Justia Contracts Opinion Summaries

The Supreme Court affirmed the decision of the court of appeals that a real property contract entered into by Henry Gray and William, Mary and Frank Stewart in this case was unenforceable under the statute of frauds but held that this decision did not apply equally to William, Mary and Frank.Henry entered into a real estate contract with Frank, his brother William, and William's wife, Mary. Later, Henry filed a complaint against Frank, William and Mary alleging breach of contract and requesting specific performance and damages. The trial court entered judgment in favor of Henry and awarded $19,286 in damages. The court of appeals reversed in part. The Supreme Court affirmed, holding (1) the contract at issue did not satisfy the statute of frauds; (2) the trial court's findings of fact may not serve as a basis to reverse the court of appeals' decision as to William and Mary; and (3) the court of appeals did not err when it reversed the trial court's damage award. View "Gray v. Stewart" on Justia Law

Russo contracted to build four airport firefighting trucks for the city. The contract provided that Russo would pay the city’s attorney fees in the event of litigation involving the trucks. Under a performance bond, Specialty agreed to be liable to the city for any losses if Russo failed to perform the contract. The city accepted and paid for two trucks, but subsequently terminated the contract and refused to pay for the remaining two trucks before they were delivered. Alleging problems with the first two trucks and Russo’s failure to timely deliver the other two, the city made a claim under the performance bond, then sued Russo for breach of contract and sought enforcement of the performance bond against Russo and Specialty, demanding the return of the payments it had made for the first two trucks. Russo sued the city for breach of contract. The city won judgments on all claims; a jury awarded the city $1. B.The court of appeal affirmed the denial of Specialty’s application for attorney fees, rejecting Specialty’s argument that, despite losing on contract liability, it is entitled to fees as the prevailing party because the jury awarded the city only nominal damages rather than the $3.4 million that the city sought. The trial court had discretion to find that neither party prevailed. View "City of Los Angeles Department of Airports v. U.S. Specialty Ins. Co." on Justia Law

Meemic Insurance Company filed a subrogation claim against Angela Jones, seeking to recover from Jones money it had paid to CitiMortgage, Inc., the mortgagee of a residential house owned by Jones and insured by Meemic, after fire damaged the property. In September 2015, Jones was living at the house when it was damaged by a fire. Meemic paid her $2,500 in partial payment of the claim for insurance benefits. During Meemic’s ensuing investigation, Jones admitted that at the time she secured the policy in 2014, she did not reside at the house but, instead, rented it to a third party. Meemic claimed that Jones’s failure to disclose in the initial policy that her home was being rented to others constituted a material misrepresentation. On the basis of the misrepresentation, Meemic rescinded and voided the insurance policy from its inception and returned Jones’s policy payments. After rescinding the policy, Meemic paid $53,356.49 to CitiMortgage under the lienholder contract of the policy. Jones filed an action against Meemic, claiming breach of contract and sought to recover under the insurance policy. Meemic moved for summary judgment, arguing that it had properly rescinded the policy given Jones’s misrepresentation in the initial policy. The motion was ultimately granted, and Jones' complaint was dismissed with prejudice. In 2018, Meemic filed the underlying action against Jones seeking to recover the $2,500 advance payment made to Jones and the $53,356.49 it had paid to CitiMortgage under the lienholder contract. Jones moved for summary judgment, arguing that she was relieved from any obligations under the insurance policy because Meemic had rescinded the insurance policy; Meemic opposed the motion and filed a countermotion for summary judgment. The Court of Appeal reversed the trial court's grant of summary judgment in favor of Meemic, and Meemic appealed. The Michigan Supreme Court held: an insurer who rescinds a homeowner’s insurance policy that contains a mortgage clause may seek subrogation from the insured under its rescinded policy for the amount paid to the mortgagee under the lienholder contract. The Court of Appeals judgment was reversed because it erred by concluding that Meemic’s rescission of the risk contract precluded it from denying payment to Jones and then asserting rights under the subrogation provision of the lienholder contract. View "Meemic Insurance Co. v. Jones" on Justia Law

Plaintiffs, two sisters, and a family friend own a large farm in north Louisiana. The farm sits atop the storied Haynesville Shale. A bank’s landman who was managing the sisters’ interests extended a mineral lease for only a tenth of the farm. The landman had misread the extension, which covered the whole farm. Within months, advances in drilling technology would open up the Haynesville Shale. Lease bonuses soared. But the faulty extension clouded the sisters’ farm.   Plaintiffs sued the bank for breach of contract. The district court found the landman violated the standards of his profession by extending the entire lease. But the court ruled this was a “mistake in judgment” under the bank’s contract with the sisters, shielding the bank from liability. It also ruled the mistake was not gross fault, which a Louisiana contract cannot exculpate.   The Fifth Circuit affirmed in part, reversed in part, and remanded. Then court explained that the landman did not make a mistake in judgment, but a mistake pure and simple. He misread the extension. The contract’s exculpatory clause does not cover this kind of error, and so the court reversed the dismissal of the sisters’ claims. The court remanded as to damages. The extension stuck the sisters with a lower royalty rate than they would have gotten otherwise. But the parties’ experts disagree over whether the differing rates would make any economic difference. The district court did not resolve this technical, fact-bound question. View "Franklin v. Regions Bank" on Justia Law

