Justia Contracts Opinion Summaries

Appellants purchased property that was subject to a Master Plan that restricted the use and development of the property. Appellants obtained title insurance from Insurer, but the policy did not mention the Master Plan. Appellants only later learned of the Master Plan when they were informed they were in violation of the Master Plan and faced substantial penalties if they failed to comply with the Plan. Appellants sued Insurer, claiming a breach of the terms of the title insurance policy, negligence, and bad faith. The district court granted summary judgment in favor of Insurer on all claims brought in Appellants' complaint. The Supreme Court affirmed, holding that the district court did not err in entering judgment in favor of Insurer. View "Sonnett v. First Am. Title Ins. Co." on Justia Law

Heath and Vail Freyer, the parents of Alicia Freyer, were all riding in their vehicle, which was insured by State Farm, when the vehicle rolled over, causing Health's death. In Freyer I, the Court held that the subject policy provided coverage for Alicia's claim for derivative damages stemming from Health's death. After remand, State Farm paid the disputed coverage amounts. The Freyers then brought claims against State Farm for the wrongful denial of coverage for Alicia's derivative claims. The district court granted summary judgment to State Farm. The Supreme Court reversed in part and affirmed in part, holding that the district court (1) erred in concluding that State Farm had not breached the insurance contract when it failed to indemnify Vail for Alicia's derivative claims based on State Farm's "reasonable basis in law" defense; (2) properly granted summary judgment to State Farm on the common-law bad faith and breach of the covenant of good faith and fair dealing claims; and (3) did not err in granting summary judgment to State Farm on the Unfair Trade Practices Act claims. View "State Farm Mut. Auto. Ins. Co. v. Freyer" on Justia Law

Pam, Allan, and Charles and Mary Lou Dees (the Dees) started a business, Great Falls Portables, Inc. (GFP), with Allan acting as sole manager of the business. Pam subsequently took over management. The Dees later filed a complaint against Pam, GFP, and others. A month later, Pam and Allan, who were married but separated, entered into a settlement agreement that provided that Pam would be responsible to the Dees for any obligation owed them in connection with their interest in GFP. In litigation with the Dees, Pam filed a third-party complaint against Allan, alleging (1) the Dees' complaint arose out of Allan's fraudulent activity (Count I), (2) Allan had fraudulently induced Pam to enter the agreement assigning responsibility for the Dees' interest (Count II), and (3) Allan must indemnify her from liability to the Dees (Count III). The district court granted summary judgment to Allan on all three counts. The Supreme Court affirmed, holding that the district court correctly determined that (1) Pam failed to plead fraud with sufficient particularity; (2) Pam failed to show reliance on Allan's representations; and (3) Count III of Pam's complaint was dependent on and related back to Counts I and II. View "Fossen v. Fossen" on Justia Law

The issue on appeal to the Supreme Court centered on whether Lincoln Farm, L. L. C. breached a contract to sell potatoes to Farming Technology Corporation, and whether certain provisions of the Uniform Commercial Code involving the unavailability of a carrier and a commercially impracticable method of delivery were applicable to the parties. Farming Technology argued at trial that Lincoln Farm was required to build a private rail spur in order to fulfill Lincoln Farm's contractual obligation to load potatoes on railcars or trucks furnished by Farming Technology Corporation to take delivery of the potatoes. After review of the contract in question, the Supreme Court held that the contract unambiguously stated that Farming Technology Corporation would furnish railcars or trucks to take delivery of the potatoes, and that the contract did not state that Farming Technology had the right to insist on delivery solely by rail, or to insist that Lincoln Farm build a private rail spur. View "Lincoln Farm, LLC v. Oppliger" on Justia Law

Robert Smith, a schizophrenic trash collector, was induced into acting as a straw buyer for two overvalued residential properties in Massachusetts. Smith sued various entities and individuals involved in the transactions. After a jury trial, the jury returned a verdict largely favorable to Smith on his claims of fraud and breach of fiduciary duty. The district court doubled and trebled certain damages pursuant to the Massachusetts Consumer Protection Statute, Mass. Gen. Laws ch. 93A. Two defendants, a real estate brokerage firm (Century 21) and a mortgage broker (NEMCO), appealed. Smith cross-appealed the dismissal of several of his claims. The First Circuit Court of Appeals (1) vacated the damage award against Century 21 and remanded for a new trial on damages; (2) reversed the judgment against NEMCO on Smith's common-law claims; (3) vacated the judgment against NEMCO on Smith's Chapter 93A claim and remanded for a determination on the merits; (4) vacated the judgment in favor of another defendant and remanded; and (5) reversed the dismissal of Smith's Chapter 93A claim against yet another defendant and remanded for a determination of the claim on the merits. View "Smith v. Jenkins" on Justia Law

