Justia Contracts Opinion Summaries

An agricultural supply company sought to recover payment for cattle feed delivered to a dairy farm owned by a married couple, Melissa and Jason. The couple separated in 2018, agreeing that Melissa would no longer be responsible for farm expenses. Jason continued operating the farm, and the company allowed him to accumulate a large debt, expecting it to be paid after the couple’s divorce. Jason died before the divorce was finalized, after which Melissa ceased farming and sold the cattle. The company then sued Melissa to recover the outstanding feed account balance, alleging breach of contract, unjust enrichment, and detrimental reliance.The Vermont Superior Court, Franklin Unit, Civil Division, denied summary judgment for the company on its contract claim and granted partial summary judgment for Melissa, concluding that a novation had occurred, releasing Melissa from future obligations. At trial, the court treated the summary judgment ruling as the law of the case, and ultimately found that a novation occurred when the company and Jason agreed that he alone would pay the debt. The court also found that the company had waived its unjust enrichment claim by not contesting summary judgment on that count and, even had it not, the claim would be barred by unclean hands.On appeal, the Vermont Supreme Court found the trial court erred in concluding a novation had occurred, holding there was no evidence that the company intended to release Melissa from her contractual obligations. The Supreme Court held that, absent evidence of a mutual agreement to discharge Melissa’s obligations, the finding of novation was clearly erroneous. The Court also held that the company failed to preserve its arguments regarding unjust enrichment for appeal. The judgment was reversed and remanded for further proceedings solely on the contract claim. View "Bourdeau Bros., Inc. v. St. Pierre" on Justia Law

A developer formed a company in 2006 and purchased property in the Town of West Yellowstone, Montana, intending to construct a 48-unit condominium project. The developer obtained a building permit and a “Will Serve Letter” from the Town, confirming that water, sewer, and storm drainage services would be provided. Construction began in 2007 but ceased in 2011, after which the building permit expired due to inactivity. The developer did not reapply for a permit, nor did it renew related approvals. In 2019, the Town adopted a resolution limiting new wastewater connections due to capacity concerns. In 2020, the developer attempted to sell the property, contingent on confirmation that service connections would still be honored. The Town responded that hookups would be permitted when capacity allowed but did not guarantee immediate service.The Eighteenth Judicial District Court, Gallatin County, denied the Town’s argument that the developer’s claims were time-barred under statutory limitations, ruling that the claims accrued only when the Town refused to guarantee connections in 2020. However, the District Court granted summary judgment for the Town on the merits, finding that the Will Serve Letter did not create an enforceable contract or vested right to service after years of inactivity and expired permits, and that the Town did not owe a special duty under the public duty doctrine.The Supreme Court of the State of Montana affirmed the District Court’s rulings. It held that the developer’s claims were timely but that, even assuming a contract existed, any right to service under the Will Serve Letter expired after a prolonged period of project inactivity and lapsed permits. The Court further held that the Town owed no special duty to the developer beyond its general obligations to the public, and summary judgment for the Town was appropriate. View "West Development, LLC v. Town of W. Yellowstone" on Justia Law

Two families who had a long-standing personal and professional relationship worked together on real estate projects, with one family providing financing and the other managing remodeling. Their arrangement involved consolidating outstanding debts from two properties into a single promissory note secured by a deed of trust, with a substantial balloon payment due after one year. After disagreements arose about the scope of renovations for a particular property, their relationship deteriorated. Eventually, the financier purchased the property from the remodelers through an escrow process in which a portion of the purchase price was transferred back to the financier to satisfy the outstanding note.The Superior Court of Los Angeles County granted summary judgment in favor of the remodelers. The court found that the financier had been fully repaid through the escrow process and, as a result, suffered no damages. Additionally, the court held that a covenant not to sue, which had been negotiated as part of the property sale, barred the financier’s lawsuit. In a prior appeal regarding other parties, the California Court of Appeal affirmed a similar summary judgment due to the financier’s failure to cite record evidence. After the remaining cross-claims were dismissed, final judgment was entered for the remaining defendants.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case independently and affirmed the judgment. The court held that when undisputed evidence shows a debt has been repaid, subjective beliefs or unexplained testimony cannot create a triable issue of fact sufficient to defeat summary judgment. The court rejected the financier’s argument that the repayment was illusory or self-funded, as the objective record showed the debt was satisfied through the escrow transfer. The court also ruled that arguments regarding other forms of damages were forfeited because they were not raised in the trial court. Costs were awarded to the respondents. View "Buchheim v. Anaya" on Justia Law

