Justia Contracts Opinion Summaries

Liberty entered into a Master Declaration and Easements, Covenants, Conditions and Restrictions for a shopping mall. PMI purchased the property and entered into a Declaration that gave Liberty the right to prior approval of future purchasers and an option to purchase. PMI borrowed $3.5 million from Nationwide, using the property as collateral. Nationwide purchased title insurance from Commonwealth, containing the ALTA 9 endorsement. PMI defaulted and conveyed the property to Nationwide, which attempted to sell to Ironwood. Liberty’s successor, Franklin, refused to approve Ironwood under its rights conferred by the Declaration, based on Ironwood’s planned use as a school. Nationwide claimed that the restrictions upon which Franklin justified refusal rendered the property unusable and unsalable. Commonwealth denied the claim. The district court dismissed. The Third Circuit remanded, holding that Commonwealth is obligated to cover the claim if the restriction causing Nationwide’s harm was covered by the ALTA 9 Endorsement and not expressly excepted on Schedule B. The district court then ruled in favor of Nationwide. The Third Circuit affirmed and remanded for determination of damages owed Nationwide, relying on the plain language of the ALTA 9 rather than deferring to industry custom and usage.

DiPonio Construction entered into a collective bargaining agreement with the Union, which it subsequently terminated according to the terms of the agreement. DiPonio refused to bargain for a new agreement and sought a declaratory judgment. The district court held that even if it possibly had concurrent jurisdiction with the National Labor Relations Board to decide this issue, it would be inappropriate to exercise it, and imposed sanctions (attorney fees) against DiPonio under Federal Rule of Civil Procedure 11. The Sixth Circuit affirmed. The ultimate issue is whether the CBA was entered into pursuant to section 8(f) of the National Labor Relations Act, 29 U.S.C. 158(f), or section 9(a) of the NLRA, 29 U.S.C. 159(a). If the CBA was a section 8 contract, DiPonio had no duty to negotiate for a new CBA; however, if it is a section 9(a) contract it did. DiPonio’s claims are clearly “primarily representational” and fall within the primary jurisdiction of the NLRB.

This appeal arose from Gaylen Clayson's attempt to purchase a restaurant and cheese factory in Thayne, Wyoming. Prior to making a formal offer on the property, Clayson was granted access to the property in order to begin operating the restaurant and refurbishing the factory. His effort to purchase the subject property ultimately failed, and Don Zebe and Rick Lawson subsequently purchased the property. Clayson then filed a breach of contract action against Zebe and Lawson, alleging the existence of both express and implied contracts entitling Clayson to compensation for the pre-purchase work Clayson had performed on the property. The district court partially granted Zebe and Lawson's motion for summary judgment, holding that there was no express contract between the parties. After a bench trial, the district court determined that the parties' conduct created both implied-in-fact and implied-in-law contracts, which required Zebe to reimburse Clayson for costs he incurred while working on the subject property. Zebe appealed, arguing that the district court erred because Zebe neither requested Clayson's performance nor received any benefit as a result of Clayson's work on the property. Zebe asked the Supreme Court to vacate the judgment of the district court and remand the matter for entry of judgment in their favor. Upon review, the Supreme Court found that assignment was silent as to consideration. It did not address whether Clayson was to be reimbursed for the expenses he had previously incurred or whether the assignment was a gratuitous act by Clayson. Therefore, the Court held that the district court did not err in finding an implied-in-fact contract.

Plaintiff, Pervasive Software Inc., a Delaware corporation having its principal office in Austin, Texas, sued Defendant, Lexware GmbH & Co. Kg, a corporation organized under the laws of the Federal Republic of Germany, for damages and injunctive relief on the basis of breach of contract, quantum meruit, unjust enrichment, and conversion in a Texas state court. Lexware removed the case to the federal district court, and that court, in response to Lexware's motion, dismissed the case for lack of personal jurisdiction over Lexware. Pervasive appealed. The Fifth Circuit Court of Appeals affirmed, concluding that Pervasive had failed to establish a prima facie case that Lexware minimum contacts with Texas to support the exercise of either specific or general personal jurisdiction over Lexware.

