Justia Contracts Opinion Summaries

Meadow Brook owned land that it developed into lots with covenants, conditions, and restrictions. Meadow Brook then decided to develop an undeveloped tract as an independent subdivision. The existing homeowners, however, argued that the covenants granted them exclusive use of three roads that future homeowners would need to use to access the subdivision. A court concluded that the covenants did not reserve an easement over the three roads for use by future lot owners. First American Title Insurance Company and First American Title Company of Montana (collectively, First American), which had issued Meadow Brook a title insurance policy, subsequently denied Meadow Brook’s claim for coverage and refused to further defend against the homeowners’ counterclaims. Meadow Brook settled with the homeowners in the easement litigation and then sued First American for, inter alia, breach of contract and negligence. The district court granted summary judgment to Meadow Brook as to the breach of contract claim, concluding First American had insured under the policy that the three roads would be open to public access. The Supreme Court affirmed, holding that the district court did not err in granting Meadow Brook’s motion for partial summary judgment on the breach of contract claim. View "Meadow Brook, LLP v. First Am. Title Ins. Co." on Justia Law

Defendant Benjamin Taub founded Dataspace, Incorporated, in 1994. In 2002, Taub hired plaintiff Rama Madugula as vice president of sales and business development for Dataspace. Around this time, Dataspace also hired an individual named Andrew Flower. Taub was Dataspace's sole shareholder until 2004, when Madugula and Flower became part owners, with Madugula purchasing 29% of the outstanding shares and Flower purchasing 20%. Pursuant to a stockholders agreement, Taub became president, secretary, and treasurer of Dataspace, while Madugula and Flower became vice presidents. After becoming a shareholder, Madugula continued to work for Dataspace. In 2007, Flower exercised his right under the buy-sell agreement and voluntarily withdrew from Dataspace. Taub and Madugula purchased Flower's shares, increasing Madugula's interest to about 36% of the shares. Around this time, with Dataspace allegedly struggling, Taub switched the focus of Dataspace to marketing a new product that it developed called JPAS, a software platform. At the time, Madugula did not object to the new focus. In August 2007, Taub terminated Madugula's employment with Dataspace. Because of his termination, Madugula no longer received a salary from Dataspace, but he maintained his board position and his interest in the company. Madugula sued Taub and Dataspace, asserting: (1) shareholder; (2) breach of the duty of good faith; (3) common-law fraud and misrepresentation; (4) exemplary damages; (5) an appointment of a receiver; and (6) an accounting of Dataspace. Madugula sought damages, the removal of Taub as a director of Dataspace, the appointment of a receiver to protect the value of his stock in Dataspace, an accounting of Dataspace, and all other relief that he was entitled to in equity or law. The circuit court granted summary judgment in favor of Taub and Dataspace, dismissing all counts against them except Madugula's claim of shareholder oppression. After its review, the Supreme Court concluded that the plaint language of Michigan's shareholder-oppression statute, did not afford a claimant a right to a jury trial and, instead, expressed a legislative intent to have shareholder-oppression claims heard by a court of equity. Furthermore, the Court held that violations of a shareholder agreement may constitute evidence of shareholder oppression pursuant to the statute. Because the trial court erred by submitting plaintiff's claim to the jury and allowing it to award an equitable remedy, the Court of Appeals erred by affirming the trial court's judgment in favor of plaintiff. View "Madugula v. Taub" on Justia Law

Randy Betz hired attorney Vincent Megna to represent him in a dispute with Diamond Jim’s Auto Sales. Megna filed a lawsuit on Betz’s behalf under two fee-shifting statutes. During the litigation, Betz and Diamond Jim’s settled the case without their attorneys’ knowledge or approval. The settlement agreement did not address statutory attorney’s fees. Megna moved to recover his statutory fees from Diamond Jim. The circuit court denied the motion, concluding that the statutory right to recover attorney’s fees belonged to Betz and not his attorneys and that the settlement agreement was a binding contract between Betz and Diamond Jim’s. The court of appeals reversed, concluding that the settlement agreement was void due to public policy concerns with enforcing settlements made “behind the backs” of the attorneys in cases brought under fee-shifting statutes. The Supreme Court reversed, holding (1) the statutory right to recover attorney’s fees belonged to Betz, and Betz did not assign his right to recover those fees to Megna in their fee agreement; and (2) therefore, Megna’s remedy against Diamond Jim’s was foreclosed. View "Betz v. Diamond Jim's Auto Sales" on Justia Law

