Justia Contracts Opinion Summaries

Mercury Casualty Company filed an action seeking declaratory relief regarding its obligation to students Hung Chu and his roommate Tu Pham. Mercury issued an automobile policy to Chu insuring his 1995 Honda Accord. Chu was driving, and Pham was a passenger, when Chu collided with a vehicle driven by Krystal Nguyen Hoang. Pham filed a personal injury action against Chu and Hoang and obtained a $333,300 judgment against Chu. Mercury sought a judicial determination confirming Mercury’s decision Chu’s policy excluded coverage for Pham’s judgment under a “resident exclusion.” Mercury also sought an order requiring Chu to reimburse Mercury the fees and costs it incurred in defending him against Pham’s lawsuit. Chu cross-complained against Mercury for breach of contract, bad faith, and general negligence. Mercury prevailed on the issue of whether the policy provided coverage for Pham’s judgment. The court determined Mercury had no duty to indemnify Chu with respect to the judgment. It granted Mercury’s motion for judgment on the pleadings (JOP) on Chu’s cross-complaint but determined Mercury could not seek reimbursement of its attorney fees and costs in defending Chu because such damages were not sought in the JOP. Both parties appealed. Chu and Pham appealed the determination that Mercury’s policy excluded coverage for Pham’s personal injury lawsuit against Chu. Mercury appealed the court’s ruling Chu was not required to reimburse Mercury for the defense fees and costs. After its review of the record, the Court of Appeal reversed, concluding the policy provision excluding Pham from coverage was an overbroad expansion of the statutorily permitted exclusion and was also contrary to public policy. Based on this ruling, the Court did not address the issue raised in Mercury’s cross-appeal regarding its entitlement to defense costs and fees.View "Mercury Casualty v. Chu" on Justia Law

Seaport Village Operating Company, LLC (the “Company”) sought to recover from Seaport Village Ltd. (“Limited”) attorneys’ fees and expenses that the Company incurred in two lawsuits against Limited. The Company’s limited liability company agreement included a fee-shifting provision providing that the prevailing party in disputes arising out of the Agreement is entitled to recover reasonable attorneys’ fees in connection with the prosecution or defense of the action. Limited argued that because the Company did not sign the agreement, it was not a party to the agreement. The Court of Chancery awarded the Company fees and expenses, holding that, under Delaware law, the Company, although not a signatory, was a party to the operating agreement and could therefore enforce the fee-shifting provision against Limited.View "Seaport Village Ltd. v. Seaport Village Operating Co., LLC" on Justia Law

Debra Ganske, Wesley Borgen, Michael Borgen, Sue Evans, and Linda McCoy ("the Borgens") appealed a district court summary judgment quieting title in certain oil and gas leases in Golden Eye Resources, LLC and dismissing their counterclaim for rescission or cancellation of the leases. Golden Eye cross-appealed. Upon review of the matter, the Supreme Court reversed and remanded, concluding the district court erred in concluding the Borgens' fraudulent inducement claims were barred as a matter of law, and the court therefore erred in dismissing their rescission action and quieting title in the leases in Golden Eye. View "Golden Eye Resources, LLC v. Ganske" on Justia Law

