Justia Contracts Opinion Summaries

Plaintiff Thomas P. Whelan, Jr.'s decedent father, Thomas P. Whelan, Sr., was in Plaintiff's parked truck when it was hit by a moving vehicle. The collision allegedly resulted in severe injuries and medical costs in excess of $100,000 and ultimately in the decedent's death a few years later. At the time of the accident, occupants of Plaintiff's truck were insureds under the terms of a $50,000 liability policy issued by State Farm, facially providing no UM/UIM coverage. In the Supreme Court's decision in "Jordan v. Allstate Ins. Co.," the effective rejection of an insured's statutory rights to UM/UIM coverage equal to liability limits had to be made in writing and as part of the insurance policy delivered to the insured. Because the result in "Jordan" was foreshadowed by other precedents, the Supreme Court declined to make Jordan applicable only to cases arising in the future, and held that policies that failed to comply with Jordan's rejection requirements would be judicially reformed to provide full statutory coverage. In 2011, following the 2010 issuance of Jordan, Plaintiff made a demand on his insurer State Farm for reformation of his policy that was in effect at the time of the accident. Relying on a clause in the policy that purported to bar UM/UIM claims made more than six years after the date of the underlying accident, State Farm rejected the claim. Plaintiff then instituted a declaratory judgment action against State Farm for reformation of the policy. Upon review of this matter, the Supreme Court held that a limitations clause based solely on the date of the accident without consideration of the actual accrual of the right to make a UM/UIM claim was unreasonable and unenforceable as a matter of law. But addressing the merits of Plaintiff's action, the Court also held that judicial reformation under Jordan did not extend to historical insurance contracts formed before another precedential opinion was issued in 2004. Because the policy in this case was issued before that date, it was not subject to retroactive reformation of its facial lack of UM/UIM coverage. View "Whelan v. State Farm Mutual Auto Ins. Co." on Justia Law

AutoSource Motors, LLC petitioned the Supreme Court for a writ of mandamus to direct the Montgomery Circuit Court: (1) to vacate its order denying AutoSource's motion to dismiss the action filed against it by Stephanie Chamberlain for lack of personal jurisdiction; and (2) to enter an order granting AutoSource's motion to dismiss for lack of personal jurisdiction. The controversy arose when Chamberlain purchased a vehicle from AutoSource via the Internet. Chamberlain's affidavit did not rebut the prima facie showing made by AutoSource in that her affidavit failed to establish that AutoSource was subject to suit in Alabama pursuant to either general personal jurisdiction or specific personal jurisdiction; consequently, the Supreme Court held that the circuit court erred in denying AutoSource's motion to dismiss Chamberlain's complaint for lack of personal jurisdiction. AutoSource demonstrated a clear legal right to the relief it sought; the Supreme Court granted its petition and issued the writ. View "Chamberlain v. AutoSource Motors, LLC" on Justia Law

Borrower borrowed $696,000 from Lenders. The note was secured by a deed of trust covering real property. Guarantor guaranteed the loan under a guaranty agreement that included a general waiver of defenses. Borrower subsequently defaulted on the loan, and Purchaser purchased the secured property in a nonjudicial foreclosure sale for $487,200. The fair market value of the property was $840,000. Purchaser sued Guarantor to recover the $266,748 balance remaining on the note after applying all credits and the proceeds from the sale. Guarantor argued that under Tex. Prop. Code Ann. 51.003 any deficiency owed should be offset by the difference between the fair market value and the foreclosure price. The trial court granted summary judgment for Guarantor. The court of appeals reversed, holding (1) section 51.003 creates an affirmative defense, and (2) by agreeing to a general waiver of defenses in the guaranty agreement Guarantor waived his right of offset. The Supreme Court affirmed, holding that Guarantor waived his statutory right to an offset. View "Mehrdad v. Interstate 35/Chisam Road, L.P." on Justia Law

Plaintiffs, two groups of cotton farmers, filed suits against the cooperative of which they were members under contract, alleging that they were fraudulently induced to join the cooperative. Plaintiffs’ agreements with the cooperative provided for the arbitration of all disputes under the Federal Arbitration Act (FAA). The cooperative filed a motion to stay the litigation and a motion to compel arbitration. The trial court denied the motions, concluding that the parties’ arbitration agreement was unconscionable. The court of appeals affirmed, reasoning that the agreements were unconscionable because they forced the farmers to “forego substantive rights and remedies afforded by statute.” The Supreme Court reversed, holding that the limitation of statutory remedies was insufficient to defeat arbitration under the FAA. Remanded. View "Venture Cotton Coop. v. Freeman" on Justia Law

RFD-TV, LLC, a television programming service, executed an affiliation agreement with Sunflower Broadband Corporation that granted Sunflower a nonexclusive right to distribute RFD programming to Sunflower’s subscribers in Kansas in exchange for a fee. Knology, Inc., subsequently purchased Sunflower’s assets. Prior to this purchase Knology was providing cable service to subscribers in South Dakota. Knology later became a wholly owned subsidiary of WOW! Cable. Two years later, Knology and WOW ceased distribution of RFD programming and did not pay fees. RFD sued Knology and WOW (collectively, Appellees) for breach of contract. Appellees filed a motion to dismiss, alleging that the district court did not have personal jurisdiction over them. The district court dismissed the complaint with prejudice, finding that the minimum contacts requirement between Appellees, as nonresident defendants, and the State had not been met. The Supreme Court affirmed as modified, holding that the district court (1) did not err in dismissing the complaint for lack of personal jurisdiction; and (2) erred in dismissing the case with prejudice. View "RFD-TV v. WildOpenFence Fin." on Justia Law

