Justia Commercial Law Opinion Summaries

The issue on appeal to the Supreme Court centered on whether Lincoln Farm, L. L. C. breached a contract to sell potatoes to Farming Technology Corporation, and whether certain provisions of the Uniform Commercial Code involving the unavailability of a carrier and a commercially impracticable method of delivery were applicable to the parties. Farming Technology argued at trial that Lincoln Farm was required to build a private rail spur in order to fulfill Lincoln Farm's contractual obligation to load potatoes on railcars or trucks furnished by Farming Technology Corporation to take delivery of the potatoes. After review of the contract in question, the Supreme Court held that the contract unambiguously stated that Farming Technology Corporation would furnish railcars or trucks to take delivery of the potatoes, and that the contract did not state that Farming Technology had the right to insist on delivery solely by rail, or to insist that Lincoln Farm build a private rail spur. View "Lincoln Farm, LLC v. Oppliger" on Justia Law

Under a 2008 master contract, governed by Minnesota law, Lyon, a Minnesota finance firm, had a right of first refusal to provide lease financing for Illinois Paper’s customers. Lyon had the option to purchase office equipment supplied by Illinois Paper and lease the equipment to Illinois Paper’s customers who were interested in that type of financing. Illinois Paper expressly warranted that “all lease transactions presented ... for review are valid and fully enforceable agreements.” Lyon purchased a copy machine from Illinois Paper and leased it to the Village of Bensenville for a term of six years. The Illinois Municipal Code provides that municipal equipment leases may not exceed five years. When the Village stopped paying, Lyon sued Illinois Paper for breach of the contractual warranty. The district court concluded that the warranty was a representation of law, not fact, and was not actionable in a suit for breach of contract or warranty. The Seventh Circuit certified the question to the Minnesota Supreme Court, noting that Minnesota adheres to the maxim that a person may not rely on another’s representation of law, so where reliance is an element of a tort claim (such as fraud), representations of law are not actionable. View "Lyon Fin. Servs., Inc. v. IL Paper & Copier Co." on Justia Law

Respondent purchased a luxury motor home manufactured by Appellant and took possession of the motor home despite noticing problems with the motor home during inspection. The motor home subsequently experienced significant electrical problems, and Respondent attempted to revoke her acceptance of the motor home from Appellant. Appellant rejected the revocation. Respondent filed suit against Appellant, asserting causes of action for revocation of acceptance under the Uniform Commercial Code, breach of contract, and breach of warranty. The district court found in favor of Respondent and awarded her damages that included the purchase price of the motor home. The Supreme Court affirmed the judgment but reversed the award of attorney fees, holding (1) Respondent was entitled to revoke acceptance of the motor home where privity existed between Respondent and Appellant because Appellant interjected himself into the sales process and had direct dealings with Respondent to ensure completion of the transaction; and (2) the district court did not err in awarding incidental and consequential damages but abused its discretion in awarding attorney fees. View " Newmar Corp. v. McCrary" on Justia Law

Steven Sheeder and Barlett Grain Co. entered into oral agreements for the sale of grain. The parties later confirmed the agreement with a signed, written document containing an arbitration clause that was not part of the oral agreements. After Bartlett requested adequate assurance of performance and Sheeder did not provide such assurance, thus repudiating the contracts, Bartlett filed a complaint against Sheeder with the National Grain Feed Association (NGFA). Sheeder failed to sign an arbitration contract as required by NGFA arbitration rules, and NGFA entered a default judgment for Bartlett for breach of contract. Bartlett subsequently filed an application for confirmation of the arbitration award. The district court denied the application, concluding that there was no enforceable agreement between the parties to arbitrate. The Supreme Court reversed, holding (1) Bartlett and Sheeder entered into written agreements to arbitrate because the parties' oral agreements were modified by signed writings including agreements to arbitrate; and (2) the written agreements between Sheeder and Bartlett were not unconscionable.View "Barlett Grain Co. v. Sheeder" on Justia Law

Construction Company contracted with Subcontractor for construction of elements of an HVAC system. As partial collateral for a revolving line of credit, Subcontractor assigned to Bank its right to receive payment under the contract with Construction Company. Construction Company instead made twelve payments to Subcontractor. Subcontractor subsequently ceased business operations, leaving an outstanding debt to Bank on its line of credit. Bank filed an action against Construction Company for breach of contract and violation of the UCC. A jury found (1) Construction Company liable on both counts for ten of the twelve checks that it had delivered to Subcontractor, and (2) Bank was estopped from recovering with respect to the final two checks. The judge entered judgment on the statutory claim in the amount of $3,015,000, the full face value of the ten checks. The Supreme Court affirmed in part and reversed in part, holding that the trial judge (1) properly entered judgment on Bank's statutory claim in the amount of the wrongfully midirected payments; but (2) erred in denying the bank's motion for partial judgment notwithstanding the verdict with respect to the final two checks, as there was insufficient evidence to support Construction Company's defense of estoppel. View "Reading Coop. Bank v. Constr. Co." on Justia Law

