Justia Contracts Opinion Summaries

This dispute arose from the lease of a commercial building from CRG to Smucker. The lease provided that, after its initial term, it would automatically renew unless Smucker provided written notice of its intent to terminate the lease 180 days prior to the end of the current term. When the termination notice to CRG arrive after the deadline, CRG refused to accept the notice and filed suit against Smucker. The court concluded that it would be unconscionable to hold Smucker to the renewal because Smucker had substantially performed its lease obligations. The court concluded that the district court erred in failing to treat the cancellation provision in this case as an option to terminate. The court also concluded that there was insufficient evidence to conclude as a matter of law that enforcing the terms of the lease against Smucker would cause Smucker such hardship as to make literal enforcement of the option unconscionable. Accordingly, the court reversed and remanded for further proceedings. View "Commercial Resource Group, LLC v. The J.M. Smucker Co." on Justia Law

After four people died from carbon monoxide poisoning while sleeping in a room above a pool heater in a motel, the motel sought coverage for the deaths from its insurer. The insurer denied coverage based on two provisions of the motel’s general liability policy, the absolute pollution exclusion and the indoor air quality air quality exclusion. The federal district court determined that the policy exclusions were ambiguous and interpreted the ambiguity in the motel’s favor. On appeal, the federal court of appeals certified questions of Nevada law to the Nevada Supreme Court. The Court answered the questions in the negative, concluding that neither the pollution exclusion nor the indoor air quality exclusion clearly excluded coverage for carbon monoxide exposure under the circumstances of this case. View "Century Sur. Co. v. Casino W., Inc." on Justia Law

Defendants and Plaintiff executed a purchase and sale agreement under which Defendants agreed to sell real property to Plaintiff. Later, Defendants’ attorney (“Attorney”) falsely told Plaintiffs that Defendants had received a higher offer for the property and to calculate its liquidated damages. Later, due to Attorney’s withholding of information before the closing, the parties were unable to close the sale. Plaintiff filed suit for specific performance. The superior court judge concluded that Defendants anticipatorily repudiated the agreement and that Attorney’s attempt to “scuttle the deal” at closing constituted an actual breach of the implied covenant of good faith and fair dealing. As a result, the court allowed Plaintiff to choose either compensatory damages, as provided by the agreement, or specific performance. Plaintiff elected to receive compensatory damages. Defendants appealed, contending that they did not commit an actual breach, and therefore, monetary damages were not available. The Supreme Court affirmed, holding that the trial judge did not err finding of an actual breach by Defendants, and therefore, the judge’s decision offering Plaintiff a choice of remedy was proper. View "K.G.M. Custom Homes, Inc. v. Prosky" on Justia Law

Plaintiff, an Indiana resident, was driving a semi-tractor trailer on behalf of Werner Transportation, a Georgia company, when he was injured in West Virginia after another truck hit his rig. Werner insured the truck under a policy from Empire Fire and Marine Insurance Co., which provided $5 million liability coverage. Empire, however, claimed that the policy included only $75,000 in underinsured motorist coverage. Applying Georgia law, the trial court granted summary judgment in favor of Empire, finding there was sufficient evidence that Werner made the affirmative choice to purchase underinsured motorist coverage in a lower amount than the liability policy limit. The court of appeals determined that Indiana law applied but nonetheless affirmed the trial court, concluding the evidence was sufficient under Indiana law to establish that Werner had explicitly rejected the default $5 million coverage limit and instead purchased coverage only in the amount of $75,000. The Supreme Court reversed, holding that the issue of whether Werner waived the higher liability limit for underinsured motorist insurance was “unsuitable for summary judgment and best left to the fact-finder.” View "Asklar v. Gilb" on Justia Law

When attorney Kent Rubens, now deceased, was a general partner in the law firm of Rieves, Rubens and Mayton (RRM) Rubens entered into an oral contingency-fee agreement for legal services rendered to Hotel Associates, Inc. (Hotel). Hotel later filed suit against RRM and other defendants, contending that the oral contingency-fee agreement was unenforceable as against public policy. RRM counterclaimed for breach of contract. The circuit court granted RRM’s motion for summary judgment on all of Hotel’s claims and on RRM’s counterclaim and awarded RRM prejudgment interest. The Supreme Court affirmed, holding that the circuit court did not err in (1) ruling that oral contingency-fee agreements are enforceable in Arkansas; (2) granting summary judgment for RRM because no material issues of genuine fact remained in dispute; and (3) granting RRM’s motion for prejudgment interest. View "Hotel Assocs. Inc. v. Rieves, Rubens & Mayton" on Justia Law

