Justia Contracts Opinion Summaries

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

ICON HD, LLC filed a lawsuit against National Sports Opportunity Partners, LLC (NSOP) and Michael Kuntz. Kuntz, the sole owner of NSOP, was previously a founding member of ICON HD. Kuntz had earlier sued ICON HD and its members, leading to a settlement agreement that included a release of claims. ICON HD later alleged that Kuntz, through NSOP, engaged in actions that harmed ICON HD, including failing to pay for contractor services provided by ICON HD.The District Court of Grand Forks County granted summary judgment in favor of Kuntz and NSOP, concluding that ICON HD’s claims were barred by the settlement agreement and by res judicata. The court found that the settlement agreement’s release terms covered the claims against Kuntz and NSOP, and that the claims were essentially variations of those resolved in the prior litigation.The North Dakota Supreme Court reviewed the case. It determined that the district court erred in applying res judicata because NSOP and Kuntz did not raise it as an affirmative defense in their answer. The Supreme Court also found that the settlement agreement unambiguously released Kuntz from the claims but was ambiguous regarding the release of claims against NSOP. The ambiguity arose from whether NSOP was considered an "unnamed third party" under the settlement agreement’s exception clause.The North Dakota Supreme Court affirmed the summary judgment dismissing the claims against Kuntz, as the settlement agreement clearly released him from such claims. However, it reversed the summary judgment dismissing the claims against NSOP, finding that the ambiguity in the settlement agreement regarding NSOP’s status as an "unnamed third party" required further factual determination. View "ICON HD v. National Sports Opportunity Partners" on Justia Law

The Borough of Englewood Cliffs filed a complaint and an amended complaint against its former attorneys and a builder, alleging professional malpractice, breach of contract, unjust enrichment, civil conspiracy, and aiding and abetting. The Borough's actions followed a previous affordable housing litigation where the Borough did not prevail and subsequently settled with the builder. The Borough's new council, elected after a municipal election, pursued the litigation despite warnings from the defendants that the claims were frivolous.The trial court dismissed the Borough's complaints with prejudice, finding that the Borough acted in bad faith to harass, delay, and cause malicious injury. The court awarded the defendants attorney fees and costs under New Jersey’s Frivolous Litigation Statute (FLS), totaling $216,484.45. The Appellate Division affirmed the trial court's decision, concluding that a public entity is not immune from sanctions under the FLS.The Supreme Court of New Jersey reviewed the case and held that municipalities and municipal corporations that engage in frivolous litigation are subject to sanctions under the FLS. The Court found that the FLS does not provide immunity to municipalities and that the doctrine of sovereign immunity does not protect municipalities from liability under the FLS. The Court emphasized that the FLS aims to deter frivolous litigation and compensate the victims of such actions. The judgment of the Appellate Division was affirmed as modified, holding the Borough liable for the sanctions imposed. View "Borough of Englewood Cliffs v. Trautner" on Justia Law

In early 2020, Robert Goodrich liquidated his stock portfolio due to concerns about the financial market's reaction to the COVID-19 pandemic, resulting in significant financial losses. Goodrich had an investment account with U.S. Trust Bank of America Private Wealth Management, managed by Matthew Lettinga. Despite advice from Lettinga to avoid liquidation, Goodrich insisted on selling his portfolio. Goodrich later sued Lettinga and Bank of America, claiming gross negligence, breach of fiduciary duty, and violations of the D.C. Securities Act, arguing that he was not adequately informed of the risks involved in liquidating his portfolio.The U.S. District Court for the District of Columbia dismissed Goodrich's claims of gross negligence and violations of the D.C. Securities Act, finding them implausibly pleaded. The court allowed the breach of fiduciary duty claim to proceed but later granted summary judgment in favor of the defendants, concluding that Goodrich had explicitly instructed the sale of his portfolio, which precluded liability under the terms of the investment agreement.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and affirmed the District Court's decisions. The appellate court held that the investment agreement's exculpatory clauses were enforceable and that Goodrich's explicit instruction to liquidate his portfolio shielded the defendants from liability. The court also agreed that Goodrich failed to plausibly allege scienter, a necessary element for his claims under the D.C. Securities Act, and found no abuse of discretion in the District Court's limitation of discovery to the dispositive issue of whether Goodrich instructed the sale. View "Goodrich v. Bank of America N.A." on Justia Law

