Justia Contracts Opinion Summaries

James Schlinger owned and operated Curtis Excavation and WW Construction. Schlinger, acting as president of WW Construction, entered into an oral agreement to lease his business and all associated equipment and land to Christopher McGhee and Jack Robinson. McGhee and Robinson formed Curtis-Westwood Construction as the entity to lease and operate the business. After eight months, Schlinger determined McGhee and Robinson were not properly managing the business and terminated the oral lease agreement. The parties disputed the financial implications of the termination. After a bench trial, the district court determined that Schlinger breached his oral agreement with Appellees, McGhee, Robinson, and Curtis-Westood Construction, and that Schlinger owed Plaintiffs $206,875. The Supreme Court (1) reversed the district court's judgment on Appellees' breach of contract claim and rejected Appellants' argument that they should be awarded breach of contract damages, holding that the district court committed clear error in awarding damages as there was insufficient evidence in the record to justify an award of damages to either party; and (2) affirmed the district court's denial of Schlinger's claims for recovery under the theory of unjust enrichment, holding that Schlinger's claims were unsupported by the evidence.

Great-West asserted claims against defendants in an eight count complaint and the court granted defendant's motion to dismiss in part. At issue are the remaining counts of the complaint which revolve around Section 12.2(c) of the LP Agreement. The court held that Great-West's motion for partial summary judgment was denied, except as to Count I, which was granted. Great-West was entitled to a declaration that the Expense Assumption could not increase until TH Lee had negotiated in good faith. Defendants' motion for summary judgment was denied as to Counts II and VII, and granted as to Counts IV, V, and VI. Great-West's claims for mistake and fraud failed as a matter of law.

Robert and Janet McKeage (Relators) sued Bass Pro Outdoor World in a five-count petition for charging a document preparation fee for purchasing a boat. Relators subsequently sought class certification of both in-state and out-of-state customers based upon the purchase agreement's choice of law provision, which required the application of Missouri law to all transactions. The circuit court certified a class that was limited to contracts entered into within the state. Relators sought relief by way of a writ of prohibition. The Supreme Court granted the writ, holding that the circuit court abused its discretion by limiting the putative class members to only those whose transactions occurred in Missouri where the class of plaintiffs that Relators sought to certify was limited to those who were charged a document preparation fee and whose contracts contained the Missouri choice of law provision.

Camelot brought this action against its tenant, AMC Showplace Theatres, seeking a declaration that section 3.4 of their lease was an option to renew if the parties agree on new, negotiated terms rather than an option to extend on the terms contained in their existing lease. The parties filed cross motions for summary judgment and the district court granted Camelot's motion. The court affirmed and held that the terms of the option period were not readily ascertainable and that section 3.4 was an option to renew that required new, negotiated terms.

Plaintiff-Appellee Deutsche Bank National Trust filed a foreclosure action against Defendant-Appellant Dennis Brumbaugh. Appellant and his wife Debra executed a note and mortgage with Long Beach Mortgage Company in 2002. In 2006, the Brumbaughs entered into a loan modification agreement with U.S. Bank, N.A., successor trustee to Wachovia Bank, N.A. Several months later, the Brumbaughs divorced, and in 2008, Debra executed a quitclaim deed to Defendant. Defendant defaulted on the note in 2009, and the bank shortly thereafter filed its petition to foreclose. Attached to the petition was a copy of the note, mortgage, loan modification agreement, and copies of statements of judgments and liens by other entities. Appellee claimed it was the present holder of the note and mortgage having received due assignment through assignments of record or conveyance via mortgage servicing transfer. The Appellant answered, denying Appellee owned any interest in the note and mortgage, and the copies attached to the petition were not the same as those he signed. He claimed Appellee lacked capacity to sue and the trial court lacked jurisdiction over the subject matter. He also denied being in default and asserted the Appellee/servicing agent caused the alleged default. Upon review, the Supreme Court agreed that there were significant questions of fact such that summary judgment was not an appropriate disposition of the case. Accordingly, the Court reversed the trial court's grant of summary judgment in favor of the bank and remanded the case for further proceedings.

