Justia Contracts Opinion Summaries

In 2001, Furnival and its insurer agreed to a Pollution and Remediation Legal Liability Policy, detailing $10 million in liability protection; a 10-year coverage period; and insurance coverage for 12 Furnival locations, including the Elizabethtown Landfill Site, which Furnival was obligated to clean up under a consent decree with the federal government. Insurer knew about the consent decree when the Policy issued. The Policy Endorsements list five reasons for which insurer may “refuse to offer a renewal extension of coverage,” and states that insurer “shall not cancel nor non-renew this Policy except for the reasons stated above.” None of the listed reasons for non-renewal occurred. In 2006, the parties increased the Policy’s limit to $14 million. After the term expired, insurer sent Furnival’s insurance broker its version of a renewal offer, providing $5 million of coverage over a one-year term, omitting coverage for Elizabethtown, the only previously insured site for which Furnival had made a claim, refusing to renew the same terms. The Third Circuit vacated a ruling in favor of insurer, holding that, for a contract to be considered a renewal, it must contain the same, or nearly the same, terms as the original contract. View "Indian Harbor Ins. Co v. F&M Equip., Ltd" on Justia Law

For several years ASC Utah, Inc. operated a ski resort on land adjacent to that owned by Plaintiffs. Plaintiffs authorized ASC to use their land in exchange for an annual payment. Plaintiffs filed this action asserting that ASC breached the contract by mismanaging the property. Plaintiffs asserted claims for breach of the covenant of good faith and fair dealing, for injunctive relief, and for equitable rescission or reformation of the agreement. A jury resolved the first claim against Plaintiffs. The district court resolved the remaining claims after a bench trial in a decision that denied injunctive relief and refused to terminate the agreement but reformed it in part. The Supreme Court vacated the portion of the portion of the trial court’s order purporting to dispose of the rights of Plaintiffs to payments tendered by ASC but rejected by Plaintiffs and otherwise affirmed, holding (1) because Plaintiffs failed to file a notice of appeal as to the jury verdict, the Court lacked jurisdiction over matters resolved in the course of the jury; (2) the trial court did not abuse its discretion in refusing to award injunctive relief; and (3) the trial court did not err in deciding to reform the contract prospectively in part. View "Osguthorpe v. ASC Utah, Inc." on Justia Law

Kachina Pipeline Co., a pipeline operator, and Michael Lillis, a natural-gas producer, entered into a Gas Purchase Agreement. Kachina bought, transported, and resold Lillis’s gas according to the Agreement. Lillis later entered into a separate purchase agreement and constructed his own pipeline to one of Davis Gas Processing’s plants. Thereafter, Lillis sued Kachina, asserting that Kachina breached the Agreement by deducting the costs of compression that occurred after he delivered the gas to Kachina. Lillis also brought a fraud claim, asserting that Kachina represented it would release him from the Agreement. Kachina counterclaimed for breach of the Agreement and seeking declarations that it had the right to deduct compression charges under the Agreement. The trial court granted summary judgment for Kachina, declaring that the Agreement entitled Kachina to deduct the costs of compression from its payments to Lillis and that the Agreement gave Kachina the option to extend the arrangement for an additional five-year term. The court of appeals reversed, concluding that the agreement unambiguously allowed neither the disputed deductions nor a five-year extension. The Supreme Court affirmed, holding that the Agreement did not allow Kachine to deduct compression costs or support a five-year extension. View "Kachina Pipeline Co., Inc. v. Lillis" on Justia Law

Trona is a sodium carbonate compound that is processed into soda ash or baking soda. Because oil and gas development posed a risk to the extraction of trona and trona worker safety, the Bureau of Land Management (BLM), which manages the leasing of federal public land for mineral development, indefinitely suspended all oil and gas leases in the mechanically mineable trona area (MMTA) of Wyoming. The area includes 26 pre-existing oil and gas leases owned by Barlow. Barlow filed suit, alleging that the BLM’s suspension of oil and gas leases constituted a taking of Barlow’s interests without just compensation and constituted a breach of both the express provisions of the leases and their implied covenants of good faith and fair dealing. The Federal Circuit affirmed the Claims Court’s dismissal of the contract claims on the merits and of the takings claim as unripe. BLM has not repudiated the contracts and Barlow did not establish that seeking a permit to drill would be futile. View "Barlow & Haun, Inc. v. United States" on Justia Law

Clayton Hinton invested substantial personal resources into a used-car business. Hinton sued his business partner, Nate Rolison, claiming that Rolison was keeping profits from that business that should have been divided equally. Hinton also sought an injunction against the financing company that was paying Rolison some of the disputed profits. Both Rolison and the financing company filed motions to dismiss. The trial court granted Rolison's motion based on res judicata and granted the finance company's motion finding Hinton had failed to state a viable claim. Finding that res judicata did not bar Hinton's claims against Rolison, and that Hinton failed to state a viable claim for injunctive relief against the financing company, the Supreme Court affirmed in part, reversed in part, and remanded. View "Hinton v. Rolison" on Justia Law