InfoDeli, LLC and Breht C. Burri (collectively, InfoDeli) brought a lawsuit against Western Robidoux, Inc. (WRI), Engage Mobile Solutions, LLC, and other defendants, including members of the Burri family and several companies. InfoDeli alleged copyright infringement, tortious interference, and violations of the Missouri Computer Tampering Act (MCTA). The dispute arose from a joint venture between InfoDeli and WRI, where InfoDeli created webstores for clients, and WRI provided printing and fulfillment services. The relationship deteriorated when WRI hired Engage to replace InfoDeli's webstores, leading to the lawsuit.The United States District Court for the Western District of Missouri granted summary judgment to the defendants on the copyright infringement claim, dismissed or tried the remaining claims before a jury, which found in favor of the defendants. The district court also granted in part and denied in part InfoDeli's sanctions motion and awarded attorney’s fees and costs to the defendants. InfoDeli appealed these decisions.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court affirmed the district court's grant of summary judgment on the copyright infringement claim, finding that InfoDeli failed to show that the nonliteral elements of its webstores were protected by copyright. The court also upheld the district court's denial of InfoDeli's motion for summary judgment on CEVA's conversion counterclaim, finding it was timely under Missouri law. Additionally, the court affirmed the district court's denial of InfoDeli's posttrial motions for judgment as a matter of law and a new trial as untimely.The Eighth Circuit also reviewed the sanctions imposed by the district court and found no abuse of discretion in the amount awarded or the decision not to impose additional sanctions under Rule 37(e). Finally, the court upheld the award of attorney’s fees and costs to the defendants, finding that the district court did not abuse its discretion in its assessment. The court affirmed the district court's decisions in all respects. View "InfoDeli, LLC v. Western Robidoux, Inc." on Justia Law

The New Jersey Turnpike Authority (NJTA) solicited bids for a contract to repair bridges in the Newark Bay area. El Sol Contracting & Construction Corp. (El Sol) submitted the lowest bid, but the NJTA rejected it because the bid documents did not include a validly executed Consent of Surety (CoS) from Liberty Mutual Insurance Co. (Liberty). The CoS was signed by an attorney-in-fact whose Power of Attorney (PoA) only authorized her to sign the Proposal Bond, not the CoS. The NJTA awarded the contract to the second-lowest bidder, Joseph M. Sanzari, Inc.The Appellate Division reversed the NJTA’s decision, interpreting the bid specifications to require that the PoA be tethered only to the Proposal Bond, not the CoS. The court concluded that Liberty’s offer to modify the PoA language addressed the NJTA’s concerns and that the NJTA’s rejection of El Sol’s bid was arbitrary, capricious, and unreasonable.The Supreme Court of New Jersey reviewed the case and held that the NJTA did not act in an arbitrary, capricious, and unreasonable manner when it rejected El Sol’s bid. The court emphasized that the CoS is a critical component of the bidding process and must be validly executed. Since the PoA did not authorize the attorney-in-fact to sign the CoS, El Sol’s bid was incomplete. The court also noted that the NJTA’s past acceptance of similar documents did not estop it from rejecting El Sol’s bid once the defect was identified. The court reversed the Appellate Division’s decision, upholding the NJTA’s rejection of El Sol’s bid. View "In the Matter of Protest Filed by El Sol Contracting and Construction Corp., Contract T100.638" on Justia Law

