Articles Posted in Contracts

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At issue was whether an agreement between two children, executed before their father’s death, could be enforced using a chapter in the Probate Code providing for the adjudicated compromise of controversies. Father, who was terminally ill, asked his son and daughter to agree between themselves how they would divide some of his assets after his death. Before Father died, Son attempted to rescind the agreement. After Father died, Daughter sued to enforce the agreement as part of the probate process. The trial court found that the agreement was not a codicil to Father’s will and that Son rescinded the agreement. Accordingly, the court ordered the personal representatives to administer Father’s estate according to his will without reference to the agreement. The Supreme Court affirmed the trial court’s order and findings, except for its alternative finding that Son rescinded the agreement, holding that the Probate Code chapter at issue may be used to enforce only post-mortem compromises. View "In re Supervised Estate of Gary D. Kent" on Justia Law

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Indiana law allows a judgment-creditor to garnish a cash bail bond the judgment-debtor posted in an unrelated criminal matter. Here, Plaintiff obtained a default judgment against Defendant in the superior court. While the judgment remained unsatisfied, Defendant was arrested in an unrelated criminal matter and posted a cash bond with the county clerk. Plaintiff attempted to garnish the cash bail bond, but the trial clerk, who was named as a garnishee-defendant in the civil case, released it to Defendant’s attorney. Plaintiff sought to hold the clerk liable. The trial court determined that the bond was not subject to garnishment and ruled against Plaintiff. The Supreme Court reversed, holding (1) the clerk who holds the bond in a criminal case is an eligible garnishee-defendant in the civil case where the judgment was entered, and the bond is subject to the garnishment lien filed there; (2) the judgment-creditor may not recover on the bond until the criminal court releases it; and (3) in the instant case, the clerk was liable on the bond because she distributed its proceeds before the civil court determined Plaintiff’s right to them. View "Garner v. Kempf" on Justia Law

Posted in: Contracts, Criminal Law

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The hospital that paid out a doctor’s ownership interest after his employment as a cardiologist terminated did not breach its agreement with the doctor. Dr. Roderick Sawyer worked as a cardiologist for St. Vincent Medical Group, Inc. (the Medical Group) and was a member-owner of The Care Group Heart Hospital, LLC (the Hospital). Sawyer agreed with the Medical Group and the Hospital that upon “any termination” of employment between him and the Medical Group, his ownership interest in the Hospital must be discontinued and redeemed. After the Medical Group terminated Sawyer’s employment, the Hospital paid out Sawyer’s ownership interest. Sawyer sued the Hospital, among others, alleging breach of contract. The jury returned a verdict against the Hospital for breach of contract. The Supreme Court reversed, holding (1) under the plain meaning of the contract language, the Hospital did not breach the agreement by discontinuing and redeeming Sawyer’s ownership interest; but (2) the Hospital did breach the agreement by delaying the payout, so Sawyer was entitled to interest on the delay. View "Care Group Heart Hospital, LLC v. Sawyer" on Justia Law

Posted in: Contracts

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Kennedy Tank & Manufacturing Company contracted with Emmert Industrial Corporation to transport an enormous process tower vessel to Indiana to Tennessee. Despite several troubles resulting in unforeseen costs, Emmert successfully delivered the vehicle. When Kennedy refused to pay any additional charges, Emmert sued, alleging breach of contract and, in the alternative, unjust enrichment. Kennedy moved to dismiss Emmert’s complaint, arguing that the federal statute of limitations preempts Indiana’s longer limitations period. The trial court denied the motion to dismiss, finding no preemption. The Supreme Court affirmed, holding that Indiana’s statute of limitations is not preempted by the federal statute of limitations. View "Kennedy Tank & Manufacturing Co. v. Emmert Industrial Corp." on Justia Law

Posted in: Contracts

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The State and International Business Machines, Corp. (IBM) entered into a ten-year, $1.3 billion Master Services Agreement (MSA) to modernize and improve Indiana’s welfare eligibility system. The State terminated the MSA in less than three years, stating that performance issues on the part of IBM constituted a material breach of the MSA. Both parties sued each other for breach of contract. The trial court determined that the State failed to prove that IBM materially breached the MSA. The Supreme Court reversed the trial court’s finding that IBM did not materially breach the MSA, holding that, under the circumstances of this case, IBM’s collective breaches were material in light of the MSA as a whole. View "State v. Int’l Bus. Machines Corp." on Justia Law