In 1996, the Air Force entered into a contract under which SUFI would install and operate telephone systems in guest lodgings on bases in Europe at no cost to the government; the Air Force agreed that SUFI network was to be the exclusive method available to a guest placing telephone calls at the lodging. The contract permitted SUFI to block other networks and required the Air Force to remove or disable preexisting Defense Switched Network (DSN) telephone lines in hallways and lobbies, but DSN phones remained in place. Call records showed that, with Air Force assistance, guests often placed multiple or lengthy individual calls. After the Air Force declined to implement controls to curb DSN and patched-call abuse, SUFI blocked guest-room access to the DSN operator numbers but permitted morale calls from lobby phones, monitored by sign-in logs. Air Force personnel failed to require guests to sign the logs and gave guests new DSN access numbers, to circumvent SUFI’s charges. After failed attempts to resolve the situation, including through the Armed Services Board of Contract Appeals, SUFI sold the telephone system to the Air Force for $2.275 million and submitted claims, totaling $130.3 million, to the contracting officer. The officer denied the claims, except for $132,922 on a claim involving use of calling-cards. The Board later awarded $7.4 million in damages, plus interest. In an action under the Tucker Act, 28 U.S.C. 1491, the Court of Federal Claims awarded $118.76 million in damages, plus interest. The Federal Circuit vacated in part and remanded for additional findings. View "SUFI Network Servs, Inc. v. United States" on Justia Law

In 2011, defendant S.G.'s vehicle collided with a motorcycle driven by John Allmer. S.G. was fifteen years old at the time. The parties stipulated Allmer suffered significant injuries, had medical expenses in excess of $1 million and continued to incur medical expenses for his care and treatment. Defendant Sandy Goetz and S.G.'s father were divorced, and S.G.'s father owned and insured the vehicle S.G. was driving. S.G. had exclusive possession of the car for six months prior to the accident. Her father's policy had an underlying liability limit of $250,000 and an umbrella policy of $1 million, which her father's insurance company offered in settlement of the claims against him. Goetz had an insurance policy with State Farm that listed Goetz and her vehicle as covered under the policy. Goetz signed S.G.'s driver's license application sponsorship form for drivers under the age of eighteen, assuming financial liability for S.G.'s negligent acts arising from operation of a motor vehicle under sections 39-06-08 (2011) and 39-06-09 (2011), N.D.C.C. State Farm filed a motion for summary judgment, arguing no dispute existed that S.G.'s vehicle was not covered under Goetz's policy. Goetz and S.G. filed a motion for summary judgment and Allmer filed a motion for summary judgment, arguing the language in Goetz's State Farm's insurance policy should be construed to provide coverage for the accident. State Farm did not dispute Goetz was liable for S.G.'s negligent acts; therefore, the district court addressed only whether State Farm's policy provided coverage for the claim. The district court found for the purposes of Goetz's policy that S.G. was considered a "resident relative" and S.G.'s Oldsmobile was a "non-owned" vehicle. The district court also determined State Farm was not required to cover S.G.'s vehicle because the vehicle was not designated on the policy. The district court granted State Farm's motion for summary judgment, and denied Goetz and S.G.'s motion for summary judgment and Allmer's motion for summary judgment. Allmer appealed, arguing that Goetz's signature on S.G.'s sponsorship form for her driver's license application imputed S.G.'s negligence to Goetz and created coverage for S.G.'s accident under Goetz's insurance policy. Finding no reversible error, the Supreme Court affirmed. View "State Farm Mutual Automobile Insurance Co. v. Gruebele" on Justia Law

The issue this case presented to the Delaware Supreme Court centered on whether coverage existed under certain management liability insurance policies. A bankruptcy trust sought a determination that those insurance policies covered potential future expenses and liabilities that might have arisen out of pre-bankruptcy wrongful acts allegedly committed by the insured debtor company’s directors and officers. XL Specialty Insurance Company and certain excess insurance carriers, appealed a Superior Court order denying their motion to dismiss the action. They claimed that the plaintiff-appellee, WMI Liquidating Trust lacked standing to prosecute its coverage claims, and, that the dispute did not present a ripe "actual controversy" susceptible of adjudication. Because the Supreme Court held that the Trust’s complaint must be dismissed on ripeness grounds, it did not reach the issue of standing. The parties’ dispute was not ripe because it has not yet assumed a concrete or final form. View "XL Specialty Insurance Co., et al. v. WMI Liquidating Trust" on Justia Law

Plaintiff and Defendant entered into a buy-sell agreement for the purchase of Plaintiff’s home. As agreed upon, Defendant moved into Plaintiff’s home and began paying rent. Before the closing date, however, Defendant notified Plaintiff that he had decided not to purchase the property and had vacated the premises. Plaintiff sued Defendant, alleging constructive fraud, deceit, and negligence. The district court dismissed Plaintiff’s tort claims on the ground that they arose strictly out of a breach of contract. The Supreme Court affirmed in part and reversed in part, holding (1) summary judgment was appropriate on Plaintiff’s constructive fraud and deceit claims; but (2) the district court erred in dismissing Plaintiff’s negligence claim on the ground it arose solely out of duties imposed under the agreement. Remanded. View "Dewey v. Stringer" on Justia Law

Franklin Quick Cash, LLC, a payday and title lending company, was sued for wrongfully repossessing a vehicle. Franklin had a commercial general liability insurance policy with Continental Western Insurance Co. that covered liability for accidents but precluded coverage of liability for property damage “expected or intended” by the insured. Continental Western refused to provide a defense on the grounds that Franklin’s actions leading to the suit were intentional. Franklin sued Continental Western for wrongful refusal to defend. The circuit court granted summary judgment for Franklin. The Supreme Court reversed, holding that Continental Western did not have a duty to defend because Franklin intended to repossess the vehicle, and therefore, there was no potential for coverage at the outset of the underlying lawsuit. View "Allen vs. Continental W. Ins. Co." on Justia Law