Justia Contracts Opinion Summaries

After Petitioners and Respondent, Town of Clay, entered into a construction contract, Petitioners filed a complaint for preliminary injunctive relief based on a dispute over the contract. Petitioners paid a $25,000 injunction bond to the circuit court. Later, the court dismissed Petitioners' complaint and ordered that Petitioners' bond be forfeited and paid over to the Town to compensate it for its attorney fees and costs. The Supreme Court affirmed in part and reversed in part, holding (1) the bond was subject to forfeiture in the absence of a finding that the underlying suit was filed in bad faith; (2) Petitioners were not given a fair opportunity to contest whether the attorney fees and costs were incurred by Respondent in attempting to secure a dissolution of the bond; and (3) the circuit court erred in not holding a hearing under the standards set forth in Aetna Casualty & Surety Co. v. Petrolo to determine whether the fees and costs were reasonable. Remanded. View "Multiplex Inc. v. Town of Clay" on Justia Law

The party to an exclusive marketing, license, and distribution agreement (licensee) brought contract and tort claims in California against the other parties to that agreement and their affiliated companies (licensors). The defendants in that action, including the licensors, were the plaintiffs in this action. Plaintiff sought a declaratory judgment that the agreement was properly terminated and injunctive relief relating to the agreement's confidentiality and termination provisions. Defendant asserted counterclaims for breach of contract, among other claims. The Court of Chancery awarded the licensee damages against the licensors, their parent, and a sister company, holding (1) those plaintiffs who were parties to the agreement breached the non-compete provision of that agreement or the implied covenant of good faith and fair dealing, and those plaintiffs and a sister company were liable in tort for tortious interference with contract; (2) the additional named plaintiffs were not liable in contract or tort; (3) the agreement was properly terminated, and Defendant was required to comply with the agreement's termination and confidentiality provisions; and (4) both parties' requests for attorneys' fees were denied. View "eCommerce Indus., Inc. v. MWA Intelligence, Inc." on Justia Law

Plaintiffs Kylie and Michael D. Shuba appealed the Superior Court's denial of their cross-motion for summary judgment and its grant of summary judgment in favor of Defendant United Services Automobile Association's ("USAA") motion for summary judgment. The Shuba's sought to be covered persons for the wrongful death of their mother under an insurance policy issued by USAA and held by the Shubas' step-mother. It was undisputed that their mother was not a named insured under the policy or a resident of the stepmother's household as the Shubas were. The Shubas claimed the trial court erred in finding the Shubas could not recover uninsured motorist benefits under the USAA policy. In making their claim, the Shubas asked the Supreme Court to overrule two Superior Court cases, "Temple v. Travelers Indemnity Co" and "Adams-Baez v. General Accident Co.," the latter of which the Supreme Court affirmed based on the trial court opinion. The Supreme Court declined to overrule those cases as precedent, and affirmed the Superior Court's judgment. View "Shuba v. United Services Automobile Association" on Justia Law

George Patrick Stacey and Innovative Treasury Systems, Inc. ("I.T.S."), sued Anthony Lee Peed for breach of contract, account stated, and money lent. Peed denied he was indebted to Stacey and I.T.S., moved for dismissal and asserted various affirmative defenses. The trial court granted Peed's motion. Stacey and I.T.S. moved to alter, amend, or vacate that judgment, which was ultimately denied by operation of law. Stacey and I.T.S. then appealed the circuit court's judgment, arguing the circuit court received substantial evidence of the formation of a contract and of "open account [stated]" and because Peed had failed to present a counterargument regarding their claim for money lent. After careful review of the circuit court record, the Supreme Court affirmed in part, reversed in part, and remanded for further proceedings. The Court affirmed summary judgment with respect to Stacey and I.T.S.'s claim for open account stated and reversed as to Stacey and I.T.S.'s claims of breach of contract and money due on an open account and as to the determination that the money was a gift. View "Stacey v. Peed " on Justia Law

The Probate Court appointed Theodore Ballard's niece, Leala Bell, as Ballard's guardian. Bell signed a promissory note to a mortgage as a "borrower"; she did not expressly indicate that she was signing as Ballard's guardian or that her signature indicated only her "approval" of Ballard's action. The loan was secured by a mortgage on Ballard's real property. The mortgage deed granted and conveyed Ballard's property to CitiFinancial, including the power to sell the property. Ballard signed the mortgage deed but Bell did not. There was no showing that the probate court licensed the mortgage. CitiFinancial alleged that Ballard had failed to make the payments called for under the note and mortgage, and therefore breached these agreements. Ballard moved for summary judgment, arguing in relevant part that he lacked the legal capacity to execute a mortgage deed and promissory note while he was under guardianship. Upon review, the Supreme Court found that Ballard's argument relied on the notion that Bell participated in the transaction with CitiFinancial, subjected herself to personal liability as a cosigner of the note, signed the settlement statement as well as the promissory note, but did not actually approve Ballard's signing of the note. Although the mortgage deed purportedly executed by Ballard and the promissory note secured by that deed were executed as part of the same overall transaction, the two documents created distinct legal obligations. The Supreme Court concluded that the trial court erred in analyzing the note and mortgage as if they were one and the same, both subject to the requirement of probate court approval. Therefore the Court reversed the award of summary judgment to Ballard on CitiFinancial's claim on the promissory note and remanded the case back to the trial court for further proceedings on that claim. View "CitiFinancial, Inc. v. Balch" on Justia Law