Gladys Garner and Randolph Scott defaulted on their respective automobile loan agreements. Both contracts were governed by the provisions of the Creditor Grantor Closed End Credit Act of the Commercial Law Article (CLEC). The contracts were later assigned to Ally Financial, Inc., Nuvell National Auto Finance, and Nuvell Financial Services (collectively, GMAC). GMAC repossessed both vehicles and informed the debtors that the vehicles would be sold at a "public auction." Both cars were later sold. The debtors filed separate complaints against GMAC alleging, in part, that GMAC violated the CLEC because the sales of their cars were in reality "private sales," requiring GMAC to provide a detailed post-sale disclosure to them under the CLEC, which GMAC had not done. The federal district court combined the cases and granted summary judgment for GMAC, concluding the sales were "public auctions" because they were both widely advertised and open to the public for competitive bidding. The federal appellate court then certified an issue for clarification to the Maryland Court of Appeals. The Court answered that the auctions were in reality "private sales" because attendance was limited to those who paid a refundable $1,000 cash deposit.View "Gardner v. Ally Fin., Inc." on Justia Law

Shipper engaged Common Carrier to transport computer equipment belonging to Company. Company claimed the shipment was damaged on arrival, and Common Carrier refused to pay the amount that Company claimed Common Carrier had agreed to settle the claim for. Company asserted a claim against Shipper, whose Insurer paid Company. As subrogee, Insurer sued Common Carrier for breach of the settlement agreement. Insurer avoided removal to federal court by not asserting a cargo-damage claim, but, on remand, amended its petition to assert one. Common Carrier contended the cargo-damage claim was barred by limitations because Insurer filed it more than four years after Common Carrier rejected Company's claim. Insurer argued the cargo-damage claim related back to its original action for breach of the settlement agreement and thus was timely filed. The trial court agreed and rendered judgment against Common Carrier. The court of appeals held the cargo-damage claim did not relate back and was therefore barred by limitations. The Supreme Court reversed and rendered judgment for Insurer, holding that Insurer's cargo-damage claim was not barred by limitations, as the cargo-damage claim and breach-of-settlement claim both arose out of the same occurrence and, therefore, the relation-back doctrine applied.View "Lexington Ins. Co. v. Daybreak Express, Inc." on Justia Law

Respondents brought an action against Appellants, alleging breach of contract and fraud- and tort-based claims based on their purchase of two furniture stores from Appellants. The district court entered judgment for Respondents. The court allowed Respondents to rescind the agreement and awarded them damages. Although they appealed the judgment, Appellants did not obtain a stay of execution. Thus, despite the pending appeal, Respondents obtained a writ of execution on the judgment, allowing them to execute against one appellant's personal property. Respondents subsequently purchased Appellants' rights and interests in the district court action. Respondents moved to substitute as real parties in interest and dismiss the appeal on the basis that they acquired Appellants' claims and defenses at the sheriff's sale. The Supreme Court denied Respondents' motion, holding that Nevada's judgment execution statutes do not include the right to execute on a party's defenses to an action, as permitting a judgment creditor to execute on a judgment in such a way would cut of a debtor's defenses in a manner inconsistent with due process principles.View "Butwinick v. Hepner" on Justia Law

MayPort Farmers Co-Op appealed the judgment entered after trial and the district court's order denying MayPort's motion to amend findings of fact and conclusions of law and to amend judgment. MayPort sued St. Hilaire Seed Co., Inc., alleging St. Hilaire owed MayPort money for storage of edible beans St. Hilaire purchased from MayPort. The district court concluded "usage of trade" applied as a gap-filler and found industry custom and standards rendered storage charges inappropriate because MayPort's inability to perform caused the need for storage. Upon review, the Supreme Court affirmed, concluding the district court's findings of fact were not clearly erroneous and the district court did not abuse its discretion by denying MayPort's motion to amend.View "MayPort Farmers Co-Op v. St. Hilaire Seed Company, Inc." on Justia Law

Pielet Brothers Scrap Iron and Metal, was founded Arthur Pielet and his brothers shortly after World War II. Arthur sold his interest to his sons in 1986 through an agreement providing for a lifetime payment to him of a “consulting” fee, and, on his death, for a lifetime fee payment to his wife, Dorothy. The agreement was binding on successors and assigns. In 1994, the then- successor company, P.B.S., dissolved, but payments to Arthur continued until 1998, when its successor, MM, had financial difficulties. It filed for bankruptcy in 1999. Litigation began. The trial court awarded Dorothy almost $2 million. In the appellate court, P.B.S. argued the traditional rule that a cause of action that accrued (1998) after dissolution (1994) cannot be brought against a dissolved corporation. The appellate court rejected the argument, holding that Dorothy’s claim could survive, but remanded for determination of whether the companies could be relieved of liability for the fee under a theory of novation. The Supreme Court reversed in part, holding that the claim of breach of contract against P.B.S. could not survive the corporate dissolution. The issue of novation is relevant as to two other successor corporations and required remand.View "Pielet v. Pielet" on Justia Law