Justia Contracts Opinion Summaries

After Respondent’s employment with a corporation was terminated, she sued the corporation and her sibling business partner, alleging that she was terminated without cause in violation of her employment agreement. The written agreement contained a for-cause provision but no definite term of employment. The trial judge found a breach of the employment agreement, concluding that the agreement transformed what had previously been an “at-will relationship” to a “lifetime contract,” and therefore, Respondent could only be terminated for cause, death, or disability. The court of special appeals affirmed in part and reversed in part, holding that the contract was a for-cause contract of continuous duration rather than a lifetime contract, obviating the need for “special consideration.” The corporation appealed. The Court of Appeals affirmed, holding that the employment agreement was not at-will employment nor an oral lifetime employment contract that has been consistently rejected by Maryland courts, but this type of contract was “continuous for-cause” employment.View "Spacesaver Sys., Inc. v. Adam" on Justia Law

Jeffrey Healey and Edward Given, residents of the Massachusetts Treatment Center, were each civilly committed as a sexually dangerous person. Plaintiffs brought separate suits, which were later consolidated, challenging the conditions of their confinement and the adequacy of their sexual offender treatment. Plaintiffs sought equitable relief against the Massachusetts Department of Corrections and other state officials (collectively, the DOC). Both plaintiffs alleged violations of the Constitution and state statutory provisions, and Healey alleged that the DOC was not in compliance with the terms of a management plan (Plan) for the Center developed by the DOC during the course of prior litigation. The district court granted Plaintiffs declaratory and injunctive relief on some claims and entered judgment in favor of the DOC on the remaining claims. The First Circuit (1) reversed the declaratory judgment in favor of Healey on his contempt claim as well as injunctive relief compelling the Commonwealth’s compliance with the Plan’s provisions; and (2) affirmed the district court’s judgment in favor of Defendants in all respects with the exception of the judgment for Plaintiffs regarding the constitutionality of the pharmacological evaluation and treatment provided by Defendants, as that portion of the judgment was not challenged on appeal.View "Healey v. Dennehy" on Justia Law

The prior owner of the 300-acre STEW Farm in Pickaway County contracted with Watershed Management for construction of waterways and received a subsidy from the Natural Resources Conservation Service (NRCS), a USDA agency, 7 U.S.C. 6962. Kohli, an employee of the Pickaway County Soil and Water Conservation District supervised by NRCS, designed the waterways, and, after certified that they were designed and constructed properly. NRCS also certified the waterways, which allowed the owner to receive the federal reimbursement. The owner failed to pay Watershed, claiming that there was a ridge at the edge of the grass waterways that prevented proper draining. In 2009, Watershed sued for breach of contract; the owner counterclaimed for breach of contract and breach of warranty. A state court granted summary judgment against the owner for failure to prove damages. The new owner then filed a federal suit. The district court dismissed, reasoning, as to NRCS, that STEW Farm had not identified a separate source of federal substantive law and failed to establish a waiver of sovereign immunity because there are no “clear guidelines” which show that the NRCS actions were not committed to agency discretion. As to Watershed, the court concluded that there was no federal cause of action nor did the state claims implicate significant federal issues. As to PCSWCD, STEW Farm alleged only state-law claims that did not implicate significant federal issues. As to PCSWCD and Kohli, the claims were time barred under Ohio’s two-year statute of limitations. The Seventh Circuit affirmed.View "Stew Farm, Ltd. v. Natural Res. Conservation Serv." on Justia Law

The superior court issued a declaratory judgment interpreting a settlement agreement between Nautilus Marine Enterprises and Exxon Mobil Corporation, then decided that Exxon was the prevailing party. Nautilus appealed awards of attorney fees and costs as excessive. It focused particularly on out-of-state hourly billing rates that the superior court accepted, the number of hours billed, and the court's imposition of a fee enhancement and sanction. Nautilus also contested the court's determination of prevailing party status, its award of costs, and its failure to apportion fees and costs. Upon review, the Supreme Court reversed and remand for the superior court to recalculate the attorney fees award based on Alaska rates and for apportionment of fees and costs; the Court affirmed on all other issues. View "Nautilus Marine Enterprises, Inc. v. Exxon Mobil Corp." on Justia Law

