Justia Contracts Opinion Summaries

Michael McCrary sued Ivanof Bay Village (Ivanof Bay) and its president, Edgar Shangin, under two contracts, alleging breaches of the implied covenants of good faith and fair dealing. The superior court dismissed the suit based on sovereign immunity. McCrary appealed the sovereign immunity ruling, arguing that even though the United States Department of Interior lists Ivanof Bay as a federally recognized Indian tribe, Ivanof Bay has not been formally designated as a federally recognized tribe. The Supreme Court previously concluded Alaska Native tribes recognized by Congress or the Executive Branch are sovereign under federal law, and McCrary did not demonstrate that conclusion should be overturned. The Court therefore affirmed the superior court's dismissal of McCrary's suit.

In late April 2006 Samuel Sengul leased a commercial storefront in downtown Juneau to Robert Manus, who was acting on behalf of CMS Franklin, Inc. The building was under construction when Sengul and CMS entered into the lease agreement, but the lease provided that Sengul would deliver the property to CMS in a specified improved condition by the time the lease commenced on June 1. The lease also included a rent abatement provision, which was at issue in this case. The building was not in improved condition until approximately June 8. Manus did not pay any rent, nor did he mention the rent abatement provision when he took possession of the building. Sengul finally demanded rent in late July, but Manus refused to pay, claiming abatement. In September, Manus had still not paid any rent, and Sengul put a lock on CMS's store door and placed signs demanding rent in the store windows. Manus had the lock cut off, but began to move the inventory out of the store, vacating it and returning the keys to Sengul two days after the lockout. Sengul then sued CMS and Manus for unpaid rent. The superior court determined that CMS had waived its right to rent abatement and owed Sengul unpaid rental amounts for the time that Manus had occupied the building. But the court also concluded that Sengul's lockout amounted to constructive eviction and awarded CMS damages as a refund for work performed on the premises that CMS was unable to benefit from after the constructive eviction. Upon review, the Supreme Court agreed with the superior court that Sengul's actions constituted constructive eviction, but the Court disagreed that CMS waived its entitlement to have the rent abated. The case was remanded for the superior court to recalculate the damages owed to CMS.

Plaintiffs sued defendant in contract and tort, alleging that defendant failed to take necessary precautions to protect its premises from water damage. At issue on appeal was the trial judge's decision not to grant prejudgment interest on the amounts that were awarded by the jury to plaintiffs. The court held that plaintiffs were entitled to prejudgment interest as a matter of right and remanded to the Superior Court to determine the amount of prejudgment interest owed.

After Kenneth Middleton was convicted of first-degree murder but before a judgment was entered against him in a wrongful-death suit, Kenneth conveyed property he owned in Arkansas to his brother. The sale was found to be fraudulent and was set aside by decree. Appellees, several individuals, filed a petition for writ of scire facias more than ten years later to allow more time to sell the property in an effort to satisfy the Missouri judgment. Appellants, the Middleton brothers, filed a motion for summary judgment, which the circuit court dismissed. Appellants subsequently filed a motion for clarification as well as a notice of appeal. Appellants' motion was subsequently deemed denied. Appellees then filed a motion to dismiss the appeal, arguing that a second notice of appeal was required after the denial of the consolidated motion for clarification. The Supreme Court denied Appellees' motion, holding that the notice of appeal in this case was effective.

Plaintiffs are producers of coal bed methane gas; defendant is large coal-mining company. Gas extraction firms need access to coal from which to extract gas and coal companies need to have gas removed from their mines before mining. To form an alliance for that purpose, plaintiff began by acquiring options to buy coal-mining rights; it planned to sell the options in exchange for the right to extract gas from its partner's coal. The parties signed memorandum of understanding, which stated that it did not constitute a binding agreement, and, later, a non-binding letter of intent. Plaintiff began transferring coal rights to defendant as contemplated by the letter of intent, but defendant delayed reciprocating. Ultimately defendant announced that it was terminating the letter of intent. The trial court entered summary judgment for defendant on a fraud claim. The Seventh Circuit affirmed, stating that "when a document says it isn't a contract, it isn't a contract" and that plaintiff did not establish promissory fraud or justifiable reliance.

