Justia Contracts Opinion Summaries

Crowley Government Services, Inc. ("Crowley") entered into a contract with the Department of Defense United States Transportation Command ("USTRANSCOM") in 2016 to provide transportation coordination services, which involved hiring motor carriers to transport freight. The General Services Administration ("GSA"), not a party to the contract, began auditing Crowley's bills under a provision of the Transportation Act of 1940, claiming Crowley overbilled USTRANSCOM by millions of dollars. GSA sought to recover these overcharges by garnishing future payments to Crowley.The United States District Court for the District of Columbia dismissed Crowley's Administrative Procedure Act ("APA") claims, holding that the claims were essentially contractual and fell within the exclusive jurisdiction of the Court of Federal Claims. The D.C. Circuit reversed, finding that Crowley's suit was not a contract claim and remanded the case. On remand, the District Court held that GSA could audit both carriers and non-carriers but agreed with Crowley that the USTRANSCOM Contracting Officer's interpretations governed any GSA audits. The court enjoined GSA from issuing Notices of Overcharge ("NOCs") contrary to the Contracting Officer's determinations.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and held that 31 U.S.C. § 3726(b) allows GSA to audit only bills presented by carriers and freight forwarders. The court found that Crowley is not a carrier because it does not physically transport freight nor is it contractually bound to help perform the movement of goods. Consequently, the court reversed the District Court's decision on the scope of § 3726(b) and remanded for further proceedings, permanently enjoining GSA from conducting postpayment audits of Crowley's bills. View "Crowley Government Services, Inc. v. General Services Administration" on Justia Law

Plaintiff Gravel & Shea PC sued defendant Costello, Valente & Gentry, P.C., claiming unjust enrichment for receiving attorney’s fees without compensating plaintiff for work done to procure a settlement. The dispute arose from lawsuits involving an employee’s injury at work and his employer’s worker’s compensation insurance. Plaintiff represented the employer in a lawsuit against its insurer, Cornerstone Risk Management, LLC, while defendant represented the employee in a personal-injury lawsuit against the employer. The employee settled with Lloyd’s of London, Cornerstone’s professional-liability insurer, and defendant received its contingency fee from the settlement proceeds.The Superior Court, Chittenden Unit, Civil Division, granted summary judgment to plaintiff, concluding that under the common-fund doctrine, equities required defendant to contribute to plaintiff’s attorney’s fees. The court found that plaintiff’s efforts in the Cornerstone action led to the settlement from which defendant received its fees. The court also held a bench trial on damages and awarded damages to plaintiff. Defendant appealed, arguing that the trial court improperly expanded the common-fund doctrine and that the facts did not support a claim of unjust enrichment.The Vermont Supreme Court reviewed the case and reversed the trial court’s order granting summary judgment to plaintiff. The Supreme Court held that the common-fund doctrine did not apply because there was no common fund created by plaintiff’s efforts that benefitted both parties. The court emphasized that the common-fund doctrine is limited to cases where a party’s efforts create a fund that benefits others who did not contribute to the litigation costs. The court remanded the case for the trial court to enter summary judgment in favor of defendant, concluding that plaintiff could not maintain an unjust-enrichment claim under the circumstances. View "WWSAF Special Partners Group, LLC (Series D) v. Costello, Valente & Gentry, P.C." on Justia Law

A dispute arose between a surety bond company, Granite Re, Inc. (Granite), and a creditor bank, United Prairie Bank (UPB), over entitlement to funds held by a receiver in a receivership action. Granite issued payment bonds to Molnau Trucking LLC (Molnau) for public works projects, but Molnau defaulted on both the projects and loans from UPB. The issue was whether Granite or UPB had priority to the bonded contract funds held by the receiver. Granite argued for priority under equitable subrogation, having paid laborers and suppliers, while UPB claimed priority under the UCC, having perfected its security interests in Molnau’s accounts receivable before Granite issued the bonds.The district court granted summary judgment in favor of UPB, recognizing Granite’s equitable subrogation rights but ruling that UPB’s perfected security interest had priority. The court of appeals affirmed, applying a “mistake of fact” standard from mortgage context case law, which Granite did not meet.The Minnesota Supreme Court reviewed the case and held that the “mistake of fact” standard does not apply to performing construction sureties. The court concluded that Granite, as a surety, has the right to equitable subrogation without needing to show a mistake of fact. The court further held that a surety’s right to equitable subrogation is not a security interest subject to the UCC’s first-in-time priority rule. Instead, a performing surety has priority over a secured creditor regarding bonded contract funds.The Minnesota Supreme Court reversed the court of appeals’ decision and remanded the case to the district court for entry of judgment in favor of Granite, allowing Granite to request redistribution of the bonded contract funds. View "In re Receivership of United Prairie Bank v. Molnau Trucking LLC" on Justia Law

