Justia Contracts Opinion Summaries

Alfa Mutual General Insurance Company ("Alfa") petitioned for a writ of mandamus to direct the Mobile Circuit Court to grant its motion seeking to realign the parties to the underlying litigation so that Alfa may "opt out" of participation in the trial. In October 2012, respondent Mark Trotter was injured when a "road sweeper" he was operating was struck by a vehicle being operated by Daniel Elijah Davis, an uninsured motorist. In October 2014, Trotter sued Alfa seeking to recover uninsured/underinsured motorist ("UIM") benefits pursuant to a policy of insurance issued by Alfa to Trotter, which was in place at the time of the 2012 accident. Trotter did not include Davis as a codefendant in his action against Alfa. Alfa subsequently filed a third-party complaint adding Davis as a third-party defendant. Specifically, Alfa's third-party complaint alleged that, to the extent it was determined to be liable to Trotter for UIM benefits, then Alfa was subrogated to and entitled to recover the amount of that liability from Davis. Thereafter, Alfa filed a "Motion to Realign Parties" in which it asked to "opt out" of the litigation. Without explaining the findings on which its decision was based, the trial court denied Alfa's motion. The Alabama Supreme Court concluded after a review of the record, that Alfa has demonstrated a clear legal right to have its motion to realign the parties granted and to allow it to opt out of the underlying litigation. No authority is cited requiring that, in order to make the permitted election, Alfa must first release the right of subrogation to which it was also clearly entitled. View "Ex parte Alfa Mutual General Insurance Company." on Justia Law

The plaintiff in the underlying case, Brian Barze, sought a writ of mandamus to direct the Jefferson Circuit Court to set aside an order sealing a motion to stay filed by one of the defendants, James Holbrook. Barze filed suit against Sterne Agee Group, Inc., and Holbrook, the then CEO of Sterne Agee. Barze included claims of promissory fraud and fraudulent inducement, breach of contract, conversion, and defamation. In his complaint, Barze alleged that, in spring 2009, Sterne Agee had approached him about leaving his old company and becoming the chief financial officer ("CFO") of Sterne Agee and that Holbrook had told him that, if he joined Sterne Agee, Sterne Agee would pay him severance pay of at least one year's salary and bonus if the job with Sterne Agee did not work out. Barze alleged that he relied on Holbrook's promises and representations when he agreed to accept the job at Sterne Agee and when he left his former employer and gave up his opportunities there. Barze asserted that, after he started working with Sterne Agee, he was presented with an employment agreement to sign; that Holbrook assured him that the employment agreement was signed by all employees; that Holbrook assured him that Holbrook could and would take care of Barze and honor their oral agreement regarding the severance pay of at least one year's salary and bonus; and that Holbrook told Barze that he was committed to Barze as the long-term CFO of Sterne Agee. Barze asserted that, in reliance on Holbrook's assertions, he signed the employment agreement. Upon review of the dispute, the Supreme Court concluded that the trial court did not comply with the controlling case law procedure set forth in "Holland v. Eads" (614 So.2d 1012 (Ala. 1993)), it exceeded its discretion when it granted Holbrook's motion and directed the circuit clerk to seal Holbrook's motion to stay the underlying civil action. Accordingly, the Supreme Court granted the petition for the writ of mandamus and directed the trial court to vacate its July 23, 2014, order granting Holbrook's motion for leave to file his motion to stay under seal and sealing Holbrook's motion to stay. View "Ex parte Barze." on Justia Law

In 2011, Respondents sued Petitioner over two acres of land that Petitioner purchased from Respondents in 2006 through a trust. The deed mistakenly - but unambiguously - failed to reserve mineral rights. When Respondents discovered the error, they demanded that Petitioner issue a correction deed, but Petitioner claimed that the statute of limitations barred Respondents’ claims over the deed. Respondents urged the trial court to declare as a matter of law that the deed did not convey mineral rights and argued that Petitioner breached the sales contract by refusing to execute a correction deed. The trial court ruled that Respondents’ claims were time-barred. The court of appeals reversed, concluding that the discovery rule delayed the accrual of limitations for a deed-reformation claim. The Supreme Court reversed, holding (1) a plainly obvious and material omission in an unambiguous deed is not a type of injury for which the discovery rule is available because it charges parties with irrefutable notice for limitations purposes; (2) Tex. Prop. Code Ann. 13.002 provides all persons, including the grantor, with notice of the deed’s contents as well; and (3) therefore, a grantor who signs an unambiguous deed is presumed as a matter of law to have immediate knowledge of material omissions. Accordingly, Respondents’ suit was untimely. View "Cosgrove v. Cade" on Justia Law