Robert Kraft formed Electronic Printing Systems, Inc. (the company), which was rebranded, restructured, and sold to various entities. This case involved several leases that the company and its progenies had with Anthony Gagliano & Co., Inc. (Gagliano). Gagliano filed claims against defendants New Electronic Printing Systems, LLC; Openfirst, LLC; Robert Kraft; and Quad/Graphics, Inc. concerning rent allegedly owned under several commercial leases. The circuit court granted (1) granted summary judgment for Quad/Graphics, the last entity to acquire assets of the company; and (2) after trial, directed a verdict in favor of Defendants, concluding that Gagliano did not give sufficient notice to extend the leases to the time when the alleged breach occurred. The court of appeals reversed summary judgment in favor of Quad/Graphics and reversed the circuit court’s directed verdict. The Supreme Court affirmed in part and reversed in part, holding (1) Gagliano’s notice was valid because Gagliano gave sufficient notice to extend the leases to the time when the alleged breach occurred; and (2) Qaud/Graphics was not liable to Gagliano because Quad/Graphics was a subtenant of the lessee, not an assignee of the leases. View "Anthony Gagliano & Co., Inc. v. Openfirst, LLC" on Justia Law

Plaintiff filed suit against Midland, contending that the plain language of an annuity contract dictates that the term is zero or that, at minimum, Midland's proffered term is unreasonable. Completely absent from the annuity contract was any indication about the interest rate to be applied in the event that Midland was no longer offering new certificates of the annuity. The court concluded that the district court did not err in this case where Restatement (Second) of Contracts section 204 permitted the district court to supply a term for the missing value that is reasonable under the circumstances of this case. Accordingly, the court affirmed the district court's grant of summary judgment to Midland. View "Murr v. Midland National Life Ins. Co." on Justia Law

MHFS filed suit against the County, the Commission, and others for interfering with its business operations at the Baxter County Airport. The court concluded that the district court did not err in dismissing MHFS's claims for breach of contract where MHFS did not allege any breach of contract distinct from the breach of the duty to act in good faith; Arkansas law does not recognize a "continuing tort" theory; even if the court were to assume such acts were intentional, MHFS failed to state a claim for intentional interference with its business relationship; the district court correctly dismissed MHFS's civil rights claims for denial of procedural due process where MHFS was not deprived of any property or liberty interest; the district court did not abuse its discretion by declining to exercise supplemental jurisdiction over state law claims; and the district court did not abuse its discretion in denying the motion to amend following its dismissal of the action. Accordingly, the court affirmed the judgment of the district court. View "Mountain Home Flight Service v. Baxter County, et al." on Justia Law

Plaintiff-appellant Nancy Lee hired Attorney William Hanley to represent her in a civil suit. After the litigation settled, Lee sought a refund of unearned attorney fees and unused expert witness fees she had advanced to Hanley. Not having received a refund, Lee hired Attorney Walter Wilson and terminated Hanley. Attorney Hanley thereafter refunded certain expert witness fees, but no attorney fees. More than a year after hiring Wilson, Lee filed a lawsuit against Hanley seeking the return of the unearned fees. Hanley filed a demurrer to Lee’s second amended complaint, based on the one-year statute of limitations contained in Code of Civil Procedure section 340.6. The court sustained the demurrer and dismissed the action with prejudice. Lee appealed. Upon review, the Court of Appeal held that to the extent a claim is construed as a wrongful act not arising in the performance of legal services, "such as garden variety theft or conversion, section 340.6 is inapplicable. . . . Here, the facts alleged in Lee’s second amended complaint could be construed as giving rise to a cause of action for the theft or conversion of an identifiable sum of money belonging to her. This being the case, we cannot say that Lee’s second amended complaint demonstrates clearly and affirmatively on its face that her action is necessarily barred by the section 340.6 statute of limitations." Because this action had not reached a point where the court could determine whether the wrongful act in question arose in the performance of legal services, and thus, whether or not section 340.6 applied, the demurrer should not have been sustained. View "Lee v. Hanley" on Justia Law