A bank holding company sued two guarantors for breach of their personal guaranties on a $1.5 million loan extended to an entity they were involved with. The guarantors argued that the bank holding company lacked standing to sue because there was no written assignment of the loan documents from the original lender, a bank, to the holding company. The district court admitted the written assignment into evidence and found that the holding company had standing. The court also granted summary judgment in favor of the holding company, finding the guarantors liable under the terms of their guaranties.The guarantors had counterclaimed against the holding company and other parties, alleging fraudulent concealment, fraudulent misrepresentation, civil conspiracy, and breach of the implied covenant of good faith and fair dealing. They argued that the bank and its president conspired with a now-deceased individual to conceal the financial instability of the individual’s entities, which led to the guarantors entering into the guaranties. The district court found no genuine issue of material fact regarding these counterclaims and granted summary judgment for the holding company.The guarantors also attempted to file a document in which the personal representative of the deceased individual’s estate confessed judgment against the estate. The district court ruled this filing a nullity, as the personal representative’s appointment had been terminated before the filing, and he was not authorized to act on behalf of the estate.The Nebraska Supreme Court affirmed the district court’s rulings, holding that the holding company had standing, the guarantors were liable under the guaranties, and the counterclaims were unsupported by evidence. The court also upheld the ruling that the purported confession of judgment was a nullity. View "Henderson State Co. v. Garrelts" on Justia Law

Clinton Mahoney, the sole member and manager of Mahoney & Associates, LLC, signed an agreement obligating the company to contribute to the Railroad Maintenance and Industrial Health and Welfare Fund, an employee benefit fund. When the Fund could not collect delinquent contributions from Mahoney & Associates, it sued Mahoney personally, citing a personal liability clause in the agreement. The district court granted summary judgment to the Fund, concluding that Mahoney was personally liable based on the clause.The United States District Court for the Central District of Illinois initially entered judgment on July 31, but it did not comply with Federal Rule of Civil Procedure 58. Mahoney filed a notice of appeal on September 26, and the district court later entered a corrected judgment on October 11. Mahoney filed a second notice of appeal the same day. The district court had awarded the Fund attorneys’ fees based on the trust agreement.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court found that there was a genuine dispute of material fact regarding Mahoney’s intent to be personally bound by the trust agreement, as he signed the memorandum in a representative capacity, which conflicted with the personal liability clause. The court concluded that this issue could not be resolved at summary judgment. The court also addressed Mahoney’s laches defense but found it waived due to his failure to address relevant complications. Consequently, the Seventh Circuit reversed the district court’s grant of summary judgment and vacated the award of attorneys’ fees, remanding the case for further proceedings. View "Railroad Maintenance and Industrial Health & Welfare Fund v. Mahoney" on Justia Law

Roy McAlister invented and patented technologies related to clean fuels and incorporated McAlister Technologies, L.L.C. (MT) to hold and license these patents. In 2009, MT entered into a licensing agreement with Advanced Green Technologies, L.L.C. (AGT), which later retained Loeb & Loeb, L.L.P. for patent matters. Conflicts arose, leading McAlister to terminate the agreement, alleging AGT's breach. McAlister and MT claimed that Loeb & Loeb's actions clouded their patents, causing prospective licensees to back out, resulting in lost profits.The Superior Court in Maricopa County granted summary judgment in favor of Loeb & Loeb on the lost profit damages, finding the plaintiffs' evidence speculative and lacking reasonable certainty. The court excluded the plaintiffs' expert testimony on damages and ruled against them on claims for trespass to chattel, slander of title, and aiding and abetting, but allowed claims for breach of fiduciary duty and negligent supervision to proceed. Plaintiffs conceded no triable damages remained and stipulated to final judgment against them.The Arizona Court of Appeals affirmed the exclusion of the expert testimony and the summary judgment on most lost profit claims but reversed on a $5 million initial payment claim, remanding for further proceedings. It also reversed the summary judgment on trespass to chattel and slander of title claims.The Arizona Supreme Court reviewed the case, focusing on the lost profit damages and trespass to chattel claim. It concluded that the plaintiffs failed to prove the lost profit damages with reasonable certainty, as material terms of the prospective licensing agreement were unresolved. Consequently, the court affirmed the summary judgment in favor of Loeb & Loeb on the lost profit damages and trespass to chattel claim, vacating the relevant parts of the Court of Appeals' decision. The case was remanded to the Superior Court for further proceedings on the slander of title claim. View "McAlister v. Loeb" on Justia Law

