Justia Contracts Opinion Summaries

The facts of this case were "clear and undisputed; in point of fact, they are a textbook example of a mechanic's-lien dispute." Plaintiff, GSM Industrial, Inc., was a subcontractor that entered into an agreement with AirPol, Inc., a general contractor, to install an air-pollution-control mechanism on property owned by Defendant Grinnell Fire Protection Systems Company, Inc. When AirPol failed to pay GSM the balance of its fee, GSM filed a complaint to enforce a mechanic's lien against Grinnell. The particular issue before the Supreme Court was whether a notarial acknowledgment in a subcontractor's notice of intention satisfied the statutory requirement that such a statement be "under oath." A justice of the Superior Court ruled that a Pennsylvania notary public's "acknowledgement" was insufficient to satisfy the oath requirement, and, as a result, the notice was fatally defective. Upon review, the Supreme Court agreed, and affirmed the judgment of the Superior Court.

Defendant-Appellant James Brown owned interests in several businesses. In late 2004, he acquired and redesigned two convenience stores on opposite sides of Exit 2 on Interstate 29 in North Sioux City, South Dakota. Plaintiff-Appellee Stern Oil, a fuel distributor for Exxon Mobil Corporation, contacted Brown while he was remodeling the properties. Although Brown was negotiating with another fuel distributor, he ultimately elected to do business with Stern Oil. When Brown notified Stern Oil that he would no longer purchase its fuel, Stern Oil initiated this breach of contract action. Brown filed a counterclaim, alleging fraudulent inducement. Stern Oil argued that Brown contracted to purchase a minimum amount of fuel for a ten-year period. The circuit court granted Stern Oil's motion for summary judgment on both the breach of contract claim and on Brown's counterclaim, but the issue of damages proceeded to trial. After trial, the circuit court awarded Stern Oil eight years of lost profits. Brown appealed. Upon review, the Supreme Court reversed the circuit court's grant of summary judgment. Both Brown's fraudulent inducement counterclaim and Stern Oil's breach of contract claim involved disputed material facts. Therefore, the Court concluded the circuit court erred in granting Stern Oil summary judgment. The case was remanded for further proceedings.

This case arose from a fatal motorcycle accident in which Steven Wadzinski was struck and killed by an uninsured motorist. Steven's wife, Michelle, sought uninsured motorist (UM) coverage under an umbrella insurance policy that Steven's company carried on him at the time of his death. At issue was the meaning of an endorsement to the executive umbrella policy, and whether that endorsement caused contextual ambiguity such that a reasonable insured would expect $2,000,000 of UM coverage under the policy. The circuit court held that the executive umbrella policy was clearly intended to provide only third-party liability coverage and granted summary judgment in favor of Auto-Owners Insurance Company. The court of appeals reversed, concluding that the executive umbrella policy was contextually ambiguous, and therefore, the policy should be construed in favor of the insured to afford coverage. The Supreme Court reversed, concluding that the policy at issue unambiguously did not afford first-party UM coverage, and therefore, the circuit court's summary judgment in favor of Auto-Owners was proper.

Appellees entered into performance and stock agreements with their employer, appellant ONEOK, Inc. The agreements required Appellees to continue their employment for three years (performance period) in order to receive the full number of shares, but allowed pro rata payments if Appellees' employment terminated under certain conditions. After Appellees left ONEOK's employment before the earliest performance period ended, ONEOK denied Appellees' claims for pro rata payments under the agreements. Appellees sued ONEOK for breach of contract. The district court found for Appellees and awarded Appellees money damages equal to each of their pro rata shares under the agreements, and denied their request for attorney fees. The Eighth Circuit Court of Appeals reversed the denial of attorney fees, holding that the district court erred in determining Appellees were not entitled to attorney fees under the Nebraska Wage Payment and Collection Act (NWPCA). Remanded for a determination of the amount of the attorney fees award under the NWPCA.

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 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 decision 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 (1) section 826 applied in this case; and (2) the statute thus authorized the court to award fees to Unicity.

This was an appeal from the circuit court's entry of summary judgment quieting title to certain property in favor of Edward and Nancy Bosch. Harpagon MO, LLC asserted that the circuit court should have entered summary judgment in its favor because it complied with the requirements of Mo. Rev. Stat. 140.405 by providing the Bosches with timely and sufficient notice of their right to redemption. The Supreme Court affirmed, holding (1) a purchaser is authorized to acquire a deed to property purchased at a tax sale one year after the sale; (2) therefore, a purchaser must notify the owner of that property of the owner's right to redeem at least ninety days prior to one year after the tax sale; (3) if the purchaser does not provide timely or sufficient notice, but still acquires the deed by presenting the certificate of purchase to the collector, then the owner can file a petition to set aside the tax sale asserting the purchaser's failure to comply with section 140.405; and (4) the circuit court did not err in finding that the notices provided to the Bosches were not timely and thus awarding the Bosches quiet title to the property.

