Justia Contracts Opinion Summaries

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

HomeAway filed suit in the District Court of Travis County, Texas, against Eye Street and others, asserting, inter alia, state law claims for breach of contract and misappropriation of trade secrets. Eye Street did not attempt to remove HomeAway's Texas suit to federal district court but, instead, filed its own action against HomeAway and others in federal district court. After HomeAway moved to dismiss Eye Street's action for improper venue or, alternatively, to transfer venue to the U.S. District Court for the Western District of Texas, the district court stayed the action pending the resolution of HomeAway's Texas lawsuit. On appeal, Eye Street challenged the propriety of the stay. The court concluded that the district court did not abuse its discretion in staying Eye Street's action. Given the strong case for a stay under the United Capitol Insurance Co. v. Kapiloff factors and Eye Street's deliberate choice to forego removal, the district court's decision would be an appropriate exercise of discretion under either Brillhart v. Excess Insurance Co. of America/Wilton v. Seven Falls Co. or Colorado River Water Conservation District v. United States. Accordingly, the court affirmed the judgment. View "VRCompliance LLC v. HomeAway, Inc." on Justia Law

Plaintiffs Patrick and Terese Ayer appealed a trial court's order granting summary judgment to Frances Harris and Louis Hemmingway, III. The dispute arose over plaintiffs' attempts to collect a debt from defendant Hemmingway individually, and doing business as Hemmingway Construction. Plaintiffs obtained a default judgment against Hemingway in February 2001. Plaintiffs subsequently secured a nonpossessory writ of attachment against Hemingway's nonexempt goods and estate. In 2010, Frances Harris brought an unrelated action against Hemingway for damages. The trial court issued a stipulated judgment order that, among other things, awarded Harris judgment against Hemingway plus interest from September 8, 2005 until the release of the lien in favor of plaintiffs, required Hemingway to keep current on payments to plaintiffs pursuant to a written payment agreement signed by Hemingway and plaintiff Terese Ayer, and provided that if Hemingway defaulted on the lien, he would be liable to Harris for any costs, including attorney's fees, to obtain a release of the lien. In May 2011, plaintiffs filed a complaint seeking to foreclose on their judgment lien. Plaintiffs cited a 2006 trial court order as controlling and asked the court to renew or revive it. Hemingway filed an unverified answer to plaintiffs' complaint, acknowledging his debt to plaintiffs and offering to make immediate payments pursuant to the 2010 agreement. Plaintiffs moved for a default judgment, but the court denied their request. Harris responded to this order; Hemingway did not. Harris later moved for summary judgment, and plaintiffs filed a cross-motion for summary judgment and default.  In January 2011, the trial court granted Harris's motion, and found that plaintiffs' judgment lien was no longer effective because more than eight years had elapsed from the issuance of the original final judgment on which it was based. In reaching its conclusion, the court rejected plaintiffs' assertion that the 2001 judgment had been renewed or revived by the 2006 stipulated amended order. This appeal followed. Agreeing with the trial court's reason to dismiss plaintiffs' motion, the Supreme Court affirmed. View "Ayer v. Hemingway" on Justia Law

Plaintiff, the widow of the insured, filed this action under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B), after AUL, the insurer, refused to pay accidental death and dismemberment (AD&D) benefits. The district court affirmed the denial of benefits on the grounds that the death was not accidental because the fatal crash was an "anticipated and expected" result of driving while intoxicated. The insurance policies did not define the term "accident" despite its critical importance for determining eligibility for AD&D benefits. Because "accident" was susceptible to more than one reasonable interpretation, the court construed it against AUL, the drafting party, and concluded that a reasonable plan participant under similar circumstances would have understood the insurer's alcohol-related crash to be an "accident" under the policy language. Accordingly, the court reversed and remanded. View "Johnson v. American United Life Ins." on Justia Law

In 2008, Donte Newsome, a university student, was the innocent victim of murder. In 2009, Newsome's mother, Angela Smith, submitted an application to the court of claims seeking reimbursement from the West Virginia Crime Victims Compensation Fund for medical expenses, funeral and burial costs, and student loans owed by Newsome at the time of his death. Smith was granted an award for medical expenses and funeral and burial costs but was denied compensation for the student loans. After a hearing, the court of claims denied Smith's request for reimbursement of her son's unpaid student loans pursuant to the West Virginia Crime Victims Compensation Act, concluding that student loans are contractual obligations that cannot be reimbursed under the Act. The Supreme Court denied Smith's petition for writ of certiorari, holding that Newsome's student loans were not subject to reimbursement under the Act because they were not loans that Newsome was unable to receive or use, in whole or in part, prior to his death. View "State ex rel. Smith v. W. Va. Crime Victims Comp. Fund" on Justia Law

Republican Valley Biofuels (RVBF) issued a confidential private placement memorandum seeking investors in a biodiesel production facility. DMK Biodiesel (DMK) and Lanoha RVBF (Lanoha) invested $600,000 and $400,000 respectively in RVBF, which was being promoted by four individuals (Promoters). Renewable Fuels Technology (Renewable Fuels) was the manager of RVBF. DMK and Lanoha entered into and executed separate subscription agreements with RVBF. DMK and Lanoha later filed a complaint against Renewable Fuels and Promoters, alleging that Defendants fraudulently induced them to invest funds in RVBF. Defendants filed a motion to dismiss and a motion to take judicial notice, requesting the district court to take judicial notice of the confidential private placement memorandum for RVBF and the subscription agreements executed between RVBF and DMK and Lanoha. The district court granted the motions. The Supreme Court reversed, holding that because the private placement memorandum and the subscription agreements were properly considered matters outside the pleading, an evidentiary hearing was required. Remanded. View "DMK Biodiesel, LLC v. McCoy" on Justia Law

Landlord and Tenant signed a lease agreement for a rental property that required Tenant to obtain a liability and renter's insurance policy at his expense. Tenants obtained a renter's protection policy of insurance. The house was later damaged by fire caused by a child using a lighter. Landlord's insurer (Insurer) paid for the loss. This subrogation action was brought against Tenants in Landlord's name. The district court dismissed the action, concluding (1) the lease provision requiring Tenant to obtain renter's insurance did not permit Landlord or Insurer to bring a subrogation action against Tenants; and (2) Tenants were coinsureds under Landlord's fire insurance policy, and Insurer could not subrogate against its coinsureds. The Supreme Court affirmed, holding that because the terms of the lease did not overcome the presumption that Tenant was coinsured under Landlord's fire insurance policy, Landlord and Insurer could not bring a subrogation action against Tenants. View "Beveridge v. Savage" on Justia Law