Breach of Contract Cases

CONTRACT — CONDITION PRECEDENT — BREACH OF CONTRACT — UNJUST ENRICHMENT — GOOD FAITH AND FAIR DEALING — PLEADINGS — MOTIONS — JUDGMENT ON THE PLEADINGS — CIV.R. 12(C) — WRITTEN INSTRUMENT — CIV.R. 10(C): Defendant employer in a contract dispute was not entitled to judgment on the pleadings because the financial statement attached to its answer was not a "written instrument" and was an improper basis upon which to grant judgment on the pleadings. The complaint sufficiently alleged breach-of-contract and breach-of-good-faith-and-fair-dealing claims and therefore, the trial court erred in granting defendant a judgment on the pleadings as to these claims, but defendant was entitled to judgment on plaintiff employee's pleadings unjust-enrichment claim where an express contract existed between the parties.

The plaintiff, M Co., which designs and develops prototypes of medical devices, sought to recover damages for breach of contract and unfair trade practices from the defendants, A, a neurosurgeon and inventor, and I Co., which A and a partner had formed to develop medical devices for use in spinal surgery. In November, 2004, L, an owner of M Co., and A entered into a written agreement under which the parties were to share equally any compensation that resulted from the sale and/or licensing of a medical device conceived of by A, or any version thereof, for use in spinal surgery. The parties' one page contract provided that any required funding or financial commitments were to be part of a separate agreement they would negotiate later and that A was to promptly notify M Co. of any compensation he received for the device or any versions thereof. A further agreed that he was not under any contractual agree- ment with any other company concerning the device. At the time the parties entered into the written agreement, they also agreed orally that M Co. would create design drawings and a prototype of the device, and, at that time, A gave M Co. his initial drawings of the device. By early 2005, M Co. had prepared a prototype of the device and successfully installed it in a cadaver. M Co. thereafter utilized a different design and produced another prototype that it gave to A by October, 2005. By that time, A had become dissatisfied with M Co.'s work and continued to work on developing the device on his own without informing M Co. In December, 2005, A applied for a patent on an anterior intervertebral spinal fixation and fusion device that he had developed with the help of his son. A thereafter did not respond in writing to a letter from L in February, 2006, concerning the value of M Co.'s services and, in July, 2007, formed I Co. A also did not respond to e-mails from L in 2008 requesting an update on the project, and, in May, 2008, A and his son, without informing M Co., as

2021 COA 125. No. 20CA0950. Johnson Nathan Strohe, P.C. v. MEP Engineering, Inc. Limitation of Liability Clause—Contracts—Ambiguity. Johnson Nathan Strohe, P.C. (architect) designed a building and contracted with MEP Engineering, Inc. (engineer) to provide mechanical, plumbing, and electrical engineering services for the building. The contract contained a clause limiting the engineer's liability to $2,000 or twice the engineer's fee, whichever was greater. The architect alleged that as the building was nearing completion and the engineer was close to completing its work, the owner and architect discovered substantial problems with the building's heating and hot water systems. The architect also alleged that the engineer admitted it erred and then designed and implemented repairs. Additional problems were subsequently discovered, and the architect hired another firm for those repairs. The building owner initiated an arbitration proceeding against the architect regarding the heating and hot water systems, and the arbitrator awarded the owner $1.2 million in damages. The architect then sued the engineer for negligence and moved under CRCP 56(h) for a legal determination of the validity of the limitation of liability provision, claiming it was too vague and ambiguous to be enforceable. The district court found the provision unambiguous and enforceable. The engineer moved for leave to deposit twice its contractual fee plus interest into the court's registry and for dismissal with prejudice. The district court granted the motion. On appeal, the architect argued that the district court erred by concluding that the limitation of liability provision was clear and unambiguous. Here, the district court did not review this provision in its entirety, did not give effect to all parts of the provision, and did not address the clause stating that "such liability shall be limited . . . as consequential damages." This clause is subject to several interpretations for example, it could

2021 COA 125. No. 20CA0950. Johnson Nathan Strohe, P.C. v. MEP Engineering, Inc. Limitation of Liability Clause—Contracts—Ambiguity. Johnson Nathan Strohe, P.C. (architect) designed a building and contracted with MEP Engineering, Inc. (engineer) to provide mechanical, plumbing, and electrical engineering services for the building. The contract contained a clause limiting the engineer's liability to $2,000 or twice the engineer's fee, whichever was greater. The architect alleged that as the building was nearing completion and the engineer was close to completing its work, the owner and architect discovered substantial problems with the building's heating and hot water systems. The architect also alleged that the engineer admitted it erred and then designed and implemented repairs. Additional problems were subsequently discovered, and the architect hired another firm for those repairs. The building owner initiated an arbitration proceeding against the architect regarding the heating and hot water systems, and the arbitrator awarded the owner $1.2 million in damages. The architect then sued the engineer for negligence and moved under CRCP 56(h) for a legal determination of the validity of the limitation of liability provision, claiming it was too vague and ambiguous to be enforceable. The district court found the provision unambiguous and enforceable. The engineer moved for leave to deposit twice its contractual fee plus interest into the court's registry and for dismissal with prejudice. The district court granted the motion. On appeal, the architect argued that the district court erred by concluding that the limitation of liability provision was clear and unambiguous. Here, the district court did not review this provision in its entirety, did not give effect to all parts of the provision, and did not address the clause stating that "such liability shall be limited . . . as consequential damages." This clause is subject to several interpretations for example, it could

Civ.R. (B)(6) dismissal on breach of contract complaint re: severance pay