Justia Contracts Opinion Summaries

Two certificateholders in ACE Securities Corp., Home Equity Loan Trust sued DB Structured Products (DBSP) for failure to repurchase loans that purportedly did not conform to the representations and warranties of DBSP, which sponsored the transaction. The Trust later sought to substitute itself as plaintiff in place of the certificateholders. DBSP moved to dismiss the complaint as untimely, arguing that the Trust’s claims accrued as of March 28, 2006, more than six years before the Trust filed its complaint. DBSP further contended that the certificateholders did not validly commence this action and lacked standing to sue. Supreme Court denied DBSP’s motion to dismiss and held the Trust’s action to be timely.The Appellate Division reversed. The Court of Appeals affirmed, holding (1) the Trust’s cause of action against DBSP for breach of representations and warranties accrued at the point of contract execution on March 28, 2006; and (2) even assuming that the certificateholders possessed standing to sue, the two certificateholders did not validly commence this action because they failed to comply with the contractual condition precedent to suit. View "ACE Sec. Corp. v DB Structured Prods., Inc." on Justia Law

Farmer owned Arkat Nutrition, which owned the Plant One feed mill in Arkansas. Arkat Land owned Plant Two, which was leased to Arkat Nutrition, which produced animal feed. In 2007, a tornado damaged Plant One. Arkat decided not to repair the plant because its equipment had little useful life remaining. Debris from the tornado was removed, leaving scrap with potential value. Friedman made an oral contract with Farmer to act as a broker for the remaining Plant One equipment. Arkat Nutrition says that it was understood that it could also continue to attempt to find a buyer on its own. Friedman disagrees. Friedman sold some equipment and received a commission of $25,000. In 2010, Arkat Nutrition and Arkat Land transferred assets to a new company, Animal Nutrition, the equity interests of which were sold to Dad’s Products, which was not to be responsible for any investor or third-party claims against Animal Nutrition. Farmer claims that sale was planned since 2002. Dad’s later changed its name to Ainsworth and hired a third-party to remove remaining Plant One scrap. Friedman sued. The Eighth Circuit affirmed summary judgment in favor of the defendants, rejecting alter-ego claims and claims of unjust enrichment and promissory estoppel, and noting the limitations period. View "Friedman v. Farmer" on Justia Law

Plaintiffs filed suit against the Dominican Republic and INDRHI for breach of contract and unjust enrichment related to an irrigation project in the Dominican Republic. After the district court entered a default judgment in favor of plaintiffs, defendants moved to vacate the default judgment. The district court denied the motion and defendants appealed. While that appeal was pending, the Dominican Republic moved to vacate the default judgment for voidness under Federal Rule of Civil Procedure 60(b)(4). The district court denied the motion on the merits, finding that the Dominican Republic had waived its sovereign immunity. The Dominican Republic appealed. In these consolidated appeals, the court concluded that the district court erred by denying the Dominican Republic’s Rule 60(b)(4) motion to vacate for voidness the default judgment entered against the foreign nation because at least one statutory exception to the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. 1602-1611, applies; the district court abused its discretion by denying the Dominican Republic and INDRHI’s Rule 60(b)(1) motion to vacate for excusable neglect the default judgment entered against them because the factual findings underlying the district court's decision were unsupported by the record; and therefore, the court reversed and remanded for further proceedings. View "Architectural Ingenieria Siglo XXI v. Dominican Republic" on Justia Law

