Justia Contracts Opinion Summaries

Plaintiffs, Clarence Furuya and Lona Furuya, filed the underlying suit against Association of Apartment Owners of Pacific Monarch, Inc. (AOAO) raising issues related to their interests in an apartment unit located at the Pacific Monarch Condominium (Pacific Monarch) and 106 parking stalls appurtenant to the unit. The circuit court concluded that there was no enforceable contract between AOAO and the Furuyas for the purchase of the leased fee interests associated with the unit and the parking stalls. The Intermediate Court of Appeals (ICA) ultimately affirmed. The Supreme Court affirmed, holding (1) the Furuyas failed to demonstrate error in the circuit court’s decision; and (2) the circuit court did not err in rejecting the Furuyas’ related claims for injunctive relief, declaratory relief, and ultra vires act. View "Furuya v. Ass’n of Apartment Owners of Pacific Monarch, Inc." on Justia Law

James Cherry appealed the grant of summary judgment entered against him and in favor of Pinson Termite and Pest Control, LLC, and Jerry Pinson. In 2011, Cherry purchased a home. The sales contract required the seller to provide a "Wood Infestation Inspection Report (WIIR)." A termite-services contract with Pinson Termite ("termite bond") was transferrable from the seller to Cherry, but it was disputed whether the bond actually transferred to Cherry. In late 2011, Cherry began remodeling him home when he discovered extensive termite damage. A State inspector confirmed the damage and sent Pinson a letter that it had "observed findings of subterranean termite damage" that were not mentioned on the WIIR and that, although the WIIR "indicates the structure was treated by your company, ... we did not observe all mechanics of subterranean control work." The State inspector monitored Pinson's re-treatment of the house. At about the same time, Cherry and Pinson signed a contract for an extension of the termite bond. Shortly thereafter, cherry hired an attorney, who sent Pinson a letter offering to settle his claim for the re-treatment of his home. The State inspector sent Cherry a letter advising that it had supervised Pinson's re-treatment of the house and that if Cherry had any question he should contact the State within 10 days of receiving the letter. If he did not contact, the letter stated the State would "assume that the matter has been resolved." There was no record of any further contact between Cherry and State inspector. Approximately one year after the State letter, Cherry sued Pinson Pest, and Pinson alleging fraud; negligence; negligent hiring, training, and supervision; and breach of contract and seeking "equitable relief pursuant to the 'made whole' doctrine." When summary judgment was granted in favor of Pinson, Cherry appealed arguing that the trial court erred. After review, the Alabama Supreme Court agreed that the trial court erred in entering summary judgment in favor of Pinson, reversed and remanded for further proceedings. View "Cherry v. Pinson Termite & Pest Control, LLC" on Justia Law

The United States Defense Threat Reduction Agency sought a prime contractor to provide event-planning services. Plaintiffs offered their services as joint subcontractors to Navar, Inc. Plaintiffs and Navar entered into a non-disclosure agreement (NDA) and a Teaming Agreement, which provided that if Navar were awarded a prime contract then it would negotiate in good faith with Plaintiffs. The Defense Agency awarded Navar a five-year prime contract, but Navar did not extend subcontracts to either Plaintiff. Thereafter, Plaintiffs sued Navar, asserting claims for breach of contract, unjust enrichment, quantum meruit, and trade secret misappropriation. A jury found (1) Navar had breached the NDA and Teaming Agreement, and (2) Navar misappropriated one plaintiff’s trade secretes under the Virginia Uniform Trade Secrets Act. The trial court set aside the verdict on breach of the Teaming Agreement and entered judgment in favor of Plaintiffs in the total amount of $1.25 million. The Supreme Court reversed in part and affirmed in part, holding (1) Navar could not be found liable for breach of contract because nothing in the Act or the NDA required Navar to use Plaintiffs as subcontractors; and (2) the trial court did not err in finding the Teaming Agreement was unenforceable as a binding contract. View "Navar, Inc. v. Federal Bus. Council" on Justia Law

Plaintiffs Patterson and Breedlove filed suit against Mortgage Systems, seeking to enforce a contract between Patterson and CitiMortgage for the sale of Breedlove’s home to Patterson for a bargain basement price. CitiMortgage contends that the sale price stated in its offer letter to Patterson was an obvious clerical error and that the contract should be rescinded for that reason. Because of the clerical error, the letter actually said that CitiMortgage wanted a net payout amount of $113,968.45, instead of the “corrected” net payout amount was $423,940. Because that letter did not lead to formation of a valid contract based on CitiMortgage's unilateral mistake that plaintiffs knew or should have known about, CitiMortgage did not have any duty not to foreclose on the property. Therefore, the wrongful foreclosure claim fails and the court affirmed the district court's grant of summary judgment for CitiMortgage and Mortgage Systems. View "Patterson v. CitiMortgage, Inc." on Justia Law

