Justia Contracts Opinion Summaries

This suit stemmed from a failed multimillion dollar investment in commercial real estate. Plaintiffs were seven investors in Southwest Corporate Center (the Property), a three-story office building in Tempe, Arizona. The 30 defendants played various roles in acquiring the Property and marketing ownership shares therein to plaintiffs. This appeal did not involve the parties from whom plaintiffs actually purchased their investments, including defendant WA Southwest Acquisitions, LLC (Acquisitions). Instead, this appeal centered on three judgments of dismissal entered on May 15, 2014, in favor of four defendants (the respondents to this appeal) on the periphery of the transaction: (1) First American Title Insurance Company, which provided escrow and closing services in connection with the acquisition of the Property; (2) Hirschler Fleischer, a law firm that worked on the investment offering and prepared a tax opinion in connection therewith; (3) Trammell Crow Company (Trammell Crow), which acted as real estate broker for the original seller of the Property and then entered into a property management and leasing agreement with plaintiffs; and (4) CBRE, Inc. (CBRE), which acquired Trammell Crow and became its successor in interest. The Court of Appeal affirmed the three judgments of dismissal at issue here because the applicable statutes of limitation foreclosed recovery. View "WA Southwest 2 v. First Amer. Title Ins. Co." on Justia Law

Avila bought his Chicago home with a $100,500 CitiMortgage loan. Five years later, a fire made the house uninhabitable. Avila’s insurance carrier paid out $150,000. CitiMortgage took control of the proceeds and paid $50,000 to get the restoration underway. CitiMortgage later inspected the work and found that it needed to be redone. By then Avila had missed several mortgage payments. CitiMortgage applied the remaining $100,000 toward Avila’s outstanding mortgage loan. Avila’s home was not repaired. CitiMortgage never claimed that restoration was economically infeasible or would reduce its security interest. Nor had any of three special conditions described in the mortgage occurred. Avila sued, alleging breach of fiduciary duty and the mortgage contract, seeking to represent a class of defaulting CitiMortgage borrowers whose insurance proceeds had been applied to their mortgage loans rather than repairs. The district court dismissed, reasoning that the allegations did not support a fiduciary duty on CitiMortgage’s part and Avila was barred from pursuing his contract claim because he had materially defaulted on his own obligations. The Seventh Circuit agreed that allegations of a fiduciary relationship were inadequate as a matter of law, but held that a claim that the mortgage agreement remained enforceable after his missed payments was plausible in light of the agreement’s structure and the remedies it prescribes in the event of default. View "Avila v. CitiMortgage, Inc." on Justia Law

"For more than one hundred and thirty years," the Mississippi Supreme Court has held that an insurance company may void a policy when the insured made material misrepresentations during the application process. While driving his mother’s 2003 Chevy Silverado in Rankin County, sixteen-year-old William Busby crashed into Kenneth Tarlton’s car, which in turn collided with a car driven by Katrice Jones-Smith. When William’s mother, Michelle, applied to Safeway Insurance Company for an insurance policy on the Silverado, the application required her to warrant that she had provided the names of all regular frequent drivers of the covered vehicles, as well as all residents of her household fourteen years old or older. Michelle failed to disclose that fifteen-year-old William resided in her home, and Safeway issued her a policy on the Silverado at a premium that was lower than the premium would have been had Safeway known about William. When Safeway learned that Michelle made a material misrepresentation when she applied for the motor-vehicle-liability policy at issue here, it had the policy declared void. The Supreme Court found no reason to disturb the trial court's grant of summary judgment in this case in favor of Safeway, so it affirmed. View "Jones-Smith v. Safeway Insurance Company" on Justia Law

A lease agreement included a five-year renewal provision but failed to specify the rent to be paid during the renewal period. The circuit judge granted a judgment on the pleadings, finding the renewal provision unenforceable. Finding no reversible error in that decision, the Supreme Court affirmed. View "Intrepid, Inc. v. Bennett" on Justia Law

In 2009, Liu, a physician in a residency program, elected basic life insurance coverage from LINA through his employer’s ERISA plan and elected supplemental coverage in an amount four times his salary. Asked whether, within the last five years he had been diagnosed with “Cancer, Tumor, Leukemia, Hodgkin’s Disease, Polyps or Mole,” he answered “no.” One month after submitting his application, Liu received a cancer diagnosis. On March 1, 2010, the insurance became effective. On April 23, 2010, Liu died. LINA paid the basic benefit of $46,858.49, but reviewed Liu’s medical records, which revealed that Liu had been experiencing symptoms without a diagnosis before submitting his November 12 application. LINA then issued a denial, stating: While the form was completed accurately at the time ... a diagnosis of cancer prior to the coverage approval date was not disclosed … [the] Form states ... any changes in your health prior to the insurance effective date must be reported. His wife responded that Liu was told he would not have to provide evidence of good health, but did not identify the person who made the alleged representation. The court rejected the wife’s suit on summary judgment. The Eighth Circuit affirmed. Liu breached an application requirement by failing to notify LINA of a cancer diagnosis he received before a policy issued. View "Huang v. Life Ins. Co. of N. Am." on Justia Law

