Justia Contracts Opinion Summaries

This matter involved a former presidential yacht whose owner (the LLC) and its sole member (together, Plaintiffs) co-induced Defendant by means of fraud to extend the owner a loan with the yacht as collateral. Under the operative loan documents, Defendant had the option to purchase up to a 100 percent interest in either the LLC or the yacht itself. Plaintiffs brought this case to enjoin Defendant from pursuing its rights in connection with the loan. Once the fraud came to light, Plaintiffs entered a stipulated order in default judgment (the judgment order). The judgment order provided that Defendant was entitled to exercise its rights under the loan documents, specifically including the option, and provided for the appointment of an independent counsel to determine outstanding current and potential liabilities of the LLC and the yacht. The judgment order retained the Court of Chancery’s jurisdiction to hear disputes arising out of the interpretation and enforcement of the order. The parties disagreed about the conclusions of the independent counsel concerning liabilities that may constitute liens against the LLC or the yacht. The Court of Chancery held (1) Defendant must exercise its option within sixty days of this letter opinion at the default option price as defined by the judgment order; and (2) the deduction for the liabilities used in reaching the default option price are as stated in the report of the independent counsel. View "Sequoia Presidential Yacht Group LLC v. FE Partners, LLC" on Justia Law

Prairie Supply, Inc. appealed a district court judgment ordering Prairie to pay Apple Electric, Inc. damages for conversion by the wrongful repossession of some ground heaters. In late 2011, Prairie and Apple entered into separate oral lease-to-own agreements for two ground heaters. The combined sales price for the heaters was $70,000. Apple took possession of the heaters and made monthly payments. After Apple made late payments, Prairie repossessed the heaters on July 1, 2012, and sued to recover past due rental payments. Apple had paid over $60,000 to Prairie at the time of repossession. At trial, Apple claimed the agreements were for the purchase of the heaters, and Prairie claimed the agreements were leases and it had the right to repossess the heaters after Apple made late payments. The district court concluded the parties' agreements were purchase agreements, not lease agreements; Prairie's repossession of the heaters was wrongful and constituted conversion; and Apple was entitled to damages. After the district court issued its memorandum decision, findings of fact, conclusions of law and order for judgment, Prairie moved for amended findings, additional findings, or in the alternative, a new trial. Prairie requested a new trial, arguing: (1) "[t]he damages awarded to [Apple] by the Court were excessive and not supported by law or the evidence presented at trial;" and (2) "there was no evidence presented as to the actual market value of the heaters." The court denied Prairie's motions and a final judgment was entered. Prairie appealed the district court's memorandum decision, findings of fact, conclusions of law and order for judgment, and judgment. Prairie did not appeal the court's order denying the motion for amended findings, additional findings, or in the alternative, a new trial. The Supreme Court affirmed, concluding its review of the issues raised by Prairie on appeal was limited to the issue of damages, and the award of damages to Apple was supported by the evidence. View "Prairie Supply, Inc. v. Apple Electric, Inc." on Justia Law

In 1996, the developer of Double Diamond Ranch Master Association (Association) entered into a maintenance agreement with the City of Reno. In 2012, the Association gave notice to the City that it was terminating the contract pursuant to Nev. Rev. Stat. 116.3105(2), which permits a homeowners’ association that provides at least ninety days’ notice to terminate “any contract…that is not in good faith or was unconscionable to the units’ owners at the time entered into.” The City rejected the Association’s notice of termination. Approximately twenty months later, the City brought an action against the Association seeking specific performance of the maintenance agreement. The Association filed a motion to dismiss, arguing that section 116.3105(2) required the City to file suit within ninety days. The district court denied the Association’s motion to dismiss. The Association subsequently petitioned the Supreme Court for a writ of mandamus or prohibition directing the district court to vacate its order denying the Association’s motion to dismiss. The Supreme Court denied the petition, holding that section 116.3105(2) does not act as a statute of limitations, and a recipient of an association’s notice of termination of a contract is not required to take legal action within ninety days. View "Double Diamond Ranch Master Ass’n v. Second Judicial Dist. Court" on Justia Law

