Justia Contracts Opinion Summaries

Plaintiff entered into an agreement with Defendant, a municipality, to install pollution control equipment at a power plant. Plaintiff fully performed the agreement, but Defendant withheld the retainage from Plaintiff. Consequently, Plaintiff filed a breach of contract action against Defendant and requested reasonable and necessary attorney’s fees, costs, and interest. Defendant filed a plea to the jurisdiction seeking dismissal of Plaintiff’s claims for attorney’s fees for lack of jurisdiction, arguing that attorney’s fees were outside the scope of statutorily-waived immunity as Tex. Local Gov’t Code 271.152 was written at the time of the agreement. In response, Plaintiff argued that Defendant had no immunity from suit because it was performing a proprietary function in its dealings with Plaintiff. The trial court granted Defendant’s plea to the jurisdiction and dismissed Plaintiff’s claims for attorney’s fees. The court of appeals affirmed. The Supreme Court reversed, holding (1) Defendant was performing a proprietary function and, therefore, was not immune from suit based on governmental immunity; and (2) a claim for attorney’s fees arising from those proprietary actions does not implicate governmental immunity. View "Wheelabrator Air Pollution Control, Inc. v. City of San Antonio" on Justia Law

Appellant C. Tucker Cheadle, as administrator of the estate of Robert F. Obarr, appealed an order denying his motion to disqualify counsel for respondent DP Pham LLC. Pham made three loans to Obarr totaling nearly $3 million, and Obarr secured each loan by granting Pham a lien on a mobilehome park he owned in Westminster (Property). This action arose when Obarr allegedly agreed to sell the Property to two different buyers. In March 2013, Obarr allegedly contracted to sell the Property to S.C.D. Enterprises (SCD). SCD promptly assigned the purchase agreement to Westminster MHP Associates, LP (Westminster), which allegedly opened escrow on the Property with Obarr. According to Westminster, it satisfied all contingencies for the sale within 10 days of opening escrow. In April 2013, Westminster filed suit alleging contract claims against Obarr. Obarr died unexpectedly in August. The trial court appointed Cheadle as a special administrator for Obarr’s estate and in that capacity substituted Cheadle for Obarr as a party to this action. Cheadle then filed a cross-complaint alleging an interpleader claim against both Westminster and Pham concerning the Property. Based on Pham’s loans to Obarr, Cheadle also alleged claims against Pham for usury, intentional misrepresentation, negligent misrepresentation, money had and received, unjust enrichment, reformation, and violation of the unfair competition law. Cheadle contended disqualification was required because Pham’s counsel improperly obtained copies of privileged communications between Obarr and his attorney, and used those communications to oppose another party’s summary judgment motion in this case. The trial court denied the disqualification motion because it concluded the communications were not privileged. The Court of Appeal reversed. After reviewing copies of the communications, the trial court concluded they were not privileged based on their content. "A court, however, may not review the contents of a communication to determine whether the attorney-client privilege protects that communication. The attorney-client privilege is an absolute privilege that prevents disclosure, no matter how necessary or relevant to the lawsuit. The privilege attaches to all confidential communications between an attorney and a client regardless of whether the information communicated is in fact privileged. Accordingly, it is neither necessary nor appropriate to review a communication to determine whether the attorney-client privilege protects it." View "DP Pham v. Cheadle" on Justia Law

