Justia Minnesota Supreme Court Opinion SummariesArticles Posted in Contracts
Maslowski v. Prospect Funding Partners LLC
The Supreme Court reversed the judgment of the district court and court of appeals finding that a repurchase rate in a litigation financing agreement violated Minnesota's usury statute, Minn. Stat. 334.01, holding that such an agreement is not subject to the usury law when repayment of the purchase price is contingent upon a recovery in the underlying litigation.Appellants sought enforcement of a litigation financing agreement they entered into with Respondent. The lower courts deemed the agreement unenforceable as violating the common-law prohibition on champerty. Following reversal, Respondent challenged the enforceability of the agreement on several different grounds. The district court and court of appeals held that the repurchase rate violated section 334.01 and that the rate, reduced to eight percent, began to accrue after the date of the Court's decision in Maslowski I. The Supreme Court reversed and remanded the case, holding (1) the agreement was not subject to section 334.01; (2) remand was required to address Respondent's challenge to the repurchase rate under the common-law doctrine of unconscionability; and (3) the repurchase rate began to accrue after the litigation financing agreement was signed, not after this Court's abolition of the former prohibition on champerty. View "Maslowski v. Prospect Funding Partners LLC" on Justia Law
Posted in: Contracts
Herlache v. Rucks
The Supreme Court reversed the decision of the court of appeals reversing Appellant's unjust enrichment award, holding that the district court did not clearly err in its award to Appellant.Over the course of the parties' romantic relationship Appellant made $282,736.02 in net cash payments to Respondent to renovate Respondent's home. Respondent sold her home for $1.2 million after the couple ended their relationship, and Appellant sued to recover his contribution. The district court awarded Appellant $282,736.02 for his contributions, concluding that Respondent had been unjustly enriched by Appellant's financial contributions. The court of appeals reversed because Appellant did not prove before the district court the increase in value to Respondent's home attributable to his financial contributions. The Supreme Court reversed, holding (1) the net amount of money that Appellant contributed directly to and on behalf of Respondent was an appropriate measure of relief for unjust enrichment; and (2) the district court did not clearly err in its award to Appellant. View "Herlache v. Rucks" on Justia Law
Wesser v. State Farm Fire & Casualty Co.
The Supreme Court reversed the decision of the court of appeals reversing the judgment of the district court that Insured was not entitled to preaward interest from Insurer on an appraisal award based on Minn. Stat. 549.09, holding that the policy language limited interest on a loss to amounts accruing after an appraisal award is issued.After a fire damaged his home, Insured disagreed with Insurer's valuation and demanded an appraisal. The claim was submitted to appraisal, but Insurer did not pay Insured any additional amounts. Insured then demanded preaward interest on the appraisal award, arguing that interest accrued from the date of written notice of his fire claim and until the appraisal award was issued. When Insurer refused to pay, Insured brought this action. The district court concluded that Insured was not entitled to preaward interest. The court of appeals reversed, concluding that the policy language must "explicitly preclude" reward interest to avoid the obligation to pay preaward interest under section 549.09. The Supreme Court reversed, holding that a fire insurance policy provision stating that "no interest accrues on the loss until after the loss becomes payable" precludes preaward interest under section 549.09. View "Wesser v. State Farm Fire & Casualty Co." on Justia Law
Wilmington Trust, Nat’l Ass’n v. 700 Hennepin Holdings, LLC
The Supreme Court affirmed the opinion of the court of appeals reversing the judgment of the district court refusing to send the underlying rent dispute to arbitration and resolving the claim itself, holding that the dispute should be sent to arbitration.Landlord entered into a lease with Tenant providing that if Tenant defaulted Landlord shall submit such dispute to binding arbitration. When a dispute arose over water damage and withheld rent, litigation and arbitration resulted, with an arbitrator awarding judgment for Tenant. Thereafter, the trustee for several entities that held mortgages on the building brought a foreclosure action against Owner and appointed Receiver. When Tenant continued to refuse to pay rent, Receiver brought suit, and Tenant sought to send the dispute to arbitration. At issue was whether Receiver was bound by the lease's arbitration clause. The district court refused to send the dispute to arbitration and ruled that Tenant must make rent payments to Receiver. The court of appeals reversed. The Supreme Court affirmed, holding that the court of appeals properly concluded that Receiver was subject to the arbitration agreement in the lease. View "Wilmington Trust, Nat'l Ass'n v. 700 Hennepin Holdings, LLC" on Justia Law
Windcliff Ass’n v. Breyfogle
The Supreme Court affirmed the decision of the court of appeals concluding that the interpretation of a restrictive covenant was a question of fact for a jury, holding that because the evidence did not conclusively establish one covenanting party's intent in drafting the document at issue, the interpretation of the covenant was a question of fact for a jury.Specifically, the Supreme Court held (1) the interpretation of an ambiguous restrictive land use covenant is a question for a jury unless extrinsic evidence proffered by the parties is conclusive as to the covenanting parties' intent; (2) a jury should strictly construe an ambiguity in a restrictive covenant against the land use restriction only if the jury is unable to resolve by a preponderance of the evidence the ambiguity from the extrinsic evidence; and (3) the court of appeals did not err in concluding that the extrinsic evidence in this case did not conclusively resolve the ambiguity in the restrictive covenant. View "Windcliff Ass'n v. Breyfogle" on Justia Law
St. Matthews Church of God & Christ v. State Farm Fire & Casualty Co.
