Justia Contracts Opinion Summaries

Roy Caputo, Wade Faerber, and Matthew Neel leased commercial space from DKN Holdings LLC and were each jointly and severally liable on this contract. Caputo later sued DKN for, inter alia, breach of contract. DKN cross-complained for monies due. The court rejected Caputo’s claims and awarded $2.8 million in DKN’s cross-complaint. Before the statement of decision in the Caputo action was filed, DKN sued Faerber and Neel for breach of the lease. Faerber demurred, arguing that suit against him was barred by the rule against splitting a cause of action because DKN’s rights under the lease had been adjudicated in the Caputo action. The trial court sustained the demurrer and entered judgment for Faerber. The Court of Appeal affirmed, concluding that a second suit is barred after entry of judgment against one of the contracting parties. The Supreme Court reversed, holding (1) joint and several liability does not implicate the “primary rights” doctrine wherein a cause of action arises from the invasion of a primary right and gives rise to only one cause of action; (2) the facts of this case do not support preclusion; and (3) Plaintiff has separate breach of contract claims against each defendant alleged to be jointly and severally liable. View "DKN Holdings LLC v. Faerber" on Justia Law

VDF has trademark and patent rights in “CoffeeBerry” extract and licensed J&J to make and sell CoffeeBerry-based skin-care products. VDF was entitled to “running royalties,” based on the number of sales by the licensee, or by sublicensees. The license permitted J&J to sublicense its rights and required J&J to pay a minimum quarterly royalty if running royalties fell below a specified level. The license could not be assigned without written permission, but it did not forbid a change of control of J&J. J&J sublicensed Stiefel, a manufacturer of dermatological products. Four years later, J&J’s owners sold their interests to Stiefel for $8.5 million. J&J became a Stiefel subsidiary. After buying J&J’s stock, Stiefel engineered amended the sublicence, reducing the alternative minimum royalties that Stiefel owed J&J and diverting part of the license-revenue stream from VDF and J&J to Stiefel. VDF filed suit, alleging de facto assignment and breach of contract. The Seventh Circuit affirmed summary judgment in favor of the defendants with respect to claims that they engineered an unauthorized assignment of the license and that the $8.5 million paid for J&J was really a purchase of J&J’s anticipated sales revenue, so that part of that revenue should have gone to VDF as advance royalties. View "VDF Futureceuticals, Inc. v. Stiefel Labs, Inc." on Justia Law

This case involved a lease agreement between Greyhound Lines, Inc., the lessee, and Utah Transit Authority (UTA), the lessor, for a section of UTA’s intermodal transportation facility (intermodal hub). The insurance procurement provision of the lease agreement required Greyhound to purchase commercial general liability insurance covering UTA. At issue was whether the provision required that this insurance cover UTA’s negligent acts. This litigation resulted from a Greyhound passenger’s fall from a concrete pedestrian ramp during a layover at the intermodal hub. UTA admitted negligence in not installing a handrail on the pedestrian ramp. UTA settled the injured passenger’s claim and requested that Greyhound reimburse it for the cost of the claim under the lease agreement. Greyhound refused. The district court entered judgment against Greyhound. The Supreme Court affirmed, holding (1) under Utah law, an agreement to procure insurance for the benefit of another is not subject to strict construction; (2) the district court did not err when it concluded that the injured passenger’s claim triggered Greyhound’s duty to procure insurance that covered UTA’s negligent acts; and (3) the district court did not abuse its discretion in awarding UTA’s attorney fees. View "Utah Transit Auth. v. Greyhound Lines, Inc." on Justia Law

Procaccio purchased its workers' compensation insurance from West Bend. This litigation concerns three policy years: 2006, 2007, and 2010. Procaccio contends that West Bend’s offset procedure effectively nullified its Illinois Contracting Classification Premium Adjustment Program (ICC) credit for these policy years, resulting in substantial overcharges. The district court agreed and awarded a large sum in damages. The court concluded that the insurance policy contained no agreement to adjust the Schedule Modification credit after the ICC credit became due; West Bend needs parol evidence to prove its version of the parties’ agreement, but the insurance contract was fully integrated so any evidence of an oral understanding with Procaccio’s president is inadmissible; and while West Bend had the unilateral right to issue endorsements, that authority is cabined by contractual and statutory restrictions on its ability to alter its rates. The court further concluded that, even if the Schedule Modification credit was artificially inflated for these policy years, West Bend was not permitted to reduce it based on Procaccio’s ICC credit. Accordingly, the court affirmed the district court's judgment. View "West Bend Mut. Ins. Co. v. Procaccio Painting & Drywall" on Justia Law