Defendant-Appellant Robert Shipley appealed a district court order which granted summary judgment in favor of Plaintiff-Appellee BNSF Railway Company. BNSF leased commercial property in Miles City, Montana, to Shipley. The lease provided that either party could terminate the lease upon 30 days written notice. Shipley failed to pay rent to BNSF for a number of years. This failure by Shipley resulted in overdue rent payments of $17,700. BNSF notified Shipley on January 7, 2011, that the Lease Agreement would be cancelled and terminated in 30 days, effective on February 10, 2011. The Lease Agreement also required that Shipley remove all improvements and personal property from the leased premises within the 30 days of the lease termination. Shipley failed to remove the items. BNSF provided Shipley with a 60 day extension to remove the items. Shipley again refused to remove the items. Shipley’s refusal prompted BNSF to file a complaint to quiet title to the improvements and personal property, a declaratory judgment that BNSF had terminated the lease validly, trespass, unlawful detainer, and claim for reasonable rent. Shipley acknowledged that he owed $17,700 in rent. Upon review, the Supreme Court concluded that no genuine issue of material fact existed and that the district court correctly granted summary judgment.

Appellants James J. and Linda L. Clark appealed a district court order that approved the filing of an amended certificate of survey, approved a settled agreement, and required each party to pay one-half of the fees and costs relative to a surveyor agreed upon by the parties. Appellees Bill and Katy Martin purchased the Fishtail General Store from Clarks in May 2000. The sewer system for the Fishtail General Store failed in July 2005. Keith Brown, a licensed Professional Engineer, designed a replacement septic wastewater disposal sewer system. The Stillwater County Health Department issued a replacement sewer system permit, and the Martins installed the new sewer system north of the Fishtail General Store on "Tract 2-A." A number of unresolved issues remained between Clarks and Martins. Clarks and Martins ultimately jointly petitioned to relocate the boundary lines between Tract 2-A and property owned by Clarks. The District Court approved the boundary line relocation. This relocation reduced the size of Tract 2-A. The new sewer system failed again in 2009. Martins requested that Clarks allow Martins to use land located outside the adjusted boundary line to install the two additional laterals. Clarks refused. Martins filed a motion pursuant to M. R. Civ. P. 60(b)(6) for relief from the district court’s order of June 7, 2006 that had approved the boundary line relocation. The parties advised the District Court at the conclusion of a pre-trial conference that they had reached a settlement. The court ordered the parties to hire Tom Kelly, a licensed surveyor, to prepare a certificate of survey that would implement the Septic System Easement Agreement. Martins then filed a motion asking the court to approve a Corrected Tract 2-A Amended Certificate of Survey prepared by Kelly. Clarks argued on appeal to the Supreme Court that the District Court incorrectly determined that the Corrected Tract 2-A'a Amended COS did not change the boundaries between the Clarks’ and Martins’ tracts. Clarks further contended that the District Court improperly concluded that Martins’ proposed septic system agreement accurately reflected the agreement of the parties. Upon review, the Supreme Court concluded that there was substantial evidence in the district court record to support the court's ultimate decision in this case. Accordingly, the Court affirmed the district court's decision.

