Justia Contracts Opinion Summaries

In 2011, the Hjelms leased an apartment in a large San Mateo complex from Prometheus. They signed the 24-page lease while still living in another state and without any negotiation. The lease had three one-sided provisions allowing Prometheus to recover attorney fees. Their apartment became infested with bedbugs, and the complex had an ongoing raw sewage problem. Ultimately the Hjelms and their children were forced to leave. The Hjelms sued Prometheus; a jury returned a verdict for them, awarding economic damage to the Hjelms in the amount of $11,652; non-economic damage to Christine Hjelm of $35,000; and non-economic damage to Justin Hjelm of $25,000. The trial court then awarded the Hjelms their attorney fees ($326, 475) based on Civil Code section 1717. The court of appeal affirmed, noting that a one-sided attorney’s fee provision violates Civil Code 1717(a). No challenge to the verdict could succeed and section 1717 does apply. View "Hjelm v. Prometheus Real Estate Grp., Inc." on Justia Law

Samantha Gillespie and her mother, Tina Taylor, appealed the grant of summary judgment dismissing their lawsuit against Taylor's motor vehicle insurer, National Farmers Union, for underinsured motor vehicle coverage. Gillespie and Taylor sued Farmers Union for underinsured motor vehicle coverage, alleging Gillespie was insured under her mother's motor vehicle policy with Farmers Union and was driving a motor vehicle owned by another person when Gillespie lost control of the vehicle and it overturned, resulting in significant injuries to her. According to Gillespie and Taylor, the motor vehicle was owned by Angela Ayers, Gillespie's aunt, and insured by GEICO. Ayers died as a result of the accident and another passenger in the motor vehicle sustained significant injuries. Gillespie and Taylor asserted GEICO paid Gillespie $25,000 in no-fault benefits, but denied her request for liability coverage based on a claim that Ayers negligently entrusted the vehicle to Gillespie, an alleged inexperienced driver who received her learner's permit two days before the accident. After review, the Supreme Court concluded Gillespie and Taylor failed to raise a genuine issue of material fact about whether Gillespie was legally entitled to collect for bodily injury from the owner or operator of an underinsured motor vehicle, and affirmed. View "Gillespie v. National Farmers Union Property & Casualty Co." on Justia Law

After Lisa Warrington accepted an offer of employment with Great Falls Clinic (the Clinic), she signed a written employment contract. On Warrington’s last day at her former job, the Clinic informed her it would not employ her after all. Warrington filed an action against the Clinic, asserting breach of contract, promissory estoppel, and breach of the covenant of good faith and fair dealing. The district court granted summary judgment on the breach of contract claim and found that the Wrongful Discharge From Employment Act (the Act) did not apply. The Clinic petitioned the Supreme Court for a writ of supervisory control, arguing that the district court made a mistake of law by concluding that the Act did not apply to the relationship between Warrington and the Clinic. The Supreme Court accepted the petition for supervisory control, affirmed the district court’s determination that the Act does not apply to the relationship between the parties, and affirmed the district court’s order granting summary judgment to Warrington on the breach of contract claim. View "Great Falls Clinic LLP v. Eighth Judicial Dist. Court" on Justia Law

Plaintiffs filed suit on behalf of themselves and a putative class of DISH subscribers, seeking monetary relief for Turner and FOX News services interruptions. The court concluded that, under Colorado law, the subscription agreement between DISH and its customers, which is comprised of both a Digital Home Advantage Plan Agreement and a Residential Customer Agreement (RCA), is not illusory. In this case, the district court’s interpretation of Section 1.I. and Section 7.A. of the RCA improperly converted the covenant of good faith and fair dealing into an additional contract term. It allowed plaintiffs to recover monetary relief for services interruptions, a remedy that is unambiguously precluded by the express terms of the parties’ contractual bargain. Therefore, the duty of good faith and fair dealing may not be applied to require DISH to provide any monetary relief when it deletes or changes programming for which subscribers have already paid. Because plaintiffs' claims for class-wide monetary relief failed to state a claim upon which relief can be granted, the court reversed and remanded for further proceedings. View "Stokes v. DISH Network" on Justia Law

Festival Fund guaranteed a loan made to an affiliate in connection with the purchase of a retail property. After default on the loan and a nonjudicial foreclosure, Clover sought to enforce the guaranty. The trial court concluded that the guaranty was unenforceable and found that Festival Fund was protected by antideficiency laws. The court concluded, however, that evidence does not support a conclusion that Festival Fund was a principal obligor on the loan. The court concluded, instead, that Festival Fund itself structured the transaction and determined that its affiliate—a separate legal entity—would take out the loan and take title to the property. Therefore, the trial court erred in applying a sham guaranty defense and entering judgment for Festival Fund. View "LSREF2 Clover Property 4 v. Festival Retail Fund 1" on Justia Law

