Justia Business Law Opinion Summaries
Tufeld Corp. v. Beverly Hills Gateway, L.P.
Plaintiff, cross-defendant, and appellant Tufeld Corporation (Tufeld) is the landlord. Defendant, cross-complainant, and cross-appellant Beverly Hills Gateway L.P. (BHG) is the tenant. The subject lease, as amended, has a term greater than 99 years. This contravenes Civil Code section 718,1, which provides in the relevant part: “No lease or grant of any town or city lot, which reserves any rent or service of any kind, and which provides for a leasing or granting period in excess of 99 years, shall be valid.” The main issue on appeal is whether a lease that violates section 718 is void or voidable. The Second Appellate District affirmed in part and reversed in part and the matter is remanded for the trial court to consider whether to grant BHG prejudgment interest on restitution. The court held that the part of the lease exceeding 99 years is void. The court reasoned that here contrary to BHG’s assertion, section 718 does not only protect tenants; it protects landlords too. Moreover, the legislative purpose of section 718 serves to promote a public benefit. The private benefit exception does not apply to section 718. View "Tufeld Corp. v. Beverly Hills Gateway, L.P." on Justia Law
Ivey v. Transunion Rental Screening Solutions Inc.
TURSS provided background and credit screening services to property management professionals and landlords through its online platforms and undertook to build an online platform to sell customizable electronic lease forms. TURSS sent Helix a letter of intent that the platform would be completed in 2009. The companies entered into a five-year marketing agreement that required TURSS to provide the platform and Helix to provide the product. TURSS would receive 35% of the revenue generated from sales and Helix would receive 65%. The agreement was not exclusive. Helix provided electronic forms and supporting materials to TURSS but the platform was still not completed in 2015.Helix sued TURSS for“willful and intentional” breach of contract, fraud, negligent misrepresentation, and promissory estoppel. The court ultimately granted TURSS summary judgment. The appellate court and Illinois Supreme Court reversed, finding that Helix failed to present proof of its damages with reasonable certainty. Helix did not present evidence of revenues of a similar product or a similar business in a similar market. Where a plaintiff seeks lost profits for a new company, "without a track record of profit, attempting to sell a new and untested product to a new market,” the specter of impermissible speculation arises. View "Ivey v. Transunion Rental Screening Solutions Inc." on Justia Law
Walworth Investments-LG, LLC v. Mu Sigma, Inc.
Walworth, a former stockholder, sued Mu Sigma, a privately held data analytics company, and Rajaram, the company’s founder, CEO, and board chairman, alleging that after reaping the benefits of Walworth’s $1.5 million investment and reputational capital, the defendants embarked on a fraudulent scheme to oust Walworth of its substantial ownership interest in the company.The Cook County circuit court dismissed the complaint, citing the stock repurchase agreement (SRA), which included anti-reliance and general release provisions. The appellate court reversed, holding that the anti-reliance language was ambiguous. The Illinois Supreme Court reinstated the dismissal, stating that “the broad and comprehensive release agreed to by [Walworth], a sophisticated party represented by experienced counsel, unambiguously encompasses” the unjust enrichment and breach of contract claims. The bargained-for anti-reliance provisions reflected the understanding that there may be undisclosed information but that Walworth was satisfied by the information provided. Walworth had direct access to Rajaram to negotiate the arm’s-length transaction at issue and Rajaram was not acting as a fiduciary for Walworth. A corporation owes no fiduciary duty to its shareholder and Delaware law does not impose “an affirmative fiduciary duty of disclosure for individual transactions.” View "Walworth Investments-LG, LLC v. Mu Sigma, Inc." on Justia Law
Bako Pathology LP v. Bakotic
A Delaware superior court held that Plaintiffs-Appellees-Cross-Appellants, two doctors who started a laboratory testing enterprise known as Bako Diagnostics (“Bako”), breached certain restrictive covenants when they left Bako to form a new, competing laboratory enterprise. Despite fee-shifting provisions in certain of the contracts, the trial court declined to award attorneys’ fees. The Delaware Supreme Court agreed with the superior court’s determinations that the two doctors breached certain of the restrictive covenants. But because it appeared that the superior court may have misapplied the formula that both sides employed for calculating damages, the Court remanded the case for the trial court to clarify how it derived its damages award and for any needed revisions. Further, the Supreme Court disagreed that no attorneys’ fees were warranted under certain of the contracts. View "Bako Pathology LP v. Bakotic" on Justia Law
City of Knoxville, Tenn. v. Netflix, Inc.
The Supreme Court answered a question of law certified by the district court in the negative, holding that two video streaming services - Netflix, Inc. and Hulu, LLC - did not provide "video service" within the meaning of Tenn. Code Ann. 7-59-303(19) and thus did not qualify as "video service providers" required to pay franchise fees to localities under section 7-59-303(20).The City of Knoxville brought this action asserting that Netflix and Hulu were required to pay franchise fees because they used public rights-of-way to provide video service. Specifically, Knoxville argued that Netflix and Hulu were "video service providers" as defined in the Competitive Cable and Video Services Act, Tenn. Code Ann. 7-59-301 to -318, and were thus required to apply for a franchise and pay franchise fees to Knoxville. The district court certified a question of law to the Supreme Court. The Supreme Court answered that Netflix and Hulu did not provide a "video service" within the meaning of section -303(19) and thus did not qualify as "video service providers" under section -303(20). View "City of Knoxville, Tenn. v. Netflix, Inc." on Justia Law
Huston v. Hearst Communications, Inc.
