Justia Contracts Opinion Summaries

This case concerned the proper application of stare decisis and required the Supreme Court to decide whether "Collins v. Farmers Ins. Co." was still good law. In "Collins," the Court held that an exclusion in a motor vehicle liability insurance policy that purported to eliminate all coverage for a claim by one insured against another insured under the same policy was unenforceable to the extent that it failed to provide the minimum coverage required by the Financial Responsibility Law (FRL). The exclusion, however, was enforceable as to any coverage beyond that statutory minimum. In this case, Plaintiff Farmers Insurance Company issued an insurance policy to Defendant Tosha Mowry that contained an exclusion identical to the exclusion in "Collins". Defendant was injured in an accident in which her friend -- a permissive user and thus an insured person under the policy -- was driving. Plaintiff brought this action seeking a declaration that Defendant had $25,000 available in coverage under her policy -- the minimum coverage required by the FRL for bodily injury to one person in any one accident. Defendant argued that her coverage was $100,000, the insurance amount stated on the declarations page of her policy. The parties filed cross-motions for summary judgment, and the trial court granted Plaintiff's motion and denied Defendant's. The Court of Appeals affirmed in a per curiam opinion that cited "Collins." The Supreme Court concluded that Defendant "advanced no argument that this court has not previously considered for reaching a different result from that in 'Collins.' Defendant failed to carry the burden for overturning a fully considered precedent of this court."

This appeal stemmed from a written agreement between the City of Rutland and the Vermont Swim Association (VSA) that granted VSA the right to host its annual swim meet at a facility in a city park. VSA appealed the trial court's award of attorney's fees to the City. Because the plain language of the parties' contract did not require VSA to pay attorney's fees incurred by the City in pursuing either indemnity from VSA or other third-party actions, the Supreme Court reversed the trial court's ruling and remanded the case for further proceedings.

A company that provides employee training filed suit against a client, claiming breach of contract based both on alleged failure to pay a gain sharing fee and breach of confidentiality provisions.It sought an accounting for disclosures or uses of its materials inconsistent with the copyright license provided by the agreement. The court granted summary judgment for the client. The First Circuit affirmed, finding that the training company did not support its figures with respect to the fee or the breach of confidentiality.

At issue in this extraordinary writ proceeding was whether Nev. Rev. Stat. 11.259(1) compels dismissal where the initial pleading in an action alleging nonresidential construction malpractice was served without filing the attorney affidavit and expert report required by Nev. Rev. Stat. 11.258(1) and (3). The Supreme Court granted the writ, holding that a defective pleading served in violation of section 11.258 is void ab initio and of no legal effect and, thus, cannot be cured by amendment. The Court held that because the initial pleadings served by certain real parties in interest in this case did not include the attorney affidavit and expert report as required by section 11.258, those pleadings were void ab initio, and the district court did not have discretionary authority to allow the parties to amend their pleadings to cure their failure to comply with section 11.258.

This case arose because the settlement of a personal-injury suit brought by a recipient of workers' compensation benefits against a third-party tortfeasor did not make any provision to repay the statutory subrogee, the Ohio Bureau of Workers' Compensation. The Bureau brought suit against both the recipient of the workers' compensation benefits and third-party tortfeasor under Ohio Rev. Code 4123.931(G) to recover the full amount of its subrogation interest. The trial court held that a two-year limitations period applied and that it had expired. The court of appeals reversed, holding that a six-year limitations period applied and that it had not yet run out. At issue on appeal was whether a claim under section 4123.931(G) brought by a statutory subrogee to recover its subrogation interest is subject to a two-year statute of limitations, the same period applicable to the injured worker's personal-injury suit against the third party, or to a six-year statute of limitations for an action on a liability created by statute. The Supreme Court affirmed the court of appeals, holding that the claim in this case was an action upon a liability created by statute and that the statute of limitations was six years.

Mother consented to the adoption of her two biological children, after which the children were placed in the legal care of Guardians. Guardians later arranged for the adoption of the children by Adoptive Parents and relinquished the children. After six months of living with Adoptive Parents, Guardians moved to have their relinquishment and consent to adoption set aside, claiming their consent was fraudulently obtained by their reliance on a deficient pre-placement evaluation provided to them by Adoptive Parents. The district court denied the motion. The Supreme Court affirmed, holding that because Guardians failed to establish the existence of actual or constructive fraud by clear and convincing evidence, there was no statutory basis to set aside the relinquishments and consents given by Guardians.

