Justia Contracts Opinion Summaries

Appellant Essie Simmons and Respondent Rubin Simmons divorced in 1990. The parties entered into a settlement agreement that was approved by the family court. Central to the agreement was the requirement that Mr. Simmons give Ms. Simmons a half or third of his Social Security benefits, depending on his age when he retired. When he retired, Mr. Simmons did not pay his ex-wife. She sued, but the family court declined to hear the complaint, finding that it could not hear a case that primarily dealt with Social Security benefits. Mr. Simmons appealed the dismissal, and the appellate court reversed. The court voided the division of Mr. Simmons' benefits, holding that the Social Security Act specifically precluded parties from dividing benefits under the settlement agreement. Because the agreement was partly voided by the court, Ms. Simmons sought to reopen the matter entirely. The family court dismissed again, holding that it lacked jurisdiction to revisit the agreement. On appeal, the Supreme Court was presented with the question of whether the family court could revisit the now partially voided agreement. Upon careful review of the arguments and applicable legal authority, the Court held that "basic principles of equity suggest[ed] that all issues should be revisited by the family court." The Court recognized the practical difficulties confronting the family court, but the Court noted, "that challenge pales in comparison to [Mr. Simmons'] suggestion that we simply end this matter with the remnant of the agreement remaining valid." The Court reversed the decision of the lower court and remanded the case to the family court for further proceedings.

This case involves the State's "working retiree program," and the propriety of its withholding retirement contributions from eligible members who returned to work with the state prior to July, 2005. Before that time, the program allowed employees to retire, then after a break, be re-hired and receive retirement benefits and a salary of up to $50,000 per year without having to pay into the pension plan. The State was ordered to refund any contributions made since July, 2005 by program members. In 2005, the State Retirement System Preservation and Investment Reform Act amended the program to require retired members pay the employee contribution as if they were active members but without accruing additional service credit. The State appealed the circuit court's order to refund the contributions. The retirees challenged the change in the program, arguing that it was unlawful for the State to change the terms of the working retiree program after the retirees "irreversibly retired" with the understanding that contributions to the pension plan would not be required. Upon careful consideration of the arguments and legal authority, the Supreme Court reversed the circuit court's holding with respect to the State's return of contributions since 2005. The Court found that the Legislature enabled the State to take the contributions when it amended the program by Act in 2005. The Court dismissed the Retirees' challenge to the State Retirement System Preservation and Investment Reform Act, finding no merit in their argument.

In 1992, Appellant Wendell Baugh, III acquired Precision Services, Inc. from Ronald and Gayla Miller. The Millers agreed to finance the transaction. Mr. Baugh and his wife personally guaranteed a note executed by the corporation that purchased Precision's assets and the right to use its name. Appellee Herman Novak and his wife were friends and neighbors of the Baughs. In 1995, Messrs. Baugh and Novak bought a company together (Penske Plastics, Inc.), and by contract, were jointly and severally liable for the company's debts and obligations. Both gentlemen agreed to share equally in the company's profits. Mr. Baugh offered to sell one-half of Precision to Mr. Novak. Before he could sell any interest in Precision, Mr. Baugh had to obtain permission from the Millers. Because Mr. Baugh found the Millers difficult to deal with, he asked his attorney to draft an arrangement so that Mr. Novak could purchase an interest in Precision without the Millers' involvement. The document drafted by the attorney included an indemnity agreement by which the Novaks would agree to indemnify the Baughs for fifty percent of any payments they were required to make on the Millers' note and Precision's other debts. Mr. Baugh kept an office at Penske Plastics. Fire destroyed Penske's building in 2003. Of import, a banker-box that contained the original signed copies of the Baugh-Novak 1995 purchase agreement was consumed in the fire. The companies' insurance policies were not enough to cover all the damage caused by the fire. In 2005, Messrs. Baugh and Novak sold Penske Plastics to Alcan Baltec. Up until the time of the closing, Precision's loan obligations were paid from the revenue of Penske Plastics. In late 2005, Mr. Novak sent Mr. Baugh a note essentially "washing his hands" of Precision. In 2006, Mr. Baugh began paying Precision's obligation to the Millers from his personal funds. Mr. Baugh filed suit against the Novaks to enforce the terms of the 1995 agreement, arguing that he was entitled to indemnification and reimbursement for Precision's obligations. The trial court ruled in favor of Mr. Baugh. Mr. Novak appealed, arguing that the trial court erred in several of its evidentiary rulings at trial. The appellate court, on its own motion, reversed the trial court, holding that the purchase agreement and indemnity agreements were contrary to public policy and state law. The Supreme Court found that the evidence did not support the appellate court's holding. The Court reinstated the trial court's decision, and dismissed the Novak's appeal.

