Justia Contracts Opinion Summaries

Appellees Floyd Demaray and James Hagemann were sued for repeated tortious activity in discharging of pollutants into lakes and streams of a nearby property. Appellees, who owned separate but identical insurance policies with De Smet Farm Mutual Insurance, notified De Smet of the lawsuit. De Smet declined defense of the suit, asserting it owed no duty to defend under the insurance contract. Appellees obtained their own defense counsel and defended the matter through trial, where a jury ruled in their favor. Appellees then sued De Smet, alleging that the company breached its duty to defend them in the previous lawsuit and seeking indemnification for all costs and fees incurred as a result. The trial court granted Appellees' motion for summary judgment, holding that De Smet owed Appellees a duty to defend because the alleged claim, if true, fell within policy coverage. On appeal, the Supreme Court reversed, holding that the policy language was unambiguous and the complaint asserted no claim that would arguably invoke coverage. Remanded with directions to grant summary judgment for De Smet.

C.R. Weaver ordered a coffee urn from defendant Advanced Restaurant Supply for use by Glacier Kitchens, a corporation in which Weaver owns the majority of the shares. Advanced Restaurant sent a coffee urn it ordered from defendant Wilbur Curtis Manufacturing. Glacier Kitchens used the urn to provide drink for forest firefighters under its food service contract with the United States Forest Service (USFS). The coffee urn ultimately malfunctioned, and, later, Glacier Kitchens' contract with the USFS was terminated by USFS. Weaver sued defendants for breach of contract, alleging that a contract attached when he ordered the coffee urn. The district court granted summary judgment to defendants, finding that Weaver, as a shareholder in Glacier Kitchens, lacked standing to bring a claim that belonged to the corporation. The Supreme Court affirmed, holding (1) the district court properly granted summary judgment to defendants; and (2) the district court properly awarded costs to defendants.

Petitioner Winecellar Farm ("Winecellar") appealed a superior court order that found it was not entitled to: (1) a decree pro confesso awarding it specific performance to purchase the Bedard Farm ("Bedard"); (2) specific performance to purchase the farm under the part performance doctrine; and (3) continued haying in perpetuity under a lease agreement. Craig and Jennifer Rief purchased Winecellar, a working farm adjacent to the Bedard Farm. Bedard was owned by two siblings who until 2006, had lived there all their lives. The Riefs had enjoyed a close, friendly relationship with the Bedards until the Bedards died in 2006. The Riefs informed the Bedards on multiple occasions of their interest in buying the Bedard Farm when the Bedards were ready to sell. Until that time, the Riefs were content with farming the two properties together. In 2004, the Riefs and the Bedards signed a "memorandum of understanding" to harvest hay. In exchange, Winecellar/Riefs would maintain certain access ways and roadways to a shared driveway. In 2004, the Riefs wanted to lease the Bedard land to raise a small herd of buffalo to which the Bedards declined. In January 2006, the Bedards acquiesced to the Riefs' proposal to lease the land for buffalo. They drafted a "letter of understanding" for which the Riefs would lease the land, and later be given the opportunity to purchase the land should the Bedards sell. When the Bedards died, the land passed to their family. The Riefs filed a preliminary injunction in an attempt to preclude the Bedards' estate from evicting its buffalo and removing fencing equipment maintained on two leased pastures. Although the Bedard heirs filed responses in the case, their answer was untimely. The Riefs moved for a decree pro confesso for the right to purchase the Bedard land. The trial court denied the motion, but ordered a voluntary nonsuit as to the Bedard estate. On appeal, the Riefs argued that the sum of the various memoranda/letters of understanding constituted contracts for which specific performance was the only remedy. According to the Riefs, the monthly lease payments were in consideration for the right to purchase the land. Upon review, the Supreme Court held that the record adequately supported the trial court's decisions to deny the Riefs specific performance for the Bedard Farm. Additionally, the Court found that the haying arrangement between the parties was not sufficient to constitute an "interest in land" consistent with "the ultimate intent that Winecellar Farm would own the Bedard Farm." As such, the Court affirmed the lower court's decisions.

Viasystems, Inc., a Missouri-based corporation, filed suit against EBM-Papst St. Georgen GmbH & Co., KG (St. Georgen), a German corporation, alleging several claims in contract and tort. At issue was whether the district court properly concluded that it had neither specific nor general personal jurisdiction over St. Georgen and granted its motion to dismiss. The court held that Viasystems failed to establish a prima facie case that specific and general jurisdiction could be asserted over St. Georgen. The court also held that the district court did not abuse its discretion in denying Viasystems' motion for jurisdictional discovery. Therefore, because St. Georgen did not have sufficient "minimum contacts" with Missouri, the maintenance of the suit would offend "traditional notions of fair play and substantial justice." Accordingly, the court affirmed the dismissal of the case.