Cowboy Racing was formed in Wyoming with two members: EFTI, which held a 51% interest and was managed by William Edwards, and Dillinger’s, with a 49% interest, managed by Ryan Clement. The company’s operating agreement appointed Edwards and Clement as the initial managers and set out procedures for removing a manager, including both a for-cause provision and a mechanism for removal with the consent of a majority interest. In February 2025, EFTI, holding the majority interest, removed Clement as a manager citing his unauthorized expenditures. Despite his removal, Clement continued to act as though he had authority on behalf of Cowboy Racing.EFTI and Cowboy Racing then filed suit in the District Court of Laramie County, seeking a declaration that Clement could not act on behalf of the company, enforcement of a purchase right under the operating agreement, damages for breach of a letter of intent, and, relevant here, a preliminary injunction to prevent Clement from representing himself as a manager. Clement objected, arguing that the removal process was procedurally and substantively improper and conflicted with the operating agreement.The Supreme Court of the State of Wyoming reviewed the district court’s grant of the preliminary injunction, applying an abuse of discretion standard. The Court held that while the district court’s order was inartfully phrased as a final determination, it properly found that Cowboy Racing and EFTI were likely to succeed on their claim that Clement was lawfully removed under the operating agreement. The Court concluded the agreement was unambiguous and that EFTI, as the majority member, had the authority to remove Clement with express written consent. The preliminary injunction was affirmed, but the parties retain the right to present further evidence at trial on the merits. View "Dillinger's LLC v. CR-GTD, LLC" on Justia Law

Lakeshore Investments loaned over $1.7 million to NOW Solutions, Inc., secured by a promissory note and collateral agreement. When NOW Solutions defaulted, the parties amended the payment terms multiple times, eventually adding Vertical Computer Systems as a co-debtor. Despite these amendments, NOW Solutions fell behind on payments again, and Lakeshore filed a lawsuit for breach of contract. During litigation, the parties entered into a settlement agreement: NOW Solutions and its parent agreed to pay $450,000 in three installments, with a provision that failure to pay would entitle Lakeshore to a stipulated judgment of $1.5 million plus interest.After defendants defaulted on the final installment and failed to cure their default, Lakeshore requested entry of the $1.5 million judgment in Los Angeles County Superior Court. Defendants objected, arguing the amount was an unenforceable penalty. The Superior Court granted Lakeshore’s request without making specific findings beyond confirming the default.On appeal, the California Court of Appeal, Second Appellate District, Division Eight, considered whether the $1.5 million stipulated judgment was a valid liquidated damages provision or an unenforceable penalty under Civil Code section 1671. The appellate court held that, because the $1.5 million amount bore no reasonable relationship to the damages that could have been anticipated from breach of the settlement, it constituted a penalty and was unenforceable. The court reversed the trial court’s order and remanded with instructions to determine the actual damages suffered by Lakeshore as a result of the breach. The court awarded costs on appeal to the defendants. View "Lakeshore Investment LLC v. Now Solutions, Inc." on Justia Law

