Justia Contracts Opinion Summaries

The case involves $14,100.00 in cash seized by the Linn County Sheriff’s Office from a Bitcoin ATM kiosk in Cedar Rapids during a fraud investigation. Bitcoin Depot, the owner of the ATM, sought the return of the seized funds, while Carrie Carlson, the customer who deposited the money, also filed a competing claim for the return of the funds. Carlson had deposited the money into the ATM and received Bitcoins in return, which were transferred to a wallet as directed by a scammer.The Iowa District Court for Linn County held a hearing on the competing claims and ordered the return of the seized funds to Carlson. The court reasoned that Carlson was a victim of fraud and likened the situation to recovering stolen property from a pawnbroker. The court also considered the transaction a "smart contract" and concluded that Bitcoin Depot had reason to know of potential duress due to the warning provided on the ATM.The Iowa Supreme Court reviewed the case de novo and concluded that Bitcoin Depot had the greater right to possession of the seized funds. The court found that Bitcoin Depot acted in good faith and without reason to know of Carlson’s duress. The court rejected the district court’s analogy to pawnbrokers and the characterization of the transaction as a smart contract that inherently involved knowledge of duress. The court held that Carlson did not meet her burden to show that Bitcoin Depot had reason to know of her duress, and thus, the contract was not voidable.The Iowa Supreme Court reversed the district court’s order and remanded the case with instructions to return the seized funds to Bitcoin Depot. View "In the Matter of Property Seized for Forfeiture from Bitcoin Depot Operating, LLC v. Carlson" on Justia Law

Joy Goodwin Adams sued Tiffany Rudd Atkinson, Katherine M. Rudd, Goodwin Capital Partners, Ltd., and KATISAM, Inc., seeking reimbursement for attorneys' fees she paid to a third party. The Jefferson Circuit Court dismissed her suit with prejudice, leading Joy to appeal. The central issue was whether the terms "hold harmless" and "indemnify" are synonymous when used independently in a contract. The Supreme Court of Alabama held that they are synonymous.The case involves three trusts and two agreements. Joy's parents created two trusts in 1986 and 1987 for Joy and her daughters, Tiffany and Kate. Joy created a third trust in 1989. Joy executed a 2011 release-and-indemnification agreement with BB&T, a co-trustee, and a 2013 settlement agreement with the defendants after Tiffany and Kate sued her for alleged breaches of fiduciary duties. The 2013 agreement included a "hold harmless" provision requiring the defendants to protect Joy against claims for attorneys' fees by corporate trustees successfully defending against suits initiated by Tiffany and Kate.In prior litigation, Tiffany and Kate sued BB&T for negligence, and BB&T filed a third-party claim against Joy for attorneys' fees. The federal district court granted summary judgment in favor of BB&T on the negligence claim and denied Joy's motion on the indemnification claim. Joy settled BB&T's claim for $614,791.62 and then demanded reimbursement from the defendants, who refused.The Supreme Court of Alabama reviewed the case de novo and concluded that "hold harmless" and "indemnify" are synonymous, meaning the defendants agreed to reimburse Joy for the attorneys' fees she paid to BB&T. The court reversed the circuit court's judgment and remanded the case for further proceedings. View "Adams v. Atkinson" on Justia Law