In this insurance coverage dispute the Supreme Court held that State Farm Fire and Casualty Company was not required to cover repair costs to masonry under either Minn. Stat. 65A.10, subd. 1 or the State Farm policy at issue.Before the Supreme Court was the interpretation and application of Minn. Stat. 65A.10, subd. 1, which generally requires replacement cost insurance to cover the cost of repairing damaged property in accordance with state or local authorities' minimum code. Specifically in question was whether State Farm must cover the cost of repairing cracks in masonry that preexisted a storm that damaged the property of St. Matthews. Because the cracks violated the City of St. Paul's building code, the City would not allow St. Matthews to replace the drywall without also repairing the masonry. The district court granted summary judgment to State Farm, determining that because the storm did not damage the masonry, which led to the code upgrade requirements, no coverage existed. The Supreme Court affirmed, holding that, while State Farm was responsible for providing replacement cost coverage to the damaged drywall, it was not required to cover repair costs to the masonry. View "St. Matthews Church of God & Christ v. State Farm Fire & Casualty Co." on Justia Law
In re Estate of Bach
In this dispute among four siblings over the ownership of 200 acres of farmland the Supreme Court reversed the judgment of the court of appeals reversing the order of the district court that the farmland be distributed to Neal Johnson and Thomas Johnson, holding that the court of appeals failed to apply well-settled common law.This dispute stemmed from the last will and testament of the aunt of the four siblings in this case - Neal, Thomas, Sylvia Perron, and Lee Johnson. The aunt, Hazel Bach, devised the farmland to Neal and Thomas based on certain conditions that were resolved in an agreement between the parties. Although Lee, acting as co-personal representative, refused to honor the agreement, the district court ordered that the farmland be distributed to Neal and Thomas. The court of appeals reversed. The Supreme Court reversed, holding that Neal and Thomas were entitled to the 200 acres under Bach's will. View "In re Estate of Bach" on Justia Law
Vermillion State Bank v. Tennis Sanitation, LLC
The Supreme Court affirmed the judgment of the court of appeals affirming the district court's judgment concluding that Tennis Sanitation, LLC breached the contract between the parties and that, as a result of the breach, Vermillion State Bank suffered $1.92 million in damages, holding that the court of appeals did not err.Tennis repudiated an alleged oral contract it negotiated with Vermillion for its purchase of certain assets, including garbage trucks and customer routes, of a trash collection business in bankruptcy. After Tennis's repudiation, Vermillion sold the assets to another company at a significantly lower price. Vermillion then sued Tennis for breach of contract. The district court entered judgment for Vermillion. The court of appeals affirmed. The Supreme Court affirmed, holding that hybrid contract involving goods and non-goods should be interpreted based on the predominant purpose of the contract. View "Vermillion State Bank v. Tennis Sanitation, LLC" on Justia Law
Glacier Park Iron Ore Properties, LLC, v. United States Steel Corp.
The Supreme Court affirmed the judgment of the district court determining that the district court, and not the arbitrator, was to decide whether the parties' dispute was subject to arbitration, holding that the district court correctly concluded that the parties' dispute was not subject to arbitration.Glacier Park Iron Ore Properties, LLC alleged that United States Steel Corporation (U.S. Steel) aided and abetted a breach of the fiduciary duty of Great Northern Iron Ore Properties Trust and sought recession of a lease that U.S. Steel signed with the Trust. Glacier Park filed a motion to stay proceedings pending arbitration and to compel the parties to engage in arbitration. The district court denied the motion, concluding that the court, not arbitrators, should decide the meaning of the arbitration clause at issue in this case and, thus, the arbitrability of the dispute. The district court denied the motion, and the court of appeals affirmed. The Supreme Court affirmed, holding that because there was not clear and unmistakable evidence that the parties intended to delegate arbitrability to the arbitrator, whether the parties' breach of fiduciary claim was arbitrable was a question for the court. View "Glacier Park Iron Ore Properties, LLC, v. United States Steel Corp." on Justia Law
King’s Cove Marina, LLC v. Lambert Commercial Construction LLC
In this insurance dispute, the Supreme Court affirmed in part and reversed in part the judgment of the court of appeals reversing the district court's determination that the insurance policy at issue covered all of the claimed property damage and that a Miller-Shugart settlement agreement was reasonable and unenforceable against Insurer, holding that the policy did not cover all of the claimed property damage.The court of appeals concluded that the settlement agreement was "unreasonable as a matter of law and unenforceable" against the insurer because the agreement failed to allocate between covered and uncovered claims. The Supreme Court reversed in part, holding (1) the policies in this case covered some, but not all, of the property damage claimed by the insured; and (2) determining the reasonableness of an unallocated Miller-Shugart settlement agreement involves a two-step inquiry set forth in this opinion. View "King's Cove Marina, LLC v. Lambert Commercial Construction LLC" on Justia Law