At issue in this case was the scope of attorneys’ immunity from civil liability to non-clients. Philip Byrd and Nancy Simenstad commenced divorce proceedings. Simenstad was represented in the proceedings by Cantey Hanger, LLP. The parties eventually settled. The decree awarded Simenstad three aircraft as her separate property, including a Piper Seminole that had been owned by Lucy Leasing, Co., LLC. Byrd and two of the companies awarded to Byrd in the decree later sued Simenstad and Cantey Hanger alleging that after the decree was entered, Defendants falsified a bill of sale transferring the Piper Seminole from Lucy Leasing to a third party in order to shift tax liability for the aircraft to Byrd in contravention of the divorce decree. The trial court granted summary judgment to Cantey Hanger on attorney-immunity grounds. The court of appeals reversed, concluding that the firm’s alleged misconduct was unrelated to the divorce litigation and that the firm had not conclusively established its entitlement to immunity. The Supreme Court reversed the court of appeals and reinstated the trial court’s judgment, holding that Canter Hanger conclusively established that it is immune from civil liability to Plaintiffs, and therefore, the trial court’s grant of summary judgment was proper. View "Cantey Hanger, LLP v. Byrd" on Justia Law

Plaintiff sustained injuries at a motel while he was on duty for Union Pacific Railroad Company. Plaintiff sued Union Pacific and the motel. The parties later settled. Thereafter, Union Pacific asserted a contractual right of subrogation to the extent of medical payments made on Plaintiff’s behalf by the Union Pacific Railroad Employees Health Systems. The contract created a lien or right of reimbursement if a third party is liable but not if Union Pacific is liable. The trial court concluded that Union Pacific did not have a valid lien, right of reimbursement or right of subrogation because it was party to the settlement. The Supreme Court affirmed, holding that, under the unambiguous terms of the contract, Union Pacific did not have a lien or right of reimbursement. View "Kasel v. Union Pacific R.R. Co." on Justia Law

The U.S. Court of Appeals for the Second Circuit certified a question of Delaware law arising out of an appeal from a decision issued by the U.S. District Court for the Southern District of New York. The question pertained to contract interpretation. Plaintiff-appellant NAF Holdings secured a contractual commitment of its contracting counterparty, defendant Li & Fung (Trading) Limited, to render a benefit to a third party. The counterparty breached that commitment. Could "the promisee-plaintiff bring a direct suit against the promisor for damages suffered by the plaintiff resulting from the promisor's breach, notwithstanding that (i) the third-party beneficiary of the contract is a corporation in which the plaintiff-promisee owns stock; and (ii) the plaintiff-promisee's loss derives indirectly from the loss suffered by the third-party beneficiary corporation; or must the court grant the motion of the promisor-defendant to dismiss the suit on the theory that the plaintiff may enforce the contract only through a derivative action brought in the name of the third-party beneficiary corporation?" The Delaware Supreme Court answered that under Delaware law, a party to a commercial contract who sues to enforce its contractual rights can bring a direct contract action under Delaware law. "Although the relationship of that party to the third-party beneficiary might well have relevance in determining whether the contract claim is viable as a matter of contract law, nothing in Delaware law requires the promisee-plaintiff's contract claim to be prosecuted as a derivative action. " View "NAF Holdings, LLC v. LI & Fung (Trading) Limited" on Justia Law

Krista Gilmore was employed by Excellence Community Management (ECM), an LLC, and signed an employment agreement containing restrictive covenants. The owners and operators of ECM later sold 100 percent of their membership interest in the LLC to First Services Residential Management Nevada (FSRM). Thereafter, Gilmore’s employment with ECM terminated, and Gilmore began working for Mesa Management, LLC. ECM sent Gilmore a cease-and-desist letter alleging that Gilmore violated her employment agreement by contacting ECM’s clients and soliciting them to hire Mesa. ECM filed a complaint seeking damages and injunctive relief against Gilmore and Mesa (collectively, Respondents). The district court denied ECM’s motion for a preliminary injunction, concluding that the agreement was not assignable to FSRM without Gilmore consenting to the assignment. The Supreme Court affirmed, holding (1) the sale of 100 percent of the membership interest in an LLC does not affect the enforcement of an employee’s employment contract containing a restrictive covenant because such a sale does not create a new entity, and therefore, ECM may enforce a restrictive covenant in Gilmore’s employment contract without Gilmore’s consent of assignment; but (2) ECM failed to show that it would suffer irreparable harm for which compensatory damages were not an adequate remedy if the district court did not enter a preliminary injunction. View "Excellence Cmty. Mgmt. v. Gilmore" on Justia Law