Clatus Junkin, a resident of Fayette County, owned and operated Johnco Materials, Inc., a sand and gravel pit located in Lowndes County. At some point in time, Junkin purchased diesel fuel from Southeastern Energy and had it delivered to Johnco Materials. When Southeastern Energy did not receive payment for the fuel, Southeastern Energy sued Johnco Materials and Junkin, individually, in Lowndes County. With regard to Junkin, Southeastern Energy alleged that "Junkin was personally liable to Southeastern Energy for diesel fuel that was sold and delivered to Johnco Materials." At the request of the parties, the Lowndes Circuit Court entered a consent judgment against Johnco Materials and in favor of Southeastern Energy for an agreed-upon amount and dismissed Junkin from the action with prejudice. Junkin then sued Southeastern Energy in Fayette County alleging malicious prosecution by Southeastern Energy in the Lowndes County case. Southeastern Energy moved to dismiss the malicious prosecution action or, in the alternative, to transfer the action to "Montgomery County, Alabama, or any other proper venue, pursuant to Rule 82(d), Ala. R. Civ. P., and governing law." Southeastern Energy Corp. petitioned the Alabama Supreme Court for a writ of mandamus ordering the Fayette Circuit Court to vacate its order denying Southeastern Energy's motion for a change of venue for the underlying action and directing the Fayette Circuit Court to grant the motion and transfer the action to the Montgomery Circuit Court (case no. 1150033). Southeastern Energy filed a second petition for a writ of mandamus asking the Supreme Court to direct the Fayette Circuit Court to vacate an order transferring the underlying action to the Lowndes Circuit Court, and to direct the Fayette Circuit Court to enter an order transferring the action to the Montgomery Circuit Court (case no. 1150294). Finding no errors in the transfer orders, the Supreme Court dismissed Southeastern Energy's petition in case no. 1150033, and denied its petition in case no. 1150294. View "Ex parte Southeastern Energy Corp." on Justia Law

Appellants filed a complaint for breach of contract, non-disclosure, rescission, damages, and negligence against Appellees. Appellants obtained a default judgment. Appellees moved to set aside the default judgment on the grounds that the summons was defective on its face. The circuit court granted the motion and set aside the default judgment due to the defective summons and resulting lack of personal jurisdiction over Appellees. Appellees then filed a motion to dismiss the case with prejudice on the grounds that service was never completed and that the savings statute did not apply. The circuit court granted the motion to dismiss. The Supreme Court (1) affirmed the circuit court’s ruling setting aside the default judgment, as the summons failed strictly to comply with the requirements of Ark. R. Civ. P. 4(b); and (2) reversed the dismissal with prejudice, holding that Appellants were entitled to the benefit of the savings statute. View "Jones v. Douglas" on Justia Law

Plaintiff Bank of America brought an action against First American Title Insurance Company, Westminster Abstract Company, and others, alleging breach of contract and negligent misrepresentation in connection with mortgages that plaintiff had partially financed on four properties whose value had been fraudulently inflated and whose purchasers were straw buyers who had been paid for their participation. Shortly after closing, all four borrowers defaulted. After discovering the underlying fraud in the four loans during the foreclosure proceedings, plaintiff sued, among others, First American, which had issued closing protection letters that promised to reimburse plaintiff for actual losses incurred in connection with the closings if the losses arose from fraud or dishonesty, and Westminster, alleging that it had violated the terms of the closing instructions. The other defendants either defaulted or were dismissed. The Court of Appeals held that plaintiff’s claim against First American relating to the properties on which it had made full credit bids was barred by "New Freedom Mtg Corp v Globe Mtg Corp," (281 Mich App 63 (2008)). With respect to First American’s liability on the other two closings, the Court of Appeals concluded that the trial court properly granted summary disposition to First American and Westminster because plaintiff had failed to produce evidence that created a question of fact regarding whether Westminster knew of or participated in the underlying fraud in those closings. Finally, the Court of Appeals concluded that plaintiff had not established a link between Westminster’s alleged violations of the closing instructions and the claimed damages and, even if a link had been established, there were no damages because of plaintiff’s full credit bid at the foreclosure sale. The Supreme Court reversed, finding the Court of Appeals erred by concluding that plaintiff’s full credit bids barred its contract claims against the nonborrower third-party defendants. To the extent that New Freedom held that the full credit bid rule barred contract claims brought by a mortgagee against nonborrower third parties, it was overruled. Further, the closing instructions agreed to by plaintiff and Westminster constituted a contract upon which a breach of contract claim could be brought. Finally, the lower courts erred by relying on New Freedom to interpret the credit protection letters given that the terms of the letters in New Freedom differed materially from the ones at issue here. View "Bank of America, NA v. First American Title Ins. Co." on Justia Law

Plaintiffs filed suit against 24 Hour Fitness, alleging that their membership contracts did not strictly comply with several technical provisions of the Texas Health Spa Act, Tex. Occ. Code Ann. 702.304, 702.305, 702.401, 702.402(a)(2). The district court dismissed the suit based on lack of standing. Because plaintiffs are not entitled to a full refund of their membership dues, and because 24 Hour’s alleged violations of the Act did not cause plaintiffs actual damages or any other form of economic harm, plaintiffs have sustained no economic injury. Furthermore, plaintiffs have not suffered a non-economic injury where plaintiffs have suffered no cognizable statutory injury under the Act. The Act does not authorize members to sue health clubs for technical statutory violations which cause the member no harm. Moreover, the Act does not authorize health club members to recover statutory or nominal damages for mere technical violations. Accordingly, the court affirmed the judgment because plaintiffs lack Article III standing. View "Wendt v. 24 Hour Fitness USA, Inc." on Justia Law