Husband and wife executed a will in 1980, which was expressly identified as being "joint and mutual," bequeathing all of their property to each other as the survivor in fee simple and at the death of the survivor, the residue of the estate was to be divided equally among husband's two children, David and Darrell, and wife's two children, Deana and Diane. After husband died in 2005, wife probated the 1980 will, became the executor, and conveyed husband's estate to herself. In November 2005, wife executed another will which could, at her death, leave 20% of the estate to appellant, Deana, and the residue to the children of Deana and Diane. Deana then obtained wife's power of attorney and conveyed all of her mother's real estate to her two children and to appellee, Diane's child. When wife died in 2008, Deana offered the 2005 will for probate and Diane filed a caveat and also sought to petition the 1980 will as the last will and testament. The court held that the trial court did not err when it applied the law in place before the 1998 probate code was adopted to determine whether husband and wife had a contract not to revoke the 1980 will; when it concluded that the 1980 will was joint and mutual and that husband and wife had an enforceable contract not to revoke the 1980 will; when it did not in fact find that the fee simple conveyance to wife was a marital trust; when it made no rulings as to whether wife's 2005 will was a contract, and as such, that issue could not be raised on appeal; and when the 1980 will specifically provided that the residue of the survivor's estate was to be divided equally among the four children. Accordingly, the court affirmed the trial court's order that the 1980 will would be specifically enforced by equity.

This case stems from Plaintiff Crowe & Dunlevy, P.C.'s (Crowe) legal representation of the Thlopthlocco in the Muscogee (Creek) Nation District Court in 2007. Nathan Anderson, a member of the Thlopthlocco Nation attempted a coup d'etat by declaring himself the only valid leader and purported to appoint a new government. While the "coup" proceeded through the tribal courts, the matter of paying the legal bill for Crowe's representation came up. With the "official" government in dispute, and tribal business halted from an injunction issued until the case was resolved, Mr. Anderson argued that his legal fees should be paid from the tribal treasury. The tribal district court dismissed his claim, reasoning that until the litigation was resolved, no one knew who had authority to spend Thlopthlocco funds. The court then ordered that any attorney fees paid from the tribe's treasury be refunded. Instead of complying with the order, Crowe filed suit with the federal district court, seeking to enjoin the tribal court from ordering a return of the legal fees. The federal court ruled in favor of Crowe, and the tribal judge, Defendant Judge Gregory Stidam, appealed. On appeal to the Tenth Circuit, Judge Stidham argued the case should have been dismissed because he was entitled to sovereign and judicial immunity. The Tenth Circuit found that the lower court did not abuse its discretion in granting the injunction against Judge Stidham's order. The Court affirmed the lower court's decision.

Plaintiffs Knipe Land Company (KLC) and John Knipe appealed a jury verdict in favor of Defendants Richard and Johnnie Robertson and Robertson Kennels, Inc. KLC is a real estate broker that specializes in agricultural and commercial real property. In 2005, the Robertsons signed an employment contract with KLC, where KLC was granted an exclusive listing to sell 1400 acres they owned. KLC would earn a percentage commission of the sales price or nonrefundable portions of any earnest money paid. In 2005, Robert and Sheila Harmon signed a purchase contract to buy the Robertsons' 1400 acres. The Harmons paid $50,000 as earnest money. Under the terms of the purchase agreement, $35,000 of the earnest amount would be non-refundable. The Harmons did not purchase the property, and the nonrefundable portion of the earnest money was transferred from the Harmons' real estate broker to KLC, which in turn distributed it to the Robertsons. In 2007, Robertson Kennels signed an employment contract with KLC to sell 1887 acres of land it owned. MidAmerican Nuclear Energy Company, LLC entered into a purchase agreement to purchase all of the Robertsons' property. The company paid $450,000 as nonrefundable earnest money. MidAmerican did not purchase the Robertsons' property. After the Harmon and MidAmerican purchase contracts ended, KLC demanded the Robertsons' pay its commission from the two cancelled purchase agreements. Upon review, the Supreme Court found that the Robertsons "clearly breached the unambiguous employment contracts and there was insufficient evidence to support the jury's verdict." The Court vacated the damages and attorney fees that were awarded to the Robertsons at trial, and remanded the case to the district court for further proceedings.

