Justia Contracts Opinion Summaries

Plaintiff, American Diamond Exchange, brought an action against Defendant, Jurgita Karobikaite, and her husband, Scott Alpert, after Alpert, who was working as an estate buyer for Plaintiff, diverted Plaintiff's customers so that he could personally purchase their jewelry. Defendant shared in the profits. A judgment of default was entered against Alpert. The court found Defendant liable for tortious interference with a business relationship or expectancy and civil conspiracy and awarded Plaintiff $118,000 in damages. On appeal, the Appellate Court reversed the judgment of the trial court as to damages and remanded for a recalculation of damages based on the existing record. On remand, the trial court awarded $103,355 in damages to Plaintiff. Defendant appealed, claiming, inter alia, that Plaintiff failed to present sufficient evidence from which its lost profits could be determined with reasonable certainty. The Supreme Court reversed, holding (1) Defendant was not precluded from challenging the sufficiency of the evidence by failing to raise it in her direct appeal or because the appellate court decided the claim against her in the first appeal; and (2) the evidence was insufficient to support an award of damages.

This action arose from a transaction involving the sale of equity in a Texas-based dental practice management company to a Chicago-based private equity firm. At issue was whether the purchasers' ability to raise the forum selection clause issue in Texas provided them with an adequate remedy at law, undermining the basis for equity jurisdiction, and if not, whether the terms of the forum selection clause were broad enough to reach the Texas claims. The court held that the forum selection clause did not provide purchasers an adequate remedy at law, and therefore, the court had subject matter jurisdiction over their claims. The court also held that the forum selection clause here, which applied to any claims arising under or relating to the transaction, was sufficiently broad in scope that the purchasers were likely to succeed in showing that it provided exclusive jurisdiction in Delaware over the claims brought by the sellers in Texas. Accordingly, the court granted purchasers' motion for preliminary injunction.

The City Council of Tulsa decided to encourage the initiation of new direct nonstop airline service to business centers on the East and West coasts, and voted to approve a Memorandum between the Tulsa Industrial Authority (TIA) and the City which would convey certain real property (Property) for that purpose. The transfer would allow TIA to mortgage the Property to the Bank of Oklahoma (BOK) in support of a non-recourse loan so that TIA could, in turn, make an aggregate loan (Great Plains Loan) to Great Plains Airlines, Inc. (Great Plains). This transfer would allow the Tulsa Airports Improvement Trust (TAIT) to enter into a Support Agreement, pursuant to which TIA, in the event of a default would have the option of selling the Property to TAIT under the direction of the BOK. Upon exercise of such option, the TIA would sell, transfer and convey the property to TAIT to satisfy the outstanding loan balance. Great Plains subsequently defaulted under the terms of the Great Plains Loan, and left a balance owed to the Bank. Ultimately TAIT did not purchase the Property. TIA and the Bank sued TAIT. TAIT alleged the Support Agreement was unlawful and an unenforceable contract because TAIT could not purchase the Great Plains Loan and Property by reason that all of TAIT's funds were airport revenues and such purchases would violate the FAA Revenue Use Policy. To resolve the matter, the parties executed a Settlement Agreement which provided the City would pay BOK. The City and its Mayor asked the trial court to determine that the settlement agreement was a lawful contract executed by the City, and the settlement payment made pursuant to the settlement agreement was a lawful expenditure of public funds. Taxpayers intervened, and asked the trial court to determine that the payment of money to the Bank of Oklahoma pursuant to the settlement agreement was an illegal transfer of public funds made pursuant to an unlawful settlement agreement. In granting the City's motion for summary judgment, the trial court found the settlement agreement was a lawful and the settlement payment was a lawful expenditure of funds. Upon its review, the Supreme Court concluded the settlement was not based on a contract, but rather under the equitable theory of unjust enrichment to the City of Tulsa, and as such, the City had authority to enter into the Settlement Agreement. However, the Court found that the unjust enrichment claim was unviable and the Statute of Limitations would have barred the unjust enrichment claim against the City. The Court remanded the matter back to the District Court to direct the repayment of the settlement funds from BOK back to the City of Tulsa.

In this action brought pursuant to 8 Del. C. 225, plaintiffs sought a determination that certain written consents validly removed defendant directors and replaced them with a new slate. Defendant directors contended that they could not be removed or a new slate elected without the consent of a majority of the Series B Preferred Stock. Applying enhanced scrutiny, the court held that defendant directors breached their fiduciary duties when issuing the Series B Preferred Stock where, although they honestly believed they were acting in the best interests of the company, they breached their duty of loyalty by structuring the stock issuance to prevent an insurgent group from waging a successful proxy contest. Therefore, the class provision could not be given effect and the written consents validly elected a new board.