Do Nguyen, Jana Nguyen, Kenny Nguyen and John Doeâs (collectively "the Nguyens") appealed a district court's grant of a motion to set aside a default judgment in favor of Janice Maynard. On appeal, Maynard contended that the district court abused its discretion in setting aside its previously entered default judgment. In 2006, Maynard filled out an application to rent a trailer home from the Nguyens and reached an agreement with the Nguyens under which Maynard would receive title to the home if she paid $500 in rent each month for a period of three years. In 2008, Maynard reported to the Ada County Jail to serve a sentence, and when she returned home on November 27, 2008, she discovered that the Nguyens had removed her belongings from the trailer home and rented the trailer to other tenants. In 2009, an evidentiary hearing was held on the issue of damages. At the beginning of that hearing Maynardâs attorney told the court that he had received a two-page letter on June 29, 2009, which was addressed to "[counsel for Maynard], Janice Maynard and To Whom it May Concern." Counsel asked whether the court had received that letter, and described various documents which were attached to it. When the court said that it had not received the letter, the attorney offered no further information concerning the letterâs contents, but proceeded to present evidence concerning damages. The district court entered a default judgment against the Nguyens in the amount of $3,265 in actual damages and an enhanced penalty of $15,000 for the ICPA violation. The Nguyens filed a motion to set aside the default judgment. The Nguyens noted that they had sent Maynardâs attorney a letter explaining their version of events and why they believed that Maynard had abandoned the trailer home. On December 7, 2009, the district court granted the Nguyensâ motion to set aside the default judgment, finding that the Nguyens had demonstrated that there were unique and compelling circumstances justifying relief. Upon review of the trial court record, the Supreme Court affirmed the district courtâs order setting aside the default judgment and remanded the case for further proceedings.

Defendant AIA Services Corporation entered into a stock redemption agreement with Appellant Reed Taylor to purchase all of his shares in AIA Services for a $1.5 million down payment promissory note and a $6 million promissory note, plus other consideration. When AIA failed to pay the $1.5 million when it became due, Appellant and AIA agreed to modify the stock redemption agreement. AIA was a still unable to make payments under the new terms. Appellant then filed suit to recover the amounts owed on the two promissory notes. The district court granted partial summary judgment in favor of AIA and dismissed six of Appellant's causes of action after finding the revised stock redemption agreement was unenforceable. On appeal, Appellant argued the redemption agreement complied with state law and was still enforceable. Upon review, the Supreme Court affirmed the district court's holding that the agreement was illegal and unenforceable and affirmed the court's dismissal of Appellant's six causes of action.

Appellants, PNH Inc. and Ronald Creatore, filed an action against Alfa Laval Flow, Inc., which manufactures equipment for sanitary processing of food and beverages, for abuse of process and tortious interference with a contract. Appellants asserted that Alfa Laval Flow misused an involuntary-bankruptcy case it filed against its distributor in an effort to eliminate Creatore as a competitor in the sale of equipment for sanitary processing of food and beverages. The trial court dismissed the claims. The Seventh District affirmed, holding that federal law preempts state-law causes of action alleging the abuse of bankruptcy proceedings. The Supreme Court affirmed, holding that the United States Bankruptcy Code preempts state-law claims that allow the recovery of damages for misconduct committed by a litigant during bankruptcy proceedings.

Several purchasers of condominium units sued developer Harborage Cottages-Stuart, LLLP (Harborage), alleging that Harborage violated the Interstate Land Sales Full Disclosure Act (ILSFDA), 15 U.S.C. 1701 et seq., and several Florida statutes. Central to this appeal was whether Harborage violated section 1703(a)(1)(B) by failing to provide the purchasers with a property report prior to their signing the purchase agreements. The court held that Harborage failed to prove that it was entitled to an exemption from the ILFSDA and its admitted failure to provide the report violated the ILFSDA. Therefore, the court affirmed the district court's grant of summary judgment in favor of plaintiffs on their claim under section 1703(a)(1)(B) and (C). The court also affirmed the district court's award of damages and attorney's fees under section 1709; affirmed the grant of summary judgment in favor of Gentry-Hunt on the claim that Harborage violated Fla. Stat. 718.506 and vacated the judgment in favor of the Stones on the section 718.506 claim; and vacated the grant of summary judgment in favor of plaintiffs on the claim that Harborage violated the anti-fraud provision of the ILSFDA and the claim asserted under Fla. Stat. 501.204(1).