Appellants Branch Banking & Trust Company ("BB&T"), Rusty Winfree, and Todd Fullington appealed a circuit court judgment entered in favor of Rex Nichols ("Sonny") and Claudene Nichols on the Nicholses' claims against appellants and on BB&T's counterclaim against the Nicholses. In late 2005, Sonny began talking to Winfree about obtaining financing from Colonial Bank ("Colonial"), Winfree's employer, for the purchase of approximately 500 acres of real property in Stapleton, Alabama. The Nicholses intended to develop the Stapleton property into a subdivision. In February 2006, the Nicholses executed a loan agreement with Colonial, in which Colonial agreed to lend the Nicholses close to $2.8 million to purchase the property. Sonny testified that in late 2007, as the maturity date on the note approached, he began contacting Colonial regarding renewing the loan; he further testified that, around the same time, Winfree became slow to communicate with him. Sonny also testified that before the February 27, 2008, maturity date on the promissory note, he spoke to Fullington about renewing the loan, with Colonial carrying the interest going forward. A few weeks later, the Nicholses were notified that Colonial would not carry the interest on the loan or provide additional funds for development of the property. Colonial ultimately renewed the terms of the note until Colonial failed in August 2009. The FDIC assumed control of its assets and liabilities. The FDIC sold many of Colonial's assets and liabilities to BB&T, including the Nicholses' loan. Fullington was hired by BB&T; Winfree was not. In early November 2009, BB&T informed the Nicholses that it would not lend them additional funds to develop the property. The Nicholses stopped making interest payments on the loan in November 2009. On March 10, 2010, the Nicholses sued the appellants and fictitiously named defendants, alleging fraud, reformation, negligence, wantonness, and breach of fiduciary duty against all appellants. Against BB&T, the Nicholses also alleged a claim of unjust enrichment and sought damages on a theory of promissory estoppel. The appellants separately moved the circuit court to dismiss the complaint pursuant to Rule 12(b)(6), Ala. R. Civ. P. BB&T also filed a counterclaim, alleging that the Nicholses had defaulted on their obligations under a June 2009 promissory note and seeking damages related to that default. The circuit court denied the motions to dismiss the complaint but granted a motion to strike the request for a jury trial. Upon review, the Supreme Court held that the circuit court erred in entering a judgment in favor of the Nicholses on their claims against the appellants and on BB&T's counterclaim against them. The judgment was reversed and the case remanded with instructions to the circuit court to enter a judgment in favor of the appellants on the Nicholses' claims against them and in favor of BB&T on its counterclaim against the Nicholses and to determine the damages to be awarded on the counterclaim. View "Branch Banking & Trust Company v. Nichols" on Justia Law

Plaintiff filed suit against defendant, a wood manufacturer, alleging that wood he bought for a fence at his home was not properly pressure-treated and that it prematurely rotted. The district court dismissed plaintiff's claims under the Alabama Deceptive Trade Practices Act (ADTPA), Ala. Code 8-19-5(5), (7), and for breach of express warranty. The court held that where a conflict exists between Federal Rule of Civil Procedure 23, which authorizes class actions including for consumer claims of this kind, and the ADTPA, which creates a private right of action but forbids private class actions, Rule 23 controls. The court also concluded that Alabama law allows a consumer to recover for breach of an express warranty, even in the absence of privity, in some circumstances. In this case, the court held that the complaint adequately alleges the required circumstances and thus states an express warranty claim on which relief can be granted. Accordingly, the court reversed and remanded. View "Lisk v. Lumber One Wood Preserving" on Justia Law