This dispute arose between H&S, the lessor of drilling equipment, and Graham, the lessee, over the lease of drilling equipment for the construction of an underground water shaft. The court reversed the jury's verdict and judgment in favor of Graham and entered judgment in favor of H&S on Graham's claim for negligent misrepresentation as the claim was barred by the economic loss doctrine; the court had no basis to conclude that the doctrine of equitable estoppel barred H&S's breach of contract claim as a matter of law; because the district court refused to submit an estoppel instruction based exclusively on failure to disclose, any error in refusing the instruction could not be predicated on evidence of affirmative representations made by H&S; the district court did not err in failing to instruct the jury on Graham's proposed mitigation instruction; therefore, the court vacated the jury award in favor of H&S on its breach of contract claim; the court concluded that the doctrine of unclean hands does not bar H&S's recovery of the value of the auger; therefore, the court vacated the district court's award in favor of H&S for loss of the auger and remanded for a new trial on damages as to those claims; and the court noted that on remand, Graham's mitigation defense may reduce all, some, or none of H&S's damages. View "Graham Construction Services v. Hammer & Steel Inc." on Justia Law

Plaintiff, an Alabama corporation, filed a breach of contract action against Defendant, a North Carolina limited liability company, in Alabama, alleging breach of contract. The Alabama court entered a default judgment against Defendant. Plaintiff subsequently filed a request to file a foreign judgment in a North Carolina court, presenting a certified copy of the Alabama judgment. In response, Defendant filed a motion for relief from and notice of defense to the foreign judgment. The trial court denied Plaintiff’s motion, concluding that, in accordance with N.C. R. Civ. P. 60(b), the intrinsic fraud of Plaintiff in obtaining the underlying Alabama judgment precluded enforcement of the Alabama judgment as a judgment of North Carolina. The Court of Appeals vacated the trial court’s order, concluding that intrinsic fraud was not a sufficient ground under the Full Faith and Credit Clause to deny Plaintiff’s motion to enforce the Alabama judgment. The Supreme Court affirmed the decision of the Court of Appeals as modified, holding that the Alabama judgment was a final judgment and was entitled to the same credit in North Carolina that it would be accorded in Alabama, and Rule 60(b) had no applicability as a defense to a foreign judgment. View "DocRx, Inc. v. EMI Servs. of N.C., LLC" on Justia Law

Borrowers applied from a home mortgage loan from Lender. During the transaction, a loan officer made an incorrect statement about lien priority. Borrowers later filed breach of fiduciary and negligent misrepresentation claims against Lender, alleging that the junior status of Lender’s lien decreased the marketability and value of their home and exposed them to increased liability. The trial court granted Lender’s motion for summary judgment on all claims. The Court of Appeals concluded that material issues of fact barred summary judgment on Borrowers’ breach of fiduciary duty claim, reasoning that Lender’s assurance of a first priority lien on Borrowers’ new mortgage loan was an act beyond the scope of a normal debtor-creditor relationship. The Supreme Court reversed, holding that the trial court correctly granted summary judgment for Lender on both claims where no fiduciary duty existed and where Plaintiffs did not forecast evidence that they made a reasonable inquiry into the validity of the loan officer’s statements. View "Dallaire v. Bank of Am., N.A." on Justia Law

GE Plaintiffs filed suit against Worthington under the Texas Uniform Fraudulent Transfer Act (TUFTA), Tex. Bus. & Comm. Code 24.009(a), seeking to void transfers that Worthington received from the GE Plaintiffs' predecessor-in-interest, allegedly with notice of the transfers' fraudulent nature. The jury found in favor of the GE Plaintiffs and the district court entered judgment for the amount of the transfers. The court concluded that the factual commonality in this case did not suffice to count the contractual dispute settlement against TUFTA's limit on recovery for a single avoidance "claim," or to render Citibank a joint tortfeasor for one-satisfaction rule purposes. Accordingly, the district court did not err in denying Worthington a settlement credit for the settlement proceeds that the GE Plaintiffs received from Citibank. The court rejected Worthington's argument that the district court erred as a matter of law in interpreting TUFTA's good faith defense as an objective standard. Accordingly, the court affirmed the judgment of the district court. View "GE Capital Commercial, Inc., et al. v. Wright & Wright, Inc." on Justia Law

Plaintiff purchased a new vehicle from Dealer that was subject to Manufacturer’s limited warranty. Plaintiff later filed a complaint against Manufacturer and Dealer (together, Defendants), alleging that the vehicle was defective and that Defendants failed to repair or remedy the defects under the warranty. Dealer demanded that Manufacturer reimburse Dealer for the attorney’s fees it incurred in defending against Plaintiff’s claims and indemnification for and liability incurred. Plaintiffs claims against Defendants were disposed of through summary judgment and voluntary dismissal. The judge also found that Dealer was not entitled to indemnificationt. The Supreme Judicial Court affirmed, holding that because Plaintiff’s allegations alleged the fault or negligence of both Manufacturer and Dealer, Manufacturer did not have a duty to defend under Mass. Gen. Laws ch. 93B, 8(a). View "Ferreira v. Chrysler Group LLC" on Justia Law