Justia Contracts Opinion Summaries

Several years ago, Plaintiffs entered into a fifteen-year lease with Defendant's predecessor in interest (Miller). The lease included a purchase option. After Defendant refused to allow Plaintiffs to exercise the purchase option on the ground that they were in default on their obligations under the lease, Plaintiffs instituted this action, demanding specific performance or damages. The district court granted summary judgment in favor of Plaintiffs and ordered specific performance of the purchase option, determining that Miller had waived a provision which prohibited Plaintiffs from subleasing without prior written permission and that all alleged defaults were inconsequential and immaterial. The First Circuit Court of Appeals affirmed, holding that summary judgment for Plaintiffs was proper, where (1) the district court correctly found that Miller waived the requirement that Plaintiffs obtain written permission before subleasing any portion of the premises; and (2) the district court properly found that Defendant had failed to present evidence of how alleged violations the lease provision requiring them to comply with state and municipal laws harmed her or Miller. View "Bachorz v. Miller-Forslund" on Justia Law

A pipeline owner (Owner) purchased sixty-eight mile-long pipeline constructed in the 1940s and made plans to remove the old pipeline and construct a new one that would carry butane. Owner awarded Contractor the contract to replace a certain section of the pipeline. After Contractor commenced work, Contractor filed suit against Owner for breach of contract and fraud based on Owner's failure to locate several hundred "foreign crossings" in the pipeline's path and its subsequent refusal to compensate Contractor for its additional expenses resulting from the obstacles. The trial court found in favor of Owner, finding that the parties' contract allocated the risk of any additional cost incurred because of foreign crossings to Contractor. The court of appeals reversed, finding that Owner failed to exercise due diligence in locating the foreign crossings. The Supreme Court reversed the court of appeals' judgment and reinstated the trial court's judgment, holding (1) the contract allocated all risk to Contractor for unknown obstacles discovered during the construction process; and (2) the jury's answers to questions about Contractor's recovery for breach of contract based on due diligence were immaterial. View "El Paso Field Servs., L.P. v. MasTec N.A., Inc." on Justia Law

The issue before the Supreme Court in this case was the manner in which defendant JPMorgan Chase Bank, N.A. (Chase), the successor in interest to Washington Mutual Bank (WaMu), acquired plaintiffs' mortgage. Plaintiffs' mortgage was among the assets held by WaMu when it collapsed in 2008. Specifically, the issue was whether defendant acquired plaintiffs' mortgage by "operation of law" and, if so, whether MCL 600.3204(3), applied to the acquisition of a mortgage by operation of law. Upon review of briefs submitted by the parties and the applicable statutory authority, the Supreme Court held that defendant did not acquire plaintiffs' mortgage by operation of law. Rather, defendant acquired that mortgage through a voluntary purchase agreement. Accordingly, defendant was required to comply with the provisions of MCL 600.3204. Furthermore, the Court held that the foreclosure sale in this case was voidable rather than void ab initio. Accordingly, the Court affirmed in part and reversed in part the judgment of the Court of Appeals and remanded the case to the trial court for further proceedings. View "Kim v. J.P. Morgan Chase Bank, N.A." on Justia Law

Petitioner David Ellis appealed a superior court order that rescinded a non-compete agreement and ordered partial restitution as a remedy. Respondents Candia Trailers and Snow Equipment, Inc. and its principals Jeffrey and Suzanne Goff, cross-appealed the rescission of the non-compete agreement. Ellis signed an asset purchase agreement (APA), non-compete agreement (NCA) and an inventory purchase agreement (IPA) in relation to the sale of Precision Truck, a business the Goffs owned. The Goffs executed the NCA with regard to Ellis' operation of Precision Truck to remain in effect for seven years. However, the NCA could end sooner if Ellis breached terms of the IPA. One of the terms of the IPA was that Ellis would pay for Precision Truck's inventory by June 1, 2007. Within weeks of signing the NCA, Goff began competing with Precision Truck. Ellis thereafter failed to purchase all of Precision Truck's inventory by June 1, 2007. Ellis subsequently sued for breach of contract and violation of the Consumer Protection Act. The trial court found the NCA, IPA and APA as three separate agreements, each with its own terms and remedies for breach, and that Ellis breached the IPA and Goff breached the NCA. Both parties argued that the trial court abused its discretion when rescinding the NCA and awarding partial restitution to Ellis. Upon review, the Supreme Court concluded the trial court erred in determining that the three agreements were severable, and as such, the NCA could not be rescinded without rescinding the IPA and the APA too. Accordingly, the Court reversed the restitution award and remanded to the trial court for a determination of what remedies were available. View "Ellis v. Candia Trailers & Snow Equipment, Inc." on Justia Law

