Justia Contracts Opinion Summaries

After Employer and Employee settled a suit Employee brought against Employer, Employer's Insurer paid the policy's maximum of $2 million pursuant to an oral funding agreement. Insurer then filed an action against Employer, seeking a declaration that its policies provided no coverage for Employee's claim and reimbursement of the $2 million. The circuit court granted summary judgment in favor of Employer on March 26, but the parties agreed to delay entry of a final judgment. On July 8, the circuit court entered a final judgment. Insurer appealed on August 12. The court of appeals dismissed the appeal as untimely, concluding that the circuit court's March 26 decision and order was the final order for purposes of appeal. The Supreme Court reversed, holding (1) Insurer's appeal was timely because although the March 26 order arguably disposed of the entire matter in litigation between the parties, it did not unambiguously do so, and therefore, the July 8 judgment was final for purposes of appeal; (2) the funding agreement was an enforceable contract; (3) under these circumstances, an insurer cannot recover payments based on an unjust enrichment theory; and (4) Insurer's asserted mistake of fact did not provide grounds for voiding the contract.

Roger Hooban sued Unicity International for breach of a distribution agreement. The district court entered summary judgment for Unicity, holding that Hooban was not a party to the agreement and lacked standing to sue for its enforcement. Unicity then filed a motion for attorney fees under Utah's reciprocal attorney fees statute, Utah Code Ann. 78B-5-826. The district court denied the motion on the ground that section 826 was inapplicable given that Hooban was not a party to the underlying contract. The court of appeals reversed, interpreting the Supreme Court's opinion in Bilanzich v. Lonetti to dictate a fee award in litigation that is based on a written contract where the contract allows at least one party to the litigation to recover fees. The Supreme Court affirmed, holding section 826 authorized the court to award fees to Unicity because, had Hooban's theory of the case prevailed in the district court, he would have been a party to the contract and the contract would have allowed Hooban to recover fees.

When Client allegedly failed to pay Firm as agreed under their contract, Firm sued Client for breach. Client counterclaimed for breach of contract and negligence. Client also filed a third-party complaint against Firm's Owner, alleging that Owner was Firm's alter ego and seeking to hold Owner liable for any judgment entered against Firm. The trial court entered (1) a directed verdict on the third-party complaint, and (2) judgment in favor of Client on Firm's breach of contract claim and on Client's counterclaim against Firm. Owner later sought attorney fees under the reciprocal attorney fees statute, Utah Code Ann. 78B-5-826, arguing that, as the prevailing party in the third-party action, he was entitled to a fee. The trial court denied Owner's request, concluding that Owner was not a party to the contract as required to trigger the statute. The court also denied Owner's request for costs. The court of appeals affirmed. The Supreme Court (1) affirmed the court of appeals' decision as to attorney fees under its analysis in Hooban v. Unicity International Inc.; but (2) reversed the court of appeals' decision as to costs based on its reading of Utah R. Civ. P. 54(d). Remanded.

At issue in this consumer protection case was which Tennessee Rule of Civil Procedure applied to a motion that sought relief from a default judgment of liability on a counter-complaint, where the motion was filed within thirty days of entry of the default, the trial court did not expressly direct the entry of judgment on the counter-complaint pursuant to Tenn. R. Civ. P. 54.02, and neither liability on the original complaint nor damages on the counter-complaint were determined. The trial court entered default judgment in favor of the consumer on her counterclaims against Discover Bank and awarded the consumer damages. The court of appeals upheld the default judgment, vacated the award of damages, and remanded the case for a new hearing on damages. The Supreme Court affirmed, holding (1) Rule 54.02, rather than Tenn. R. Civ. P. 60.02, applies in this situation, but the same test applies to motions seeking relief from default judgment, under either rule, on the basis of "excusable neglect"; and (2) actual damages are recoverable for loss of available credit under Tennessee Consumer Protection Act where the plaintiff suffers a demonstrable loss of credit, proximately caused by the defendant, resulting in actual harm.

Charles and Lisa Hart filed a complaint against TICOR Title Insurance Company for breach of contract after TICOR refused to defend the Harts under their title insurance policy against an escheat claim asserted by the State. The district court entered judgment in favor of TICOR and awarded TICOR attorneys' fees and costs. The Intermediate Court of Appeals (ICA) affirmed. The Supreme Court vacated the ICA's judgment and reversed the judgment of the district court in favor of TICOR and vacated the district court's award of attorneys' fees and costs to TICOR, holding that TICOR owed a duty to defend the Harts under the policy against the State's claim and prayer for affirmative relief. Remanded to the district court with instructions (1) to enter judgment in favor of the Harts, and (2) to determine an award of attorneys fees and costs to the Harts.