This appeal concerns the District's construction of an ambitious project to impound water until it can be cleaned up and released safely: the Tunnel and Reservoir Plan (TARP). The United States and the State of Illinois jointly filed suit, under sections 301 and 309 of the Clean Water Act, 33 U.S.C. 1311, 1319, seeking an order that the District improve the TARP’s performance, accelerate its completion date, and do more to contain and mitigate overflows in the interim. The Alliance was permitted to intervene. The district court entered a proposed consent decree that accompanied the complaint and rejected the Alliance's protest of the proposal. The district judge also concluded that the settlement binds the Alliance. The Alliance appealed, arguing that it cannot be bound by the consent decree - essentially a contract - to which it did not agree. The court concluded that the consent decree that the district court has approved is reasonable in light of the current infrastructure, the costs of doing things differently (no one proposes to build a new sewer system or redo the Deep Tunnel project), and the limits of knowledge about what will happen when the system is completed. Because the decree is the outcome of diligent prosecution, it binds would-be private litigants such as the Alliance. Accordingly, the court affirmed the judgment. View "United States v. Metropolitan Water Reclamation" on Justia Law

Plaintiff filed suit against MBCC, alleging claims arising from MBCC's failure to timely release a lien placed on her residence after she satisfied her underlying debt obligation. The district court granted summary judgment to MBCC and plaintiff appealed. The court rejected plaintiff's claims for breach of contract; slander of title; violation of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601 et seq.; violation of the Virginia Consumer Protection Act (VCPA), Va. Code 59.1-200; violation of Virginia Code 55-66.3; and declaratory judgment. Therefore, the court affirmed the district court's judgment. The court noted the substandard nature of MBCC’s conduct in releasing the lien on plaintiff’s home. While the various statutory barriers cited negate plaintiff’s claims, had she acted diligently she may have had viable claims at least as to breach of contract and Va. Code 55-66.3(B). Finally, the court stated that MBCC would be well served to review its business practices to forestall such claims in future cases. View "Poindexter v. Mercedes-Benz Credit Corp." on Justia Law

Ash Park, LLC entered into a one-party listing contract with Re/Max Select, LLC providing that Ash Park shall pay a broker’s commission to Re/Max if Ash Park enters into an “enforceable contract” for the sale of a parcel of vacant land. Ash Park entered into a contract for the sale of the land with Alexander & Bishop, LLC, but Alexander & Bishop later breached the purchase contract, and the sale of the land was never consummated. The circuit court declared that Ash Park owed no broker’s commission to Re/Max and ordered Re/Max’s broker lien discharged from the property. The court of appeals reversed. The Supreme Court affirmed, holding that the purchase contract between Ash Park and Alexander & Bishop constituted an “enforceable contract” within the meaning of the listing contract between Ash Park and Re/Max, and therefore, Re/Max was entitled to a broker’s commission even though Alexander & Bishop breached the purchase contract and the sale was never consummated. View "Ash Park, LLC v. Alexander & Bishop, Ltd." on Justia Law

Graham sold insurance for American Family from 1988 until 2011. In 1996, they entered into an Agent Agreement. In 2010, following a customer complaint, American Family concluded that Graham had increased coverage and added endorsements without customer permission, increasing premiums; improperly applied multi-vehicle discounts to accounts with only one car; and changed vehicle-rating symbols used to assign risk and determine appropriate premiums for automobile insurance. American Famly terminated the Agreement. Weeks later, Graham formed an independent agency and sent letters to approximately 1,500 of his former American Family customers telling them he no longer represented American Family and had signed an agreement not to solicit or induce former customers for one year, but was not prohibited from serving needs not covered by American Family. Graham stated he now represented over 50 companies and could offer clients “more choices, expanded coverage, and excellent rates” that might be “better suited for your needs.” If a former customer contacted Graham, the customer was asked to sign a “non-inducement form.” American Family sued. Graham counterclaimed for wrongful termination. American Family asserted that Graham’s conduct qualified as “dishonest,” obviating the need for notice under the Agreement. The Eighth Circuit affirmed enforcement of a stipulated damages clause in the Agreement, in favor of American Family. View "Am. Family Mut, Ins. Co. v. Graham" on Justia Law