Casey Cotton was involved in a car collision with Caleb and Adriane Crabtree, resulting in severe injuries to Caleb. The Crabtrees filed a lawsuit against Cotton and his insurer, Allstate, alleging that Allstate refused early settlement offers and failed to inform Cotton of these offers. While the claims against Allstate were dismissed, the claims against Cotton proceeded in the Lamar County Circuit Court. During the personal injury suit, Cotton declared bankruptcy, and his bankruptcy estate included a potential bad faith claim against Allstate. The Crabtrees, as unsecured creditors, petitioned the bankruptcy court to allow the personal injury suit to proceed to trial.The bankruptcy court directed that the suit against Cotton be liquidated by jury trial to pursue claims against Allstate for any resulting excess judgment. The Crabtrees sought an assignment of Cotton’s bad faith claim as a settlement of their unsecured claims in Cotton’s bankruptcy estate. Unable to afford the $10,000 up-front cost, they engaged Court Properties, LLC, to assist with financing. Court Properties paid the trustee $10,000 to acquire the bad faith claim, then assigned it to the Crabtrees in exchange for $10,000 plus interest, contingent on successful recovery from Allstate. Cotton was discharged from bankruptcy, and a jury verdict awarded the Crabtrees $4,605,000 in the personal injury suit.The Crabtrees filed an action in the United States District Court for the Southern District of Mississippi, which dismissed the case for lack of subject matter jurisdiction, finding the assignments champertous and void under Mississippi Code Section 97-9-11. The Crabtrees appealed to the United States Court of Appeals for the Fifth Circuit, which certified a question to the Supreme Court of Mississippi.The Supreme Court of Mississippi held that Mississippi Code Section 97-9-11 prohibits a creditor in bankruptcy from engaging a disinterested third party to purchase a cause of action from a debtor. The court clarified that solicitation of a disinterested third party to prosecute a case in which it has no legitimate interest violates the statute. View "Crabtree v. Allstate Property and Casualty Insurance Company" on Justia Law

Neely, acting as his own general contractor, hired Grosvold to perform excavation work on his property under an oral contract. Grosvold worked from April to October 2021, but their relationship deteriorated, and Neely refused to pay for an invoice amounting to $55,858. Neely sent Grosvold a notice of alleged defects in the work, which Grosvold disputed. Grosvold then filed a complaint for breach of contract and prejudgment interest, while Neely counterclaimed for breach of contract, negligence, and construction defect.The District Court of the Third Judicial District in Anaconda-Deer Lodge County tried the case before a jury. The court refused to instruct the jury on Neely’s construction defect and negligence claims, reasoning that the evidence did not substantiate the work was done to a residence and that the case was strictly a breach of contract matter. The jury found Neely had breached the contract and awarded Grosvold $60,512.60 in damages. The court denied Grosvold’s request for prejudgment interest, finding the damages were not certain until the jury’s determination.The Supreme Court of the State of Montana reviewed the case. It affirmed the District Court’s decision not to instruct the jury on the construction defect claim, holding that the residential construction defect statute did not create an independent cause of action beyond breach of contract or tort. The court also affirmed the refusal to instruct the jury on negligence, finding that Neely’s substantial rights were not affected as the breach of contract instructions adequately covered the disputed subject matter. Finally, the court upheld the denial of prejudgment interest, concluding the amount of recovery was not capable of being made certain until the jury’s verdict. View "Grosvold v. Neely" on Justia Law

Bernadette O’Malley purchased a used 2007 Dodge Caliber from Valpo Motors, Inc. in late 2019. Valpo provided O’Malley with a Buyers Guide stating the car was sold “AS IS” and a Sales Agreement that disclaimed all warranties unless a written warranty or service contract was extended within 90 days. O’Malley also purchased a Service Contract, which was noted in the Buyers Guide. The car broke down a month later, and a repair shop deemed it not worth repairing due to extensive mechanical issues. O’Malley’s son-in-law, Glenn Thomas, took the car to the shop. After Valpo refused to arbitrate, O’Malley sued for breach of implied warranty of merchantability under the Magnuson-Moss Warranty Act (MMWA). O’Malley passed away during the proceedings, and Thomas continued the case as the personal representative of her estate.The Porter Superior Court granted summary judgment for Valpo Motors, and the Indiana Court of Appeals affirmed, holding that the Buyers Guide’s disclaimer of all warranties controlled over any contrary provisions in the Sales Agreement. The appellate court rejected Thomas’s argument that the handwritten note on the Buyers Guide negated the warranty disclaimer. Judge Felix dissented, arguing that the Sales Agreement’s specific terms should trump the Buyers Guide’s general terms and that there was a genuine issue of material fact regarding Valpo’s opportunity to cure the breach.The Indiana Supreme Court reviewed the case and held that Valpo did not effectively disclaim the implied warranty of merchantability due to ambiguities in the Buyers Guide. The court found that fact issues remained regarding whether Valpo had a reasonable opportunity to cure the defects. The court vacated the summary judgment for Valpo, directed the trial court to enter partial summary judgment for Thomas on the warranty-disclaimer issue, and remanded for further proceedings to determine if Valpo had a reasonable opportunity to cure. If Thomas prevails, the trial court is to assess damages and reasonable attorney’s fees. View "Thomas v. Valpo Motors Inc." on Justia Law

