Justia Contracts Opinion Summaries

Plaintiff Robert Bonnet is a petroleum landman who conducted business through Bobby Bonnet Land Services. In 2008, Plaintiffs entered into a written contract with the Energy and Minerals Department of the Ute Indian Tribe of the Uintah and Ouray Reservation to serve collectively as an independent contractor and consultant. When the Tribe terminated this contract in 2009, Plaintiffs sued various companies and individuals (but not the Tribe) in federal court, alleging these defendants caused the Tribe to terminate this contract prematurely. Plaintiffs served the Tribe with a non-party subpoena duces tecum requesting documents relevant to their suit. The Tribe moved to quash the subpoena based on the doctrine of tribal sovereign immunity. The district court denied the Tribe's motion, but modified the subpoena to limit or strike requests it deemed overbroad. The Tribe appealed. The issue before the Tenth Circuit was whether a subpoena duces tecum served on a non-party Tribe seeking documents relevant to a civil suit in federal court is itself a "suit" against the Tribe triggering tribal sovereign immunity. Pursuant to the collateral order doctrine, the Court concluded, yes, it is a "suit" against the Tribe. Therefore the Court reversed the district court's denial of the Tribe's motion to quash based on tribal immunity. View "Bonnet v. Ute Indian Tribe" on Justia Law

In 1983 Bitler leased gas stations to Marathon. The Environmental Protection Agency adopted new regulations so that that underground petroleum tanks and pipes at the gas stations had to be removed, upgraded, or replaced, 40 C.F.R. 280.21(a). In 1992 the parties amended the leases to make Marathon “fully responsible for removing” the tanks and pipes, filling holes created by the removal, complying with all environmental laws, “leav[ing] the Premises in a condition reasonably useful for future commercial use,” and “replac[ing] any asphalt, concrete, or other surface, including landscaping.” Marathon agreed to return the Premises “as nearly as possible in the same condition as it was in prior to such remediation work,” and to be responsible “for any and all liability, losses, damages, costs and expenses,” and to continue paying rent. The properties can be restored as gas stations with above‐ground storage tanks, and may be suitable for other commercial outlets. After completion of the work Bitler sued Marathon, alleging breach of contract and “waste.” The Seventh Circuit vacated to waste regarding Michigan properties, with directions to double those damages. The court affirmed dismissal of some of the contract claims. It would not conform to the reasonable expectations of the parties to limit liability for waste or other misconduct by a tenant simply because a lease had to be extended for an indefinite period to allow a response to unforeseen changes. View "Bitler Inv. Venture II v. Marathon Petroleum Co. LP" on Justia Law

Plaintiffs filed a putative collective action under the Fair Labor Standards Act, seeking backpay for time spent donning and doffing pieces of protective gear required by the employer because of hazards at its steel plants. The employer argued that the time, otherwise compensable under the Act, is noncompensable under its collective bargaining agreement with plaintiffs’ union. Under 29 U.S.C. 203(o), parties may collectively bargain over whether “time spent in changing clothes ... at the beginning or end of each workday” must be compensated. The district court granted the employer partial summary judgment. The Seventh Circuit and Supreme Court affirmed, concluding that the protective gear constitutes “clothes,” even if integral and indispensable to the work. Whether one exchanges street clothes for work clothes or simply layers one over the other may be a matter of purely personal choice, and section 203(o) should not be read to allow workers to opt into or out of its coverage at random or at will when another reading is textually permissible. Although safety glasses, earplugs, and a respirator do not fit the interpretation of “clothes,” the relevant question is whether the period at issue can, on the whole, be fairly characterized as “time spent in changing clothes or washing.” In this case, time spent donning and doffing safety glasses and earplugs was minimal. View "Sandifer v. United States Steel Corp." on Justia Law

Plaintiff filed suit against Wells Fargo in state court, raising claims related to Wells Fargo's foreclosure and Freddie Mac's attempts to evict plaintiff. Wells Fargo then removed the case to federal court where the district court dismissed all of plaintiff's claims. At issue on appeal was whether Wells Fargo could move for attorney's fees pursuant to Federal Rules of Civil Procedure 54(d)(2). Here, the deed of trust at issue provided for attorney's fees to compensate Wells Fargo, inter alia, for the prosecution or defense of a claim. The language of the contract and the nature of the claim were the dispositive factors concerning whether the fees were an element of damages or collateral litigation costs. In this instance the court concluded that the motions for attorney's fees provided by contract were permissible under Rule 54(d)(2). Accordingly, the court reversed and remanded. View "Richardson v. Wells Fargo Bank, N.A., et al." on Justia Law

Rick Wheeler had two liability insurance policies with American Family Mutual Insurance Company. Both Rick and his son Ryan were insureds under the policies. Both policies provided personal liability coverage and included exclusions for abuse and intentional injury. Both policies also contained a severability clause, which required that the insurance be applied separately to each insured. Joshua and Maren McCrary sued Rick and Ryan for Ryan’s alleged sexual assault of the McCrarys’ minor daughter. American Family filed a complaint for declaratory judgment seeking a judgment that its policies did not provide liability coverage to Rick. The district court granted summary judgment to American Family. At issue on appeal was whether the severability clause changed the effect of, or rendered ambiguous, the exclusions that would otherwise bar coverage for Rick. The Supreme Court affirmed, holding that the severability clause did not affect the unambiguous language of the policies’ exclusions, which barred coverage for Rick. View "Am. Family Mut. Ins. Co. v. Wheeler" on Justia Law

