Justia Contracts Opinion Summaries

Edwin Mitchell, a lobster fisherman, was sued by Victor Ames, who alleged that a group of lobster fishermen had conspired to prevent him from fishing for lobster in the area. The Ames complaint alleged that Mitchell had, among other things, converted Ames's personal property. Mitchell held a homeowners policy with Allstate Insurance Company. By the policy's terms, Allstate agreed to provide a defense if the policyholder was sued for such damages. Allstate, however, declined to provide coverage to Mitchell on the Ames litigation, after which Mitchell sued Allstate for breach of contract. The superior court granted summary judgment in favor of Allstate, concluding that Allstate had no contractual duty to defend Mitchell because a policy exclusion for certain intentional acts applied. The Supreme Court vacated the superior court's judgment, holding that Allstate did have a duty to defend because the liability alleged in the Ames complaint had the potential to result in covered liability.

This case involved a dispute between the Mattesons and the Batchelders over fee ownership of less than one acre of land on a stream and the location of a deeded right-of-way on property owned by the Mattesons. The superior court (1) concluded that the Mattesons owned the disputed parcel of land; and (2) reformed the deed to locate the easement along a field road that crossed that Mattesons' property, concluding that the deed description of the right-of-way was ambiguous. The Supreme Court affirmed in part and vacated in part, holding (1) the superior court did not err in finding that the Mattesons obtained the property in dispute, which was included in the deed's property description; and (2) the court erred in reforming the deed to reflect a new location of the easement along the field road where there was no mutual mistake of fact that anything other than the shoreline was the boundary, as described in the deed. Remanded.

Arrow Financial Services filed a complaint against Sarah Guiliani alleging breach of contract and unjust enrichment. Arrow then filed a motion for summary judgment seeking to establish that Arrow owned a credit card account registered to Guiliani and that Guiliani owed an unpaid balance of $5044 on the account. In support of its motion, Arrow asserted in an affidavit that it was the assignee of Guiliani's credit card account with Washington Mutural. The district court granted Arrow's motion and awarded Arrow $3493, plus interest and court costs. The Supreme Court vacated the district court's judgment, holding that the district court incorrectly granted summary judgment in favor of Arrow because disputes remained as to material facts regarding the balance due on the account and its assignment to Arrow.

In November 1998, Respondent David Moeller’s 1996 Honda Civic CRX was damaged in a collision. Respondent had an insurance policy through Farmers Insurance Company of Washington (Farmers). Farmers chose to repair Respondent's damaged car, and he authorized the repairs. In May 1999, Respondent brought suit on behalf of himself and other similarly situated Farmers policy holders in Washington State asserting a breach of contract claim on the grounds that Farmers failed to restore his vehicle to its "preloss condition through payment of the difference in the value between the vehicle's pre-loss value and its value after it was damaged, properly repaired and returned." The issue on appeal before the Supreme Court was whether the contract between Farmers and Respondent provided for the diminished value of the post-accident, repaired car. Upon review, the Court affirmed the appellate court which held that the policy language at issue here allowed for recovery for the diminution in value.

Claimant appealed from a judgment of the district court ordering the forfeiture to plaintiff United States, pursuant to 22 U.S.C. 401(a), of certain communication-jamming devices, to wit, the defendant-in-rem Jammers, owned by claimant and a company of which he was the majority shareholder and CEO. On appeal, claimant contended that the district court erred in dismissing his claim, arguing principally that the stipulation he signed was void on the grounds that it was signed under duress and without consideration. The court held that, as a matter of New York law, no consideration for claimant's agreement to the release was needed; and thus, if consideration was absent, its absence did not make the stipulation invalid. The court also held that claimant's assertions did not meet any part of the test of duress. The court further held that the district court correctly granted the government's motion to strike or for summary judgment on the ground of claimant's lack of Article III standing. Accordingly, the judgment was affirmed.