Anthology, Inc. entered into a 10-year contract with Tarrant County College District (TCCD) in June 2022 to provide Enterprise Resource Planning products and services for approximately $42 million, plus annual fees. In October 2023, TCCD terminated the contract without cause, as permitted by the contract, but refused to pay the early termination fee and demanded a refund of about $1.7 million already paid. Anthology sued TCCD in the United States District Court for the Northern District of Texas, seeking a declaratory judgment and damages for breach of contract.TCCD moved to dismiss the case under Federal Rules 12(b)(1) and 12(b)(6), arguing four grounds: entitlement to immunity from suit under Texas law, state sovereign immunity, lack of diversity jurisdiction, and a statutory bar on recovering damages under Texas law. The district court granted TCCD’s Rule 12(b)(1) motion, dismissing Anthology’s claims without prejudice, based on TCCD’s entitlement to immunity from suit under Texas law, without addressing the other grounds for dismissal. Anthology appealed the decision.The United States Court of Appeals for the Fifth Circuit reviewed the case and found that the district court erred in its decision. The appellate court held that state-law immunity cannot limit the jurisdiction of federal courts, which is defined by the Constitution and Congress. Therefore, the district court should not have dismissed the case based on state-law immunity without first addressing the jurisdictional issues of state sovereign immunity and the absence of complete diversity. The Fifth Circuit vacated the district court’s judgment and remanded the case for further proceedings consistent with its opinion. View "Anthology v. Tarrant County College District" on Justia Law

Mullins Food Products, Inc. was sued in Illinois state court for violating the Biometric Information Privacy Act (BIPA). Mullins requested its liability insurer, Citizens Insurance Company of America, to defend the suit, but Citizens declined and instead filed a federal suit seeking a declaratory judgment that it had no duty to defend or indemnify Mullins based on exclusions in the commercial liability insurance policies issued to Mullins in 2015, 2016, and 2017. While the federal suit was pending, Mullins settled the state-court action.The United States District Court for the Northern District of Illinois agreed with Citizens that the policy exclusions relieved Citizens of the duty to defend or indemnify Mullins. Specifically, the court found that the Access or Disclosure of Confidential or Personal Information exclusion and the Recording and Distribution of Material or Information in Violation of Law exclusion barred coverage for BIPA claims. The district court also ruled against Mullins on its counterclaim for breach of contract, reasoning that Citizens' timely filing of the declaratory judgment action precluded a finding of breach.The United States Court of Appeals for the Seventh Circuit reviewed the case and vacated the district court's decision. The appellate court concluded that the Access or Disclosure exclusion in the 2016 and 2017 policies barred coverage for BIPA claims, but the Statutory Violations exclusion did not. Therefore, Citizens had a duty to defend and indemnify Mullins under the 2015 policy, assuming Mullins provided timely notice of the state-court action. The appellate court remanded the case for further proceedings to determine the timeliness of Mullins' notice and to address Mullins' claim for reimbursement of defense costs. View "Citizens Insurance Company of America v Mullins Food Products, Inc." on Justia Law

An executive at a litigation funding company, Signal, resigned to start a competing business and sought legal advice from Signal’s outside counsel, Sugar Felsenthal Grais & Helsinger LLP. Signal sued the law firm and several of its attorneys, alleging legal malpractice, breach of contract, breach of fiduciary duty, and fraud. The district court dismissed some claims and granted summary judgment in favor of the defendants on the remaining claims. Signal appealed these rulings.The United States District Court for the Northern District of Illinois dismissed Signal’s breach of fiduciary duty claim and part of its fraud claim, allowing the legal malpractice, breach of contract, and fraudulent misrepresentation claims to proceed. The court also struck Signal’s request for punitive damages. During discovery, the court denied Signal’s motion to compel production of a memorandum prepared by one of the defendants. The district court later granted summary judgment in favor of the defendants on all remaining claims.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court’s rulings. The appellate court agreed that Signal failed to establish proximate cause and damages for its legal malpractice and breach of contract claims. The court also found that Signal waived its challenge to the summary judgment ruling on the fraudulent misrepresentation claim by not adequately addressing it on appeal. Additionally, the court upheld the district court’s decision to deny Signal’s motion to compel production of the memorandum, as Signal did not demonstrate that the document influenced the witness’s testimony. The appellate court concluded that the district court’s dismissal of the fraudulent concealment theory was harmless error and denied Signal’s motion to certify a question to the Illinois Supreme Court as moot. View "Signal Funding, LLC v Sugar Felsenthal Grais & Helsinger LLP" on Justia Law