The parties married in 1988. In 2010, petitioner Cheryl Serodio filed for divorce. In October 2011, respondent Arthur Perkins moved to have a prenuptial agreement enforced. The copy of the agreement accompanying respondent's motion was signed only by him, though he alleged both parties signed it, and petitioner kept the original. In his motion, respondent claimed petitioner was unable to locate the original, and that he possessed a copy to be admitted as evidence. Petitioner objected, stating she did not recall signing the agreement, and that she never held an original signed document. Petitioner moved to dismiss respondent's motion to enforce, and the trial court granted it. On appeal, the respondent argues "[t]hat the trial court overlooked the standard of review for a motion to dismiss when it failed to assume the truth of the facts alleged by the [respondent], including the truth of the allegation that a written, executed [prenuptial] agreement was entered into by the Parties." The respondent also argues that the trial court erred because the threshold issue is whether the signed Agreement, in fact, had existed, not, as the trial court ruled, whether the signed Agreement presently exists. The petitioner responds that, since the respondent did not produce a prenuptial agreement signed by the petitioner, the trial court properly concluded that it had no statutory authority to enforce the terms of the Agreement. The Supreme Court observed, "petitioner's arguments regarding the enforcement of an oral or unsigned prenuptial agreement focus on the wrong issue. The respondent is not requesting that the trial court enforce an oral or unsigned agreement; rather, he is seeking to enforce the terms of a written, signed prenuptial agreement, notwithstanding the fact that neither a signed original nor a copy thereof has been produced in court. Accordingly, we turn to the question before us: whether the factual allegations in the respondent's pleadings are reasonably susceptible of a construction that would permit recovery." Respondent's motion to enforce the Agreement alleged that a written prenuptial agreement existed, and that both parties signed it. Assuming the truth of the respondent's allegations, the Court concluded that the allegations in the respondent's motion are reasonably susceptible of a construction that would permit recovery, and as such, reversed and remanded the case back to the trial court for further proceedings. View "In the Matter of Serodio & Perkins" on Justia Law

Plaintiff Autofair 1477, L.P. (d/b/a Autofair Honda) appealed a Superior Court order denying its motion for summary judgment and granting summary judgment to defendant, American Honda Motor Company, Inc. (AHM), on plaintiff's petition for attorney's fees. In November 2010, AHM performed a warranty audit at Autofair, after which it proposed $45,733.02 of chargebacks and a potential escrow reversal of $54,571.17 for claimed warranty work that deviated from AHM's policies and procedures. AHM did not debit Autofair's account for these amounts. Autofair contested the escrow reversal and $30,001.51 of the proposed chargebacks. After review, AHM reduced the amount of the proposed chargebacks to $43,957.94. In February 2011, Autofair filed a protest with the New Hampshire Motor Vehicle Industry Board pursuant to the New Hampshire Dealership Act. Even though AHM had neither debited Autofair's account nor held any disputed funds in escrow, Autofair specifically requested a "finding and ruling that the warranty audit charge backs and the [proposed] escrow violate[d] RSA 357-C:4 and RSA 357-C:5, that the audit charge backs be reversed, and the escrow funds released." Prior to a final hearing before the Board, the parties had ongoing discussions and reduced the disputed amount to $29,729.92, and Autofair withdrew its request for relief regarding the proposed escrow. Following a hearing, the Board affirmatively ruled on whether Autofair had reasonably substantiated 123 claims still at issue, and thus whether AHM was entitled to charge back the amounts associated with each claim. In total, the Board determined that AHM was entitled to charge back claims totaling $1,032.13, but not the remaining $28,697.79 of disputed claims. The Board also stated that because "Honda has paid the claims, and not held the funds in escrow, the request in the protest to find a statutory violation due to same is moot." Finally, the Board ordered Autofair to pay $1,032.13 to AHM, with interest. In January 2012, Autofair filed a petition for attorney's fees and costs with the trial court pursuant to RSA 357-C:12, X (2009). Both parties moved for summary judgment. The trial court denied Autofair's motion and granted AHM's cross-motion. It based its ruling upon the fact that the Board had not found that AHM committed a violation of the Dealership Act because it had not charged back Autofair, and the court's conclusion that an award of fees would not be consistent with the public policy behind the Dealership Act. This appeal followed. Finding no reversible error, the Supreme Court affirmed.View "Autofair 1477, L.P. v. American Honda Motor Company, Inc." on Justia Law

Defendant, a law firm, contracted with Plaintiff for Plaintiff to provide title insurance on two mortgages that Defendant took as security from a client indebted to Defendant. Upon foreclosure of liens that were superior to those of Defendant, Defendant sought coverage from Plaintiff under the insurance policies, which seemingly provided coverage for priority liens. Defendant requested indemnification, and Plaintiff sought declaratory judgment, arguing that coverage for priority liens was not intended by either party. A federal district court granted summary judgment in favor of Plaintiff, concluding that because Defendant was aware of the prior mortgages, it could not expect to receive coverage it did not bargain for. The First Circuit affirmed, holding that Plaintiff had conclusively shown that Defendant was aware that its bargain with the client for security of its debt would result in junior mortgages, and the insurance policies clearly excluded such encumbrances from coverage.View "First Am. Title Ins. Co. v. Lane Powell PC" on Justia Law