Lisa Knitter worked as a "handyman" for Lewis General Contracting, Inc. (LGC) from March to October 2010. During this time, LGC's sole client was Picerne Military Housing, LLC (Picerne), now known as Corvias Military Living, LLC. Knitter performed handyman services exclusively on Picerne properties. She sued Picerne under Title VII of the Civil Rights Act of 1964, alleging: (1) she was paid lower wages than her male counterparts; (2) Picerne effectively fired her in retaliation for her complaints of sexual harassment and wage discrimination; and (3) after she was fired, Picerne denied her application for vendor status in retaliation for her prior complaints of discrimination. The district court granted summary judgment to Picerne, dismissing Knitter's Title VII action because Picerne was not her employer. The district court also dismissed her claim for retaliatory denial of vendor status because Knitter did not apply for employment with Picerne when she applied to be a vendor. Knitter appealed to the Tenth Circuit Court of Appeals. Finding no reversible error, however, the Tenth Circuit affirmed. View "Knitter v. Picerne Military Housing" on Justia Law

Veridyne’s first contract to provide logistics services to the Maritime Administration (MARAD), was awarded pursuant to the Small Business Administration’s (SBA) 8(a) program for small, disadvantage businesses, 15 U.S.C. 637(a). To obtain extension of the contract without it being submitted to bidding, Veridyne estimated that the new contract would not exceed “$3,000,000 in the aggregate.” Veridyne and MARAD officials knew that the services to be provided under the extension would cost far more than $3,000,000. MARAD proposed that SBA approve the new contract without opening it to competition. MARAD, Veridyne, and the SBA executed the new contract. From 2001 to 2004, MARAD issued additional work orders to Veridyne and paid Veridyne $31,134,931.12. In part due to MARAD’s cost overruns, the Office of Inspector General investigated and concluded that Veridyne had obtained the extension through fraud. After a stop order issued, Veridyne continued to work for MARAD and submitted additional invoices. Veridyne sued to recover $2,267,163. The government entered a defense under the Fraudulent Claims statute, 28 U.S.C. 2514, and counterclaimed for penalties under the False Claims Act, 31 U.S.C. 3729, and the Contracts Disputes Act, 41 U.S.C. 7103. The Claims Court held that Veridyne’s contract claim was forfeited under the Fraudulent Claims Act, but awarded Veridyne partial recovery under a quantum meruit theory, while awarding penalties to the government under the False Claims Act and the Contract Disputes Act. The Federal Circuit reversed the quantum meruit award, but affirmed the award of penalties.View "Veridyne Corp. v. United States" on Justia Law

This case involved efforts to create an Armenian Genocide Museum. Gerard Cafesjian, one of the project's principal founders and benefactors, and CFF first filed suit against the Assembly, alleging that the Assembly failed to reissue a $500,000 promissory note as required by a Grant Agreement, asserting claims for breach of contract and breach of the implied covenant of good faith and fair dealing. The court concluded that the district court did not err in its disposition of appellants' claims for breach of fiduciary duty against Cafesjian and John Waters; the district court correctly determined that CFF was entitled to take the Grant Property in full because the Grants were fully funded at the time CFF exercised its reversionary rights; the court found no basis to disturb Cafesjian and Water's indemnification award; the court affirmed the district court's denial of appellants' post-trial motions for relief; and rejected the notion that the Assembly's lease in the Families USA building is invalid. Accordingly, the court affirmed the judgment of the district court. View "Armenian Assembly of America, et al. v. Cafesjian, et al." on Justia Law