In 1998 the Gillespie School District hired Wight under for services preliminary to the actual designing and construction of a new elementary school building. Wight agreed to perform a “site mine investigation.” Wight hired Hanson Engineers to assess the potential for coal mine subsidence. A physical engineer at Hanson sent a letter to Wight, noting recorded subsidence events, including five to six events since 1979, affecting more than 40 structures in the area. The letter stated: “No one can predict when or if the land above the roof-and-pillar mine will subside… The owner should consider the fact that there is no economically feasible corrective action… to guarantee against future subsidence… it can be intuitively concluded that there is a relatively high risk of subsidence in the Benld/Gillespie area. The letter was not attached to the report, which noted some of its highlights. The school was built and occupied, but in 2009 was severely damaged as the result of subsidence and was condemned. The District sued Wight, alleging professional negligence, breach of implied warranty, and fraudulent misrepresentation by concealment of material fact. The court entered summary judgment in favor of Wight, based on statutes of limitations applicable to the claims. The appellate court affirmed. The Illinois Supreme Court affirmed, noting that it was expressing no opinion concerning the merits of various claims. View "Gillespie Cmty. Unit Sch. Dist. No. 7 v. Wight & Co." on Justia Law

Buyers purchased two condominium units pursuant to contracts entered into in 2006. Buyers later contended that the contracts were voidable because Seller failed to maintain Buyers’ deposits in escrow in the manner required by the Condominium Act (the Act). The trial court dismissed the claims against Seller. The Third District Court of Appeal reversed, concluding (1) the contracts were voidable under the escrow provisions of the Act that were in force in 2006; and (2) the application of a 2010 amendment to the Act that was intended to have retroactive effect and that removed a statutory ground for determining that the contracts were voidable violated the constitutional prohibition on the impairment of vested contractual rights. The Supreme Court reversed, holding (1) the 2010 amendment did not make a substantive change in the law; and (2) the contracts were not voidable under the statutory provisions in force in 2006. View "N. Carillon, LLC v. CRC 603, LLC" on Justia Law

Arloe Designs, LLC proposed to build a building at an airport. Arkansas Capital Corporation (ACC) and National Bank of Arkansas (NBA) allegedly worked together to procure a loan for the building’s construction. After the NBA approved financing for the project, Arloe entered into a thirty-year lease for the new hangar. Later that month, Arloe learned that NBA would not close the loan without a bond as collateral, which Arloe did not give, and therefore, the loan was not closed. Arloe sued ACC and NBA, alleging breach of contract, violations of the Arkansas Deceptive Trades Practices Act, negligence, and promissory estoppel. The circuit court granted summary judgment to Defendants as to all but Arloe’s promissory estoppel claim, and limited damages for that claim to the money Arloe had spent in reliance on the claimed promise. At trial, a jury found Arloe had not proved that either defendant had made a promise to loan Arloe money. The Supreme Court affirmed, holding (1) Arloe’s claims that the circuit court erred in denying it recovery for lost profit damages and limiting its damages on its promissory-estoppel claim were moot; and (2) summary judgment was proper in regard to the remainder of Arloe’s claims. View "Arloe Designs LLC v. Ark. Capital Corp." on Justia Law

Nationwide Mutual Fire Insurance Company issued a policy to Danny Ludwick insuring his home and its contents. The policy named Citizens Bank & Trust Company as the first mortgagee. The dwelling was subsequently destroyed by fire. However, based on material misrepresentations in Ludwick's application, Nationwide voided the policy back to its inception. Citizens submitted a claim to Nationwide. Nationwide denied the claim on the basis that the policy was void ab initio, allegedly extinguishing not only Ludwick’s interest but also Citizen’s interest as mortgagee. Citizens filed a complaint for wrongful denial of its claim. The circuit court granted summary judgment to Citizens. The Supreme Court affirmed, holding (1) an insurance company is entitled to rescission of its insured’s policy based on the insured’s fraud or misrepresentation, but the rescission of the policy has no effect on an independent contract with the mortgagee; and (2) because the policy at issue contained a standard mortgage cause, which operated as an independent contract between the insurance company and the named mortgagee, the rescission of Nationwide’s policy had no effect on the independent contract with Citizens. View "Nationwide Mut. Ins. Co. v. Citizensbank & Trust Co." on Justia Law

The issue before the Supreme Court in this case centered on whether a minority stockholder in a closely held corporation had a right to a non-conflicted board decision on whether to repurchase her shares. That stockholder argued that such a right exists, under common law fiduciary duty principles and under the implied covenant of good faith and fair dealing. The Court of Chancery found that the common law did not impose any duties on directors to consider buying out minority stockholders. The trial court also found that, given the language in the repurchase provision of the stockholders agreement, the implied covenant of good faith and fair dealing did not create any duty to negotiate a reasonable repurchase price. The Supreme Court agreed and affirmed the trial court. View "Blaustein v. Lord Baltimore Capital Corp." on Justia Law