The Supreme Court affirmed the judgment of the trial court in favor of Seneca Mortgage Services after finding that Neal Bruder breached the parties' consulting agreement by failing to pay the consultant's fee, holding that there was no error.The court of appeals reversed the judgment of the trial court, finding that Seneca's recovery of the fee would sanction the requirement of an illegal act as a condition of the loan Seneca obtained to Bruder. The Supreme Court granted transfer, vacated the court of appeals' opinion, and affirmed the trial court's judgment, holding (1) the record lacked support for the conclusion that Bruder was required, or even asked, to commit an illegal act; and (2) the parties' agreement provided for the consultant's fee to be paid regardless of whether a particular financing offer was accepted. View "Bruder v. Seneca Mortgage Services, LLC" on Justia Law

The First Circuit affirmed in part and reversed in part the judgment of the district court dismissing Plaintiff's complaint against Harvard University for breach of contract and other related claims, holding that the district court erred in dismissing Plaintiff's breach of contract claim.The day before Plaintiff was about to graduate from Harvard three female Harvard students accused him of sexual assault. Following a disciplinary hearing, Harvard withheld Plaintiff's undergraduate degree. Plaintiff sued, and the district court dismissed the complaint for failure to state a claim. The First Circuit reversed in part, holding (1) at the pleadings stage, Plaintiff's allegations, taken as true, stated a plausible breach of contract claim; and (2) the district court properly dismissed the remaining counts of Plaintiff's complaint. View "Sonoiki v. Harvard University" on Justia Law

The Supreme Court answered certified questions seeking to clarify whether, in payment of royalties under an oil and gas lease, the lessor may be required to bear a portion of the post-production costs incurred in rendering the oil and gas marketable.Specifically, the district court asked whether Estate of Tawyne v. Columbia Natural Resources, LLC, 633 S.E.2d 22 (W. Va. 2006) is still good law in West Virginia and then asked the Supreme Court to expound upon its holding in Tawney. The Supreme Court answered (1) Tawney is still good law; and (2) this Court defines to answer the reformulated question of what level of specificity Tawney requires of an oil and gas lease to permit the deduction of post-production costs from a lessor's royalty payments. View "SWN Production Co., LLC v. Kellam" on Justia Law

The Supreme Court granted Petitioner's request for a writ of prohibition as moulded in this case involving a business dispute rooted in a contract between Petitioner, a manufacturer of hemp-derived vaping cartridges, and Respondent, its distributor, holding that Petitioner was entitled to the writ.Respondent filed a complaint in the Circuit Court of Logan County even though the parties' contract required that any lawsuit arising out of the breach of their agreement be filed in the Circuit Court of Hamilton County, Indiana. The circuit court denied Petitioner's motion to dismiss the complaint based on the forum-select clause. The Supreme Court remanded the case after granting a writ of prohibition, holding that the circuit court incorrectly evaluated the enforceability of the forum-selection clause. View "State ex rel., 3C LLC v. Honorable Eric H. O'Briant" on Justia Law

Plaintiff-appellant Jayen Patel, M.D. brought a tort claim for wrongful termination against defendant-appellee Tulsa Pain Consultants, Inc. (TPC). The trial court found Patel was not an at-will employee and entered a directed verdict in favor of TPC. Patel appealed, and the Court of Civil Appeals affirmed. TPC moved for appeal-related attorney fees, which the Court of Civil Appeals denied. The Oklahoma Supreme Court granted certiorari to determine whether TPC had a contractual right to recover attorney fees as the prevailing party in Patel's wrongful termination claim. After review, the Supreme Court found that the specific language in the parties' employment agreement authorized attorney fees in this case. View "Patel v. Tulsa Pain Consultants" on Justia Law

Crown Energy Company ("Crown") brought suit against Mid-Continent Casualty Company ("Mid-Continent") seeking declaratory judgment that two commercial general liability policies issued to Crown provided coverage for claims of property damage brought against Crown in a separate action. The claims arose out of seismic activity allegedly caused by Crown's use of waste water disposal wells in its oil and gas operations. Mid-Continent filed a counterclaim, seeking declaratory judgment that the claims were not covered under the policies because the seismic activity did not constitute an "occurrence" and that the claims fell within a pollution exclusion to the policies. The trial court granted summary judgment in favor of Crown. Mid-Continent appealed, and the Court of Civil Appeals affirmed the trial court's judgment. After its review, the Oklahoma Supreme Court found that the seismic activity did constitute an occurrence under the policies, and that the pollution exclusion did not bar coverage. The Court of Civil Appeals’ judgment was reversed and the trial court affirmed. View "Crown Energy Co. v. Mid-Continent Casualty Co." on Justia Law