Justia Contracts Opinion Summaries

Beka Industries, Inc. ("BEKA") sued the Board of Education of Worcester County ("County Board") alleging claims that arose from a written contract dispute between BEKA and the County Board when BEKA was dissatisfied with the methods and amounts of the County Board's payment for its work. The court considered several issues on appeal and held that a new trial was warranted where the County Board was precluded from presenting evidence on its recoupment claim and BEKA may have been awarded impermissible "delay damages" under the contract. The court also reversed the intermediate appellate court's holding that the County Board's governmental immunity was not waived unless and until BEKA proved that there was a funding mechanism to satisfy a judgment for money damages rendered against the County Board. Accordingly, court affirmed in part, reversed in part, and remanded the case to the intermediate appellate court with direction to remand to the circuit court for a new trial.

Plaintiff sued defendant in personam and also sued a number of defendant's vessels in rem for breach of contract when defendant failed to make payments due on four promissory notes held by plaintiff and on defendant's default on loan agreements to cover those notes. At issue was whether the district court properly granted plaintiff's motion for summary judgment based on the determination that defendant's defenses were not assertable under Alabama law and that there were no genuine issues of material fact. The court affirmed summary judgment and held that the "entire agreement" clause in the Third Amended Loan Agreement between plaintiff and defendant defeated defendant's defenses of promissory and equitable estoppel.

Petitioner filed a breach of contract claim against its former employee claiming that the employee violated the terms of her employment agreement by breaching the duty of loyalty and by breaching a non-solicitation clause which was included in the contract. The employee filed a counterclaim alleging that petitioner withheld her bonus in violation of the Maryland Wage Payment and Collection Law, Md. Code Ann., Labor and Employment section 3-501. At issue was whether an employee who breached her duty of loyalty could seek certain of the provisions of the contract which she breached. Also at issue was whether a party could recover attorneys' fees pursuant to a contract provision that provided reimbursement of fees incurred when a third party retained and paid counsel and the party did not pay attorneys' fees, nor had any obligations to pay attorneys' fees. The court held that the employee's breach of duty of loyalty did not result in forfeiture of her rights under the fee shifting provision of the non-solicitation clause where the clause presented divisible rights and obligations from the remainder of the contract. The court also held that the employee was entitled to attorneys' fees under the fee shifting provision where she prevailed under the terms of the contract and the breach did not result in the forfeiture of her rights.

Bruce Bedrick appeals the trial courtâs decision in favor of his wife Deborah Bedrick. Deborah filed suit seeking dissolution of her marriage in August, 2007. She sought permanent alimony, an equitable distribution of the partiesâ real and personal property, and other relief. Bruce filed a cross-complaint seeking to enforce a postnuptial agreement that the parties executed in December, 1977 but most recently modified in 1989. The agreement provided that in the event of dissolution, neither party would pay alimony. Instead, Deborah would receive a cash settlement. The 1989 amendment listed the cash settlement to be $75,000. The agreement further provided that Deborah would waive her interests in Bruceâs businesses, and not be liable for Bruceâs personal and business loans. The trial court concluded that because there was not much case law addressing the validity of postnuptial agreements in Connecticut to use as a guide, it may not enforce an agreement that was not fair and equitable. The court concluded that the postnuptial agreement was not fair and equitable, and declined to enforce it. Bruce appealed the decision and lost. The Supreme Court reviewed the case and concluded that postnuptial agreements are valid and enforceable, and generally must comply with contract principles. The Court also concluded that the terms of such agreements should be both fair and equitable at the time of execution, and not unconscionable at the time of dissolution. The Court found that the terms of the Bedricksâ agreement were unconscionable, and it affirmed the lower courtâs decision.

Respondents filed a complaint against AT&T Mobility LLC ("AT&T"), which was later consolidated with a putative class action, alleging that AT&T had engaged in false advertising and fraud by charging sales tax on phones it advertised as free. AT&T moved to compel arbitration under the terms of its contract with respondents and respondents opposed the motion contending that the arbitration agreement was unconscionable and unlawfully exculpatory under California law because it disallowed classwide procedures. The district court denied AT&T's motion in light of Discover Bank v. Superior Court and the Ninth Circuit affirmed. At issue was whether the Federal Arbitration Act ("FAA"), 9 U.S.C. 2, prohibited states from conditioning the enforceability of certain arbitration agreements on the availability of classwide arbitration procedures. The Court held that, because it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," quoting Hines v. Davidowitz, California's Discover Bank rule was preempted by the FAA. Therefore, the Court reversed the Ninth Circuit's ruling and remanded for further proceedings consistent with the opinion.