The issue before the Supreme Court in this case stemmed from the grant of summary judgment in favor of an insurance company. The insureds contended that the liability coverage provision in their homeowner's policy required the insurer to defend a lawsuit brought by a contractor they hired to repair fire damage to their home and to remodel the home, and that the insurer was required to indemnify against any recovery by the contractor. Upon review of the policy underlying this case, the Supreme Court found no such duties as the insureds contended and affirmed the district court's judgment. View "Linford v. State Farm Fire & Casualty" on Justia Law

Ida-Therm, LLC appealed the grant of summary judgment in favor of Bedrock Geothermal, LLC, which held that a reservation of "all the oil, gas, and minerals, in, on, or under the surface of [deeded] lands," in a 1946 warranty deed included the geothermal resources underlying the property. The district court determined that the Deed's mineral reservation severed the mineral estate from the surface estate, and that geothermal resources were included in the scope of the mineral estate. Because the Supreme Court found that the term "mineral" was ambiguous with respect to the deed in question, and because ambiguous grants in deeds are construed against the grantor, the Court construed the grant in favor of Ida-Therm and reversed the district court. View "Ida-Therm v. Bedrock Geothermal" on Justia Law

Dr. Stephen L. Wallace appealed the grant of summary judgment in favor of Belleview Properties Corporation, IPF/Belleview Limited Partnership ("IPF"), HR/Belleview, L.P., and Infinity Property Management Corporation ("the defendants"). In August 1991, Wallace leased office space in the Belleview Shopping Center to use for his dental practice. Around 1996, the defendants purchased the shopping center and renewed Wallace's lease. The lease was renewed a second time in 2003 for a term of five years. In 2005, Wallace sued the defendants,1 alleging fraud and suppression; negligence; wantonness; breach of contract; unjust enrichment; and negligent training, supervision, and retention. Wallace alleged that, during the term of the lease, he reported various maintenance problems to the defendants. He also alleged that, although the defendants assured him that the problems would be taken care of, but that they were not. Wallace asserted that, as a result of reported water leaks that were left unrepaired, the office was infested with toxic mold. Therefore, he had to close his practice to avoid exposing his employees and his patients to the toxic mold. The defendants successfully filed a motion for a summary judgment as to Wallace's claims against them. In 2010, Wallace filed a motion for reconsideration which was denied. Upon review of the matter, the Supreme Court concluded that Wallace did not timely file his notice of appeal. Accordingly, the Supreme Court dismissed the appeal for lack of jurisdiction. View "Wallace v. Belleview Properties Corp." on Justia Law