The issue before the Supreme Court was the determination of the proper test for evaluating whether an oil or gas lease has produced "in paying quantities," as first discussed "Young v. Forest Oil Co.," (194 Pa. 243, 45 A. 1 (1899)). Appellant Ann Jedlicka owned a parcel of land consisting of approximately 70 acres. The Jedlicka tract is part of a larger tract of land consisting of approximately 163 acres, which was conveyed to Samuel Findley and David Findley by deed dated 1925. In 1928, the Findleys conveyed to T.W. Phillips Gas and Oil Co. an oil and gas lease covering all 163 acres of the Findley property which included the Jedlicka tract. The lease contained a habendum clause which provided for drilling and operating for oil and gas on the property so long as it was produced in "paying quantities." Notably, the term "in paying quantities" was not defined in the lease. Subsequently, the Findley property was subdivided and sold, including the Jedlicka tract, subject to the Findley lease. A successor to T.W. Philips, PC Exploration made plans to drill more wells on the Jedlicka tract. Jedlicka objected to construction of the new wells, claiming that W.W. Philips failed to maintain production "in paying quantities" under the Findley lease, and as a result, the lease lapsed and terminated. After careful consideration, the Supreme Court held that when production on a well has been marginal or sporadic, such that for some period profits did not exceed operating costs, the phrase "in paying quantities" must be construed with reference to an operator's good faith judgment. Furthermore, the Court found the lower courts considered the operator's good faith judgment in concluding the oil and gas lease at issue in the instant case has produced in paying quantities, the Court affirmed the order of the Superior Court which upheld the trial court's ruling in favor of T.W. Phillips Gas and Oil Co. and PC Exploration, Inc.

Plaintiff commenced a putative class action against Bloomberg alleging a violation of General Obligations Law 5-901 and 5-903; breach of contract; unjust enrichment; negligent misrepresentation; violation of General Business Law 349; and sought declaratory and injunctive relief. The Appellate Division subsequently granted Bloomberg's motion to dismiss plaintiff's complaint in its entirety. The court affirmed, holding that, even affording plaintiff every favorable inference, when reviewing the pleadings and factual allegations of his complaint, plaintiff's failure to identify a cognizable injury proved fatal to his action against Bloomberg.

Plaintiff sued his former employer alleging causes of action for failure to pay wages in violation of Labor Law 190-198 and breach of contract. The employer subsequently appealed the Appellate Division's order, arguing that there was insufficient evidence to support the jury's verdict because statements in the employment application and employee handbook negated plaintiff's alleged expectation of, or entitlement to, a guarantee or non-discretionary bonus and that the oral agreements respecting the bonus, if, in fact, entered into by the parties, were unenforceable. The court concluded that plaintiff's bonus was "expressly link[ed]" to his "labor or services personally rendered." Further, plaintiff's bonus had been earned and was vested before he left his job; its payment was guaranteed and non-discretionary as a term and condition of his employment. Since plaintiff's bonus therefore constituted "wages" within the meaning of Labor Law 190, the employer's neglect to pay him the bonus violated Labor Law 193, and entitled plaintiff to an award of attorney's fees under Labor Law 198(a-1). The court considered the employer's remaining arguments and found them to be without merit. Accordingly, the order of the Appellate Division was affirmed.

This action arose from practices employed in connection with the handling of claims made under retrocessional reinsurance treaties providing what was known as "non-life" coverage. At issue was the sufficiency and extra-territorial reach of plaintiff's claim under New York State's antitrust statute (Donnelly Act), General Business Law 340 et seq. Plaintiff, a New York branch of a German reinsurance corporation, sued defendants, English based entities engaged in the business of providing retrocessionary reinsurance. The Appellate Division found that the complaint adequately pled a worldwide market. And, while acknowledging that the crucial allegations contained in paragraph 36 of the amended pleading did not separately allege market power, the allegations read together and liberally construed were adequate to that purpose. The Appellate Division granted plaintiff leave to appeal, certifying to the court the question of whether its order reversing the order of Supreme Court was properly made. The court answered in the negative and reversed. Even if the pleading deficiency at issue could be cured and the court perceived no reason to suppose that the formidable hurdle of alleging market power could be surmounted by plaintiff there would remain as an immovable obstacle to the action's maintenance, the circumstance that the Donnelly Act could not be understood to extend to the foreign conspiracy plaintiff purported to described.

Lowell Burris and his wife commenced a product liability action against Menard, Versa, and Versa's affiliate in Minnesota state court. After Menard removed the action to federal court, which had diversity jurisdiction, Gulf commenced this action seeking a judgment declaring "that the policy issued by Gulf to [the named insureds] does not afford coverage to them or Menard, Inc. for any claim made by [Burris] under the terms of the Gulf Policy." The district court granted Gulf's motion for a summary declaratory judgment on the ground that Versa' dissolution after expiration of the policy meant that the insured "cannot meet its obligations under the SIR" (Self-Insured Retention endorsement), a material breach that terminated Gulf's obligations under the policy. Burris appealed. The court concluded that summary judgment for Gulf was factually unwarranted and the declaratory judgment action was dismissed with prejudice.