American Eagle Waste Industries, LLC v. St Louis County, Missouri

The Missouri Supreme Court held that the plaintiffs — trash haulers — weren’t entitled to relief from the county’s actions based on an implied-in-law contract theory, as the intermediate appellate court had held, because the county hadn’t received a benefit from the haulers. (“The essential elements of quasi-contract are: (1) a benefit conferred upon the defendant by the plaintiff; (2) appreciation by the defendant of the fact of such benefit; and (3) acceptance and retention by the defendant of that benefit under circumstances in which retention without payment would be inequitable.”) However, the haulers were entitled to relief because R.S. Mo. § 260.247 provides an implied private right of action. [continue reading…]

Truman Bank v. New Hampshire Insurance Co.

In this case, Truman Bank’s debtor, a marina, suffered storm damage, repaired the damage using insurance proceeds, later sold the marina, and paid off the bank debt. The bank sued because the insurance company failed to pay the bank directly as a loss payee, seeking a second payment as well as statutory damages for vexatious refusal to pay. Here’s a short excerpt of the appellate court’s narration of the facts. Clearly, the court wasn’t impressed with the bank:

Still, the bank continued to demand that the insurer pay a second time for the storm damage. Undeterred by the fact that the owner had repaired the marina and paid off its loan, the bank filed suit against the insurer. To add insult to injury, the bank sued both for breach of contract and statutory penalties for vexatious refusal to pay.

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Good Morning America recently ran a story about a mother who gave her son an iPhone — along with her own terms of service. Failure to follow them would “result in termination” of his iPhone ownership.

Actually, “ownership” isn’t to be taken too literally, as the arrangement is more of a license: “It is my phone. I bought it. I pay for it. I am loaning it to you.” And the license is subject to certain acceptable use requirements, such as, “Do not send or receive pictures of your private parts or anyone else’s private parts.” And the risk of loss sits squarely on the licensee’s shoulders: “If it falls into the toilet, smashes on the ground, or vanishes into thin air, you are responsible for the replacement costs or repairs. Mow a lawn, babysit, stash some birthday money. It will happen, you should be prepared.”

To read the whole contract and a clip of an interview of licensor and licensee, see To My 13-Year-Old, An iPhone Contract From Your Mom, With Love. I’m sure more people have read these personal ToS than have slogged through Apple’s version.

Wally & Co., LC v. Briarcliff Development Co.

Reversing the trial court, the Missouri Court of Appeals, Western District held that a real estate broker’s commission was earned when the landlord and tenant entered a binding agreement setting out a resolution process for determining price, although the process wasn’t completed until after expiration of the broker agreement.

Teasdale & Associates v. Richmond Heights Church of God in Christ

The Missouri Court of Appeals, Eastern District affirmed a judgment awarding Teasdale & Associates damages in an action on account. Teasdale, a law firm, had represented the church in a suit against the church and its pastor, James Hunt, in which certain of the church’s parishioners sought to enjoin Hunt from selling real property owned by the church. The church prevailed in the suit but refused to pay Teasdale’s legal fees under a fee agreement signed by Hunt individually and on behalf of the church as its president.

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People often come to the blog looking for a sample liquidated damages clause. Although I have a nice little piece explaining liquidated damages provisions and cautioning people to avoid including penalty provisions in their contracts, I haven’t provided sample language.

Liquidated damages clauses should be tailored to the specific situation — this is particularly important because courts won’t enforce penalty provisions. Thus, it’s important that (1) your clause not in fact be a penalty provision and (2) the liquidated damages clause clearly reflect an attempt to compensate the non-breaching party.

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You’re a franchisor and the term of your franchise agreement is five years, but you can terminate it early for cause. The term and termination provision also auto-renews. Do you have the right to elect not to renew the agreement at the end of the initial term or a renewal term? Or are you on the hook for ever if the franchisee doesn’t give you an out by materially breaching the agreement?

To help you analyze the issue, here’s the first part of the term and termination provision: “The initial term of this Agreement shall begin on the date hereof and, unless sooner terminated by [the franchisor for cause] as provided in paragraph 6, shall end five years after such date, and shall automatically renew itself for successive five-year terms thereafter (the ‘renewal terms’).”

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Rivermont Village, Inc. v. Preferred Land Title, Inc.

Preferred Land Title agreed to act as an escrow agent under a real estate purchase agreement, although there was no written escrow agreement. The buyer delivered an earnest money deposit check to the title company, and the title company informed the seller that it had received the check and would deposit it that business day. The buyer then instructed the title company not to deposit the check until the buyer had completed due diligence. The title company didn’t deposit the check and failed to inform the seller.

The transaction didn’t close and the seller eventually sold the property to a different buyer for considerably less money. The seller sued the title company for breach of fiduciary duty and negligence, seeking liquidated damages in the amount of the deposit, punitive damages, and attorneys’ fees. After a bench trial, the trial court entered judgment in favor of the seller in the amount of the deposit plus interest.

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It’s that time of year … time for bloggers to put together a list of their top posts as the new year approaches. Well, I’m happy to get ahead of the curve and serve as the antipasto — the hors d’oeuvre, the aperitif, the opening act — for the more substantial bloggers among us who’ll soon be serving up their best dishes of the year gone by.

It’s been a fantastic year as I (finally) reached my 100th post, met new interwebs friends, and had great conversations with contracts aficionados and law business enthusiasts on this blog and others. I’m looking forward to blogging in 2013.

1. Battle of the Forms Explained (Using a Few Short Words)

In this primer on UCC 2-207’s battle of the forms, I discuss the common-law approach to mis-matched offers and acceptances that result from the use of pre-printed contract forms, as well as the solution offered by article 2 of the Uniform Commercial Code. The post comes complete with a handy flowchart to help solve battle-of-the-forms problems (but see the comments on use of the chart). Like cheese, this post gets better with time as Google serves it up more often as time goes by. In the new year I plan to do some pieces on specific battle of the forms issues and include exercises and real-life examples.

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Graham v. State Farm Mutual Automobile Insurance Co.

In a case involving two uninsured motorist policies, the Missouri Court of Appeals, Eastern District held that a State Farm policy provided coverage only to the extent that its policy limits exceeded the primary underinsured motorist coverage.

Two provisions in the policy were at issue. One read,

The most we pay will be the lesser of: a. the difference between the amount of the insured’s damages for bodily injury, and the amount paid to the insured by or for any person or organization who is or may be held legally liable for the bodily injury; or b. the limits of liability of this coverage.

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