The Maryland State Retirement System (System) filed a claim against Milliman, an actuary, asserting that Milliman had understated the contributions required to fund three of the State's ten retirement and pension systems because of Milliman's misinterpretation of a particular data code. The Retirement System Procurement Officer determined that Milliman had failed to comply with its contractual duties and awarded damages to the System. On appeal, the State Board of Contract Appeals determined that the actuary had substantially breached its contracts with the System and affirmed the damages. The circuit court affirmed the Board's findings that Milliman breached its contracts with the System and affirmed the award of lost investment earnings but reversed the Board's award of amounts equaling lost contributions. The Supreme Court granted certiorari, holding (1) Milliman was liable to the System for repeatedly misinterpreting a data code; (2) the System was not negligent in the development or transmission of data provided to Milliman and, therefore, contributory negligence did not bar the System's recovery; and (3) the circuit court erroneously reduced the Board's damage award representing lost contributions. The Court, therefore, vacated the judgment of the circuit court and affirmed the Board's decision.

Respondent Annapolis Towne Centre (ATC), the owner and developer of a mixed-use development, entered into an agreement with petitioner Hovnanian Land Investment, a residential developer, under which ATC agreed to sell a portion of the property to Hovnanian for the construction of a residential tower. The contract required certain conditions to be met by ATC prior to the closing and contained a clause stating that any waiver of the contract had to be in writing. Before closing, Hovnanian terminated the agreement, alleging that ATC failed to meet a condition precedent. ATC sought a declaratory judgment, and both parties filed motions for summary judgment on the issue of whether ATC had complied with the condition precedent. The circuit court granted ATC's motion for summary judgment on that issue, holding that Hovnanian waived the condition precedent. The court of special appeals affirmed. The Court of Appeals reversed, holding that summary judgment was not appropriate because (1) a condition precedent may be waived by a party's conduct, despite a non-waiver clause, but whether Hovnanian's actions amounted to a waiver was a dispute of material fact; and (2) the question of whether ATC strictly fulfilled the condition also involved material questions of fact. Remanded.

Eric and Martha Hankins executed a promissory note and mortgage on their residence in favor of the lender, Option One Mortgage Corporation, which later assigned the mortgage and note to Deutsche Bank. A loan modification agreement changed the lender to Liquidiation Properties. When the Hankinses stopped making payments on the note, Liquidation filed a complaint for foreclosure against the Hankinses. Deutsche Bank then assigned the mortgage to Liquidiation, which, in turn, assigned the mortgage and note to Kondaur Capital Corporation. Liquidation then moved to substitute Kondaur as the named plaintiff. The Hankinses did not challenge the motion to substitute, and the district court granted the motion. The district court then entered summary judgment in favor of Kondaur. Martha Hankins appealed. The Supreme Court vacated the judgment of the district court, holding (1) the district court did not err in substituting Kondaur as the named plaintiff because the substitution did not alter the underlying allegations of the foreclosure action or tend to produce a manifest injustice; and (2) entry of summary judgment was error because the record did not establish the essential elements of a foreclosure action without dispute as to genuine issues of material fact. Remanded.

Plaintiff sued to recover a "break-up fee" it claimed was owed to it under the letter of intent the parties executed in relation to a negotiated sale of defendants' assets and real estate properties. At issue was whether the district court properly granted summary judgment in favor of defendants, holding that no break-up fee obligation had been triggered. The court held that there were genuine issues of material fact as to whether actual negotiations had terminated and therefore, the court reversed the order of summary judgment and remanded the case for further proceedings.

Barbara and Steven Selvig, as sellers, and Blockbuster Enterprises, as buyer, entered into a real estate purchase contract for the purchase of a bed and breakfast. The contract specified that the deed to the property would be recorded when Blockbuster paid the full purchase price. Before paying the full purchase price, however, Blockbuster recorded the deed. The sellers sued in district court on several theories of liability. The district court granted Blockbuster's motion to dismiss, dismissing (1) the seller's claims for breach of contract and breach of the covenant of good faith and fair dealing, holding that the sellers had elected their remedy pursuant to an election of remedies provision in the contract by keeping the earnest money deposit; and (2) the seller's unjust enrichment claim. The Supreme Court affirmed in part and reversed in part, holding (1) the district court erred in dismissing the seller's contractual claims because the election of remedies provision does not apply to a breach of contract claim out of a wrongful recording of the deed; and (2) the district court correctly dismissed the seller's claim for unjust enrichment because the sale of the property was covered by a written contract.

This suit stemmed from the efforts of plaintiff and its owner and founder to obtain a patent for an invention related to personalized postage stamps and the suit involved state law claims of fraud and breach of fiduciary duty in connection with a patent application. Plaintiff appealed the district court's grant of summary judgment in favor of defendants, holding that there was no genuine issue of material fact as to whether plaintiff's claims were time-barred such that defendants were entitled to judgment as a matter of law and that in the alternative, there was no genuine issue of material fact as to the causation elements of plaintiff's claims. The court held that this case raised issues of patent law, and those issues were substantial because of the special federal interest in developing a uniform body of patent law in the Federal Circuit as recognized in Scherbatskoy v. Halliburton Co. and expressed by Congress's grant of exclusive appellate jurisdiction over patent cases to that court. Therefore, the court held that it lacked jurisdiction over the appeal and transferred the suit to the United States Court of Appeals for the Federal Circuit pursuant to 28 U.S.C. 1631.