Articles Posted in Contracts

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In this employment case arising out of the sale of a cattle feedlot the Supreme Court affirmed the decision of the court of appeals reversing summary judgment on Plaintiff's implied-in-fact employment contract claim and Plaintiff's claim for promissory estoppel, holding that a genuine issue of material fact existed preventing summary judgment. Plaintiff moved his employment from the old owner of the feedlot to the new owner, Defendant. Because of operational changes, Defendant later terminated Plaintiff's employment. Plaintiff then sued Defendant alleging breach of an employment contract, or in the alternative, detrimental reliance and estoppel. The district court concluded that Plaintiff was Defendant's employee at will, and therefore, Defendant could terminate Plaintiff's employment at any time without cause. The court of appeals reversed, holding that whether Plaintiff's employment was at will - or protected by an implied-in-fact contract - was a disputed question of fact. The Supreme Court affirmed, holding (1) whether a meeting of minds existed between the parties on an implied-in-fact employment contract presented a genuine issue of material fact precluding summary judgment; and (2) therefore, summary judgment should not have been granted for Defendant on Plaintiff's promissory estoppel claim. View "Peters v. Deseret Cattle Feeders, LLC" on Justia Law

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The Supreme Court reversed the decision of the court of appeals affirming the district court’s garnishment order in favor of a judgment creditor and her insurer, holding that the insurer demonstrated prejudice as a matter of law from its lack of notice of suit. The policy in this case contained a requirement that the insured inform the insurer of a lawsuit arising out of an otherwise covered automobile accident. After the judgment creditor and her insurer obtained the garnishment order, the court of appeals affirmed. The Supreme Court reversed, holding that the stipulated facts established that the insured breached his notice-of-suit duty under the insurance policy and that the insurer was prejudiced by that breach. View "Geer v. Eby" on Justia Law

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The Supreme Court reversed the decision of the Court of Appeals affirming the decision of the district court granting summary judgment to The Bar Plan Mutual Insurance Company on Daniel Becker’s insurance coverage dispute with the company, holding that the lower courts erroneously relied upon certain caselaw in granting summary judgment and that, under the correct caselaw, questions of fact remained that were inappropriate for summary judgment. Specifically, the Court held (1) the lower courts erred in relying on the “expansion of coverage” rule in concluding that Becker was asking for the coverage to be expanded beyond the insurance contract’s terms and that that courts should instead have continued their analysis to see if estoppel was appropriate to apply to the facts under the “reservation of rights” rule; and (2) because several genuine issues of material fact remained on the issue of estoppel, this case must be remanded for further proceedings. View "Becker v. Bar Plan Mutual Insurance Co." on Justia Law

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In this case construing the full-performance exception to the statute of frauds, Kan. Stat. Ann. 33-101 et seq., the Supreme Court adopted the rule set forth in Restatement (Second) of Contracts, 130, holding that full performance by one party alone is sufficient to remove an agreement from the statute and allows the performing party to enforce the agreement in a court of law. Three employees asked the Supreme Court to enforce their oral agreement with their former employer, arguing that they fully performed their obligation under the agreement and were owed the compensation they bargained for. The court of appeals ruled in favor of the former employer, concluding that the former employer’s duty to pay depended on the action of third parties. The Supreme Court reversed, holding (1) the court of appeals erroneously construed the full-performance exception; and (2) because the employees completed their employment and fulfilled their end of the bargain, the full-performance exception applied and the alleged oral agreement was removed from the statute of frauds. View "Ed DeWitte Insurance Agency v. Financial Associates Midwest" on Justia Law

Posted in: Contracts

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The Supreme Court reversed the decision of the court of appeals reversing the district court’s grant of summary judgment for Defendants in this contract dispute, holding that the district court correctly found that the contract at issue violated the corporate practice of medicine doctrine and was therefore unenforceable. Central Kansas Medical Center (CKMC) contracted with Dr. Stanley Hatesohl to provide family medicine services. The contract contained several postemployment covenants. Two years later, Plaintiff resigned and began practice family medicine at Great Bend Regional Hospital’s (GBRH) Central Kansas Family Practice (CKFP) clinic. CKMC sued Hatesohl for violating the postemployment covenants and GBRH and CKFP for tortiously interfering with the contract. The district court granted summary judgment for Defendants on the basis of the corporate practice of medicine doctrine, which forbids a corporation from hiring a physician to practice medicine that the corporation itself is not licensed to provide. The court of appeals reversed. The Supreme Court reversed, holding that the contract between Hatesohl and CKMC violated the corporate practice of medicine doctrine. View "Central Kansas Medical Center v. Hatesohl" on Justia Law

