Justia Contracts Opinion Summaries

Soon after Yale Preston was employed by Pennaco Energy, a wholly-owned subsidiary of Marathon Oil Company (collectively referred to as Marathon), Preston signed an employee agreement with a disclosure and assignment of intellectual property clause. The present dispute centered around allegations of patent infringement and questions of ownership of two patents that covered a baffle system that Preston invented. The district court found that Preston was the sole inventor of the patents and that the employee agreement was a valid contract, pursuant to which Preston was required to assign his ownership interest in the patents to Marathon. At issue on appeal was the validity of the assignment of intellectual property rights given to Marathon without an additional consideration other than continued at-will employment. The Supreme Court accepted certification and held that continuing the employment of an existing at-will employee constitutes adequate consideration to support an agreement containing an intellectual property-assignment provision.

In the early 1990s, Kevin Costner commissioned Peggy Detmers and Detmers Studios, Inc. (collectively, Detmers) to design several sculptures, intending to display them at the entrance of a luxury resort called The Dunbar that Costner had envisioned. Subsequently, Costner and The Dunber (collectively, Costner) and Detmers entered into a binding contract in which Costner would provide Detmers additional compensation. Paragraph three of the agreement provided that if The Dunbar was not built within ten years or the sculptures were not "agreeably displayed elsewhere," Costner would give Detmers fifty percent of the profits from the sale of the sculptures. The sculptures were later placed on Costner's project called Tatanka. Detmers later brought suit against Costners, seeking a declaratory judgment that she did not agree to the placement of the sculptures as required by paragraph three of the parties' contract. The trial court granted judgment in favor of Costner. The Supreme Court affirmed, holding that the circuit court did not err in (1) determining that the sculptures were "agreeably displayed elsewhere," in the absence of a guarantee from Costner that The Dunbar would be built; and (2) concluding that Tatanka was "elsewhere" under the language of the contract.

Two appeals are were consolidated from chancery-court cases. In the first case, Diamondhead Country Club and Property Owners Association, Inc. sued Thomas R. Alfonso, III, and Anne Scafidi Cordova,1 d/b/a Bay Jourdan Publishing Co. (BJP) for breach of a contract to publish "The Diamondhead News." In 1997, the chancery court entered a preliminary injunction order preventing BJP from publishing "The Diamondhead News," selling advertising, collecting or disposing of advertising revenues derived from the publication the paper, and interfering with the printing, publication, or distribution of "The Diamondhead News." The chancery court also found that an arbitration clause in the publishing contract was inapplicable to the lawsuit. The chancery court denied BJP’s two subsequent motions to compel arbitration of the breach-of-contract dispute. BJP appealed the chancery court’s latest denial of arbitration. In the second case, BJP sued Diamondhead and Gulf Publishing Co., Inc., d/b/a "The Sun Herald" (“Gulf Publishing”), for intentional interference with the publishing contract. Gulf Publishing filed a motion for summary judgment. The court granted summary judgment to Gulf Publishing and directed the entry of a final judgment as to Gulf Publishing pursuant to Mississippi Rule of Civil Procedure 54(b). BJP appealed the grant of summary judgment. Upon review, the Supreme Court affirmed the chancery court’s order denying BJP’s third motion to compel arbitration because the issue was ruled upon previously, and no appeal was taken. Finding genuine issues of material fact for trial, the Court reversed the chancery court’s order granting summary judgment to Diamondhead and Gulf Publishing, and remanded the second case for further proceedings.

This appeal and cross appeal concerned the authority of the named defendant, the city of Waterbury, under its city charter to offset the pension benefits of Plaintiffs, several individuals who had worked for the city, by the heart and hypertension benefits they received. The trial court rendered judgment in favor of Plaintiffs on their breach of contract claims. The Supreme Court reversed in part and directed judgment in favor of Defendants on all claims except Nicolas Russo's claim for breach of contract, and remanded the case for a new trial on that claim, holding (1) the trial court improperly concluded, with respect to all of Plaintiffs except Russo, their respective collective bargaining agreements conflicted with the Waterbury city charter, which allowed the city to offset Plaintiff's pension benefits based on their heart and hypertension benefits; and (2) although the trial court properly interpreted Russo's collective bargaining agreement to permit the city to offset his pension benefits by his heart and hypertension benefits, the court improperly failed to determine whether Russo's combined pension and heart and hypertension benefits exceeded the cap set forth in the agreement, thus permitting an offset.

David Caron purchased a majority membership in Goodhall's Chrysler-Plymouth-Dodge-Jeep-Eagle, LLC without having obtained the written consent of Goodhall's, Inc. (Goodhall's), in violation of Goodhall's lease with Goodhall's Chrysler-Plymouth-Dodge-Jeep-Eagle. The lease idenitified Goodhall's as the landlord and Goodhall's Chrysler-Plymouth-Dodge-Jeep-Eagle as the tenant. After a dispute arose concerning the party responsible for remediating certain environmental conditions on the property, Plaintiffs, David Caron and David Caron Chrysler Motors, filed suit against Defendants, Goodhall's and others, claiming that Defendants had violated provisions of its lease regarding Goodhall's responsibility for preexisting environmental conditions and Goodhall's warranty of fitness and habitability. The trial court rendered judgment in favor of Defendants, concluding that no contract existed between the parties to this action because the assignment of the majority interest in the tenant to Caron was invalid. The appellate court affirmed. The Supreme Court reversed, holding (1) the appellate court improperly failed to consider Plaintiffs' claim that the trial court had improperly concluded that no contract existed between David Caron Chrysler Motors and Goodhall's; and (2) the trial court was incorrect in finding that, because Goodhall's did not consent to the assignment, there was no contract between David Caron Chrysler Motors and Goodhall's.