The Delaware Supreme Court certified two questions of New York law to the New York Court of Appeals. This case was a consolidated appeal in an insurance-coverage dispute from separate trial court judgments by the Delaware Court of Chancery and the Delaware Superior Court. Viking Pump, Inc. and Warren Pumps, LLC sought to recover under policies issued to Houdaille Industries, Inc. Viking claimed it was the successor to insurance policies that Liberty Mutual Insurance Company issued to Houdaille, or in the alternative, sought partition of the Liberty policy limits. Liberty, Viking and Warrant settled their dispute, but Viking and Warren then filed new complaints in the Court of Chancery against more than twenty other insurers that had issued excess policies to Houdaille. The Court of Chancery held that Houdaille's policies unambiguously provided for an all sums allocation. The case was then transferred to the Superior Court to determine several other issues. That court held that as a matter of New York law, Viking and Warren were obligated to horizontally exhaust all triggered "primary and umbrella insurance layers before tapping" any of Houdaille's excess coverage. The legal insurers in this appeal were controlled by New York law. As such, the Delaware Supreme Court certified two questions of New York law to the New York Court of Appeals, centering on the proper method of allocation and interpretation of the policies at issue here. View "In Re Viking Pump, Inc." on Justia Law

Developer filed suit against the University after the University terminated the lease agreement between the parties because Developer failed to make a rental payment. The district court granted summary judgment in favor of the University. The court vacated and remanded for further proceedings, concluding that there is a genuine dispute whether a rental payment was due on May 30, 2013, and therefore whether the University was entitled to terminate the lease and to collect damages. View "Howard Town Center Developer v. Howard University" on Justia Law

Plaintiffs filed a complaint against 24 Hour Fitness USA, Inc. (24 Hour) stating causes of action for premises liability, general negligence, and loss of consortium. Plaintiffs Etelvina and Pedro Jimenez appealed the grant of summary judgment in favor of 24 Hour. Etelvina sustained a catastrophic injury while using a treadmill at a 24 Hour facility in Sacramento. Etelvina’s expert opined that she fell backwards off of a moving treadmill and sustained severe head injuries when she hit her head on the exposed steel foot of a leg exercise machine that 24 Hour placed approximately three feet ten inches behind the treadmill. 24 Hour filed an answer to the complaint generally denying the allegations and claiming several affirmative defenses, including the defense that plaintiffs’ claims were barred by a liability release. Plaintiffs asserted that 24 Hour was grossly negligent in setting up the treadmill in a manner that violated the manufacturer’s safety instructions. On appeal, plaintiff argued that the trial court erred in granting summary judgment in 24 Hour’s favor because: (1) the liability release was not enforceable against plaintiffs’ claim of gross negligence; (2) the release was obtained by fraud and misrepresentation; and (3) the release only encompasses reasonably foreseeable risks and Etelvina’s injury was not reasonably foreseeable at the time she signed the release. After review, the Court of Appeal agreed with plaintiff's first two contentions. Accordingly, the Court reversed and remanded for further proceedings. View "Jimenez v. 24 Hour Fitness USA, Inc." on Justia Law

Defendant was a CEO and director of now bankrupt Agra Services of Canada, Inc (Agra Canada) and an officer and director of Agra USA. Agra Canada entered into a purchase agreement with Cooperative Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) under which Rabobank purchased and financed certain receivables of Agra Canada. Thereafter, Defendant and Eduardo Guzman Solis, Agra Canada’s president and a manager of both Agra businesses, signed personal guarantees in favor of Rabobank. After Guzman Solis died, an investigation revealed fraudulent receivables based on nonexistent transactions submitted by Guzman Solis. Rabobank sued Agra Canada, Agra USA, and the estate of Guzman Solis seeking to recover the millions of dollars owed to Rabobank under the purchase agreement and guarantees. Defendant appeared represented by counsel but failed to retain counsel for Agra USA. The district court entered default judgment against Agra USA. Rabobank then filed this action in state court alleging that Defendant was liable under the guaranty. The Appellate Division granted Rabobank summary judgment. Defendant appealed, arguing that the default judgment against him was obtained by Rabobank’s collusion. The Court of Appeals affirmed, holding (1) Defendant’s collusion claim constituted a defense barred by the language in the guaranty; and (2) Defendant’s claim of collusion was contradicted by the record. View "Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A. v. Navarro" on Justia Law