Posted in: Contracts

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At issue was a real estate contract containing a “first right of refusal” applicable to a separate land tract. Appellant sought specific performance and title to a smaller parcel that was sold after he failed to respond to an earlier offer to sell the entire tract subject to the real estate contract. The district court granted summary judgment for Defendants. A Court of Appeals panel reversed. Defendants petitioned for review solely on the panel’s contractual compliance analysis. The Supreme Court affirmed, holding (1) the panel both misread the contract and improperly inserted terms inconsistent with the plain language under consideration; but (2) the first right of refusal was fulfilled after Appellant failed to respond to the offer to sell him the full tract subject to the contract. The Court remanded the case for further proceedings where there remained an unresolved claim as to whether the parties discharged their implied duty of good faith and fair dealing when the offer was presented, and the answer to this question will determine whether the first right of refusal provision lapsed when Appellant failed to respond. View "Trear v. Chamberlain" on Justia Law

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Mahnaz Consolver hired attorney Bradley Pistotnik to represent her in her personal injury lawsuit. Consolver terminated Pistotnik without cause just before settlement. Thereafter, Consolver hired Stephen Brave, who settled the case for $360,000. The district court concluded that Pistotnik was entitled to a fee in the amount of nearly $87,000 and expenses of approximately $10,000. The court of appeals reversed, finding that the district court “stepped outside the legal principles guiding quantum meruit to premise the fee award to Pistotnik on the contingency percentage in the parties’ contract." The Supreme Court reversed, holding that the district court did not abuse its discretion when it determined the reasonable value of Pistotnik’s services by considering, in part, the terms of the contingency fee agreement between Pistotnik and Consolver. View "Consolver v. Hotze" on Justia Law

Posted in: Contracts

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In 2003, Mid America Ag Network, Inc. (MAAN, Inc.) and Journal Broadcast Group of Kansas, Inc. (JBGK) entered into a settlement agreement governing dealings between the companies. The agreement contained a clause stating that neither party shall assign the agreement without prior written consent of the other party. In 2005, MAAN, Inc. allegedly sold the agreement and its right to do business under the MAAN name to Steckline Communications, Inc. (SCI) without JBGK’s consent. SCI and JBGK continued to do business with each other pursuant to the agreement’s terms until 2012. That year SCI sued JBGK for breaching the agreement. The district court dismissed the suit on the grounds that SCI lacked standing because it was not a party to the contract. The Supreme Court reversed, holding that the district court erred in granting JBGK’s motion to dismiss because SCI set forth a colorable claim that JBGK was equitably estopped from asserting that SCI lacked standing on the grounds of an inadequate assignment. Remanded. View "Steckline Communications, Inc. v. Journal Broadcast Group of Kansas, Inc." on Justia Law

Posted in: Contracts

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Some of Plaintiffs’ cattle grazed on Defendants’ ranch. Plaintiffs sued Defendant alleging that Defendant breached numerous grazing contracts while Plaintiffs’ cattle were supposed to be calving, fattening, and breeding on Defendants’ pastures and that Defendant failed in his duty to adequately feed, supervise, and care for their cattle. The district court found that Defendant had breached the grazing contracts and awarded a total of $240,416 in damages. Defendant appealed. The court of appeals affirmed the damage award in most respects but remanded the award to the district court to correct three errors. The court also concluded that one Plaintiff, Steve Peterson, did not have standing and dismissed his claims. The Supreme Court affirmed in part, reversed in part, and remanded, holding (1) the court of appeals correctly found that Peterson, who failed to present evidence that he personally owned any of the cattle in question, had no standing; (2) Defendant breached the grazing contract; and (3) the court of appeals correctly resolved the question of damages. View "Peterson v. Ferrell" on Justia Law

Posted in: Contracts

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Prairie Land Electric Cooperative, Inc. (Prairie Land), which purchases wholesale electricity from various suppliers and distributes that electricity to retail customers, entered into temporally overlapping, long-term all-requirements contracts with two different wholesale electricity suppliers, Sunflower Electric Power Corporation (Sunflower) and Kansas Electric Power Cooperative, Inc. (KEPCo). After a dispute arose regarding which supplier had the right to serve a certain pumping station delivery point, Prairie Land filed a petition for declaratory judgment asking the district court to determine which supplier was entitled to serve the new delivery point. The district court ruled in favor of Sunflower, which entered into the first all-requirements contract with Prairie Land. The court of appeals reversed. The Supreme Court reversed the court of appeals’ decision and affirmed the district court’s judgment, holding that under the facts of this case, Prairie Land must meet its obligations under its contract with Sunflower, the first supplier, before it may comply with any obligations under its contract with KEPCo, the second supplier. View "Prairie Land Elec. Coop., Inc. v. Kan. Elec. Power Coop., Inc." on Justia Law