Plaintiff Kenneth Jakeman appealed a trial court's dismissal of his claims against Defendants Alderwoods, Inc., Lawrence Group Management Company, LLC, Montgomery Memorial Cemetery, Inc. and Judy Jones. Plaintiff's father purchased a "family plot" in the cemetery in 1967 containing ten burial spaces. Pursuant to the terms of the purchase agreement for the family plot, burial was limited to members of the Jakeman family. The cemetery mistakenly conveyed two spaces in the Jakeman family plot to James Jones and his wife, Defendant Judy Jones. Mr. Jones died and was buried in one of the Jakeman spaces. Plaintiff learned of the mistake in 2006, and notified the the cemetery and Mrs. Jones. Mr. Jones was reinterred in another space, however, still within the Jakeman spaces. When Plaintiff's father died in 2008, Mr. Jones was still interred in one of the Jakeman spaces. Despite an offer to exchange burial spaces, and based on a purported refusal to again exhume Mr. Jones, Plaintiff filed suit alleging breach of contract, trespass, negligence, willfulness and/or wantonness, outrage and conversion. Mrs. Jones cross-claimed against Alderwoods, Lawrence and the cemetery based on their alleged error in conveying to her spaces already owned by the Jakemans. Upon review, the Supreme Court found that it did not have jurisdiction to hear the case: "Despite representations in [Plaintiff's] notice of appeal that the underlying matter has been disposed of in its entirety, we hold that, because Judy's cross-claim remains pending below, this appeal is from a nonfinal judgment, and we do not have subject-matter jurisdiction." Accordingly, the Court dismissed the appeal and remanded the case for further proceedings.

In this breach of contract and fraud action, the attorney for Respondents reviewed confidential documents on disk that he received, unsolicited, from an anonymous source. Petitioners filed a motion to disqualify opposing counsel based on counsel's receipt of the confidential documents. The district court denied the motion, concluding that Petitioners failed to show that any of the documents, except a draft affidavit, contained on the disk were privileged. Petitioners then sought extraordinary writ relief to instruct the district court to disqualify the attorney and his firm, or, alternatively, to compel the district court to reconsider the disqualification motion. The Supreme Court denied the relief requested, holding (1) although there is no Nevada Rule of Professional Conduct that specifically governs an attorney's actions under these facts, the attorney in this case fulfilled any ethical duties by giving prompt notification to opposing counsel, soon after his receipt of the disk, through a Nev. R. Civ. P. 16.1 disclosure; and (2) the district court did not abuse its discretion in refusing to disqualify counsel even though one of the documents sent to counsel was privileged.

Tenant fell behind in its monthly rental payments to Landlord, after which Landlord obtained a summary eviction order in justice court. Landlord subsequently filed a complaint in district court against Tenant for damages for breach of the parties' lease agreement. Tenant filed a motion for summary judgment on the ground that Landlord's claim for damages was precluded by the doctrine of claim preclusion and arguing that Landlord was required to seek summary eviction in unison with its claim for damages. The district court denied Tenant's motion. Tenant then petitioned the Supreme Court for a writ of mandamus directing the district court to vacate its order denying Tenant's motion for summary judgment. The Court denied the petition, holding that the summary eviction scheme provided in Nev. Rev. Stat. 40.253 allows for an exception to claim preclusion in cases such as this one in that it permits a landlord to bring a summary eviction proceeding in justice court and subsequently bring a damages claim in district court.

Appellant Joseph Francis incurred a $2 million debt at Wynn Las Vegas, a casino. When unable to collect on the debt, Wynn sued Francis for, among other things, breach of contract, conversion, and unjust enrichment. When Wynn deposed Francis during discovery, Wynn invoked his Fifth Amendment privilege against self-incrimination to nearly every question. Wynn eventually filed a motion for summary judgment, which the district court granted after refusing to permit Francis to withdraw his invocation and denying his request to reopen discovery. At issue on appeal was how, in response to a civil litigant's request for accommodation of his Fifth Amendment privilege, the district court should proceed in order to prevent the opposing party from being unfairly disadvantaged. The Supreme Court affirmed, holding (1) in response to a civil litigant's request for accommodation of his privilege, the district court should balance the interests of the invoking party and the opposing party's right to fair treatment; and (2) after reviewing the particular considerations in the instant case, the district court did not abuse its discretion in refusing to permit Appellant to withdraw his invocation or in denying his request to reopen discovery.

This post-trial opinion determined the voting membership of GnB, LLC, a Delaware limited liability company. The parties disputed whether Firehouse Gallery, LLC, a Florida limited liability company, was a voting member of GnB. The parties also disputed whether GnB possessed an exclusive license to use the first-tier, generic domain name candles.com; held an option to purchase candles.com; and owned other assorted domain names relating to the candles business. The court held that Firehouse and plaintiff, who controlled GnB, each held a 50% voting membership interest; GnB owned the exclusive license and option to purchase candles.com and the other domain names; and plaintiff and defendant, the current principal of Firehouse, each breached their fiduciary duty of loyalty to GnB and must account for the profits and personal benefits they received. The court held that defendant was not otherwise liable to GnB or plaintiff. Because all of the litigants engaged in misconduct that could support fee-shifting, the doctrine of unclean hands applied with particular salience. Accordingly, the court held that all parties would bear their own fees and costs.

This case arose when Cat Tech sought indemnification from its insurers after Cat Tech damaged several components of a hyrotreating reactor owned by Ergon Refining, Inc. and arbitrators entered an award against Cat Tech for the damage. Insurers subsequently denied the claim, contending, inter alia, that the "your work" exclusion found in the policies precluded coverage for damage to the reactor. The district court found that insurers had no duty to indemnify Cat Tech. The court held that the information contained in the arbitration award was insufficient to properly apply the "your work" exclusion. As such, the court concluded that the district court erred when it relied on the award in granting insurer's summary judgment motion. On remand, the district court should conduct any additional fact-finding necessary to determine whether the damage suffered by Ergon's reactor was limited only to those components upon which Cat Tech worked, or instead included other components unrelated to Cat Tech's operations. Accordingly, the judgment was reversed and the case remanded for further proceedings.