Buyer purchased a manufactured home from Sellers. The parties entered into a contract setting forth the terms of the sale and the parties obligations. The contract contained an arbitration provision under which Sellers retained the right to seek relief in a judicial forum for limited purposes. Buyer later brought a breach of contract action against Sellers, and Sellers filed a motion to compel arbitration. The trial court denied the motion to compel, holding that the non-mutuality remedies in the arbitration provision rendered it unconscionable and invalid. The court of appeals affirmed. The Supreme Court reversed, holding that Sellers’ retention of a judicial forum for limited purposes did not render the arbitration agreement unconscionable. View "Berent v. CMH Homes, Inc." on Justia Law

Sergio Acosta petitioned for a writ of mandamus to direct the circuit court to vacate an order granting a motion filed by Trinity Bank to strike Acosta's jury demand with respect to all counts in Acosta's counterclaim and third-party complaint in the bank's action against him. The bank filed filed suit seeking a judgment against Acosta for financial losses it incurred after Acosta defaulted on certain "Multipurpose Note and Security Agreement[s]" he had executed with the bank. The bank alleged that Acosta had executed two secured notes and one unsecured note, which, it said, Acosta had failed and/or refused to pay; that the bank had foreclosed on the properties pledged as collateral on the secured notes; and that proper credit had been applied to the notes. The bank sought a judgment for the balance due on the notes, plus interest, fees, costs, and attorney fees. Acosta filed a counterclaim against the bank, as well as a third-party complaint against two of its officers, alleging that he had entered into a business relationship with R&B Properties under the name of SilverPalm Properties, LLC; that loans from the bank were the principal source of funding for SilverPalm; that the financing plan was for SilverPalm to procure from the bank the funds to construct the properties, for SilverPalm to pay the interest on the notes until the properties were rented, and for SilverPalm to pay off the notes once the properties generated sufficient rental income to do so. Acosta and R&B Properties dissolved SilverPalm because of a downturn in the economy; but the bank induced that Acosta was personally liable for the notes previously secured only by SilverPalm The bank at some point advised Acosta that additional security was required to continue financing the notes, that Acosta declined to pledge additional security. The bank then called the notes due and foreclosed on the properties securing the notes. Acosta requested an accounting for the amounts claimed by the bank on the notes and the mortgages securing the notes, and he sought damages based on allegations of wantonness, breach of good faith and fair dealing, negligence, fraud, breach of fiduciary duty, unjust enrichment, and promissory estoppel. The counterclaim and third-party complaint included a demand for a jury trial. In its motion to strike Acosta's jury demand, the Bank relied on a jury-waiver provision in four Assignments of Rents and Leases that Acosta had executed in consideration of the notes. The trial court initially denied the bank's motion to strike, and then granted it after reconsideration. The Supreme Court concluded that Acosta demonstrated a clear legal right to a jury trial on the claims asserted in his counterclaim and third-party complaint. As such, the Court granted the petition and directed the trial court to vacate its order striking Acosta's jury demand. View "Ex parte Sergio Acosta." on Justia Law

Defendants hired various construction companies to assist in the construction of a house and barn on their property. Plaintiff was one of the subcontractors that worked on the project. Plaintiff brought this action against Defendants for breach of contract, book account, and unjust enrichment seeking payment for the work it had completed but for which it had not been paid. The superior court justice entered judgment for Plaintiff on its claim of unjust enrichment but entered judgment for Defendants on the remainder of Plaintiff’s claims. The trial justice also entered an order awarding costs to Plaintiff. The Supreme Court affirmed the superior court’s judgment but vacated and remanded the order, holding (1) the trial justice correctly found the three elements that a Rhode Island plaintiff must prove to recover on a claim of unjust enrichment; and (2) the trial justice erred in awarding Plaintiff’s “Application for Taxation of Costs” because the order explicitly included the fee generated by expert testimony. View "South County Post & Beam, Inc. v. McMahon" on Justia Law