In this core adversary proceeding, a Chapter 7 bankruptcy Trustee appealed an order of the Bankruptcy Appellate Panel (BAP) denying his turnover action on the ground that an unjust enrichment claim exceeds the scope of 11 U.S.C. 542(a), a remedy limited to recovering property of the bankruptcy estate in the possession, custody, or control of a third party. The Eighth Circuit Court of Appeals affirmed, holding (1) the BAP correctly concluded that the Court's In re NWFX decisions did not recognize unjust enrichment as a basis for collecting a debt under section 542(a); and (2) thus, the Trustee's claim for unjust enrichment based upon a debt owed was beyond the scope of section 542(a).

The Union established two funds for its members—a Pension Fund and a Health & Welfare Fund. DLF entered into a Memorandum of Agreement with the Union, under which DLF agreed to be bound to all Collective Bargaining Agreements between the Union and various employer associations in the geographical jurisdiction of the Union. Under the CBA, DLF is required to make fringe benefit contributions to the Funds on behalf of members of the Union. An audit of DLF’s payroll records showed that DLF had failed to make contributions on behalf of Mata, a cement mason who also performed other work (such as painting), for 1,119.5 hours in 2007 and for 234.5 hours in 2008, a total $11,955.05 in fringe benefit contributions. The district court granted summary judgment in favor of the Funds, The Seventh Circuit affirmed rejecting DLF’s argument that, under the MOA, it is not contractually bound to make contributions for non-bargaining unit work. The MOA binds DLF to the CBAs and establishes the type of employee covered under the CBA. It was not intended to, and does not, define bargaining unit work for purposes of fringe benefit contributions.

A broker doing business as McCully Ranch Company brought suit against its client Baccaro Ranch, LLC, as seller, claiming that Baccaro breached the real estate listing agreement and that McCully was entitled to a commission from Baccaro under contract theory or, in the alternative, under the theory of unjust enrichment. In a previous appeal, the Supreme Court concluded that the listing agreement was enforceable and remanded the cause for further proceedings. After trial, the district court determined that McCully was not entitled to a real estate commission. The Supreme Court reversed, holding that McCully erred in its judgment, as MuCully produced a ready, willing, and able purchaser during the term of the listing agreement on terms acceptable to Baccaro and therefore was entitled to a commission.

After coming home drunk, Wesley Vincent was found face-down in front of his house by his wife, Cheryl Likens. Vincent was taken to the hospital but eventually died. Likens tried to collect as the beneficiary of an accidental-death insurance policy, but the claim was denied under an alcohol exclusion because Hartford Life and Accident Insurance Company determined that the injury resulted from being legally intoxicated from alcohol. The district court granted summary judgment for Hartford based on the alcohol exclusion. The Fifth Circuit Court of Appeals affirmed, holding that a reasonable jury could not help but conclude that Vincent fell and suffered injuries as a result of his intoxication. On these facts, intoxication may not have been the only cause, but it did not have to be so to satisfy the exclusion.

Dameware Development, LLC Defined Benefit Pension Plan and Trust bought several life insurance policies from American General Life Insurance Company. After Dameware was unable to obtain the tax benefits it hoped would result from purchasing the policies, it sued American General for damages and for rescission of the contract. The district court granted summary judgment to American General. The Fifth Circuit Court of Appeals affirmed, holding that Dameware had not shown any basis for rescinding the contract nor any contractual duties breached by American General, and therefore, the district court did not err in granting summary judgment to American General.

Plaintiffs-Appellants WaveDivision Holdings, LLC and Michigan Broadband, LLC (collectively, "Wave") entered into two exclusive agreements with third-party Millennium Digital Media Systems, LLC ("Millennium") to purchase cable television systems from Millennium. Millennium terminated the agreements and pursued a refinancing with its note holders and senior lenders. In a separate proceeding, the Court of Chancery found Millennium liable to Wave for breach of contract and awarded Wave damages. Wave also brought an action in the Superior Court against Millennium's note holders and senior lenders, Defendant-Appellees Highland Capital Management L.P., Highland Crusader Funds, Highland Floating Rate Fund, Trimaran Capital Partners, L.P., and Pioneer Floating Rate Trust, (collectively, "Appellees"). Wave sought damages against Appellees, contending among other things, that the Appellees tortiously interfered with the Wave-Millennium contract. The Superior Court granted summary judgment to Appellees on this claim, concluding that any interference was justified under Delaware law and that Appellee Pioneer did not have actual or imputed knowledge of the underlying contract. Upon review, the Supreme Court agreed and affirmed the appellate court's decision.