Dahua Technology USA, Inc. ("Dahua") and Feng "Frank" Zhang, a former Dahua executive, are involved in a contract dispute. Zhang claims Dahua breached its obligation to pay him severance of $680,000 per month for sixteen months, while Dahua asserts the severance was intended to be a total of $680,000 paid in sixteen monthly installments. Dahua sued under diversity jurisdiction, seeking reformation of the contract and alleging breach of the implied covenant of good faith and fair dealing. Zhang counterclaimed for breach of contract.The United States District Court for the District of Massachusetts initially granted summary judgment in Dahua's favor, finding a mistake in the severance provision. However, the United States Court of Appeals for the First Circuit vacated this judgment, leading to an eleven-day bench trial. The district court concluded that the severance provision contained a mistake but could not be reformed under Massachusetts law, and thus must be enforced as written. Consequently, the district court entered judgment for Zhang in the amount of $10,200,000, plus prejudgment interest.On appeal, the United States Court of Appeals for the First Circuit reviewed the case. The court found the severance provision ambiguous and vacated the judgment, remanding the case for resolution consistent with extrinsic evidence of the parties' intent. The court affirmed the district court's ruling that Dahua's implied covenant of good faith and fair dealing claim fails. View "Dahua Technology USA, Inc. v. Zhang" on Justia Law

Kenneth and Doreen Miller entered into a contract with Foundation, Elevation & Repair, LLC (FER) in 2010 for home elevation and foundation work. They also hired Direct Source Home Renovation, LLC (DSHR), owned by the same individual as FER. The Millers' home was allegedly damaged before the renovation was completed, leading them to fire FER. In 2012, FER filed a petition against the Millers for specific performance and declaratory judgment. The Millers responded with exceptions, claiming they were denied a certificate of occupancy due to the damage.After a period of inactivity, the Millers reset their exceptions in 2015, leading to a consent judgment dismissing FER's actions. In 2016, the Millers filed exceptions, an answer, affirmative defenses, and a reconventional demand against FER, including third-party demands against DSHR. After another period of inactivity, the Millers obtained a default judgment against FER and DSHR in 2019. In 2022, the Millers filed a motion to confirm the default judgment, which was denied by the trial court. Subsequently, FER and DSHR filed a motion to dismiss the Millers' action on grounds of abandonment, which the trial court granted.The Court of Appeal affirmed the trial court's dismissal of the Millers' claims against FER but reversed the dismissal against DSHR, finding that DSHR's filing of an answer after the abandonment period constituted a waiver of abandonment. The Supreme Court of Louisiana reviewed the case and reversed the Court of Appeal's decision. The Supreme Court held that DSHR's general denial answer did not constitute a renunciation of abandonment, as it did not clearly demonstrate an intent to proceed with the litigation. The court reinstated the trial court's judgment in favor of DSHR, dismissing the Millers' claims as abandoned. View "FOUNDATION ELEVATION & REPAIR, LLC VS. MILLER" on Justia Law

