Justia Contracts Opinion Summaries

Carlyle Investment Management L.L.C. (CIM) and TC Group, L.L.C. (collectively, Plaintiffs) filed suit against defendant-appellant National Industries Group (NIG). Plaintiffs sought a declaratory judgment to enforce the terms of a forum selection clause contained in a Subscription Agreement between Carlyle Capital Corporation, Ltd. (CCC) and NIG. Specifically, they sought an injunction against NIG from proceeding with litigation that it filed against CCC in Kuwait in December, 2009. The Court of Chancery entered a Default Judgment against NIG. As part of the Default Judgment, the Court of Chancery issued an anti-suit injunction. NIG filed a Motion to Vacate the Default Judgment and to Dismiss the Complaint approximately one year later. The Court of Chancery denied the motion. NIG raised several related issues on appeal to the Supreme Court: (1) that the Court of Chancery erred in refusing to vacate the Default Judgment because the Default Judgment was void due to lack of subject matter and personal jurisdiction; (2) that the Court of Chancery's limited subject matter jurisdiction did not encompass actions for which a remedy at law is available or from which no irreparable harm could result; and (3) that the Court of Chancery erred in refusing to vacate the Default Judgment because, in so doing, the court effectively denied NIG the opportunity to litigate its claims against Carlyle. Upon review, the Supreme Court concluded that all of NIG's claims of error were all without merit, and affirmed the Court of Chancery's judgment. View "National Industries Group v. Carlyle Investment Management, L.L.C." on Justia Law

Law Firm sued Client for breach of contract, alleging that Client failed to pay its legal fees. A jury found that Client breached the agreement and awarded Law Firm damages, $150,000 as reasonable attorney's fees, and pre- and post-judgment interest. To suspend enforcement of the judgment pending appeal, Client deposited a cashier's check with the trial court, including the breach of contract damages and pre- and post-judgment interest. The trial court subsequently ordered Client to supplement the deposit to cover the attorney's fees award. The court of appeals denied Client appellate relief, concluding that attorney's fees are both compensatory damages and costs for the purpose of suspending enforcement of a judgment. The Supreme Court conditionally granted Client mandamus relief, holding that attorney's fees are neither compensatory damages nor costs for purposes of suspending enforcement of a money judgment, and directed the trial court to vacate its order and refund and monies overpaid by Client. View "In re Nalle Plastics Family Ltd. P'ship" on Justia Law

Plaintiffs leased an apartment from Defendant for thirteen months. Before the lease term expired, a dispute arose between the parties. Plaintiffs subsequently filed a complaint against Defendant, alleging breach of the terms of the lease, negligence, and negligence per se. The justice court found in favor of Plaintiffs. Defendant appealed, seeing a trial de novo. After a bench trial, the district court ruled in Plaintiffs' favor on their breach of lease claim and awarded them damages, costs, and attorney's fees. The Supreme Court affirmed, holding (1) the district court did not abuse its discretion when it allowed Plaintiffs to amend their complaint to add a claim that had not been pled during the justice court proceedings; (2) the district court did not abuse its discretion when it denied Defendant's motion in limine to prohibit any reference to the testimony and evidence presented during the justice court proceedings; and (3) because the district court's references to the prior proceedings did not suggest that the district court was unduly influenced by the justice court proceedings, Defendant was not denied her right to a trial de novo. View "McDunn v. Arnold" on Justia Law

Plaintiff's young son was injured by an uninsured motorist while he was a passenger in his daycare provider's van. Plaintiff filed a petition on behalf of her son against the daycare provider's insurance company, Shelter Mutual, alleging that her child was an "insured" under the uninsured motorist provisions of the policy. The policy defined "insured" to include owners, operators, and other users who exercise physical control of the right of control of the vehicle. The trial court granted summary judgment to Shelter. Plaintiff appealed, arguing that the uninsured motorist statute requires coverage of all passengers within the definition of "user." The Supreme Court affirmed, holding that Plaintiff's child was not an insured because (1) Plaintiff's child was not included in the definition of "insured" under the policy itself; (2) the financial responsibility law implies coverage as a matter of law in a policy for owners, operators and users to the extent that liability may be imposed on them under Missouri law for damages arising out of such ownership, operation, or use; and (3) Plaintiff's child did not come within this scope of coverage. View "Steele v. Shelter Mut. Ins. Co." on Justia Law

Plaintiffs, the owners and lessors of royalty rights to natural gas produced in Trumbull and Mahoning Counties in Ohio, filed a putative class-action lawsuit, alleging that three interrelated energy companies that entered into oil and gas leases with plaintiffs deliberately and fraudulently underpaid gas royalties over more than a decade. Plaintiffs asserted breach of contract and five additional tort and quasi-contract claims and sought compensatory and punitive damages. The district court dismissed, holding that the contract claim was time-barred by Ohio’s four-year statute of limitations and that none of the tort and quasi-contract claims were separate and distinct from the underlying contract action because they did not allege any obligations apart from those imposed by the leases. The Sixth Circuit reversed in part, finding that the district court failed to consider plaintiffs’ fraudulent concealment argument and that allegations regarding due diligence were sufficient to require further analysis. View "Lutz v. Chesapeake Appalachia, L.L.C." on Justia Law