The Division of Capital Asset Management and Maintenance (DCAM), the owner of a construction project, entered into a contract with a designer to prepare the project’s designs. DCAM contracted with Gilbane Building Company to be the construction manager at risk (CMAR). Gilbane subcontracted with Coghlin Electrical Contractors, Inc. to perform electrical work. Coghlin later filed a complaint against Gilbane alleging that Gilbane breached the subcontract by causing Coghlin to incur additional costs resulting from design errors. Gilbane filed a third-party complaint against DCAM, asserting that DCAM breached its contract with Gilbane by refusing to pay Gilbane the amounts claimed by Coghlin. The trial court allowed DCAM’s motion to dismiss the third-party complaint. The Supreme Judicial Court vacated the superior court’s judgment, holding (1) a public owner of a construction management at risk project gives an implied warranty regarding the designer’s plans and specifications, but the scope of liability arising from that implied warranty is limited; (2) the construction management at risk contract in this case did not disclaim the implied warranty; and (3) the contract's indemnification provision did not prohibit Gilbane from filing a third-party complaint against DCAM seeking reimbursement of additional costs under the implied warranty for damages claimed by Coghlin caused by an insufficient or defective design. Remanded View "Coghlin Elec. Contractors, Inc. v. Gilbane Bldg. Co." on Justia Law

Michels is a member of the Pipe Line Contractors Association (PLCA), a trade association that negotiates collective bargaining agreements (CBAs) on behalf of its employer members with unions. In 2006, the PLCA and the Union entered into a CBA in “effect until January 31, 2011, and thereafter from year to year unless terminated at the option of either party after sixty (60) days’ notice.” The CBA required contributions to the Central States multiemployer pension plan, 29 U.S.C. 1000(2), (3), (37). In August 2010, the PLCA informed the Union that it intended to terminate the 2006 CBA on January 31, 2011, and begin negotiations for a new agreement; the parties signed eight extensions, the last ending November 15, 2011. Michels contributed to the pension plan throughout those extensions. The parties agreed that the employers would cease making contributions to the plan as of November 15, 2011; that they would make comparable payments to an escrow fund until a “mutually acceptable” fund was designated; and that they would otherwise extend the terms of the 2006 CBA until December 31, 2011. The fund claimed that the obligation to make contributions had not ended. The Seventh Circuit reversed the district court holding that this was not sufficient to end the duty to contribute. View "Michels Corp. v. Cent. States, SE & SW Areas Pension Fund" on Justia Law

The Navy, Military Sealift Command (MSC), issued a contract solicitation, involving management and coordination of lodging and transportation for federal civil service mariners who were completing required training at the New Jersey MSC Center. MSC issued the solicitation as a total small business set-aside under North American Industrial Classification System code: “Hotels (except Casino Hotels)”. After bidders revised and resubmitted their initial proposals, MSC accepted the proposal of Mali. Losing bidder DMC filed a size protest with the Small Business Administration (SBA), which found that Mali was not a small business.. Because DMC had submitted the next lowest-priced, technically acceptable bid, it was then declared the successful bidder. Tinton Falls then filed a size protest, alleging that DMC intended to subcontract the lodging services portion of the contract to hotels that did not qualify as small businesses. The SBA concluded that the primary and vital requirements of the solicitation were a coordinated package of rooms, transportation, and other services; that DMC would be performing a significant portion of the contract’s primary and vital requirements; that DMC’s relationship with its subcontracted hotels did not violate the ostensible contractor rule; and that DMC could be considered a small business concern. The Federal Circuit affirmed final judgment for the government and DMC. View "Tinton Falls Lodging Realty, LLC v. United States" on Justia Law

Plaintiffs owned most of Mouse Island in the Town of Southport in common with Defendants. Plaintiffs filed a complaint for equitable partition. Defendants counterclaimed. The superior court entered summary judgment in favor of Defendants on Plaintiffs’ complaint for equitable partition. After a trial, the court awarded Defendants damages for nonpayment of commonly-shared expenses. The Supreme Court affirmed, holding (1) the rights of first refusal in the parties’ deeds violated the rule against perpetuities and were therefore void as a matter of law; (2) the rights of first refusal in the parties’ separate contractual agreements with one another were valid vis-à-vis each other and constituted an effective waiver of these parties’ rights to equitable partition; and (3) the superior court did not err in apportioning expenses. View "Pew v. Sayler" on Justia Law

Defendant worked for Plaintiff, a technology company, as an engineer. During and after her employment with Plaintiff, Defendant forwarded confidential emails to her private Gmail account, copied a confidential business plan to a thumb drive, and placed protected information on the record in an administrative proceeding. Plaintiff filed suit, alleging that Defendant had violated a non-disclosure agreement and misappropriated company trade secrets. The district court granted summary judgment for Defendant, determining that Plaintiff had failed to make an adequate showing of harm. The court further entered Utah R. Civ. P. 11 sanctions against Plaintiff and awarded attorney fees to Defendant. The Supreme Court reversed, holding (1) there was sufficient evidence of threatened harm - or at least genuine issues of material fact concerning such harm - to defeat Plaintiff’s motion for summary judgment; and (2) because Plaintiff prevailed on Defendant’s motion for summary judgment, Defendant could not be entitled to sanctions or fees. View "Innosys v. Mercer" on Justia Law