This insurance-coverage dispute arose after a driver of a leased vehicle struck and seriously injured a pedestrian. The vehicle, a BMW, was owned by BMW Financial Services. The pedestrian and her family sued the driver and BMW Financial for damages. Citizens Insurance Company provided a personal automobile policy listing the driver as an insured and BMW Financial as an additional insured lessor. A separate business auto insurance policy was issued by Empire Fire and Marine Insurance Companies to BMW Financial. The case settled, with Citizens and Empire paying their policy limits. Citizens reimbursed Empire for a portion of the costs Empire expended in legal expenses defending BMW Financial in the civil action but refused to provide Empire with any further reimbursement. Empire subsequently filed a complaint for declaratory judgment seeking a determination that Citizens was liable for reimbursement of all attorneys' fees it incurred. The superior court granted Empire's motion for summary judgment. Citizens appealed, arguing that Empire was entitled only to a pro-rata apportionment of defense costs. The Supreme Court affirmed, holding that it would be improper to resort to a pro-rata apportionment of liability.

This case arose when plaintiff, a Massachusetts resident, entered into an executive employment contract with defendant. A forum selection clause dictated that all disputes arising out of the contract or the employment relationship were to be resolved in courts situated in Erie County, New York, defendant's principal place of business. The court concluded that a forum selection clause operated as a special contract only when three conditions were met: the employer's claim was covered by the Massachusetts Wage Act, G.L.c. 149, sections 148, 150; the court of the forum state, applying its choice-of-law principles, would choose a law other than that of Massachusetts to govern the dispute; and application of the foreign law would deprive the employee of a substantive right guaranteed by the Wage Act. Under modern choice-of-law doctrines, these conditions rarely coincided. On the facts alleged in the case, a New York court, applying New York's choice-of-law doctrine, would certainly apply the Wage Act to this dispute. Therefore, the court held that because enforcement of the forum selection clause would not deprive plaintiff of the protections of the Wage Act, dismissal of the action was affirmed.

A group of residential tenants (collectively, Tenants) alleged claims of negligence against Canyon Cover Properties, LLC and Apartment Management Consultants, LLC (collectively, AMC). AMC argued that it was relieved from liability because Tenants signed a residential lease agreement (Agreement) that included a limited liability provision (Exculpatory Clause) waiving the right to bring an action for negligence against AMC. The district court concluded that the Agreement and Exculpatory Clause did not violate public policy and were therefore valid and enforceable, and accordingly, granted summary judgment for AMC. The Supreme Court reversed, holding that because AMC failed to respond meaningfully to Tenants' claim that the Exculpatory Clause was unenforceable because it violated public policy, AMC's brief was rejected and Tenants' claim was accepted that the Exculpatory Clause in the Agreement was unenforceable. Remanded.

Come Big or Stay Home, LLC (CBSH) appealed the grant of summary judgment in favor of EOG Resources, Inc. dismissing its claims for refusing to provide it with oil and gas well information unless CBSH agreed to not disclose the information to third parties without EOG's consent. EOG owned and developed oil and gas interests in North Dakota and has drilled and operated numerous oil and gas wells in the state. CBSH owned mineral or leasehold interests in the state, including interests in spacing units where wells have been drilled and operated by EOG. In late 2008, EOG sent CBSH an invitation to participate in drilling a horizontal oil and gas well in Mountrail County, ending with a joint operating agreement (JOA) for that well. CBSH refused to execute subsequent JOAs for several additional wells. After each refusal by CBSH to execute a JOA, EOG sent letters to CBSH explaining it was willing to provide well information to CBSH if it would agree to the nondisclosure provision contained in the JOA. Upon review of the matter, the Supreme Court affirmed the grant of summary judgment, concluding as a matter of law that CBSH's theories of recovery were not viable under the circumstances.

Defendant-Appellee Barbara McDermott appealed a district court's grant of partial summary judgment in favor of Plaintiff-Appellee Kevin Pifer when the court concluded that Defendant's mother Dorothy Bevan, validly gifted Plaintiff an option to purchase land. In 2001, Ms. Bevan executed a durable power of attorney in favor of Plaintiff who was a distant relative. Thereafter, Plaintiff assisted Bevan with managing her farmland and performing miscellaneous other tasks. Ms. Bevan granted Plaintiff the option to purchase that land in 2004. Ms. Bevan died in 2010, and Plaintiff recorded a notice of his intent to exercise the option. Defendant rejected the attached cashier's check, questioning Ms. Bevan's capacity to execute the purchase option agreement. Plaintiff subsequently sued for specific performance of the purchase option. The district court granted Plaintiff partial summary judgment, concluding the purchase option agreement was valid and enforceable. In its judgment, the district court stated, "This Judgment shall be final for appeal purposes, and there is no just reason for delay." Upon review, the Supreme Court concluded the district court inappropriately certified the partial summary judgment under the North Dakota Rules of Civil Procedure, and the court abused its discretion in directing an entry of final judgment. Accordingly, the Court dismissed Defendant's appeal and directed the district court to vacate its portion of the partial summary judgment certifying the judgment as final.