Appellant, in his capacity as vice-president of Izett Manufacturing, Inc., executed a guaranty in connection with a loan agreement entered into by the company. The loan agreement entitled Izett Manufacturing to borrow up to $50,000 and was secured by a promissory note. The note and the guaranty both were dated 1999, and Appellant personally guarantied the payment of all liabilities under the note. The guaranty included a confession of judgment clause and stated that it was "executed under seal," with the designation "(SEAL)" as part of the signature line. By 2001, the company had borrowed $50,000 under the agreement. At that time, Appellee Osprey Portfolio, LLC purchased the loan and was assigned the note and guaranty. In late 2005, Osprey sent a letter to Izett Manufacturing, declaring the loan to be in default and demanding payment in full. Izett failed to remit payment. More than four years later, Osprey filed a Complaint in Confession of Judgment against Appellant as the guarantor of the loan. The court entered judgment the same day. Thereafter, Appellant filed a Petition to Strike and/or Open Judgment, claiming, in relevant part, that Osprey's action was precluded by Section 5525(a)(8) of the Judicial Code, which establishes a four-year limitation period for "[a]n action upon a contract, obligation or liability founded upon a writing . . .under seal . . ." The Supreme Court allowed this appeal to determine the limitation period that applies to an action on a guaranty executed under seal. Upon review, the Court held that the loan guaranty executed under seal by Appellant was an "instrument in writing under seal" subject to a 20-year limitation period set forth in Section 5529(b)(1) of the Judicial Code. Therefore, the Superior Court was affirmed. View "Osprey Portfolio, LLC v. Izett" on Justia Law

Defendant-appellant offered to purchase plaintiffs-appellees' mineral interest in Seminole County. At the time, plaintiffs did not know that they had inherited the mineral interest, that the mineral interest was included in a pooling order, or that proceeds had accrued under the pooling order. Defendant admitted it knew about the pooling order and the accrued proceeds but did not disclose these facts in making the offer. Plaintiffs signed the mineral deeds which defendant provided, and subsequently, they discovered the pooling order and the accrued proceeds. Plaintiffs filed suit against defendant for rescission and damages, alleging misrepresentation, deceit and fraud. The trial court entered summary judgment in favor of plaintiffs. The Court of Civil Appeals reversed. The issues before the Supreme Court on appeal were: (1) whether the summary judgment record on appeal established that defendant owed the plaintiffs a duty to disclose the pooling order and the accrued mineral proceeds when it made an unsolicited offer to purchase their undivided mineral interest in Seminole County and provided the mineral deeds to be executed; and if so, (2) whether rescission of the mineral deeds was a remedy for defendant's breach of the disclosure duty. The Court held that defendant owed a duty to disclose the accrued mineral proceeds to plaintiffs when it offered to purchase the mineral interest and provided the mineral deeds conveying the mineral interest and assigning the accrued mineral proceeds, if any. Furthermore, the Court held that rescission is an appropriate remedy in this case for the breach of defendant's disclosure duty. View "Croslin v. Enerex, Inc." on Justia Law

The issue before the Supreme Court in this case centered on a general partner's obligations under a limited partnership agreement. The plaintiffs alleged that the general partner obtained excessive consideration for its incentive distribution rights when an unaffiliated third party purchased the partnership. Notably, the plaintiffs did not allege that the general partner breached the implied covenant of good faith and fair dealing. Upon review of the matter, the Supreme Court concluded that the limited partnership agreement's conflict of interest provision created a contractual safe harbor, not an affirmative obligation. Therefore, the general partner needed only to exercise its discretion in good faith, as the parties intended that term to be construed, to satisfy its duties under the agreement. The general partner obtained an appropriate fairness opinion, which, under the agreement, created a conclusive presumption that the general partner made its decision in good faith. Therefore we the Supreme Court affirmed the Court of Chancery's dismissal of the complaint. View "Norton v. K-Sea Transportation Partners, L.P., et al." on Justia Law

Plaintiff–Appellee PharmAthene, Inc., and Defendant–Appellant SIGA Technologies, Inc., are both Delaware corporations engaged in biodefense research and development. SIGA appealed the Vice Chancellor's finding that it breached a contractual obligation to negotiate in good faith and was liable under the doctrine of promissory estoppel. The Supreme Court reaffirmed that where parties agree to negotiate in good faith in accordance with a term sheet, that obligation to negotiate in good faith is enforceable. Where a trial judge makes a factual finding that the parties would have reached an agreement but for the defendant's bad faith negotiation, the Court held that a trial judge may award expectation damages. In regard to the facts of this case, the Court reversed the Vice Chancellor's promissory estoppel holding because a promise expressed in a fully enforceable contract cannot give rise to a promissory estoppel claim. The Court also reversed the Vice Chancellor's equitable damages award based on his factual conclusion that the parties would have reached an agreement. The case was remanded for further proceedings in light of the Court's decision in this opinion. View "Siga Technologies, Inc. v. Pharmathene, Inc." on Justia Law

KEC appealed from the district court's order denying its motion for a declaration and specific performance of the obligations of BorgWarner under the Master Settlement Agreement, the Merger Agreement, and the Cooperation Agreement. This case arose when plaintiffs filed a complaint alleging that KEC, BorgWarner, and others improperly disposed and negligently disposed of substances containing toxic chemicals at the Crystal Springs site, where KEC owned a facility manufacturing transformers, and such negligence resulted in injuries to plaintiffs. The court affirmed the judgment of the district court because the terms of the Merger Agreement and Cooperation Agreement were not incorporated into the Master Settlement Agreement, and BorgWarner fulfilled its obligations under the Master Settlement Agreement. View "Alford, et al v. Kuhlman Corp." on Justia Law