A holdover franchisee is a franchisee who receives the benefits of an expired franchise agreement but fails to make payments to the franchisor per the agreement. Donut Holdings, Inc. (DHI) was the Nebraska parent corporation of LaMar’s Donuts International, Inc. (LaMar’s). LaMar’s was a franchise company with nine franchisees, including one in Springfield Missouri that was purchased by Risberg Stores, LLC, a Missouri entity, in 2002. At the time of the purchase, the store was operating under the terms of a 1994 franchise agreement entered into by Risberg Store’s predecessor. DHI filed a claim against Risberg Stores for royalty and marketing fees accruing after June 2009. Risberg Stores argued that it did not owe DHI fees because the parties’ written agreement ended in 2004. The district court ruled in favor of Risberg Stores, concluding that the franchise agreement ended in June 2009 and that DHI was not entitled to any payments thereafter. The Supreme Court affirmed, holding (1) DHI, the franchisor, did not have a breach of contract claim against Risberg Stores, the holdover franchisee; and (2) therefore, DHI was not entitled to fees under the contract. View "Donut Holdings, Inc. v. Risberg" on Justia Law

Defendant, a convicted fraudster, is subject to a $10 million restitution order. Harbor America, which had contracted with defendant and his fraudulently run businesses, is subject to a writ of garnishment for that debt. However, Harbor America asserts that it no longer holds defendant's property as it has terminated the contracts under which it owed him regular payments. Harbor America alleges it was entitled to terminate the contracts based on defendant's fraud and did so by obtaining a judgment in a Texas state court declaring its right to terminate. The court held that the state court ruling is not binding because the government was not allowed to participate in the proceeding; considering the question of termination in the first instance, Harbor America has lawfully terminated one of the contracts but may or may not have been entitled to terminate the other; and thus the court remanded for further fact finding. View "United States v. Mire" on Justia Law

Plaintiff, who suffers from epilepsy, was fired from his cardiology practice after a series of stress-related seizures. Plaintiff filed suit against HCA, alleging claims arising out of his alleged wrongful termination. The district court ordered arbitration of his claims based on equitable estoppel. In this case, the viability of plaintiff's claim depends on reference to the Physician Employment Agreement. The court concluded that, as the district court correctly recognized, an at-will employment relationship may exist even if the parties have entered into an employment contract, such as the Agreement. The court concluded that HCA’s liability depends on the Agreement and the district court did not abuse its discretion in applying direct benefits estoppel to Hays’s tortious interference claim. In making an Erie guess, the court held that the Texas Supreme Court would recognize intertwined claims estoppel and that plaintiff's remaining claims are subject to arbitration under that theory. Accordingly, the court affirmed the judgment. View "Hays v. HCA Holdings, Inc." on Justia Law

This lawsuit centered around the termination of the employment of Dr. Sonia Hernandez by Avera Queen of Peace Hospital (Avera). Hernandez brought suit against Avera and multiple persons associated with the hospital for, inter alia, defamation and breach of contract. The circuit court dismissed several of Hernandez’s causes of action and, during the ensuing jury trial, entered judgment as a matter of law dismissing the defamation action. At the conclusion of the trial, the jury returned a verdict in favor of Avera on the breach of contract claim. The Supreme Court affirmed, holding that the circuit court did not err (1) when it dismissed several of Hernandez’s claims against Avera and the additional parties, and (2) when it dismissed Hernandez’s defamation claim during trial. View "Hernandez v. Avera Queen of Peace Hosp." on Justia Law

In this appeal, the issue presented for the Supreme Court's review was whether a contractor could maintain an action under the Contractor and Subcontractor Payment Act (CASPA) against a property owner’s agents. Beginning in 2005, Appellant Scungio Borst & Associates (SBA) entered into a series of written and oral construction contracts with Appellee 410 Shurs Lane Developers, LLC (410 SLD), which 410 SLD’s part-owner and president, Appellee Robert DeBolt, executed on 410 SLD’s behalf. Therein, SBA agreed to improve real property owned by 410 SLD in connection with the development of a condominium complex, and did so until November 2006, when SBA’s contracts were terminated with approximately $1.5 million in outstanding payments due. SBA requested payment, but 410 SLD, again through DeBolt, refused. Accordingly, SBA sued 410 SLD; its alleged successor corporation, Appellee Kenworth II, LLC; and DeBolt in his personal capacity. SBA asserted, among other claims, violations of CASPA. After careful review, the Supreme Court held that a contractor could not maintain an action under CASPA, and, accordingly, affirmed the order of the Superior Court. View "Scungio Borst & Assoc. v. 410 Shurs Lane Developers, LLC" on Justia Law