Two Texas lawyers, Michael A. Pohl and Robert Ammons, represented out-of-state clients in personal injury cases filed outside Texas. The clients, from Louisiana and Arkansas, alleged that they were solicited by individuals on behalf of the lawyers, which led to the signing of legal-services contracts. The clients later sued the lawyers in Texas, seeking to void the contracts under Texas Government Code Section 82.0651(a), which allows clients to void contracts procured through barratry, and to recover fees and penalties.The trial court dismissed all claims, granting summary judgment in favor of the lawyers. The clients appealed, and the Court of Appeals for the First District of Texas reversed the trial court's decision, concluding that Section 82.0651(a) applied because part of the lawyers' conduct occurred in Texas. The court also rejected the lawyers' arguments regarding limitations and res judicata and allowed Reese's intervention in the case.The Supreme Court of Texas reviewed the case and held that Section 82.0651(a) does not extend to the nonresident clients' claims because the core conduct targeted by the statute—solicitation of a legal-services contract through barratry—occurred outside Texas. The court reversed the Court of Appeals' judgment to the extent it allowed the clients to proceed with their claims under Section 82.0651(a) and rendered judgment that they take nothing on those claims. However, the court affirmed the Court of Appeals' judgment regarding the breach of fiduciary duty claims and remanded those claims to the trial court for further proceedings. View "POHL v. CHEATHAM" on Justia Law

In February 2014, Clint Shalla entered into a debt settlement agreement with Greg and Heather Koch to prevent a foreclosure on his farm. The Kochs agreed to purchase the farm and give Clint an exclusive option to repurchase it by August 15, 2015, with written notice and financing commitment. Clint's wife, Michelle, was not a party to the agreement but conveyed her marital interest in the property. Clint sought financing from Christopher Goerdt, then president of Peoples Trust and Savings Bank, who allegedly agreed to secure financing. Clint missed the option deadline, and the Kochs later agreed to sell the farm for a higher price. Goerdt, who had moved to County Bank, secured financing for the Shallas, but was later found to be involved in fraudulent activities.The Iowa District Court for Washington County granted partial summary judgment in favor of Peoples Bank, dismissing Michelle's fraudulent misrepresentation claim. The court later reconsidered and dismissed the Shallas' negligence and fraudulent misrepresentation claims, citing Iowa Code section 535.17. The court ruled in favor of County Bank in the foreclosure action and found Goerdt liable for conversion. The Shallas appealed, and the Iowa Court of Appeals affirmed the district court's judgment, with a dissent on the application of the statute of frauds.The Iowa Supreme Court reviewed the case and affirmed the lower courts' decisions. The court held that Iowa Code section 535.17, the credit agreement statute of frauds, barred the Shallas' claims for negligence and fraudulent misrepresentation. The court concluded that the statute applies to all actions related to unwritten credit agreements, regardless of whether the claims are framed in contract or tort. The case was remanded to the district court for a determination of County Bank's attorney fees, including appellate attorney fees. View "County Bank v. Shalla" on Justia Law

Shanda Yates was bitten by a pit bull named Yurk while visiting her friend Neah Friar, who rented a property from TLM Investments, LLC. Friar's lease had a no-pet provision, which she disregarded by keeping Yurk and concealing his presence from TLM. Yates filed a personal injury claim against both Friar and TLM, alleging negligence on TLM's part for allowing Yurk on the property and claiming protections under the lease.The Prentiss County Circuit Court denied TLM's motion for summary judgment, leading to an interlocutory appeal. TLM argued that it had no knowledge of Yurk's presence or his dangerous propensities, as Friar had intentionally concealed the dog. TLM also contended that Yates failed to establish herself as an intended third-party beneficiary under the lease.The Supreme Court of Mississippi reviewed the case de novo and found that Yates did not provide evidence that TLM had actual or constructive knowledge of Yurk or his dangerous propensities. The court noted that the no-pet provision in the lease was not an admission that all dogs are dangerous but was intended to prevent property damage. Additionally, the court found that Yates did not have standing to claim protections under the lease as she was not a party to it and was not an intended third-party beneficiary.The Supreme Court of Mississippi reversed the trial court's denial of summary judgment, rendered summary judgment in favor of TLM, and remanded the case to the Prentiss County Circuit Court for any necessary further proceedings. The case against TLM was dismissed with prejudice. View "TLM Investments, LLC v. Yates" on Justia Law