Justia Contracts Opinion Summaries

In April 2003, the City of Columbia entered into a Memorandum of Understanding (MOU) with Stevens & Wilkinson of South Carolina, Inc. (S&W) and several other parties, to develop a publicly-funded hotel adjacent to the Columbia Metropolitan Convention Center. As architect, S&W was to complete sufficient preliminary design work to determine a guaranteed maximum price for the project, which would be used by the City to obtain municipal bond funding to cover the cost of the hotel. Pursuant to the MOU, the construction company was to pay S&W directly. On June 26, 2003, the City received a letter stating S&W would complete its preliminary design on July 10, 2003, and would then stop working until the bond financing for the hotel was finalized. Realizing this could delay the start of construction, S&W offered to continue working the remaining ninety days until the anticipated bond closing date of October 13, 2003, but required assurance it would be compensated for the work it performed during this time frame. It provided an estimate requiring $650,000 and $75,000 per week after that. On July 30, the City approved "$650,000 for interim architectural design services for a period of 90 days prior to bond closing." The bond closing did not occur as scheduled, but S&W nevertheless continued to work. S&W submitted an invoice to the City for $697,084.79 for work that took place from July 10 to December 15, 2003. By letter dated December 17, 2003, S&W informed the construction company that the City had voted that day "to advance [$705,000.000] to the design team for design services and expenses. Because under the MOU the construction company was to pay S&W, not the City, the construction company agreed to reimburse the City for the funds paid to S&W after the bond closing. The City paid S&W's invoice. S&W continued to work on the project, but in March 2004, the City abandoned its plans under the MOU and ended its relationship with S&W. S&W received no further compensation and sued the City for breach of contract under the MOU and the July 2003 agreement. The City argued there was no separate agreement and the payment of interim fees was merely an advance on fees under the MOU and furthermore, the MOU provided that S&W was to be paid by the construction company, not the City. The trial court granted partial summary judgment in favor of S&W, finding a contract existed between it and the City. On certiorari, the City conceded a contract exists, but argued the contract terms have been satisfied. The Supreme Court found the City's arguments were unpreserved and affirmed as modified. View "Stevens & Wilkinson of South Carolina, Inc. v. City of Columbia" on Justia Law

When Respondent was promoted from her position was an hourly employee to a salaried managerial position at one of Appellants’ long-term care facilities, the parties signed an employment agreement and arbitration agreement. Appellants later terminated Respondent from her position. Respondent filed a class action lawsuit against Appellants seeking compensation for allegedly unpaid overtime hours. Appellants filed a motion to compel arbitration, but the circuit court overruled the motion. The Supreme Court affirmed, holding that Respondent’s continued at-will employment and Appellants’ promise to resolve claims through arbitration did not provide valid consideration to support the arbitration agreement. View "Baker v. Bristol Care, Inc." on Justia Law

In September 2003, appellant The Cutler Group, Inc. sold a new house in Bucks County to Davey and Holly Fields. After living in the house for three years, the Fields sold the house to appellees Michael and Deborah Conway. In 2008, Appellees discovered water infiltration around some of the windows in the home, and, after consultation with an engineering and architectural firm, concluded that the infiltration was caused by several construction defects. In 2011, Appellees filed a one-count complaint against Appellant, alleging that its manner of construction breached the home builders' implied warranty of habitability. Appellant filed a demurrer, arguing, inter alia, that, as a matter of law, the warranty rextended from the builder only to the first purchaser of a newly constructed home because there was no contractual relationship between the builder and second or subsequent purchasers of the home. Recognizing that courts have traditionally required a showing of privity of contract before permitting a party to proceed with a warranty claim, the trial court concluded that the question presented was "one of policy as to who will bear the burden for damages caused by latent defects [in] relatively new residential dwellings." The trial court sustained Appellant's demurer based on lack of privity, and dismissed Appellees' complaint with prejudice. After an unsuccessful appeal to the Superior Court, appellees petitioned the Supreme Court. Finding no reversible error, the Supreme Court affirmed, holding that a subsequent purchaser of a previously inhabited residence may not recover contract damages for breach of the builder's implied warranty of habitability.View "Conway v. The Cutler Group, Inc." on Justia Law

The parties in this case were two specialty food business and their respective owners. The current dispute arose when the companies signed a distribution agreement and orally promised to form a joint venture between the businesses. After one company formally terminated the distribution agreement, Plaintiffs sued Defendants seeking to recover money damages for breach of an oral contract and promissory estoppel for failing to form the joint venture. The trial court found in favor of Defendants on all of Plaintiffs’ claims except promissory estoppel and rendered judgment for Defendants on their breach of contract counterclaim. Both parties appealed. The Supreme Court affirmed the judgment of the trial court in all respects, holding that the trial court properly (1) calculated Plaintiffs’ damages; (2) rendered judgment for Defendants on their counterclaim; and (3) rendered judgment for Plaintiffs on their promissory estoppel claim.View "Weiss v. Smulders" on Justia Law

