Justia Contracts Opinion Summaries

Plaintiff, a property owner, and Defendant, a tenant, entered into a one-year commercial rental lease agreement. Prior to the end of the one-year term, the parties extended the lease for a nine-year term. Several months after executing the lease extestion, Defendant vacated the premises and ceased paying rent. Plaintiff commenced this action for rent arrears and an amount equal to the future remaining rent owed on the lease. Supreme Court entered judgment for Plaintiff in the amount of $1,488,604, consisting of the rent remaining due under the lease, reduced by the amount of rent Plaintiff was able to collect by reletting the premises. Defendants appealed, arguing that Plaintiff was barred from collecting unpaid future rents pursuant to an acceleration clause in the leasehold agreement. The Court of Appeals affirmed as modified, holding that the court below erred by limiting the damages hearing to whether Plaintiff relet the premises without allowing Defendants the opportunity to present evidence that the undiscounted accelerated rent amount was disproportionate to Plaintiff’s actual losses, notwithstanding that Plaintiff had possession and no obligation to mitigate. View "172 Van Duzer Realty Corp. v Globe Alumni Student Assistance Ass’n, Inc." on Justia Law

Plaintiff, a law student, filed a breach of contract suit against a lawyer who extended a "million-dollar challenge" on national television while representing a client accused of murder. The lawyer denied payment, claiming that he did not make a serious offer. The court concluded that the district court properly applied Florida law to plaintiff's claim. The court did not find that the lawyer's statements were such that a reasonable, objective person would have understood them to be an invitation to contract, regardless of whether the court looks to the unedited interview or the edited television broadcast seen by plaintiff. Neither the content of the lawyer's statements, nor the circumstances in which he made them, nor the conduct of the parties reflects the assent necessary to establish an actionable offer. The court found no genuine issue as to whether the parties' conduct implied a contractual understanding where the lawyer's spoken words, the circumstances in which those words were said, and the parties' conduct are all undisputed. Accordingly, the court affirmed the judgment of the district court. View "Kolodziej v. Mason" on Justia Law

Plaintiff, a construction company, filed a five-count complaint in superior court against Defendants, alleging breach of contract, quantum meruit, unjust enrichment, and violation of the Prompt Payment Act. In the fifth count of the complaint, Plaintiff sought enforcement of a mechanic’s lien it recorded against Defendants’ property. Plaintiff then moved for summary judgment on its claims for breach of contract, violation of the Prompt Payment Act, and enforcement of the mechanic’s lien. The superior court granted summary judgment for Plaintiff on those three counts but made no mention of Plaintiff’s quantum meruit or unjust enrichment claims. Defendants appealed. The Supreme Court dismissed the appeal as interlocutory, as there was no final judgment on any of Plaintiff’s causes of action where two of Plaintiff’s claims were still pending. View "Warren Constr. Group, LLC v. Reis" on Justia Law

Danko practiced law with the firm of O’Reilly & Collins, until, in 2009, Danko sued O’Reilly, as an individual, and O’Reilly & Collins, for unpaid wages. Before trial, O’Reilly, as an individual, obtained directed verdict. In 2012, judgment was entered in favor of Danko for more than $2,000,000. Danko filed moved to amend the judgment and the costs and fee order “to include Terry O’Reilly as a judgment debtor for all amounts owed to Michael Danko” on the ground that O’Reilly knew that the firm owed Danko more than $2 million, but drew out all the firm’s available funds without reserving any amounts to satisfy the debt he knew was owed to Danko, telling Danko “you will not be able to execute on any judgment.” The court of appeal affirmed the trial court’s amendment of the judgment, citing Code Civ. Proc., 187. The court rejected arguments that the amendment was entered in violation of a stay in the bankruptcy of the firm; the amendment was precluded by the doctrine of res judicata; and the amendment was contrary to the principles governing collateral estoppel. View "Danko v. O'Reilly" on Justia Law