The Weitz Company sued MacKenzie House and MH Metropolitan for breach of construction contract. Arrowhead and Concorde were third-party defendants. MH Metropolitan counterclaimed for breach of the same contract, seeking liquidated damages and the cost to complete the project. Arrowhead also counterclaimed. The jury returned a verdict for MH Metropolitan, Arrowhead, and Concorde on Weitz's claim. The district court denied post-judgment motions and Weitz appealed. The court held that there was a legally sufficient evidentiary basis for the jury's verdict; the district court properly exercised its discretion in excluding the evidence of other projects; the district court correctly decided that the issue of liquidated damages and completion costs were issues of fact that were properly submitted to the jury; there was a legally sufficient evidentiary basis for the district court to deny judgment as a matter of law for Weitz's breach-of-contract claims against Arrowhead; the district court did no err in refusing to enter a default judgment against Concorde when it failed to appear at trial, or in the alternative, refusing to grant Weitz judgment as a matter of law on its claims against Concorde; and because the district court properly found against Weitz on all issues, there was no reason to consider the issue of vicarious liability.

Plaintiff sued defendant, with which she had a catastrophic medical insurance policy, because defendant told her that she had not yet "incurred" sufficient charges to satisfy its deductible. Plaintiff claimed that defendant's refusal to pay benefits rested on a deliberate misinterpretation of "incurred" and breached the insurance contract. The district court held that plaintiff, a Medicare recipient, could not have incurred charges that her physicians had agreed with Medicare to forgo prior to providing treatment. On appeal, plaintiff argued that the district court incorrectly read "incurred" in the insurance policy as including only those amounts that the insured paid or was legally obligated to pay. The court held, however, that the district court correctly interpreted "incurred," and therefore affirmed.

In 2004, Doctor informed Employer, a medical clinic, that he planned to exercise his rights under Employer's policy that rewarded length of service by giving benefits to physicians who were sixty years old or older and had at least fifteen years of taking night calls. Doctor agreed to postpone exercising his rights under the policy until the next year. In 2005, Employer told Doctor that the policy no longer existed. Doctor later withdrew from taking night call. As a result, Employer reduced Doctor's salary. In 2009, sued Employer for breach of contract and promissory estoppel, claiming Employer breached the policy by refusing to allow him to be exempt from night call without salary reduction. The district court granted Employer's motion to dismiss, holding that the two-year statute of limitations began to run in 2005 when Employer informed Doctor it would not honor its obligations under the policy. The court of appeals reversed, concluding that a new cause of action accrued each time a payment was due but not paid. The Supreme Court reversed, holding that Doctor's cause of action accrued, and the statute of limitations began to run, in 2005, and therefore, Doctor's claim was barred by the statute of limitations.

This litigation arose out of a franchise agreement between West Coast Hotels and Mahmoud Karimi. The successor in interest to West Coast Hotels was Red Lion, both were incorporated in Washington state. Karimi and his hotel management company (collectively, Karimi) operated a Red Lion franchise in Modesto, California. Red Lion subsequently terminated the franchise and sued Karimi for breach of contract and Karimi counterclaimed, asserting state-law claims, including a claim based on the "franchise bill of rights" of the Washington Franchise Investment Protection Act (FIPA), Wash. Rev. Code 19.100.180, 19.86.020. At issue on appeal was whether a non-Washington franchisee could assert a claim against a Washington franchisor under FIPA's bill of rights. The court concluded that an out-of-state franchisee could assert such a claim. Because FIPA's bill of rights applied to the franchise agreement at issue, the court remanded to the district court for further proceedings. The court agreed with the district court's conclusion that Red Lion was not equitably estopped from terminating the franchise agreement. The court remanded for consideration by the district court of the entry of judgment against Karimi's wife.

Plaintiff asserted wide-ranging claims against defendant and its managing member after plaintiff and defendant agreed to combine their investment management operations into a single firm. After coming to believe that defendant was engaged in fraud, plaintiff terminated the arrangement. In a formal termination agreement, plaintiff agreed to pay certain enumerated expenses and the parties granted each other expansive global releases. The court held that, on its face, the broad and unambiguous language of the General Release encompassed all of the claims asserted in the Complaint. Accordingly, defendant's motion to dismiss was granted.