Randy Braswell sued Ergon Oil Purchasing, Inc. in Amite County over some oil contracts. Two days later, Ergon brought a declaratory judgment action against Braswell in Rankin County over those same contracts. Ergon removed the Amite County action to federal court, where it remained for eighteen months before it was remanded. In the meantime, Ergon obtained summary judgment against Braswell in Rankin County. Braswell appealed, arguing that the Rankin County judge erred when he granted summary judgment in Ergon's favor and when he refused to transfer the action to Amite County. The Supreme Court agreed with Braswell that the action should have been transferred to Amite County, and reversed the judgment of the Rankin County circuit judge based on the doctrine of priority jurisdiction, and remanded the case to the circuit court. View "Braswell v. Ergon Oil Purchasing, Inc." on Justia Law

In 2009, the Town of Lead Hill, Arkansas and Ozark Mountain Regional Public Water Authority entered into a Wholesale Water Purchase Contract with a forty-year term for Ozark to provide potable water to Lead Hill. In 2013, Lead Hill notified Ozark that it had decided to terminate its contract with Ozark. Ozark filed suit against Lead Hill seeking a declaratory judgment and a writ of mandamus to enforce the contract. The circuit court granted Ozark’s motion for summary judgment and issued a writ of mandamus. The Supreme Court affirmed, holding (1) the contract does not violate article 12, section 4 or amendment 78 of the Arkansas Constitution; (2) the contract does not violate 7 U.S.C. 1926(b); (3) Ozark maintained the statutory authority to enter into the contract; and (4) contrary to Lead Hill’s assertions, the contract is enforceable under several contract principles. View "Town of Lead Hill v. Ozark Mountain Reg'l Pub. Water Auth." on Justia Law

Plaintiff filed suit against defendants, owners of a rare coin known as a "Brasher Doubloon," alleging claims for quantum meruit, fraud, breach of contract, constructive trust, and misappropriation of trade secrets. Plaintiff offered to sell defendants information that would prove that their coin was the first legal-tender coin struck pursuant to an Act of Congress. After plaintiff gave defendants the information, defendants denied payment. The district court granted summary judgment to defendants. The court concluded that the Coin was not, as plaintiff theorized, legal tender struck pursuant to the Act Regulating Foreign Coins, and For Other Purposes, ch. 5. 1 Stat. 300. Plaintiff could not recover because he had not provided the information he alleged he was required to provide pursuant to the parties’ agreement. Further, the court concluded that plaintiff did not satisfy the requirements of Federal Rule of Civil Procedure 56(d) because he failed to identify what specific facts a deposition of Defendant Contursi would have revealed that would have precluded summary judgment. Accordingly, the court affirmed the judgment. View "Swoger v. Rare Coins Wholesalers" on Justia Law

A certified question of Oregon law was certified to the Oregon Supreme Court from the United States Court of Appeals for the Ninth Circuit. The question arose out of a construction contract dispute in which a homeowner's association sued a builder in state court for construction defects. The homeowner's association and the builder settled, and the settlement included an unconditional release and covenant not to execute against the builder. When the homeowner's association attempted to garnish the builder's liability insurance policy, however, the insurer claimed that it had no liability because the settlement unconditionally released its insured from any liability. The state trial court agreed, and the builder appealed. Meanwhile, in response to the state trial court's conclusion that the settlement agreement eliminated the insurer's liability, the homeowner's association and the builder amended their settlement agreement to eliminate the unconditional release and covenant not to execute. Pursuant to the new agreement, the builder initiated this action in federal court against its insurer. In the federal court action, the insurer argued that the state court already had determined that, given the terms of the original settlement, the builder could not recover under its insurance policy and that the parties lacked authority to create any new insurance coverage obligation by amending their settlement agreement. The federal district court agreed. On appeal, the Ninth Circuit certified a question on whether the homeowner's association and the builder could amend their settlement agreement in such a way as to revive the liability of the builder's insurer. After review, the Oregon Court concluded that, although the parties possessed authority to amend the terms of their settlement agreement, they could not do so in a way that retroactively revived the liability that was eliminated in their original agreement (at least not on the basis of the legal theories that they proposed). View "A&T Siding, Inc. v. Capitol Specialty Ins. Corp." on Justia Law

MERV, an LLC formed to purchase and operate an antique mall, encountered difficulties paying its mortgage loan and entered into a forbearance agreement with the Bank. MERV later defaulted and filed a Chapter 11 Bankruptcy Petition. Although a plan of reorganization was confirmed, MERV again defaulted. The Bank foreclosed its mortgage on the property. Before the bankruptcy case closed, MERV retained special counsel and filed an adversary proceeding against some of its founders and the Bank. The claims against the Bank alleged breach of contract, “facilitation of fraud and theft”, and equitable subordination of the Bank’s claim. MERV sought punitive damages. The bankruptcy court granted summary judgment, agreeing with the Bank that MERV had executed a release of all of the claims as part of the forbearance agreement. The Sixth Circuit Bankruptcy Appellate Panel affirmed, finding that the Bank offered prima facie evidence of a complete affirmative defense to the complaint by showing that MERV executed a Release of all claims. MERV did not demonstrate a genuine issue of material fact as to the validity of that Release. MERV did not file a motion or a Rule 56(d) affidavit or declaration with the bankruptcy court requesting more time for discovery. View "In re: MERV Props., LLC" on Justia Law