Defendant is a captive insurer owned by plaintiff plans across the nation. In 2003 healthcare providers filed class action suits in Florida against all of those plans. Twelve plans, which had errors-and-omissions insurance from defendant, asked it to assume the defense and indemnify. Defendant declined, and the plans demanded arbitration. Acting under the Federal Arbitration Act, 9 U.S.C. 5, the district court held that the arbitrators could determine whether arbitration of a class action or consolidated arbitration were authorized by contract and appointed a third arbitrator. The court dismissed the appeal of the court's first ruling for lack of jurisdiction and affirmed the appointment. If defendant wanted a judge to decide whether the plans' demands should be arbitrated jointly or separately, it should have refused to appoint an arbitrator. Both sides appointed arbitrators, however, and the proceeding got under way. Nothing in the Federal Arbitration Act authorizes anticipatory review of the arbitrators' anticipated decisions on procedural questions.

Defendant was managing member of a partnership that built a warehouse and began receiving rent. In 2000, plaintiff acquired a 10% interest in the business that garnered about 45% of its net cash flow. A year later, plaintiff was in an accident and suffered brain injury. In 2002 plaintiff had his guardianship terminated, representing that he was able to manage his own affairs. Weeks later, defendant notified plaintiff that the warehouse tenant was in bankruptcy. In 2003, defendant purchased plaintiff's interest for $600,000. In a complaint filed more than five years later, plaintiff claimed breach of fiduciary duty; that he sold his interest only because defendant represented that the tenant was delinquent on rent. The district court granted defendant summary judgment, applying the Illinois discovery rule with respect to the limitations period, and holding that plaintiff could not rely on his self-serving affidavit to create an issue of material fact when his deposition testimony contradicted his representations about his ability to verify the tenant's payment of rent. The court held that defendant a basis for indemnity by plaintiff. The Seventh Circuit affirmed, finding that plaintiff waived any claim of legal disability and that the 2000 agreement unambiguously provided for an award of fees.

Excel Construction entered into a contract with the Town of Lovell to replace the Town's water and sewer system mains and service connections. Excel subsequently filed a complaint against the Town of breach of contract and related claims. The district court dismissed Excel's claims for failure to submit a governmental notice of claim that met the itemization requirements of the Wyoming Constitution and Wyoming Governmental Claims Act. The Supreme Court reversed, holding (1) Excel's notice of claim met the itemization requirements of Wyo. Stat. Ann. 1-39-113(b)(iii) and Wyo. Const. art. XVI, 7; (2) Excel complied with the service requirements of Wyo. Const. art. XVI, 7 when it served its notice of claim on the mayor, town administrator, town attorney, and town project engineer; and (3) the district court had jurisdiction to consider Excel's motion for leave to file a second amended complaint. Remanded.

On June 17, 2006, wife applied for a $500,000 life insurance policy. She paid $100 and signed a conditional receipt agreement for immediate coverage, subject to conditions that "on the Effective Date the Proposed Insured(s) is (are) insurable exactly as applied for under the Company’s printed underwriting rules for the plan, amount and premium rate class applied for; ... (C) the Proposed Insured(s) has/have completed all examinations and/or tests requested by the Company." On June 28, wife was examined and submitted specimens. Her cholesterol level and urine sample raised concerns. The company sought medical records from her physician and a second urine specimen. On July 22, 2006, wife was diagnosed with a brain tumor. On August 9, the company declared wife uninsurable based on her brain surgery. About a year later, she died. Husband claimed that the request for the second urine specimen was communicated in a untimely and ineffective fashion. The district court entered summary judgment for the insurance company on claims of breach of contract, estoppel, bad faith, and negligence. The Seventh Circuit affirmed, finding no evidence of purposeful misconduct; if there was no contract, any duty of good faith did not come into play.

The Fronks (Fronks) purchased two pieces of property from the Collinses (Collins), and the parties entered into an oral agreement whereby Collins would acquire horses and Collins would be entitled to keep the first foal from each mare as payment for their services. Fronks later transferred $215,000 to Collins for the acquisition of the horses. Fronks later deeded the properties back to Collins with the understanding that Collins would reconvey the land back to Fronks within five years. The parties subsequently signed an agreement setting forth each party's obligations. When Collins did not comply with the agreement, Fronks brought an action for breach of contract, breach of implied covenant of good faith and fair dealing, and misrepresentation seeking, inter alia, to enforce the agreement and recover damages, obtain ownership of the real property, and recover attorney fees. The district court determined that the agreement was a valid, enforceable contract and granted summary judgment to Fronks. The Supreme Court affirmed, holding that the agreement was a valid contract and the agreement did not suffer from a lack of consent by virtue of duress or menace.