisions, and how they function together, especially given the absence of a duty by the insurers to defend. The Supreme Court emphasized the need for a more in-depth analysis of the contract provisions and their intended function. View "Origis USA v. Great American Insurance" on Justia Law

Bernard Perez, an ophthalmologist, entered into a disability insurance contract with MONY Life Insurance Company in 1988. After being diagnosed with throat cancer in 2011, Perez began receiving monthly disability benefits. MONY later suspected Perez of dishonesty in his disability claims and financial information, leading to the discontinuation of payments in February 2018. MONY sued Perez for unjust enrichment, and Perez counterclaimed for breach of contract.The Middle District of Florida held a nine-day trial where evidence showed Perez's deceitful conduct, including misrepresenting his ownership in his medical practice and overstating his physical ailments. The jury found in favor of MONY on the unjust enrichment claim, awarding $388,000, and rejected Perez's breach of contract counterclaim.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that under Florida law, an unjust enrichment claim cannot proceed when an express contract covers the same subject matter. Therefore, the district court erred in allowing the unjust enrichment claim to go to the jury. The Eleventh Circuit set aside the jury's verdict on this claim and directed the district court to vacate the judgment awarding MONY $448,930.06.Regarding Perez's breach of contract counterclaim, the Eleventh Circuit found that the district court erred in failing to interpret the ambiguous term "acceptable proof of loss" in the insurance contract. However, this error was deemed harmless because the evidence overwhelmingly showed Perez's dishonesty in his proofs of loss. Thus, the jury's verdict against Perez on his breach of contract counterclaim was affirmed. The court also affirmed the district court's evidentiary rulings and denial of sanctions. View "MONY Life Insurance Co. v. Perez" on Justia Law

James E. Carroll, Jr. signed a contract with Isle of Palms Pest Control, Inc. and SPM Management Company, Inc. for termite protection services for his home. The contract specified the use of the Exterra Termite Interception and Baiting System, with a liability limit of $250,000 for new termite damage. However, the respondents abandoned the bait station system without informing Carroll and began using a liquid application, which was allegedly done negligently. Carroll continued to renew the bait station contract, unaware of the change, and discovered significant termite damage to his home ten years later.Carroll sued the respondents for negligence and breach of contract. The Circuit Court granted summary judgment to the respondents on the negligence claim, citing the economic loss rule, which confined Carroll's remedy to the breach of contract action. The Court of Appeals affirmed this decision.The Supreme Court of South Carolina reviewed the case and reversed the lower courts' decisions. The court clarified that the economic loss rule applies only in the product liability context when the only injury is to the product itself. Since the contract did not involve the sale of a product, the economic loss rule did not apply. The court found that the respondents' conduct in secretly switching to a liquid termiticide application was beyond the contract's scope, creating a duty of due care. The court held that there was sufficient evidence to create a genuine issue of material fact regarding the respondents' negligence and its proximate cause of the termite damage. The case was remanded for further proceedings, with the $250,000 liability limitation applying only if the verdict is based solely on the breach of contract claim. View "Carroll v. Isle of Palms Pest Control, Inc." on Justia Law