Target Media Partners Operating Company, LLC ("Target Media"), and Specialty Marketing Corporation d/b/a Truck Market News ("Specialty Marketing"), both publishers of magazines directed to long-haul truck drivers and to the truck-driving industry, have been in a commercial-contract dispute since 2007 in which each party alleged breach-of-contract claims against the other. Specialty Marketing also alleged fraudulent-misrepresentation and promissory-fraud claims against Target Media and Ed Leader, Target Media's vice president of trucking, and sought punitive damages in addition to compensatory damages. The jury returned a verdict in favor of Specialty Marketing on its breach-of-contract and promissory-fraud claims against Target Media, in favor of Leader on the promissory-fraud claim against him, in favor of Specialty Marketing on its fraudulent-misrepresentation claim against Target Media and Leader, and in favor of Target Media on its breach-of-contract counterclaim against Specialty Marketing. Target Media and Leader appealed that aspect of the judgment entered on the jury verdict in favor of Specialty Marketing on its claims against Target Media and Leader. Specialty Marketing did not appeal the judgment insofar as it found in favor of Target Media on Target Media's counterclaim. Upon review of the matter, the Supreme Court affirmed the trial court's order denying Target Media's motion for a judgment as a matter of law (JML)and/or a new trial as to Specialty Marketing's breach-of-contract claim. The Court reversed the trial court's order denying Target Media and Leader's motion for a JML as to Specialty Marketing's fraudulent-misrepresentation and promissory-fraud claims. The case was remanded back to the trial court for entry of a JML in favor of Target Media and Leader as to Specialty Marketing's fraudulent-misrepresentation claim and to enter a JML in favor of Target Media as to Specialty Marketing's promissory-fraud claim. Because the Court concluded that the trial court should have granted a JML as to Specialty Marketing's fraudulent-misrepresentation and promissory-fraud claims, the Court pretermitted consideration of the other arguments made by the parties regarding those claims. View "Target Media Partners Operating Company, LLC v. Specialty Marketing Corp." on Justia Law

Appellants Raoel and Janet Clark and Jerry and Betty Peterson appealed the district court's grant of summary judgment in favor of Buku Properties, LLC. Buku filed suit against the Clarks and the Petersons to recover earnest money deposits after two codependent land sale contracts failed to close. At the time the parties entered into the land sale contracts, the properties were zoned "R-1," which allowed for a minimum density of one acre lots. However, after the contracts were executed, but prior to closing, the Jefferson County Planning and Zoning Commission began discussions to change the R-1 designation of the properties to R-5, which mandated a five acre minimum density. While conducting its due diligence, Buku discovered the County’s plan to change the zoning designation of the properties. Aware of the potential re-zoning, Buku sent Appellants proposed addenda to the land sale contracts seeking to extend the review period and closing date due to concerns about zoning and financing. The bank financing Buku’s purchase of the properties sent Buku a letter stating that Buku’s loan was only “conditionally approved,” and that, if the property were re-zoned R-5, the property value would be decreased. The bank stated that in order to fund the loan it “must receive verification from Jefferson County that this property will remain zoned R-1 Residential.” Buku sent Appellants’ counsel a letter demanding that all of the earnest money, except for a non-refundable amount from the Peterson contract, be returned. When none of the earnest money was returned, Buku brought suit alleging: (1) return of earnest money under contract; (2) conversion; and, (3) unjust enrichment. Additionally, Buku requested prejudgment interest on the earnest money and attorney fees. Appellants filed a counterclaim with their answer, asserting seven claims: (1) specific performance; (2) breach of contract; (3) unjust enrichment; (4) estoppel; (5) promissory estoppel/unjust enrichment; (6) Consumer Protection Act violations; and, (7) attorney fees. Upon review, the Supreme Court found no error in the district court's judgment, and affirmed its decision to grant summary judgment in favor of Buku. View "Buku Properties v. Clark" on Justia Law

Ila and Gary Fedderson owned a business called Whisky Flow Dining and Minor Alley. Whisky Flow was destroyed by fire, after which Ila and Gary submitted a sworn proof of loss statement to the business's insurer, Columbia Insurance Group. Gary, however, made misrepresentations and committed fraud in submitting the statement. Columbia declined to pay Ila benefits, relying on a condition that voided the policy for fraud or misrepresentation by any insured. Ila filed suit, claiming that she was an innocent insured who was entitled to her share of the claim that related to her fifty percent interest in the business. The circuit court granted summary judgment for Columbia. The Supreme Court affirmed, holding that the circuit court correctly granted Columbia's motion for summary judgment, as Gary's misrepresentation and fraud voided the policy. View "Fedderson v. Columbia Ins. Group" on Justia Law