Two foreign nationals from the United Kingdom rented vehicles from a car rental company during separate visits to the United States. Each used a third-party website to reserve vehicles and selected a package that included supplemental liability insurance. Upon arriving at the rental location, they signed rental forms and received a “rental jacket” that contained additional terms, including a statement that supplemental liability insurance would be provided via an excess automobile policy and an arbitration clause requiring most disputes to be resolved through arbitration.Later, the customers believed the company did not actually secure the promised insurance policy but intended to pay claims from its own funds. They filed a putative class action in the U.S. District Court for the District of New Jersey, asserting breach of contract, fraudulent misrepresentation, and a violation of Florida’s consumer protection law. The District Court dismissed the fraud and statutory claims but allowed the contract claim to proceed. The defendants, Budget and its parent company, reserved their right to arbitrate and pursued discovery. After deposing the plaintiffs, the defendants moved to compel arbitration, arguing the plaintiffs were aware of the arbitration clause when they received the rental jackets.The District Court denied the motion, finding that by litigating into discovery before moving to compel arbitration, the defendants had impliedly waived their right to arbitrate. On appeal, the United States Court of Appeals for the Third Circuit reviewed the waiver determination de novo. The Third Circuit held that the defendants did not impliedly waive their right to arbitrate. Because factual development was necessary to determine arbitrability under a prior circuit decision, the defendants’ conduct—reserving their arbitration right and moving to compel after depositions—was not inconsistent with an intent to arbitrate. The Third Circuit vacated the District Court’s order and remanded for further proceedings on the motion to compel arbitration. View "Parkin v. Avis Rent a Car System LLC" on Justia Law

A Puerto Rican distributor of HVAC products brought suit against a Miami-based manufacturer after their commercial relationship deteriorated. The distributor alleged that the manufacturer’s actions impaired its distribution rights under Puerto Rico’s Dealer’s Act (Law 75). After the distributor dismissed claims against certain non-diverse defendants, the manufacturer removed the case to federal court and asserted a counterclaim alleging the distributor owed over $235,000, as well as seeking a declaratory judgment that it had just cause to terminate the relationship.The United States District Court for the District of Puerto Rico granted summary judgment to the manufacturer on the Law 75 claim, finding in its favor, and dismissed the manufacturer’s declaratory judgment counterclaim as unripe. The court denied summary judgment on the remaining damages counterclaim, finding material factual disputes and setting it for trial. The distributor sought entry of final judgment under Rule 54(b), which the court denied due to overlap between the claims. The distributor’s attempt to obtain appellate review via a petition under Rule 5 was also denied by the United States Court of Appeals for the First Circuit. Subsequently, the manufacturer moved to voluntarily dismiss its remaining counterclaim without prejudice. The district court granted that motion, dismissing the counterclaim without prejudice and denying the distributor’s requests for dismissal with prejudice or for attorney fees and costs. The court then entered judgment dismissing the distributor’s claims with prejudice and the manufacturer’s counterclaim without prejudice.On appeal, the United States Court of Appeals for the First Circuit determined that it lacked appellate jurisdiction. The court held that a voluntary dismissal without prejudice does not produce a final decision under 28 U.S.C. § 1291 when the dismissed claim could be revived in the same district court. Consequently, there was no final, appealable judgment, and the appeal was dismissed. View "Air-Con, Inc. v. Daikin Applied Latin America, LLC" on Justia Law

The dispute centers on a business relationship involving ownership interests in Delaware Valley Regional Center, an EB-5 investment business. Joseph P. Manheim, holding a controlling interest through West 36th, Inc., eliminated Young Min Ban’s interests by unilaterally enacting a bylaw that allowed him to acquire Ban’s shares and redeem a partnership interest at self-determined values. Ban, who owned a minority share of West 36th, Inc. and a significant partnership interest in a related entity, sued for breach of fiduciary duty, unjust enrichment, and conversion, seeking damages equivalent to the fair value of his lost interests.The Court of Chancery of the State of Delaware found Manheim liable for breaching his duty of loyalty and awarded Ban $6,898,612 in damages, declining to consider Ban’s expert’s supplemental valuation as it was based on new inputs not timely disclosed. After trial, Ban moved for an award of attorneys’ fees and expenses, arguing for the first time that Manheim’s pre-litigation conduct warranted fee shifting under the bad-faith exception to the American Rule. The Court of Chancery granted this, treating fees as an element of damages due to Manheim’s conduct.On appeal, the Supreme Court of the State of Delaware affirmed the lower court’s damages determination and its exclusion of the supplemental valuation, finding no abuse of discretion. However, the Supreme Court reversed the award of attorneys’ fees and expenses. It held that a claim for attorneys’ fees as damages based on pre-litigation conduct must be raised before trial to provide adequate notice and an opportunity for the opposing party to defend. Because Ban did not raise this claim until after trial, the Supreme Court concluded it was waived. The case was remanded for further proceedings consistent with this ruling. View "Ban v. Manheim" on Justia Law