Phoenix Insurance Company ("Phoenix") filed a complaint in circuit court rejecting the arbitration award given to appellee when she requested coverage under the underinsured-motorist provisions of her policy with Phoenix after she was injured in a car accident and the other driver's vehicle was underinsured. At issue was whether a provision allowing either party to an insurance contract to demand a trial de novo following arbitration was unenforceable when it appeared in an underinsured-motorist policy. The court held that the provision in appellee's underinsured-motorist policy allowing either party to reject an award over the statutory minimum for liability coverage did not violate public policy and was not unconscionable.

Petitioner 600 North Frederick Road, LLC, owner of one parcel of a three-parcel tract of land in Montgomery County, appealed the judgment from the Court of Special Appeals that affirmed the judgment of the circuit court. In that case, the court held that Petitionerâs predecessor in interest and the owner of one of the other parcels could modify bilaterally an earlier declaration executed and recorded by a single predecessor-owner at the time when all three parcels were under single ownership. The modification now limits Petitionerâs development rights on its later-acquired parcel, notwithstanding that two earlier declarations provided that any purported modification required the consent of the owner(s) of all three parcels. The court also ruled that the revised declaration applied not only to any third-party developer of the restricted parcel, but to Petitioner as owner of the proposed-for-development restricted parcel. Petitioner claims that because the original declaration required expressly the consent of the owner(s) of all of the parcels, an attempt to modify the agreement in a writing executed by less than all of the owners is ineffective, and the revised declaration is invalid and unenforceable. Respondent Burlington Coat Factory of Maryland, LLC, the assignee-leaseholder on one of the parcels, argued that two parties to a tripartite agreement may modify that agreement in writing, provided that the modifications do not prejudice the non-signatory party. The Supreme Court, on review of the record, held that the modifications in the revised declarations in this case were valid and enforceable absent a showing of prejudice by the non-consenting parcelâs owners. Furthermore, the Court held that the restrictions contained in the revised declaration apply not only to third-party developers of the restricted parcel, but also to Petitioner as owner. The Court affirmed the appellate courtâs decision, and remanded the case to the circuit court for further proceedings.

Appellant, Retail Holdings, N.V. (together with its predecessors, "New Singer"), appealed from a judgment in favor of appellee, Lockheed Martin Corporation (together with its predecessors, "Old Singer"), regarding a dispute revolving around the interpretation of a 1986 Reorganization and Distribution Agreement ("Spin-off Agreement") between appellee's predecessor, The Singer Company, and appellant's predecessor, SSMC, Inc. At issue was whether the Spin-off Agreement transferred a particular pension plan, the Executive Office Foreign Service Retirement Plan ("Plan"), from Old Singer to New Singer. The court reversed the judgment and held that the district court erred in considering extrinsic evidence of the parties' post-contract conduct where the contract admitted only one reasonable interpretation when the Plan was transferred to New Singer by clear and unambiguous terms.

On appeal, the Supreme Court reviewed whether the circuit court erred in its interpretation of a management agreement between Condominium Services, Inc. (CSI) and First Owners' Association of Forty Six Hundred Condominium, Inc. (FOA). FOA filed a complaint alleging CSI breached the terms of the management agreement and had wrongfully converted FOA's funds. CSI filed a counterclaim and amended counterclaim for breach of contract. The circuit court sustained FOA's demurrers to the counterclaim and amended counterclaim. FOA's claims proceeded to a jury trial; the jury returned a verdict in favor of FOA on both its claims . CSI sought to strike the jury verdict and for judgment notwithstanding the verdict. The court denied the motion and CSI appealed. On review, the Supreme Court agreed with the lower court's holding and affirmed the judgment in favor of FOA.

Plaintiff sued defendants, United Healthcare Insurance Company and the American Association of Retired Persons, alleging breach of contract, fraud under the D.C. Consumer Protection Procedures Act, and unjust enrichment when plaintiff had to pay nearly $40,000 in uninsured medical bills. At issue was whether the district court properly dismissed plaintiff's claim under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim when plaintiff tried to recover the uninsured amount by alleging that the contract between plaintiff and defendants was ambiguous. The court held that the district court properly dismissed plaintiff's claim under Rule 12(b)(6) where the contract was not ambiguous when it included sections on what services were and were not covered and included notations limiting coverage that was directly relevant to plaintiff's circumstances.