Plaintiffs Memorial Properties, LLC (Memorial) and Mount Hebron Cemetery Association (Mt. Hebron) are respectively the manager and owner of Liberty Grove Memorial Gardens. Mt. Hebron was sued in 2007 and 2008 in seven lawsuits in the Superior Court of New Jersey and the Supreme Court of New York by family members of decedents whose remains were sent by funeral directors to Liberty Grove for cremation in 2003, 2004 and 2005. The New Jersey and New York plaintiffs alleged that prior to being sent to Liberty Grove, the decedents’ bodies were unlawfully dissected, and that tissue, bone and organs were removed for commercial sale. The families contended that they did not discover the illegal harvesting scheme until 2006, when law enforcement officials who investigated and prosecuted the perpetrators advised them that their relatives’ body parts had been illegally harvested. Memorial and Mt. Hebron contended that they received the decedents’ remains in closed containers and were unaware that the remains had been tampered with before being turned over to the crematory. Memorial and Mt. Hebron were not prosecuted as a result of the criminal investigation of the illegal harvesting. This appeal arose from Memorial’s and Mt. Hebron’s pursuit of a defense and indemnification with respect to the New Jersey and New York litigation, under two insurance policies. The first policy, issued by Assurance Company of America (Assurance), provided coverage for the year 2003 for claims arising from damage to human remains and bodily injury, including mental anguish. The second, issued by Maryland Casualty Company (Maryland), provided analogous coverage for the year 2006, but contained an "improper handling" exclusionary clause, barring coverage for bodily injury or property damage arising from specified acts and omissions including "[f]ailure to bury, cremate or properly dispose of a 'deceased body.'" In 2008, Memorial and Mt. Hebron demanded that Assurance and Maryland defend and indemnify them. Assurance declined coverage on the ground that the occurrences were outside of the policy period, invoking plaintiffs' claims that they learned of the harvesting scheme in 2006. Maryland declined coverage, citing the "improper handling" exclusionary clause in its 2006 policy. Memorial and Mt. Hebron filed a declaratory judgment action on May 14, 2008, naming as defendants Assurance, Maryland and Zurich North American Insurance Company (Zurich), and demanding defense and indemnification. Assurance and Maryland cross-moved for summary judgment. The trial court denied the summary judgment motion filed by Memorial and Mt. Hebron, but granted defendant insurers' cross-motion for summary judgment, identifying the year 2006 as the time frame of the "occurrence" in the two cases for which the insureds sought coverage. The Appellate Division affirmed both of the trial court’s orders granting the summary judgment motions filed by Assurance and Maryland. After its review, the New Jersey Supreme Court concluded that neither the Assurance policy nor the Maryland policy required the insurer to defend or indemnify Memorial and Mt. Hebron for claims asserted in the New Jersey and New York litigation. The Court affirmed the Appellate Division's ruling.

In August of 2009, Samson Resources Company owned oil and gas leases covering 87.78 mineral acres in Roger Mills County, Oklahoma, including the Schaefer Lease. The Schaefer Lease covered 70 net acres in the Southwest Quarter of Section 28 and had a three-year primary term that ended on November 22, 2007. If drilling operations were commenced by the end of the primary term, the lease would continue so long as such operations continued. On August 2, 2007, Newfield sent a letter to Samson, proposing to drill a well in Section 28. The estimated cost of the well was over $8.5 million dollars. On August 9, 2007, Newfield filed an application with the Commission, seeking to force pool the interests of Samson and other owners in Section 28. Newfield sent an e-mail dated April 14, 2008, to Samson that informed Samson that Newfield had commenced operations prior to the expiration of the Schaefer Lease. Newfield's e-mail stated that Samson had underpaid well costs and that an election to participate with 87.78 acres would require prepayment of $1,411,982.45. Samson responded by e-mail on the same date, informing Newfield its intent was only to elect its 17.78 acres. On April 28, 2008, Samson filed an Application seeking to have its election to participate in the well limited to 17.78 acres rather than 87.78 acres. After an administrative hearing, the Administrative Law Judge determined that Samson's timely election to participate only covered 17.78 acres of its interest and that Samson accepted the cash bonus as to its remaining 70 acres. The Oil and Gas Appellate Referee reversed the ALJ's determination, finding that the ALJ improperly relied on actions which occurred prior to the issuance of the pooling order. The Commission issued Order No. 567706, which adopted the Referee's report, reversed the ALJ, and declared that Samson had elected to participate to the full extent of its 87.78 acre interest in the unit. The Commission found Samson made a "unilateral mistake" when it elected to participate to the full extent of its interest. Samson appealed the Commission's order to the Court of Civil Appeals, which affirmed. Before COCA issued its opinion affirming the Commission, Samson filed an action in the district court alleging actual fraud, deceit, intentional and negligent misrepresentation, constructive fraud, and breach of duty as operator. Samson also alleged Newfield's actions amounted to extrinsic fraud on the Commission, rendering Pooling Order No. 550310 invalid as to Samson's working interest attributable to the 70-acre Schaefer Lease. The trial court granted Newfield's motion to dismiss for lack of subject matter jurisdiction, finding the petition to be an impermissible collateral attack on a valid Commission order. The Court of Civil Appeals affirmed. After its review, the Supreme Court found that Samson's actions for damages sounding in tort were beyond the Commission's jurisdiction, and the district court in this case was the proper tribunal for Samson to bring its claims. The trial court's order granting Newfield's Motion to Dismiss was reversed, and the case was remanded for further proceedings.