A Homeowner contracted with a Builder to build a home on property owned by the Homeowner. The Builder contracted with a Plumber to put in the plumbing at the house. After the home was completed, the Builder and the Homeowner sued the Plumber for damages allegedly caused by plumbing leaks, alleging breach of contract, breach of express warranty, and negligence. The trial court granted summary judgment for the Plumber, reasoning (1) the Homeowner could not recover contract damages because it was not a party to the plumbing subcontract, nor could the Builder recover contract damages because it had not suffered any compensable damage; and (2) the plaintiffs did not have a negligence claim because they did not allege violation of any tort duty independent of the contract. The Supreme Court reversed, holding that the court of appeals erred in concluding that the pleadings and summary judgment evidence negated the existence of a negligence claim. View "Chapman Custom Homes, Inc. v. Dallas Plumbing Co." on Justia Law

At issue in this case was whether Washington State courts have jurisdiction over a civil case arising out of a contract in which the tribal corporation waived its sovereign immunity and consented to jurisdiction in Washington State courts. The Washington Supreme Court held that it did not infringe on the sovereignty of the tribe to honor its own corporation's decision to enter into a contract providing for jurisdiction in Washington State courts. View "Outsource Servs. Mgmt. v. Nooksack Bus. Corp." on Justia Law

In 1987, Joseph Bagley purchased a cancer and dread-disease policy through his friend and insurance agent, Jackie McPhail. The policy was issued by American Heritage Life Insurance Company. McPhail worked as an independent insurance broker, and she was a registered agent with American Heritage at the time the policy was written. The policy indicated that Bagley purchased coverage concerning cancer and dread disease, a home-recovery rider, and a hospital intensive-care rider. Bagley also had an option to purchase life insurance; however, McPhail testified that Bagley did not purchase life insurance under this policy because he had purchased a separate life-insurance policy. In 2008, Bagley was diagnosed with cancer. Bagley contacted McPhail to file a claim under the policy and to "change the beneficiary" of the policy from his estate to Michael and Betty Strait. McPhail testified that she had ceased writing policies for American Heritage; however, she still retained the authority to service Bagley's policy, and she acquired his written consent to receive information regarding his policy from the insurance company. While Bagley was in the hospital, McPhail presented an American Heritage change-of-beneficiary form, which Bagley ultimately signed. The signature was witnessed by Bagley's physician, a nurse, and McPhail. Bagley orally communicated that he wished for the beneficiary to be changed from his estate to the Straits. At the time that Bagley signed the form, the Straits had yet to be listed as beneficiaries on the form. McPhail met with the Straits after the form was signed to confirm their correct legal names to be placed on the change-of-beneficiary form at a later time. McPhail provided that she did not fully complete the form because she was attempting to contact American Heritage to confirm the correct procedure for completing the process; however, American Heritage's office was closed because of Hurricane Fay, and McPhail never succeeded in speaking with American Heritage regarding the matter. Bagley's physician, who witnessed Bagley signing the form, later communicated to Betty Strait that his attorney advised that the form could not be used because the Straits' names were not listed on the form prior to Bagley's signature. Betty Strait relayed this to McPhail, who then attempted to contact American Heritage's legal department. McPhail called the company on multiple occasions, but she never received a return phone call. Soon thereafter, Bagley passed away, and the form was never completed. The estate was probated and the Straits did not contest the passage of the policy proceeds to the estate at the time that the estate was being settled. The executor of Bagley's will, William Kinstley, petitioned for the approval of the estate's final accounting, which included the policy proceeds. The Straits initiated legal action against McPhail and American Heritage in Hinds County Circuit Court, arguing that Bagley intended for them to receive the proceeds from the cancer policy. The Straits alleged breach of contract, tortious breach of contract, negligence and gross negligence, breach of fiduciary duties and the duty of good faith and fair dealing, bad-faith refusal to pay benefits and to promptly and adequately investigate the claim, misrepresentation and/or failure to procure, promissory and/or equitable estoppel, and they sought a claim for declaratory relief. McPhail filed a motion to dismiss, which was granted by the circuit court. The circuit court found that the issue had been previously litigated and resolved in chancery court, and that no appeal had been taken from the chancery court judgment. Likewise, the circuit court granted American Heritage's motion for summary judgment, finding that there were no genuine issues of material fact to be resolved. The Court of Appeals reversed the judgment and remanded the case, finding that genuine issues of material fact did exist and that res judicata and collateral estoppel did not bar the Straits' claims. Because the Straits failed to raise any issues upon which relief may be granted, the circuit court's grant of McPhail's motion to dismiss was proper. However, the circuit court erred in granting the motion to dismiss based on res judicata and collateral estoppel. Furthermore, the circuit court properly granted American Heritage's motion for summary judgment: the Straits were never eligible to be third-party beneficiaries under the policy, and they have failed to show any equitable entitlement to reimbursement. For those reasons, the Supreme Court reversed the judgment of the Court of Appeals and reinstated the circuit court's judgment. View "Strait v. McPhail " on Justia Law