Plaintiffs Jourdan Rivers Estates, LLC (JRE) and Jourdan River Resort and Yacht Club (Yacht Club), filed suit for damages in December 2011 against Defendants Scott Favre, Cindy Favre, Jefferson Parker, and CB Partners, LLC d/b/a Cinque Bambini. CB Partners, LLC d/b/a Cinque Bambini was later dismissed from the action without prejudice. The complaint alleged multiple claims against Defendants, including slander of title; slander and/or defamation; trespass; nuisance; tortious interference with use of property; tortious interference with contractual relationships; harassment and intimidation of plaintiffs' agents and intentional infliction of emotional distress upon plaintiffs' agents; assault upon plaintiffs' agents; willful destruction of plaintiffs' property; negligence; gross, willful, and wanton negligence; malicious prosecution; unjust enrichment; false imprisonment; and any other applicable theory of law giving rise to a cause of action. Defendants moved to dismiss for failure to state a claim under Rule 12(b)(6) of the Mississippi Rules of Civil Procedure. The circuit court granted the motion in part and denied it in part. The circuit court dismissed all of Yacht Club's claims in relation to the claim(s) that Defendants made false representations to the Hancock County Board of Supervisors and/or Hancock County employees, finding that such allegations fell under the "Noerr-Pennington" doctrine, expressly adopted by the Mississippi Supreme Court. The circuit court dismissed JRE's claims of slander of title, slander and/or defamation; harassment; assault; and false imprisonment and intentional infliction of emotional distress because each claim constituted an intentional tort and was barred under the statute of limitations. The circuit court denied Defendants' motion to dismiss as to JRE's claims for trespass; nuisance; tortious interference with use of property; tortious interference with contractual relationships; willful destruction of property; negligence; gross, willful, and wanton negligence; malicious prosecution; and unjust enrichment. Plaintiffs thereafter petitioned for an interlocutory appeal. Because the Supreme Court found that Defendants' Rule 12(b)(6) motion should have been converted into a motion for summary judgment, as provided in Rule 56 of the Mississippi Rules of Civil Procedure, it reversed the circuit court's order granting the Rule 12(b)(6) motion and remanded for further proceedings. View "Jourdan River Estates, LLC v. Favre" on Justia Law

Appellants and Appellees owned property on two sides of Hurricane Creek. Appellants alleged that Appellees and past owners of the property placed fill material in the floodway and floodplain of Hurricane Creek and that, since that time, Appellants had experienced an increased frequency and extent of flooding on their property. The parties subsequently reported to the trial court that they had reached a settlement. However, the proposed settlement contained a provision releasing claims Appellants “may have in the future.” Appellants disputed the scope of the release. The circuit court granted Appellee’s motion to enforce settlement agreement, concluding that the agreement and release encompassed the terms actually agreed on by the parties. The Supreme Court reversed, holding that the trial court’s grant of Appellee’s motion to enforce settlement was in error where there was no agreement between the parties as to the scope of the release. View "Billingsley v. Benton NWA Props., LLC" on Justia Law

Appellant, a family-owned retail clothing and footwear business with two stores in Massachusetts, had sold Nike footwear for approximately twenty-eight years before Nike notified Appellant that it was terminating the parties’ business relationship. Appellant sued Nike in Massachusetts state court, alleging contractual claims and a claim under Mass. Gen. Laws ch. 93A. Nike removed the suit to federal court and then moved to dismiss under Fed. R. Civ. P. 12(b)(6), alleging that its invoices included a forum selection clause requiring Appellant to file its claims in Oregon, not Massachusetts. The district court agreed and dismissed Appellant’s complaint. The First Circuit affirmed, holding that the forum selection clause was valid and enforceable, and the district court properly dismissed the present action. View "Carter's of New Bedford, Inc. v. Nike, Inc." on Justia Law