The Fleets applied to have their Bank of America (BofA) home loan modified in 2009 under the Making Homes Affordable Act. The result of multiple telephone calls and letters to various BofA-related personnel, the Fleets were either (a) assured the Fleets that everything was proceeding smoothly or (b) told BofA had no knowledge of any loan modification application. Finally, in November 2011, BofA informed the Fleets they had been approved for a trial period plan under a Fannie Mae modification program. All they had to do, was to make three monthly payments starting on December 1, 2011. If they made the payments, then they would move to the next step (verification of financial hardship); if they passed that test, their loan would be permanently modified. The Fleets made the first two payments, for December 2011 and January 2012, which BofA acknowledged receiving, and therefore foreclosure proceedings had been suspended. Toward the end of January 2012, their house was sold at a trustee’s sale. Two days after the sale, a representative of the buyer showed up at the house with a notice to quit. The Fleets informed him that the house had significant structural problems, and he said he was going to rescind the sale. The Fleets continued to try to communicate with BofA regarding the property. A BofA representative left voice mail messages to the effect that BofA wanted to discuss a solution to the dispute, but otherwise it appeared that productive conversation between the Fleets and BofA and between the Fleets and the buyer had ceased. In light of this silence (which they interpreted to mean the buyer was trying to rescind the sale), the Fleets spent $15,000 to repair a broken sewer main, which was leaking sewage onto the front lawn. They were evicted in August 2012. In June 2012, the Fleets sued BofA, the trustee under their deed of trust, BofA officers and some of the employees who had been involved in handling their loan modification, and the buyer of the property and its representative. BofA’s demurrer to the first amended complaint was sustained without leave to amend as to the remaining causes of action promissory estoppel, breach of contract, fraud, and accounting. All of the BofA defendants were dismissed. The Court of Appeal reversed: "Although the Fleets’ amended complaint spreads the fraud allegations over three causes of action and contains a great deal of extraneous information, it also alleges the requisite elements of promissory fraud. [. . .] This cause of action may or may not be provable; what it definitely is not is demurrable." The Court sustained the demurrer to the Fleets' action for promissory estoppel, and affirmed the trial court in all other respects. The case was remanded for further proceedings. View "Fleet v. Bank of America" on Justia Law

Plaintiff filed suit against Wynn Las Vegas, alleging claims of breach of contract and recoupment regarding gambling debts that plaintiff owed to Wynn. The district court dismissed based on plaintiff's failure to exhaust the claims before the Nevada Gaming Control Board. The court held, however, that plaintiff was not required to exhaust his claims before the Gaming Control Board because the markers that underlie his case are credit instruments under Nevada law. Because the markers are credit instruments, plaintiff's claims did not trigger the Gaming Control Board's exclusive jurisdiction under Nev. Rev. Stat. 463.361(2). Plaintiff's claims must be resolved in the same manner as any other dispute involving the enforceability of a negotiable instrument. Accordingly, the court reversed and remanded.View "Zoggolis v. Wynn Las Vegas" on Justia Law

Defendants DISH Network LLC, AT&T Corporation, and EchoStar Satellite LLC appealed a judgment and two postjudgment orders in favor of plaintiffs Manuel and Deborah Holguin following a jury trial on the Holguins' complaint for breach of contract, negligence, and other torts. DISH, AT&T, and EchoStar argued that the trial court erred by denying their motion for judgment notwithstanding the verdict and for a new trial and by granting contractual attorney fees to the Holguins. The Holguins cross-appealed, arguing the court abused its discretion in making an award of attorney fees that allegedly did not fully compensate the Holguins' attorneys. The Holguins ordered a bundle consisting of telephone, Internet, and satellite television services. A DISH technician arrived at the Holguins' home to install the satellite dish and related equipment. The installation did not go as planned. The DISH technician drilled through a sewer pipe in the wall, fed a satellite television cable through it, and patched the wall without repairing the pipe. The Holguins did not discover the improper installation until 14 months later. In the intervening time, the damaged pipe leaked sewer water into the surrounding wall cavity and caused mold buildup in the Holguins' home. As a result, the Holguins suffered respiratory problems and other health issues. A DISH representative told the Holguins that DISH would reimburse them if they did not want to live in their house pending repair work, but the Holguins never received reimbursement. The Holguins retained an attorney and an industrial hygienist, who told the Holguins that there was still extensive mold growth even after remediation work. In particular, there was evidence of mold growth in other areas of the Holguins' home, in addition to the area immediately surrounding the damaged pipe. The Holguins asked DISH to complete the remediation and repair, but DISH did not do any additional work. The Holguins eventually hired their own contractor, who performed the remediation and repair at the Holguins' expense. DISH California admitted that the Holguins' satellite television equipment was negligently installed, but it denied that it was responsible for damages beyond the cost of repairing the pipe and certain incidentals. Aside from DISH California's admission of negligence, the defendants denied all of the Holguins' claims. Finding no reversible error, the Court of Appeal affirmed the trial court's denial of defendants' posttrial motions, and the trial court's order awarding attorney fees. View "Holguin v. Dish Network LLC" on Justia Law