Defendant sold home theater systems manufactured by Plaintiff, Bose Corporation, for use in the U.S. to customers abroad. Defendant, who was not an authorized reseller or distributor of Bose products, sold the systems across international markets to take advantage of high retail prices in other countries. Plaintiff filed this action against Defendant for breach of contract and trademark infringement, asserting that Defendant sold its American products in Australia without Plaintiff's consent even though he had signed a settlement agreement promising not to make such sales after he had made similar sales in Europe. The First Circuit Court of Appeals affirmed, holding (1) the settlement agreement was a valid contract; and (2) summary judgment on the trademark infringement claim was appropriate. View "Bose Corp. v. Ejaz" on Justia Law

Plaintiff, the owner of a home warranty plan from First American, filed a class action complaint alleging that First American refused to make timely repairs, used substandard contractors, and wrongfully denied claims. The district court dismissed some of plaintiff's claims under Rule 12(b)(6); First American made an offer of judgment on plaintiff's remaining claims; and, when plaintiff did not accept the offer, the district court dismissed the remaining claims for lack of subject matter jurisdiction. On appeal, plaintiff challenged the district court's dismissal of plaintiff's remaining claims. The court vacated the dismissal of the remaining individual claims, holding that an unaccepted Rule 68 offer that would fully satisfy plaintiff's claim was insufficient to render the claim moot. Therefore, plaintiff's remaining claims were not made moot by her refusal to accept First American's Rule 68 offer, even assuming that the offer would have fully satisfied her claims. View "Diaz v. First American" on Justia Law

Plaintiff filed a legal malpractice action against two attorneys and a law firm (Respondents) alleging that their negligence resulted in failed collateral in securing a promissory note, particularly a defective deed on certain property. Plaintiff then sued a holding company and two individuals to recover the remaining balance due under the note. In the collection action, the circuit court entered a stipulated settlement that extinguished the parties' obligations under the note. In the malpractice action, the circuit court awarded summary judgment to Respondents, concluding that Plaintiff had failed to prove he sustained damages as a result of Respondents' alleged professional negligence because the stipulated settlement extinguished the defective deed upon which Plaintiff based his claim for damages. After the circuit court entered a subsequent nunc pro tunc order in the collection action omitting the language extinguishing the parties' obligations under the note, Plaintiff sought relief from the summary judgment ruling in the legal malpractice action. The circuit court denied relief. The Supreme Court affirmed, holding (1) Plaintiff failed to prove Respondents' alleged professional negligence caused him to sustain any purported damages; and (2) based on the law of judicial estoppel, the circuit court correctly ruled that Plaintiff was not entitled to relief from its earlier summary judgment ruling. View "Burnworth v. George" on Justia Law

Sha'Kayla St. Mary and Veronica Damon became romantically involved and decided to have a child together. The couple subsequently drafted a co-parenting agreement. Using Damon's egg and an anonymous donor's sperm, St. Mary gave birth to a child through in vitro fertilization. After their relationship ended, the parties disputed who had custodial rights over the child. The district court (1) concluded that St. Mary was a mere surrogate and therefore not a parent entitled to any custodial rights; and (2) refused to uphold the parties' co-parenting agreement. The Supreme Court reversed, holding (1) the district court erred in determining that St. Mary was a surrogate lacking any legal rights to parent the child without holding an evidentiary hearing on that issue; and (2) the parties' co-parenting agreement was not void as unlawful or against public policy, and therefore, the district court abused its discretion in deeming the agreement unenforceable. View " St. Mary v. Damon" on Justia Law

Respondent purchased a luxury motor home manufactured by Appellant and took possession of the motor home despite noticing problems with the motor home during inspection. The motor home subsequently experienced significant electrical problems, and Respondent attempted to revoke her acceptance of the motor home from Appellant. Appellant rejected the revocation. Respondent filed suit against Appellant, asserting causes of action for revocation of acceptance under the Uniform Commercial Code, breach of contract, and breach of warranty. The district court found in favor of Respondent and awarded her damages that included the purchase price of the motor home. The Supreme Court affirmed the judgment but reversed the award of attorney fees, holding (1) Respondent was entitled to revoke acceptance of the motor home where privity existed between Respondent and Appellant because Appellant interjected himself into the sales process and had direct dealings with Respondent to ensure completion of the transaction; and (2) the district court did not err in awarding incidental and consequential damages but abused its discretion in awarding attorney fees. View " Newmar Corp. v. McCrary" on Justia Law