BNY appealed the district court's grant of summary judgment for Morgan Stanley, arguing that the district court erred in concluding, as a matter of law, that Morgan Stanley was not contractually obliged to repurchase a mortgage loan allegedly issued in breach of a contract representation because (1) the Trustee’s duty to give “notice to cure” within three business days of becoming aware of a material breach was a condition precedent to the seller’s repurchase obligation, and (2) that condition was not performed within the specified three days, but two to four weeks later. The court concluded that the contract at issue did not require notice to cure as a condition precedent to Morgan Stanley remedying breach where the phrase “notice to cure” does not appear in the contract. In this case, the contract contains distinct provisions for giving notice of breach and making request for cure, neither of which is cast in the express language of condition. Therefore, the request for cure is not a condition precedent to Morgan Stanley’s remedy obligations, and the timeliness of a request for cure, as well as of a notice of breach, is properly construed as a promise and reviewed for substantial performance. The court also concluded that the notice of breach and request for cure in this case cannot be held untimely as a matter of law, particularly when reviewed for substantial performance. Accordingly, the court reversed and remanded for further proceedings. View "Bank of New York Mellon Trust v. Morgan Stanley Mortgage" on Justia Law

Defendants were business entities that organize physically challenging obstacle course events in locations throughout the United States. The four named Plaintiffs registered to participate in one of those events. Plaintiffs filed suit in Massachusetts superior court alleging that they were unable to participate in the event because of a second change of location and that Defendants refused to refund Plaintiffs’ registration fees. Plaintiffs sought relief on behalf of themselves and a class of similarly situated persons. Defendants removed the case to federal court, asserting that removal was permitted under the Class Action Fairness Act because the matter in controversy exceeded $5 million. Plaintiffs moved to remand the case to state court arguing that Defendant failed to show that over $5 million was in controversy. The district court denied Plaintiffs’ motion to remand the case to state court. The district court then dismissed the case and compelled mediation and arbitration of the dispute. The First Circuit reversed, holding that the district court erred in concluding that Defendants met their burden of showing that over $5 million was in controversy in this matter. Remanded with instructions to remand the case to state court for lack of jurisdiction. View "Pazol v. Tough Mudder Inc." on Justia Law

Pursuant to a merger agreement, Sellers agreed to indemnity Buyer for the tax liabilities of the company being sold. The tax bills for indemnification purposes, however, were to be calculated as if certain deductions were not going be taken when both parties knew they would be. These deductions reduced the company’s tax liability to zero. After the merger, the company’s tax prepayments and credits were refunded in their entirety, thus benefitting Buyer. Because the calculation of the indemnity obligation was based on a counterfactual measure of tax liability, that calculation resulted in Sellers’ owing Buyer a substantial amount of liability. Buyer filed this complaint asserting claims for declaratory relief and breach of contract. At issue in this case was whether the prepayments and credits affected the tax indemnification obligation of Sellers. The district court entered judgment on the pleadings in favor of Sellers, concluding that the indemnification provision unambiguously required that the indemnity obligation be offset by the amount of the refunded prepayments and credits. The First Circuit vacated the judgment of the district court, holding that the indemnification provision was ambiguous as to how the tax refunds affect the indemnification obligation of Sellers. Remanded. View "Mercury Sys., Inc. v. S’holder Representative Servs., Inc." on Justia Law

The parties in this dispute were a city and a design engineer. The city and the design engineer settled their dispute pursuant to an agreement that contained a non-disparagement clause. After the city released the design engineer from all claims relating to the earlier litigation, the city pursued a claim against the engineer’s construction manager for breach of contract. When the design engineer heard of the city’s disparaging statements made during the current lawsuit, it filed a complaint against the city for injunctive and monetary relief, alleging that the city breached the non-disparagement agreement during the current litigation. The circuit court denied injunctive relief and then granted the city’s amended motion to dismiss. The Court of Special Appeals affirmed, holding that no claim can stand for a deliberate and voluntary breach of a non-disparagement agreement when the disparaging statements are made in legal proceedings. The Court of Appeals affirmed, holding (1) the litigation privilege can immunize a party from a claim for breach of a non-disparagement clause; and (2) the city did not waive the litigation privilege in this case. View "O'Brien & Gere Eng'rs, Inc. v. City of Salisbury" on Justia Law

32nd Street filed suit against the insurers for quantum meruit, unjust enrichment, and vexatious refusal to pay an insurance claim, as well as injunctive relief arising out of medical services provided to the insurers' insureds. The district court granted summary judgment for the insurers and denied 32nd Street's motion to compel discovery. The court concluded that the plain language of the provisions at issue support the district court's conclusion that, in the ancillary-provider agreement, 32nd Street agreed to accept the Blue Traditional rate for services rendered to insureds belonging to all of the insurers’ networks; the district court did not err by finding that the equitable claims were barred by the contracts governing the reimbursement rates paid by the insurers; the district court did not err in granting summary judgment to the insurers on the vexatious-refusal claim where 32nd Street fails to establish any genuine issue of material fact that the insurers refused to pay an amount due under an insurance policy; and the district court did not abuse its discretion by denying 32nd Street's motion to compel. Accordingly, the court affirmed the judgment. View "32nd St. Surgery Ctr. v. Right Choice Managed Care" on Justia Law

American Family filed suit seeking a declaratory judgment as to whether an umbrella insurance policy issued to Todd Patton provided any coverage for an automobile accident in which a passenger in a vehicle driven by Todd's son, Jacob Patton, was seriously injured. The district court granted summary judgment for American Family. The court concluded that the Pattons breached the umbrella policy's cooperation clause by entering into a Miller-Shugart agreement after already being protected from personal liability in the Drake-Ryan settlement, and that such breach was material and prejudicial. Accordingly, the court affirmed the judgment. View "American Family Mutual Ins. v. Donaldson" on Justia Law