In 2007, Larry Thompson executed a continuing guaranty in favor of Lafarge Building Materials, Inc., as part of an application for credit submitted by his company, Elite Dwellings, LLC. During 2008, Elite Dwellings ordered building materials under the account established based on the application but then failed to pay Lafarge for the materials. In May 2009, Lafarge sued Elite Dwellings and Thompson, alleging that they were jointly and severally liable for the debt. Lafarge and Thompson eventually filed cross-motions for summary judgment, and in October 2012, the trial court ruled that the guaranty satisfied the Statute of Frauds and entered summary judgment against Elite Dwellings and Thompson jointly and severally. Elite Dwellings did not appeal the judgment, but Thompson did. A divided Court of Appeals reversed, holding that the guaranty was unenforceable because it did not sufficiently identify the name of the principal debtor and thus failed to satisfy the Statute of Frauds. The question presented for the Supreme Court's review was whether the Court of Appeals erred in holding that the guaranty agreement at issue here did not identify the principal debtor with sufficient specificity to satisfy the Statute of Frauds. The Supreme Court concluded the appellate court did err, and reversed. View "Lafarge Building Materials, Inc. v. Thompson" on Justia Law

The Georgia Department of Corrections (GDOC) entered into a construction contract with Lewis Walker Roofing (Walker Roofing) to re-roof several buildings at Valdosta State Prison. The Contract contained two “no assignment” clauses, and as a prerequisite to contracting with GDOC, Walker Roofing was required to obtain payment and performance bonds. It obtained such payment and performance bonds from Developers Surety and Indemnity Company. Walker Roofing did not complete its work within the time frame required by the Contract, and GDOC declared Walker Roofing in default. Developers Surety did not notify GDOC within 25 days of receipt of GDOC's notice of default regarding whether it would remedy the default or perform the contract. However, approximately three months after the declaration of default, Developers Surety gave GDOC the option of entering into a contract with another company for the completion of the work. GDOC then contracted with that company to finish the project. Under the payment and performance bonds and prior to Walker Roofing's default, Developers Surety had provided financial assistance to Walker Roofing. Developers Surety filed suit against GDOC for breach of contract and for a declaratory judgment that it had no obligation under the payment and performance bond it issued to Walker Roofing on behalf of GDOC. GDOC filed a counterclaim for breach of contract. The parties filed cross-motions for summary judgment, and the trial court determined that Developers Surety's claims were not barred by sovereign immunity and that GDOC had breached the construction contract as a matter of law. It concluded that GDOC waived its sovereign immunity by entering into the contract with Walker Roofing, and that the doctrine of equitable subrogation gave Developers Surety the ability to file suit against GDOC once it incurred liability and paid the obligations of its principal under the bond. Consequently, the trial court granted summary judgment to Developers Surety and denied it to GDOC; in the same order, the trial court entered judgment in favor of Developers Surety in the amount equal to the "financial assistance" Developers Surety provided to Walker Roofing. The Supreme Court granted certiorari to the Court of Appeals to consider whether the State’s sovereign immunity was waived for the claim Developers Surety made on its contract with the State. The Supreme Court found that immunity was indeed waived in this instance, and accordingly, it affirmed the judgment of the Court of Appeals. View "Georgia Dept. of Corrections v. Developers Surety & Indemnity Co." on Justia Law