In 2008 Motorola agreed to make a good-faith effort to purchase two percent of its cell-phone user-manual needs from Druckzentrum, a printer based in Germany. After a year, Motorola’s sales contracted sharply. Motorola consolidated its cell-phone manufacturing and distribution operations in China, buying all related print products there. Motorola notified Druckzentrum. The companies continued to do business for a few months. After losing Motorola’s business Druckzentrum entered bankruptcy and sued Motorola, alleging breach of contract and fraud in the inducement. Druckzentrum claimed that the contract gave it an exclusive right to all of Motorola’s user-manual printing business for cell phones sold in Europe, the Middle East, and Asia during the contract period. The district judge entered summary judgment for Motorola. The Seventh Circuit affirmed. The written contract contained no promise of an exclusive right and was fully integrated, so Druckzentrum cannot use parol evidence of prior understandings. Although Motorola promised to make a good-faith effort, the contract listed reasons Motorola might justifiably miss the target, including business downturns. There was no evidence of bad faith. The evidence was insufficient to create a jury issue on the claim that Motorola fraudulently induced Druckzentrum to enter into or continue the contract. View "Druckzentrum Harry Jung GmbH v. Motorola Mobility LLC" on Justia Law

Ibson and her family were insured by UHS through a policy available to her to as a member of her law firm. Due to an error, UHS began informing Ibson’s medical providers that Ibson and her family no longer had insurance coverage. Although UHS eventually paid the claims it should have paid all along, Ibson sued, raising state law claims of breach of contract, negligence, and bad faith, and seeking punitive damages. UHS responded that Ibson’s claims were preempted by the Employee Retirement Income Security Act (ERISA) and barred by the policy’s three-year contractual limitations period. The district court agreed and entered summary. The Eighth Circuit reversed and remanded, agreeing that Ibson’s state law claims are preempted under ERISA, but rejecting entry of summary judgment on the basis of the three-year contractual limitations period. View "Ibson v. United Healthcare Servs., Inc." on Justia Law

Borrowers executed the Note in favor of GACC in the amount of $62,000,000, with a maturity date of August 2016. Borrowers, as trustors, executed in favor of Chicago Title Company, as trustee, a “Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing” for the benefit of GACC with respect to the real property security—the Trust Property—which included real property in Los Angeles County. The individual defendants executed a Guaranty of “all obligations, requirements, and indemnities of Borrowers under the Loan Documents.” Through various assignments and a merger, plaintiff became the holder of the Loan Documents. In 2011, plaintiffs claimed default by failure to make various required payments and purported to accelerate the loan and claim interest at the default rate. Borrowers apparently filed a voluntary bankruptcy petition under Chapter 11. The trial court granted plaintiff summary judgment of $81,850,619.33, which included a “Yield Maintenance Amount”—i.e. a prepayment fee—of $14,007,811.30. The court of appeal reversed, holding that even though the legal issue was not raised before the trial court, the documents should be interpreted so that the prepayment obligation only accrues upon payment and not on acceleration of the Note. View "U.S. Bank Nat'l Ass'n v. Yashouafar" on Justia Law