Two investigative journalists, on assignment for a nonprofit media organization known for undercover reporting, infiltrated Democratic political consulting operations in 2016 using false identities. One reporter, posing as a philanthropist, met with a political consultant who then arranged for his colleague to hire the second reporter, also undercover, as an unpaid intern at the consultant's firm. The intern secretly recorded conversations and internal meetings over eight days, gaining access to nonpublic information. The media organization later published a video series alleging a conspiracy to incite violence at political events, using footage from both public interactions and the intern’s covert recordings.After the video’s release, major clients of the consulting firm terminated their contracts, citing concerns about scandal and the security breach. The consulting firm and its principals sued the journalists and their organizations in the United States District Court for the District of Columbia, alleging fraudulent misrepresentation, conspiracy, and violations of federal and D.C. wiretapping laws. The district court granted summary judgment for the defendants on some claims but allowed others to proceed to trial. A jury found for the plaintiffs on the remaining claims and awarded damages for lost contracts and statutory damages for wiretapping.The United States Court of Appeals for the District of Columbia Circuit reviewed the verdict. It held that the First Amendment barred damages based on losses caused by the publication’s protected speech, as the plaintiffs failed to prove that the unprotected conduct (the infiltration and covert recording) was the predominant cause of their damages. The court also held that the intern did not owe a fiduciary duty to the consulting firm under D.C. law, and therefore the wiretapping claims could not stand. The court reversed the district court’s denial of judgment as a matter of law and vacated the damages awards. View "Democracy Partners, LLC v. O'Keefe" on Justia Law

A property dispute arose when the estate of William King sold a property on Broad Street in Gadsden to Mobile Investments, LLC, in 2019. Corporate Pharmacy Services, Inc. (CPS), which had originally leased the property from King, claimed the lease included an option to purchase the property and that King’s estate improperly sold it without giving CPS the opportunity to exercise its right of first refusal. CPS sued Mobile Investments and The Broadway Group, LLC (TBG), alleging breach of the lease and seeking specific performance of the purchase option. After Mobile Investments and TBG repeatedly failed to comply with discovery requests and court orders, the Etowah Circuit Court entered a default judgment against them, ordering that CPS was entitled to purchase the property for $110,000.Mobile Investments and TBG first moved for relief from the default judgment, which was denied. They appealed to the Supreme Court of Alabama, arguing they had not been properly informed by their counsel about discovery orders and their consequences. The Supreme Court of Alabama affirmed the trial court’s judgment. Afterward, Mobile Investments and TBG filed a Rule 60(b)(4) motion, later amended to add Rule 60(b)(6) grounds, seeking to set aside the judgment as void for lack of due process and to correct the property description. The trial court denied the motion in large part but scheduled a further hearing to resolve issues regarding the legal description of the property and the corresponding purchase price.Before the trial court could complete its proceedings on these unresolved issues, Mobile Investments and TBG appealed again to the Supreme Court of Alabama. The Supreme Court of Alabama held that because the trial court had not yet issued a final judgment—leaving substantive issues pending—it lacked jurisdiction over the appeal. Accordingly, the appeal was dismissed. View "Mobile Investments, LLC v. Corporate Pharmacy Services, Inc." on Justia Law