This appeal involves a breach of contract dispute between the parties regarding the proper configuration and installation of rooftop air handling units for passenger boarding bridges. The court concluded it was error to grant summary judgment for INET on the basis that DFW first breached the contract. The record contains disputes of material fact regarding which party prevented performance by failing to fully cooperate in arriving at a solution once the parties discovered defects. Accordingly, the court reversed the grants of summary judgment for INET and Hartford and remanded this case for the claims to proceed to a fact finder. Because the district court granted INET damages and fees based on its summary judgment rulings, the court also vacated those awards. View "Dallas/Fort Worth Int'l Airport Bd. v. Inet Airport Sys." on Justia Law

For more than a century, Asarco LLC and its predecessors operated a lead smelting facility (the Site). For almost fifty years, Atlantic Richfield Company’s predecessor operated a zinc fuming plant on land leased from Asarco at the Site. Atlantic Richfield subsequently sold the plant and related property to Asarco. Due to extensive contamination at the Site, the Environmental Protection Agency determined that Asarco was obligated to fund cleanup efforts at the Site. After conducting extensive remediation at the Site, Asarco filed a complaint seeking contribution pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) from Atlantic Richfield, asserting that Atlantic Richfield was liable under CERCLA for its equitable share of costs related to the Site’s cleanup. The federal district court granted summary judgment for Atlantic Richfield, concluding that Asarco’s claims were untimely under CERCLA’s statute of limitations. Asarco then commenced the present action against Atlantic Richfield alleging several state-law claims. The district court granted Atlantic Richfield’s motion for judgment on the pleadings on the ground that the doctrine of claim preclusion barred Asarco’s claims. The Supreme Court affirmed, holding that claim preclusion barred Asarco’s action because Asarco could have brought its state-law claims before the federal district court in Asarco I. View "Asarco LLC v. Atlantic Richfield Co." on Justia Law

Plaintiff filed suit against LP, alleging claims for fraudulent misrepresentation, unfair or deceptive practices, and breach of warranty against LP for the purported defectiveness of its TrimBoard product. The district court granted summary judgment to LP. In order for plaintiff to prevail on his fraudulent-misrepresentation claim under Iowa law, he must prove eight elements. At issue is the sixth element - justifiable reliance. In this case, plaintiff's builder's affidavit is insufficient to create a genuine issue of material fact as to whether the builder - a third party - received a communication from LP that he subsequently communicated to plaintiff and upon which plaintiff relied. Therefore, the district court did not err in rejecting defendant's fraudulent-misrepresentation claim. Likewise, plaintiff's unfair or deceptive practices claims fail. The court also concluded that the district court did not err in enforcing the terms of LP's limited warranty where the mere fact that the limited warranty does not compensate plaintiff for the entirety of his damages does not mean it has failed of its essential purpose, and where the limited warranty is neither procedurally nor substantively unconscionable. Accordingly, the court affirmed the district court's judgment. View "Brown v. Louisiana-Pacific Corp." on Justia Law

St. Jude filed suit against Jose B. de Castro and Biosense, alleging state law claims of breach of contract and tortious interference. The court concluded that the district court correctly concluded that the Minnesota choice-of-law provision in St. Jude's employment agreement with de Castro is valid because the parties acted in good faith and without the intent to evade the law; the district court correctly concluded that St. Jude's term-of-years employment agreement with de Castro is valid and enforceable under Minnesota law and that Biosense was liable for tortuously interfering with that agreement; the district court correctly concluded that St. Jude could recover damages for lost profits based on Biosense's tortious interference; and the district court correctly determined that there was sufficient evidence from which a reasonable jury could conclude that Biosense caused St. Jude to lose profits. Accordingly, the court affirmed the judgment. View "St. Jude Medical S.C., Inc. v. Biosense Webster, Inc." on Justia Law