In 1996, the developer of Double Diamond Ranch Master Association (Association) entered into a maintenance agreement with the City of Reno. In 2012, the Association gave notice to the City that it was terminating the contract pursuant to Nev. Rev. Stat. 116.3105(2), which permits a homeowners’ association that provides at least ninety days’ notice to terminate “any contract…that is not in good faith or was unconscionable to the units’ owners at the time entered into.” The City rejected the Association’s notice of termination. Approximately twenty months later, the City brought an action against the Association seeking specific performance of the maintenance agreement. The Association filed a motion to dismiss, arguing that section 116.3105(2) required the City to file suit within ninety days. The district court denied the Association’s motion to dismiss. The Association subsequently petitioned the Supreme Court for a writ of mandamus or prohibition directing the district court to vacate its order denying the Association’s motion to dismiss. The Supreme Court denied the petition, holding that section 116.3105(2) does not act as a statute of limitations, and a recipient of an association’s notice of termination of a contract is not required to take legal action within ninety days. View "Double Diamond Ranch Master Ass’n v. Second Judicial Dist. Court" on Justia Law

Voorhees Cattle Co. brought a foreclosure action against Dakota Feeding Co. (DFC). In answering the complaint, DFC brought a third party complaint against B and B Equipment, Inc. (B&B) for breach of contract. B&B counterclaimed, alleging breach of contract and impossibility of performance. After a jury trial, judgment was entered for Voorhees on the foreclosure claim and for B&B on its counterclaims against DFC. DFC satisfied the judgment granted to Voorhees, leaving DFC and B&B as the remaining parties to this appeal. DFC appealed, arguing that evidence admitted at trial violated the attorney-client privilege and that the error prejudicially tainted the trial. The Supreme Court affirmed, holding (1) the privileged evidence should not have been allowed, but the evidence did not prove, nor go to the heart of B&B’s claims; and (2) as a result, the erroneous admission of the privileged communications was not unfairly prejudicial to DFC as against B&B. View "Voorhees Cattle Co. v. Dakota Feeding Co." on Justia Law

Voorhees Cattle Co. brought a foreclosure action against Dakota Feeding Co. (DFC). In answering the complaint, DFC brought a third party complaint against B and B Equipment, Inc. (B&B) for breach of contract. B&B counterclaimed, alleging breach of contract and impossibility of performance. After a jury trial, judgment was entered for Voorhees on the foreclosure claim and for B&B on its counterclaims against DFC. DFC satisfied the judgment granted to Voorhees, leaving DFC and B&B as the remaining parties to this appeal. DFC appealed, arguing that evidence admitted at trial violated the attorney-client privilege and that the error prejudicially tainted the trial. The Supreme Court affirmed, holding (1) the privileged evidence should not have been allowed, but the evidence did not prove, nor go to the heart of B&B’s claims; and (2) as a result, the erroneous admission of the privileged communications was not unfairly prejudicial to DFC as against B&B. View "Voorhees Cattle Co. v. Dakota Feeding Co." on Justia Law

This case involved a series of shifting employment arrangements between Plaintiff and Defendant, TSI Semiconductors America, LLC (TSA). In 2009, Plaintiff began working for Tejas Silicon, Inc. under a written employment agreement (Agreement). In 2011, corporate restructuring led to Plaintiff’s termination with Tejas and the offer of new employment with TSA. The parties amended the Agreement in certain respects. After Plaintiff was furloughed in 2012, Plaintiff sued TSA in a California state court alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and California state law claims. TSA removed the case to federal district court. The district court entered summary judgment in favor of TSA, concluding that neither the reorganization, the non-renewal of the Agreement, nor the layoff constituted a termination without cause that triggered the duty to pay severance under the Agreement. The First Circuit reversed in part, affirmed in part, and remanded, holding (1) because genuine issues of material fact permeated the record, the district court erred in granting summary judgment for TSA on Plaintiff’s claim for severance benefits arising out of the 2011 reorganization; and (2) the district court did not err in granting summary judgment on Plaintiff’s claims regarding the 2012 non-renewal and the 2012 layoff. View "Mason v. Telefunken Semiconductors America, LLC" on Justia Law