Posted in: Contracts

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The Indiana State Fair Commission manages the Indiana State Fair. Since the 1990s, the Commission has utilized Mid-America Sound to provide equipment for the concerts and other events that take place at the Fair. In August 2011, on the closing night of the Fair, the Mid-America’s roof collapsed, killing seven people. The victims and families filed lawsuits, including as defendants Mid-America and the Commission. Mid-America filed a third-party lawsuit claiming that the Commission was required to indemnify it for Mid-America’s own negligence in relation to the roof collapse due to years-long course of conduct in paying invoices that had standard indemnity language on the back. The trial court granted summary judgment for the Commission. The Supreme Court affirmed, holding that because the terms of Mid-America’s invoices to the Commission did not clearly and unequivocally provide for retroactive application, the Court will not infer such a provision from a course of dealing. View "Mid-America Sound Corp. v. Ind. State Fair Comm’n" on Justia Law

Posted in: Contracts

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James Armour’s employment contract with AM General LLC entitled him to payment of a long-term incentive plan (LTIP). When Armour retired, he was to receive a lump sum LTIP payment, but instead he started receiving quarterly installment payments in the form of checks. AM General attempted to make the final installment payment with a subordinate promissory note. Armour rejected the Note and requested full payment. Thereafter, AM General filed a complaint seeking a declaratory judgment that it had not breached the LTIP portion of its agreement with Armour. Armour counterclaimed, asserting that AM General breached the employment agreement by failing to pay Armour the full LTIP payment when it was due and claiming that, by attempting to pay the remaining portion of the LTIP payment with a promissory note, AM General breached the duty of good faith and fair dealing. The trial court entered summary judgment in favor of Armour. The Court of Appeals reversed, finding a genuine issue of material fact with regard to how “payment” could be made under the LTIP provision of the agreement. The Supreme Court granted transfer and affirmed the grant of summary judgment, holding that AM General breached its employment agreement with Armour because the Note did not constitute payment under the employment agreement. View "AM General LLC v. Armour" on Justia Law

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General Contractor hired several subcontractors to assist in contracting an IMAX theater. After the theater was completed and three of the subcontractors (“Subcontractors”) had not been paid in full for their services, the Subcontractors filed mechanic’s liens against the IMAX property and sued the General Contractor to foreclose on their respective liens in the amount due on their contracts. The trial court awarded the Subcontractors judgments against the General Contractor and awarded attorney’s fees. At issue in this case was whether, under Indiana’s mechanic’s lien statute, the Subcontractors were entitled to collect attorney’s fees incurred in foreclosing on their liens from the General Contractor, which posted a surety bond and filed an undertaking obligating it to pay attorney’s fees upon recovery of a judgment against it. The Supreme Court affirmed the trial court’s fee award, holding that the trial court did not abuse its discretion in awarding the Subcontractors attorney’s fees incurred in their foreclosure suits under the circumstances of this case. View "Goodrich Quality Theaters, Inc. v. Fostcorp Heating & Cooling, Inc." on Justia Law

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Before he died, John Markey entered into a contract with his second wife, Frances, to make and not revoke a mutual will providing that, upon the death of whomever died later, the couple’s estate would be divided equally between John’s son, David, and Frances’s granddaughter. After John died, Frances breached the contract, instead leaving everything to her own children. Approximately nine months after Frances’s death, David filed suit to enforce the contract. The trial court granted summary judgment in favor of Defendants, concluding that a breach of contract regarding mutual wills is neither a “claim” in probate nor a will contest and is therefore subject to the three-month statute of limitations for suits challenging the distribution pursuant to a probated will. The Supreme Court reversed, holding that the plain language of the statutory definition of “claim” under the Probate Code includes an action for breach of a contract to make and not revoke a will. Remanded to consider the timeliness of David’s claim, considered under the Probate Code. View "Markey v. Estate of Markey" on Justia Law

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Before he died, John Markey entered into a contract with his second wife, Frances, to make and not revoke a mutual will providing that, upon the death of whomever died later, the couple’s estate would be divided equally between John’s son, David, and Frances’s granddaughter. After John died, Frances breached the contract, instead leaving everything to her own children. Approximately nine months after Frances’s death, David filed suit to enforce the contract. The trial court granted summary judgment in favor of Defendants, concluding that a breach of contract regarding mutual wills is neither a “claim” in probate nor a will contest and is therefore subject to the three-month statute of limitations for suits challenging the distribution pursuant to a probated will. The Supreme Court reversed, holding that the plain language of the statutory definition of “claim” under the Probate Code includes an action for breach of a contract to make and not revoke a will. Remanded to consider the timeliness of David’s claim, considered under the Probate Code. View "Markey v. Estate of Markey" on Justia Law