Huston, a Good Housekeeping magazine subscriber, filed a putative class action alleging that media conglomerate, Hearst, offered to sell and sold mailing lists containing her, and 9.1 million other subscribers’, identifying information. Huston sought statutory damages under the Illinois Right of Publicity Act (IRPA) and an injunction requiring Hearst to obtain prior written consent before selling its subscribers’ information.The district court dismissed. The Seventh Circuit affirmed. To establish an IRPA violation, the plaintiff must allege an appropriation of the plaintiff’s identity, without the plaintiff’s written consent, and for the defendant’s commercial purpose. IRPA prohibits the use or holding out of a person’s identifying information to offer to sell or sell a product, piece of merchandise, good, or service; it contemplates a use or holding out of an individual’s identity with the aim of effectuating a sale. Any use or holding out must either accompany an offer to sell or precede the sale, but it cannot follow the sale. Huston failed to allege that Hearst used or held out her identity to effectuate the sale of the mailing lists or her Good Housekeeping subscription. View "Huston v. Hearst Communications, Inc." on Justia Law
In re Cote d’Azur Estate Corp.
The Court of Chancery granted Plaintiff's motion for the issuance of a letter of request to obtain the assistance of the central authority in Switzerland to obtain electronic data that Swiss investigators seized from the law office of defendant Dieter Neupert while investigating whether Neupert falsified evidence in a Switzerland civil proceeding, holding that Plaintiff was entitled to relief.In granting the motion, the Court of Chancery held that Plaintiff showed that issuance of the letter of request was warranted. Specifically, the Court concluded that Plaintiff met her burden of convincing the issuing court to ask a foreign court for assistance by showing that the letter of request was targeted and appropriate, that it would be difficult to obtain the information through other means, that the crime/fraud exception to privilege issues applied, and that Neupert would not produce the discovery materials if he had them. View "In re Cote d'Azur Estate Corp." on Justia Law
American Healthcare Administrative Services, Inc. v. Aizen
The Court of Chancery granted Selling Stockholders' motion for partial judgment on the pleadings in this action brought after Corporation sold assets to Buyer and Buyer placed a portion of the consideration in escrow to fund any purchase price adjustment and to secure indemnification obligations, holding that there was no contractual basis for maintaining the funds in escrow.The asset purchase agreement in this case appointed Corporation's former CEO as the sellers' representative for purposes of making decisions about the escrowed funds, but the period for holding the escrowed funds had expired, and no claims against the escrowed funds remained outstanding. Selling Stockholders' filed this action against the former CEO asserting a series of claims designed to compel the release of the escrowed funds. The Court of Chancery granted relief, holding (1) the former CEO must exercise his discretionary authority over the release of the escrowed funds, but he must exercise that authority consistent with the implied covenant of good faith and fair dealing; and (2) the order implementing this ruling will provide for the release of funds from escrow on a date not earlier than sixty days after the judgment becomes final. View "American Healthcare Administrative Services, Inc. v. Aizen" on Justia Law
Bull Field, LLC v. Merced Irrigation Dist.
Appellants Bull Field, LLC, Barley, LLC and Colburn Hills Ranch, LLC (Appellants) appeal from a judgment denying their petition for a writ of mandate (Petition). Appellants sought an order compelling respondent Merced Irrigation District (District) to sell them surplus surface water for the 2019 water year. Appellants’ farmland is outside the District, but within the same groundwater basin as the District’s service area. The District authorized the sale of surplus water to out-of-district users for 2019 but denied Appellants’ application to purchase such water. The District claimed, and the trial court found, that the District’s general manager denied Appellants’ applications to purchase surplus surface water because the District had a history of difficult dealings with Appellants’ manager. Substantial evidence supports that finding. The Second Appellate District affirmed, finding that District acted within its discretion in making its decision on this ground. The court explained that the court may not interfere with the District’s discretionary decision that denying Appellants’ applications to purchase surplus water was in its best interest. The court may not substitute its judgment for the District about how its interests would best be served. So long as the District actually exercised such discretion, this court may not issue a writ contravening the District’s decision. View "Bull Field, LLC v. Merced Irrigation Dist." on Justia Law
Wasatch Transportation v. Forest River
A transportation company, Wasatch Transportation, Inc., needed three buses to comply with a state contract. Compliance required "particularly durable buses" because the routes would exceed 350 miles in inclement weather with substantial changes in elevation. Wasatch bought Synergy buses from the manufacturer, Forest River, Inc., based on assurances from a Forest River sales personnel that the buses were “[q]uality buses” that Forest River “would take really good care of” and would “be amazing when they were done.” For each bus, Forest River provided a warranty packet containing three limitations: (1) the warranty covered only repair costs; (2) the warranty was exclusive, taking the place of other possible warranties; and (3) the warranty provided the buyer’s only remedy for defects under any legal theory. After the purchase, the buses developed mechanical problems. Even after the bus was repaired, it continued to break down. Another bus broke down soon after the purchase and was usable only a third of the next year. Given the breakdowns, Wasatch allegedly had to buy another bus to comply with the state contract; but the state cancelled the contract anyway. Wasatch thereafter sued Forest River for: breach of an express warranty; breach of an implied warranty of fitness for a particular purpose; and fraud. The district court granted summary judgment to Forest River, reasoning that its warranty packet prevented any relief. The Tenth Circuit Court of Appeals determined there were genuine issues of material fact to preclude the district court's grant of summary judgment. That judgment was reversed and the matter remanded for further proceedings. View "Wasatch Transportation v. Forest River" on Justia Law