CentiMark, a commercial roofer, hired Turnell as a laborer in 1978. In 1988 CentiMark promoted him to Chicago District Operations Manager. In his employment agreement, Turnell agreed to a non-disclosure provision and to restrictive covenants that prohibit “engag[ing] … in any Competing Business” during his employment and for two years afterward in any of the “regions and/or divisions and/or territories” in which he “operated” for CentiMark and “solicit[ing] the trade of, or trade with,” any of CentiMark’s “customers or suppliers, or prospective customers or suppliers” during his employment and for two years afterward. Turnell became Senior Vice President and Midwest Regional Manager. The company fired him in 2013, claiming that Turnell had misappropriated company resources and covered up fraudulent billing by his wife's company. Turnell claims the real reasons were his age, health issues, and high compensation. Turnell made little effort to find a job outside commercial roofing, but accepted an offer from Windward Roofing and contacted CentiMark customers. The court found Turnell’s covenants too broad, and entered a preliminary injunction, affirmed by the Seventh Circuit, that “Turnell shall not sell, attempt to sell, or help sell any products or services, or any combination thereof, related to commercial roofing to any person or entity who was a customer of Centimark Corporation as of January 8, 2013 and who is located in Illinois, Indiana, Michigan, Minnesota, North Dakota, South Dakota, or Wisconsin” and required CentiMark to post a $250,000 bond. View "Turnell v. Centimark Corp." on Justia Law

Northbound generates and sells life insurance leads, using the brand name “Leadbot,” but ran out of cash with a frozen line of credit and revenue that did not support its overhead. Norvax generates and sells health insurance leads. An asset purchase agreement was signed in 2009, “by and between” Northbound and Leadbot LLC, a subsidiary of Norvax that was formed to purchase the assets of Northbound. Under the agreement, Leadbot LLC was obligated to use the assets it acquired from Northbound in furtherance of the Leadbot brand. The purchase price was not paid in cash. Instead Northbound would receive an “earn-out” calculated as a percentage of the monthly net revenue of Leadbot LLC. The agreement also contained an Illinois choice-of-law clause. Northbound claims that Leadbot LLC and Norvax violated the agreement. The district court dismissed some claims and granted summary judgment for defendants on the remainder. The Seventh Circuit affirmed, reasoning that Norvax was not actually a party to the contract that was allegedly breached, nor is there any basis for holding Norvax liable for any breach by a subsidiary. View "Northbound Grp., Inc. v. Norvax, Inc." on Justia Law

At dispute in this case was compensation paid to Attorney by Law Firm for work Attorney performed on several class-action contingency fee cases involving the weight-loss pill Fen-Phen. Attorney was paid approximately fifteen percent of the fees generated by the Fen-Phen cases. Attorney filed suit claiming (1) the parties agreed that the general compensation agreement, which entitled Attorney to eighty percent of the fees he generated from hourly work, would apply to the fees generated by the Fen-Phen litigation; (2) under quantum meruit, Law Firm and additional defendants were unjustly enriched by his work; and (3) a second law firm that worked on the Fen-Phen litigation and received a portion of the fees was liable to him under Utah’s Fraudulent Transfer Act (FTA). The district court dismissed Attorney’s contract claim and concluded that Attorney failed to establish that he provided services more than the amount he received from the Fen-Phen fees. The Supreme Court (1) affirmed the dismissal of Attorney’s contract claim; (2) reversed the denial of Attorney’s jury demand and, sending the claim back to the jury, clarified the correct measure of damages on the quantum meruit claim; and (3) upheld the dismissal of the individual defendants from both the quantum meruit claim and the FTA claim. View "Jones v. Mackey Price Thompson & Ostler" on Justia Law