Plaintiff, the Chairman of the Trustees of the Rhode Island Bricklayers Benefits Funds (the Funds), sued Union Stone Inc., alleging that Union Stone had failed to pay the full amount of fringe benefit contributions due for work performed in Massachusetts and Connecticut by members of the International Union of Bricklayers and Allied Craftworkers pursuant to a collective bargaining agreement. After a trial, the district court entered judgment in favor of the Funds, awarding the unpaid contributions, interest, and attorneys' fees. The First Circuit Court of Appeals affirmed, holding that the district court did not err in (1) refusing to enforce a purported settlement agreement between the parties; (2) admitting certain evidence on the ground that it was tainted by violations of the discovery rules; (3) declined to impose sanctions; and (4) awarding interest and attorneys' fees. View "Enos v. Union Stone, Inc." on Justia Law

Appellant sued his former employer (Employer) in district court, alleging claims for fraud and wrongful termination. Employer, however, had been sold to a foreign corporation (Corporation), which was not a resident of Wyoming. Corporation filed a motion to dismiss the case for improper venue and failure to state a claim upon which relief could be granted. The district court granted the motion on both grounds. The Supreme Court (1) affirmed the district court's dismissal for improper venue; but (2) vacated the district court's dismissal for failure to state a claim, holding that the court erred as a matter of law when it reached the merits of the case after determining that it had to be dismissed on venue grounds. Remanded for a dismissal without prejudice based upon improper venue. View "Bourke v. Grey Wolf Drilling Co., LP" on Justia Law

Jerry Herling Construction, Inc. (JHCI) contracted with Plaintiff for rental and service of earthmoving equipment but defaulted on the payments due under the contract. Plaintiff sued Jerry Herling, JHCI's CEO, seeking to enforce personal guaranties of JHCI's performance. Herling, in turn, argued that he was released from his guaranties because of an assignment of JHCI's retainage account and a settlement between other parties. The trial court granted summary judgment to Plaintiff, concluding that Plaintiff was entitled to judgment against Herling on his guaranties as a matter of law, and entered judgment against Herling in the amount of $1,383,473 based on his guaranties. The Supreme Court reversed, holding that there were genuine issues of material fact as to whether Herling was entitled to credit for the $500,000 settlement. Remanded. View "Herling v. Wyo. Machinery Co." on Justia Law

YA, a nonprofit corporation serving at-risk youth, transported young people to an event using vans that it owned. After the event four people were unable to board because a van was full. A YA employee requested that 16-year-old Lee, a YA participant who had driven to the event in a separate vehicle, drive them home. Lee agreed. Lee did not possess a valid driver’s license and the car that he was driving had been stolen during a carjacking. Police saw Lee driving erratically, ran a license plate check, and gave chase. Lee lost control and hit a tree. Lee survived, but all four passengers were killed. Their estates filed suit. YA requested defense and indemnification under policies issued by Indemnity: a commercial general liability policy with a $1 million limit and a commercial excess liability policy with a $2 million limit. Indemnity provided a defense, but disputed coverage and sought a federal declaratory judgment. YA counterclaimed that Indemnity breached its duty of good faith and violated the Kentucky Unfair Claims Settlement Practices Act, by misrepresenting coverage and failing to affirm liability within a reasonable time. The district court held that Indemnity was obligated under the CGL policy but not under the excess policy. The state court action settled with Indemnity’s payment of the $1 million limit of the CGL policy, plus $800,000 of the excess policy. The federal court dismissed the bad-faith counterclaims, reasoning that, as a matter of law, Indemnity’s coverage position had not been taken in bad faith. The Sixth Circuit affirmed. View "Philadelphia Indem. Ins. Co. v. Youth Alive, Inc." on Justia Law

Padraic Conroy and Heather Wicks owned real property as tenants in common. In 2010, Wicks filed a complaint seeking an equitable partition and sale of the house, with profits to be split equally between her and Conroy. Following a jury-waived trial, the trial court granted Wicks's petition and ordered the sale of the house. The court ordered the profits to be split equally between the parties subject to a credit due to Wicks for Conroy's rent-free occupancy of the downstairs apartment. The Supreme Court affirmed, holding that the superior court did not err in (1) finding there was no contract in which the parties agreed Conroy would live in the house rent-free; (2) crediting Wicks for one-half of the fair rental value of the downstairs apartment during the period Conroy lived there; and (3) denying Conroy the opportunity to buy out Wicks's interest in the property. View "Wicks v. Conroy" on Justia Law