The City of Oklahoma City charged Christopher Tucker with municipal misdemeanor offenses of interfering with official process, obstructing an officer, and failing to obey lawful commands of an officer. Tucker signed an agreement for the Cochran Firm-Criminal Defense, Birmingham, L.L.C. to provide him with legal representation for his scheduled trial in October of 2010. Tucker was found guilty of a municipal charge. Tucker alleged that the firm's Case Manager informed him that the law firm would engage in a four to five-day trial to defend him, the law firm would provide an experienced trial lawyer with twenty to thirty years of experience to represent him at trial, and that the law firm "had attorneys who were licensed to practice in Oklahoma and who would in fact defend the Plaintiff in trial . . . ." He alleged that these statements were untrue and were made to fraudulently induce him to enter into an agreement for legal services and to pay "outrageous fees." From Tucker's complaint, he alleged: (1) the firm required a non-refundable retainer of $13,690.00 for legal representation for the trial; (2) after he signed the agreement, the Cochran Firm informed him that a specific attorney would represent him but that another showed up at trial; (3) the morning of his trial was the first time he met the attorney who actually represented him at his trial; and (4) the firm failed to properly represent him. After filing an amended motion to dismiss, the trial court determined that the forum-selection clause in the retainer agreement should be judicially enforced. The trial court also determined that enforcement of a forum-selection clause would not be unfair or unreasonable under the circumstances. The trial court dismissed the action for improper venue. Tucker appealed, and the Court of Civil Appeals concluded that the forum-selection clause should not have been enforced, reversed the trial court's order dismissing his claims, and remanded the matter for further proceedings in the District Court. The law firm petitioned for certiorari. After review, the Supreme Court concluded: (1) when a parties' agreement has an interstate forum-selection clause and a party seeks its judicial enforcement in an Oklahoma District Court by seeking dismissal of the Oklahoma proceeding, then the procedure for its enforcement is by a motion pursuant to 12 O.S. section 2012(B)(6), or Rule 13 motion for summary judgment; and (2) an interstate forum-selection clause is separable from the contract in which it appears, and its validity like any other provision in a contract is subject to the requirements of a valid contract. The appellate court's decision was vacated and the case remanded for further proceedings. View "Tucker v. Cochran Firm-Criminal Defense Birmingham, LLC" on Justia Law

Hyundai Amco America, Inc. and S3H, Inc. entered into a subcontractor services agreement. According to the agreement, disputes would be subject to arbitration. Hyundai Amco sued S3H for breaching the agreement, as well as for other related causes of action. S3H filed a motion to compel arbitration; the trial court denied the motion on the ground that S3H had failed to allege: (1) it demanded arbitration, and (2) Hyundai Amco refused. S3H appealed, and the Court of Appeal reversed: under Code of Civil Procedure section 1281.2, a party requesting a court order for arbitration must prove the existence of a written agreement to arbitrate, and that the other party refuses to arbitrate their controversy. S3H unquestionably established the existence of the parties’ written agreement containing an arbitration provision; Hyundai Amco did not dispute this fact. The Court held that S3H was not required to make a formal demand for arbitration because Hyundai Amco’s filing of a complaint invoked the protections and procedures of the court system, and thus was an effective refusal of arbitration. S3H met its burden under section 1281.2. View "Hyundai Amco v. S3H, Inc." on Justia Law

Marina Pacifica was built on Long Beach waterfront land owned by McGrath and leased to the limited partnership (LP) in the 1970s. The ground lease was subdivided into 570 leases, one for each condominium unit. When LP sold a unit, it assigned the unit lease to the purchaser. The leases required owners to pay monthly rent to McGrath and an “assignment fee” to LP. Both payments were nominal ($15) until 2006, when they would be recalculated so that together, they would equal 10 percent of the value of the underlying land. In 1999, the Homeowners Association purchased the underlying land from McGrath for $17 million. Each owner paid a pro rata share. Owners no longer pay rent. The HOA attempted to buy out the assignment fee before the 2006 adjustment. In 2000, it purchased the interests of two limited partners (56.25 percent) for $5 million. It was unable to reach agreement with Lansdale to buy his 43.75 percent interest. Litigation resulted in a finding that the land’s fair market value was $60,615,500. The HOA instructed owners not to pay and filed suit, alleging that the assignment fee is invalid or overstated, and that the purchase of the underlying land extinguished the lease. The court of appeal reversed a holding that the assignment fee was an invalid transfer fee after December 31, 2008, under Civil Code 1098 and 1098.5 and directed the court to enter judgment for the HOA on contract claims. View "Marina Pac. Homeowners Ass'n v. So. Cal. Fin. Corp." on Justia Law