In 2011, Wells Fargo foreclosed on the plaintiffs’ residential mortgage loan and purchased their home at a trustee sale conducted by First American. Plaintiffs sued, alleging, that defendants violated their deed of trust’s incorporation of a pre-foreclosure meeting requirement contained in National Housing Act (NHA) regulations and the Federal Debt Collection Practices Act (FDCPA). The trial court sustained demurrers and denied a preliminary injunction. The court of appeal reversed, finding that plaintiffs pled viable causes of action for equitable cancellation of the trustee’s deed obtained by Wells Fargo based on their allegation that Wells Fargo did not comply with the NHA requirements incorporated into the deed of trust. Because compliance was a condition precedent to the accrual of Wells Fargo’s contractual authority to foreclose on the property, if, as plaintiffs allege, the sale was conducted without such authority, it is either void or voidable by a court sitting in equity. Whether void or voidable, plaintiffs were not required to allege tender of the delinquent amount owedView "Fonteno v. Wells Fargo Bank, N.A." on Justia Law

Dan C. Morton successfully bid on several federal oil and gas leases. Morton sought the assistance of RDG Oil and Gas, LLC to develop the leases. In 2005, the parties entered into two separate agreements for the development of the leases. In 2012, Morton’s successor in interest, the Jayne Morton Living Trust, filed a complaint against RDG alleging breach of contract of both agreements. RDG did not respond to the complaint, and the district court entered a default judgment against RDG. RDG later moved to set aside the entry of default and the default judgment. The district court denied RDG’s motions. The Supreme Court affirmed, holding that the district court did not abuse its discretion in denying RDG’s motion to set aside the entry of default and the entry of default judgment.View "RDG Oil & Gas, LLC v. Jayne Morton Living Trust " on Justia Law

The Andrews, a married couple, contracted to purchase a newly constructed home from Appellants, Joe Seneshale and his company, Legacy Builders, LLC (together, Legacy). After the Andrews took possession of the property, they discovered that the house had numerous structural and cosmetic flaws. The Andrews filed a complaint against Legacy alleging breach of contract and breach of implied warranty of habitability. The trial court entered judgment in favor of the Andrews and awarded a total of $319,302 in damages. The Supreme Court affirmed but remanded with instructions to correct the damage award, holding (1) when the cost of repairs in a homeowners’ construction case alleging breach of contract and breach of warranty may be disproportionate to the loss in value to the home resulting from the breach, the plaintiff has the burden of proving damages at trial, and the defendant has the burden of challenging the reasonableness or disproportionality of the plaintiff’s method; and (2) the district court did not commit clear error when it relied upon the majority of the Andrews’ cost of repair expert’s testimony and when it found that expansive soils caused damages to the home’s foundation.View "Legacy Builders, LLC v. Andrews" on Justia Law

The Service Employees International Union, Local 509 (Union) filed a complaint seeking a declaratory judgment that the Department of Mental Health (DMH) violated the Massachusetts privatization statute by entering into contracts with private entities without adhering to the requirements set forth in Mass. Gen. Laws ch. 7, 52-55. The superior court judge allowed DMH’s motion for judgment on the pleadings, which she treated as a motion to dismiss for lack of subject matter jurisdiction, determining that the Union lacked both direct and associational standing to pursue its claim and, additionally, that the superior court lacked jurisdiction because the Union failed to join necessary parties to the action. The Supreme Judicial Court vacated and set aside the judgment of dismissal, holding (1) the judge did not err in dismissing the complaint on the basis of its failure to name all necessary parties; but (2) the Union had direct standing to seek a declaratory judgment that would invalidate the contracts at issue. Remanded for the limited purpose of allowing the Union to seek leave to amend its complaint by adding all necessary parties.View "Serv. Employees Int’l Union, Local 509 v. Dep’t Mental Health" on Justia Law

Plaintiff Helena Murphy appealed a superior court judgment in favor of defendant, Patriot Insurance Company, her homeowner’s insurer. The dispute between the parties stemmed from storm damage done to plaintiff's house in 2007, and the subsequent claims she made on her insurance policy. On appeal of the superior court's ruling in Patriot's favor, plaintiff argued: (1) Patriot was estopped from denying coverage for the removal and replacement of a chimney on her home; and (2) the trial court erred in dismissing claims for negligence and bad faith. Finding no reversible error, the Supreme Court affirmed. View "Murphy v. Patriot Insurance Company" on Justia Law

After Harold Forest Snow died, Linda Moulton, as personal representative, filed a civil action against Susan Snow, alleging that one of the transfers identified in Harold’s codicil was an improvident transfer and a product of undue influence. During discovery, the parties’ attorneys announced that they had settled the case. Neither side, however, would agree to sign the other’s proposed settlement documents. Linda subsequently filed a motion to enforce the settlement agreement. The probate court granted Linda’s motion to enforce, finding that the record contained an “unequivocal stipulation by the parties’ attorneys that the matter was settled” and that the material terms of the agreement were clearly defined in the transcript. The Supreme Court affirmed, holding (1) there was ample evidence that the parties intended to enter into an enforceable settlement agreement and that the terms placed on the record reflected all of the material terms of the contract; and (2) the probate court did not abuse its discretion in granting the motion to enforce the settlement agreement without holding a trial or an evidentiary hearing.View "In re Estate of Snow" on Justia Law