Sisters of Charity Health System, Inc. (SOCHS) sued its former employees, Douglas Farrago, MD, Raymond Stone, DO and Carolyn Kase, DO, to enforce restrictive covenants contained in contractual agreements between the doctors and SOCHS. The Superior Court entered a judgment in favor of SOCHS and ordered each doctor to pay liquidated damages pursuant to clauses in their contracts. On appeal, the doctors contended that the restrictive covenants and liquidated damages clauses were unenforceable. The Supreme Court's focus on appeal was whether the covenants reasonably sought to protect a legitimate business of SOCHS. The Court concluded that the covenants did protect legitimate business interests, and the contracts contained enforceable liquidated damages provisions. The Court affirmed the decision of the Superior Court in favor of SOCHS.

Dr. Daniel Dare appealed a ruling of the Chancery Court that denied him the ability to intervene in the modification of a marital property agreement entered into by Paul and Sharon Stokes. Mr. and Mrs. Stokes were married in 1985. In 2007, Mrs. Stokes had an affair with Dr. Dare. Shortly after the affair began, Mr. Stokes filed for divorce. With the entry of a divorce decree, the Chancery Court incorporated a child-custody and property-settlement agreement that was "executed" by Mr. and Mrs. Stokes. Pertinent to the Supreme Court's review of this matter was a "covenant not to sue" included in the property agreement. Mr. Stokes filed a petition to modify the property agreement and sought to delete that part of the provision that barred him from bringing suit against "any other person for alienation or affection." Mrs. Stokes did not contest Mr. Stokes' petition, and the court deleted the term "any other person." Mr. Stokes then sued Dr. Dare for "alienation of affection." Dr. Dare sought to intervene in Mr. Stokes' modification matter. The court held that Dr. Dare was not a party to the divorce or the property agreement, and as such, had no legally cognizable interest in the divorce. Dr. Dare argued on appeal to the Supreme Court that the modified "covenant not to sue" implicitly targeted Dr. Dare as a party, and that he should be allowed to intervene in the modification proceedings. The Supreme Court agreed with the Chancery Court that Dr. Dare had no legally protected interest in the Stokes' divorce and affirmed the lower court's decision.

Plaintiff Darlene Gray appealed an order of the Superior Court that dismissed her complaint against Defendant Commonwealth Land Title Insurance Company. In 2003, Plaintiff and her sister, in their capacity as trustees of the Ocean Estates Realty Trust, received a quitclaim deed from the Triple P Ranch Realty Trust. Ocean Estates paid $80,000 for the parcel and recorded the deed. Later that year, Ocean Estates conveyed a warranty deed for the land to Plaintiff. At the time she received the deed, Plaintiff obtained a construction loan, granted a mortgage, and purchased title insurance from Commonwealth. The title insurance provided $328,000 in coverage against a title defect. In 2006, Plaintiff learned that Triple P Ranch Realty Trust never acquired title to the property and that the State legally owned it. The land was appraised at $15,000, and the insurer paid the mortgage lender the amount of the appraisal. Plaintiff sued Commonwealth for breach of contract, arguing that Commonwealth's policy should reimburse her for all expenses she incurred prior to learning of the title defect. When the Superior Court denied Plaintiff's motion for reconsideration, she appealed to the Supreme Court. The Court found that trial court properly determined the measure of damages for Plaintiff's claim. Without finding errors in the trial court's findings of fact, the Supreme Court affirmed the trial court's decision dismissing Plaintiff's complaint.

The Air Force petitioned for review of the decision and order of the Federal Labor Relations Authority ("FLRA") that a union proposal for uniform cleaning was a negotiable condition of employment. Based on a recently discovered Conference Report, the Air Force contended that the expenditure under 5 U.S.C. 5901(a) of funds was not authorized for the provision of services related to uniforms and statutory silence did not leave it discretion to do so. At issue was whether the court lacked jurisdiction under 5 U.S.C. 7123(c) to entertain the Air Force's petition because the Air Force failed to present its new interpretation of the uniform statutes. The court held that the Air Force's belated discovery of a constructional appropriations bar was an extraordinary circumstance under section 7123(c) that permitted consideration of an argument not presented by the FLRA. Were the exception not to apply, the FLRA's order would, in effect, permit the Air Force, by contract with the union, to authorize the expenditure of funds beyond what Congress had approved and therefore, the court granted the petition for review. Accordingly, whether as a matter of the plain text of the two uniform statues, or the Air Force's permissible interpretation of any statutory ambiguity to which the FLRA must defer, the Air Force correctly maintained that the union's uniform cleaning proposal was non-negotiated because the statute the Department of Defense administered did not authorize such payments for appropriated funds.