The case involves a dispute between Peter Lowes and Amy Thompson, formerly Amy Lowes, regarding a nondisparagement clause in their stipulated divorce judgment. Lowes alleged that Thompson breached this clause by describing him as her "abuser" during a political campaign interview. Thompson filed a special motion to strike the breach of contract claim under Oregon’s anti-SLAPP statute, which aims to quickly dismiss nonmeritorious claims arising from protected speech. The trial court granted Thompson’s motion, but the Court of Appeals reversed, concluding that the nondisparagement clause waived Thompson’s right to the anti-SLAPP statute’s protections.The Deschutes County Circuit Court initially granted Thompson’s special motion to strike, finding that her statements were protected under the anti-SLAPP statute and that Lowes failed to show a probability of prevailing on his claim. The Court of Appeals reversed this decision, holding that the nondisparagement clause constituted a waiver of Thompson’s anti-SLAPP protections, thus making it unnecessary to evaluate whether Lowes could prevail on his claim.The Oregon Supreme Court reviewed the case and disagreed with the Court of Appeals. The Supreme Court held that the nondisparagement clause did not clearly indicate an intention to waive the procedural protections of the anti-SLAPP statute. Therefore, the clause alone could not defeat Thompson’s special motion to strike. The Supreme Court reversed the Court of Appeals' decision in part and remanded the case back to the Court of Appeals to determine whether Lowes met his burden of establishing a probability of prevailing on his breach of contract claim. View "Lowes v. Thompson" on Justia Law

Anthony Rojas, a student at the University of Florida, filed a class action lawsuit against the University of Florida Board of Trustees. Rojas claimed that the University breached its contract by suspending on-campus services and closing facilities during the COVID-19 pandemic, despite students being required to pay mandatory fees for these services. He also alleged that the University failed to refund these fees. The complaint included a spring 2020 tuition statement, a general statement of tuition and fee estimates for the 2019-2020 academic year, and the University’s financial liability agreement.The trial court dismissed the unjust enrichment claim but denied the University’s motion to dismiss the breach of contract claim, ruling that the complaint adequately pleaded the existence of an express contract. The University appealed, and the First District Court of Appeal reversed the trial court’s decision, holding that the claims were barred by sovereign immunity. The First District concluded that the contract alleged by Rojas did not constitute an express written contract sufficient to overcome sovereign immunity.The Supreme Court of Florida reviewed the case and quashed the First District’s decision. The Court held that the waiver-by-contract doctrine does not preclude claims based on the breach of implied covenants or conditions that do not conflict with express contract provisions. The Court found that the First District erred in requiring extraordinary specificity in government contracts and in failing to recognize permissible implied covenants. The case was remanded for further proceedings consistent with this opinion. View "Rojas v. University of Florida Board of Trustees" on Justia Law

In this case, Donald Neuens entered into a contract for deed with Dorothy Czajkowski for the sale of property in Golden Valley County, North Dakota. Czajkowski agreed to pay $60,000 for the property, with a down payment and the remaining balance to be paid in monthly installments at an interest rate of 6%, along with property taxes. After Neuens passed away, the Axvigs purchased his interest from his estate. The Axvigs then initiated a quiet title action against Czajkowski to cancel the contract for deed, alleging that Czajkowski had abandoned the property, failed to make the required payments, and failed to pay the property taxes.The District Court of Golden Valley County awarded summary judgment in favor of the Axvigs, concluding that the contract for deed was canceled and awarding the property to the Axvigs. The court found that the contract allowed the Axvigs to proceed with a court action without providing notice and an opportunity to cure the default. Czajkowski appealed, arguing that the court erred in its interpretation of the contract and failed to allow a redemption period.The North Dakota Supreme Court reviewed the case and reversed the amended judgment. The court held that the contract for deed was unambiguous and required the seller to provide notice of default and an opportunity to cure before seeking cancellation. The court found that the district court misinterpreted the contract by allowing the Axvigs to proceed with the cancellation action without first providing the required notice and time to cure the default. The Supreme Court concluded that the Axvigs breached the contract by not providing the necessary notice of default before initiating the cancellation action. View "Axvig v. Czajkowski" on Justia Law

E.H. Turf Supply Company, Inc. filed a small-claims action against Roger Tavares, alleging that Tavares stopped payment on a check for services performed on his tractor. Tavares denied the allegations and counterclaimed for $2,500, asserting that the services were not rendered. The District Court ruled in favor of E.H. Turf Supply, awarding $1,500 plus costs. Tavares appealed to the Superior Court, arguing procedural errors and bias.The Superior Court held a de novo bench trial. E.H. Turf Supply presented testimony from its president, Erik Hagenstein, who detailed the company's repair process and confirmed that Tavares had approved and paid for the services before stopping payment. Tavares cross-examined Hagenstein and attempted to introduce invoices from other repair shops to show that the repairs were not properly done. The trial justice excluded these invoices as hearsay but allowed Tavares to testify about his experience.The Superior Court found in favor of E.H. Turf Supply, awarding $1,703.71. Tavares appealed to the Rhode Island Supreme Court, arguing that the Superior Court erred in allowing E.H. Turf Supply to present its case first, excluding his evidence, and not considering his status as a self-represented litigant.The Rhode Island Supreme Court reviewed the case and found no merit in Tavares's arguments. The Court held that E.H. Turf Supply, as the plaintiff, was correctly allowed to present its case first. The exclusion of the invoices was proper as they were hearsay, and the trial justice provided Tavares with ample opportunity to present his case. The Court affirmed the judgment of the Superior Court. View "E.H. Turf Supply Co. v. Tavares" on Justia Law