Appellee Yvonne Butler was a principal at a DeKalb County elementary school. Appellant DeKalb County School District notified appellee it would be terminating her employment for: (1) incompetency; (2) insubordination; (3) wilful neglect of duties; and (4)for other good and sufficient cause. Appellee was placed on suspension while the charges were pending. A hearing was scheduled pursuant to the Fair Dismissal Act (FDA), but the parties agreed to a continuance. The record revealed the hearing never took place. Appellant offered appellee, in lieu of termination, a contract for a classroom teaching position for the 2011- 2012 school year and required that she sign and return the contract before May 19, 2011, if she chose to accept the offer. On May 31, 2011, appellee responded to the May 11 letter by asserting that she had a right to an FDA hearing. In her May 31 response, appellee never indicated she would be accepting the offered position of classroom teacher. On June 30, 2011, upon hiring new counsel, appellee returned the signed teaching contract "under protest." In July, appellant issued appellee a separation notice indicating appellee’s employment had ended as of June 30, 2011. The following March, appellee filed this mandamus action, requesting an FDA hearing, a name-clearing hearing, and damages for breach of an implied covenant of good faith and fair dealing in regard to the proffered 2011-2012 teaching contract. Both parties moved for summary judgment and the trial court granted and denied in part both parties’ motions: the decision effectively granted appellee’s petition for a writ of mandamus and held that appellee was entitled to an FDA hearing because she was a tenured employee and had been demoted from an administrator to a teacher. In addition, the trial court held that the request for a separate name-clearing hearing was moot as appellee could clear her name at the FDA hearing. Finally, the trial court denied appellee’s claim of damages for breach because it found that appellee had not timely accepted the contract to be a classroom teacher for the 2011-2012 school year. Upon review, the Supreme Court found that since appellee had earned tenure as a teacher, at the time of her suspension from the position as principal in 2010, the only right she had under the FDA was continued employment as a teacher. Therefore, the School District complied with the FDA when it offered appellee a teaching position for the 2011-2012 school year rather than insisting upon her termination. At that point, the FDA did not require any additional action by appellant. Thus, it was error for the trial court to conclude that appellant was required to hold a demotion hearing pursuant to the FDA in addition to offering appellee continued employment as a teacher. The Supreme Court affirmed the Superior Court in all other respects. View "Dekalb County Sch. Dist. v. Butler" on Justia Law

Mid-Continent Casualty Company brought a declaratory judgment action to settle an issue with its commercial commercial general liability (CGL) policy issued to Pennant Service Company. In 2001, True Oil Company, an owner and operator of oil and gas wells, entered into a master service contract (MSC) with Pennant for work on a well in Wyoming. The MSC included a provision whereby Pennant agreed to indemnify True Oil resulting from either Pennant or True Oil's negligence. In July 2001, Christopher Van Norman, a Pennant employee, was injured in an accident at True Oil's well. Van Norman sued True Oil in Wyoming state court for negligence. In accordance with the MSC's indemnity provision, counsel for True Oil wrote to Pennant requesting indemnification for its defense costs, attorney fees, and any award that Van Norman might recover against it. Mid-Continent refused to defend or indemnify True Oil based on Wyoming's Anti-Indemnity Statute, which invalidates agreements related to oil or gas wells that "indemnify the indemnitee against loss or liability for damages for . . . bodily injury to persons." In May 2002, True Oil brought a federal action against Mid-Continent for declaratory relief, breach of contract (CGL policy), and other related claims. In February 2005, the district court granted Mid-Continent summary judgment, determining that the MSC's indemnity provision, when invoked with respect to claims of the indemnitee's own negligence was unenforceable as a matter of public policy. The court held that Mid-Continent was not required to defend or indemnify True Oil in the underlying suit as it then existed because "where an indemnification provision in a MSC is void and unenforceable, the insurer never actually assumed any of the indemnitee's liabilities under the policy." The district court granted summary judgment to True Oil, determining Mid-Continent breached its duty to defend and indemnify True Oil. As damages, the court awarded True Oil the amount it paid to settle the underlying suit and the attorney fees and costs incurred in defending itself. Mid-Continent appealed the district court's judgment. Finding no reversible error, the Tenth Circuit affirmed.View "Mid-Continent v. True Oil Company" on Justia Law