Appellant Graham Law Firm (Graham) appealed a trial court's order granting respondents' motion to set aside default judgment on the grounds that the court lacked jurisdiction based upon inadequate service of process.  In 2007 Graham filed suit against Respondents MKKM, Inc., and Mohamed Makawi, individually and doing business as International House of Pancakes, seeking payment for professional services.  Graham served both complaints on Makawi, who is MKKM's president and registered agent for service of process, by certified mail, return receipt requested, restricted delivery, at the IHOP location in Florence, South Carolina. Neither Makawi nor MKKM filed an answer to the complaint, and Graham's motions for entry of default and default judgment were granted.  Graham served a copy of the order granting default judgment by certified mail on Makawi and Makawi as registered agent of MKKM, and the return receipt was signed by Makawi.  In March 2009, counsel for respondents contacted Graham to request information about the judgment. After reconsideration, the trial court issued an order granting respondents' motion for relief from judgment. Graham appealed. Upon review, the Supreme Court found that Graham was not given sufficient opportunity for discovery and cross-examination of witnesses on the matter of authorization to accept service of process. The Court therefore reversed the trial court's decision and remanded the case for further proceedings.

El Paso operated an interstate pipeline that transported natural gas to California and other western states, and Freeport shipped gas on El Paso's pipeline to power its various mining, smelting, and refining facilities. El Paso and Freeport separately challenged several orders of the Commission issued in connection with El Paso's 2005 rate filing and subsequent settlement. The court denied the petition for review and held that the Commission's reasoning was sound when it found that the CAP Orders had neither changed the bargain underlying the 1996 Settlement nor abrogated Article 11.2 of the Settlement. The court also held that the Commission reasonably determined the converted FR contracts were "amended" within the meaning of that term in Article 11.2; Article 11.2 applied to turnback capacity; the applicable rate cap for turnback capacity was determined by the shipper's delivery point; Article 11.2 did not apply to capacity created by the Line 2000 project; and where the Commission adopted the presumption that the capacity of El Paso's system on December 31, 1995 was 4000 MMcf/d. The court further found that the Commission's approval of the Settlement appropriate under the so-called Trailblazer Pipeline Co. approach. Accordingly, the Commission's orders were not arbitrary or capricious and the petitions for review were denied.

Petitioner, former CEO of Fitracks, sought advancements from Fitracks for attorneys' fees and expenses incurred defending claims in litigation in the underlying action. Aetrex sued petitioner in the underlying action and Aetrex is currently the parent corporation of Fitracks, having acquired Fitracks by triangular merger in 2008. Because Aetrex's claims in the underlying action arose out of representations made by petitioner in his capacity as CEO of Fitracks, petitioner was entitled to advancements for the underlying action. Therefore, summary judgment was granted in favor of petitioner and against Fitracks on the issues of liability for advancements in the underlying action and indemnification for this proceeding.

This case concerned a family dispute over ownership of what had been the family home in Woburn. At issue was whether a party could establish that she lacked the capacity to contract, thus making the contract voidable by her, in the absence of evidence that she suffered from a medically diagnosed, long-standing mental illness or defect. The court concluded that its evolving standard of contractual incapacity did not in all cases require proof that a party's claimed mental illness or defect was of some significant duration or that it was permanent, progressive, or degenerative; but, without medical evidence or expert testimony that the mental condition interfered with the party's understanding of the transaction, or her ability to act reasonably in relation to it, the evidence would not be sufficient to support a conclusion of incapacity. In this case, the evidence was insufficient to support a determination of incapacity where Susan, among other things, understood at the time that she was participating in a mediation to discuss settlement of the lawsuit, was aware that the subject of the mediation was to resolve the dispute regarding the family home, participated in the mediation, and listened to the arguments of counsel. Therefore, the court vacated the motion judge's order and remanded for entry of an order enforcing the settlement agreement.

Plaintiffs, Northern Virginia Real Estate and its principal broker, Lauren Kivlighan, filed an eight-count second amended complaint against McEnearney Associates, its real estate agent Karen Martins, and David and Donna Gavin (collectively, Defendants), alleging conspiracy to harm in business, interference with contract expectancy, and defamation. The trial court eventually entered an order granting Plaintiffs' motion to nonsuit all counts and dismissing the case as to all counts and all parties. Defendants subsequently filed motions for sanctions against Plaintiffs and Plaintiffs' counsel, Forrest Walpole, seeking attorneys' fees and costs and arguing that Plaintiffs violated Va. Code Ann. 8.01-271.1 by filing the suit without any basis in fact, without support in law, and with improper purposes. The trial court granted the motions. The Supreme Court affirmed, holding (1) the trial court did not err when it imposed sanctions jointly and severally against Plaintiffs and Walpole; and (2) the trial court applied an objective standard of reasonableness in concluding that the facts of this case could not support a reasonable belief that the Plaintiffs' claims along with the damages sought were well grounded in fact or law as required by section 8.01-271.1.