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Plaintiffs Yvonne Reid and Serena Wong sued defendants the City of San Diego (City) and the San Diego Tourism Marketing District (TMD) in a putative class action complaint, challenging what they allege is "an illegal hotel tax." The trial court sustained Defendants' demurrer without leave to amend on statute of limitations and other grounds. The Court of Appeal affirmed, concluding some of the causes of action were time-barred and the remainder failed to state facts constituting a cause of action. View "Reid v. City of San Diego" on Justia Law

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After months of negotiations, the parties in this case signed versions of two transaction agreements: a limited liability company agreement, and a contribution and assignment agreement. However, a serious question existed as to whether the parties intended to be bound by these signed documents. And whether there exists a valid, binding contract implicated the other main issue raised on appeal—namely, whether the Delaware Supreme Court could exercise jurisdiction over the defendant. If at least one of these transaction documents was a valid, independently enforceable contract, then the Supreme Court had jurisdiction via a forum selection clause favoring Delaware. If neither document was independently enforceable, and if earlier agreements did not provide another means of exercising jurisdiction over the defendant, then Delaware courts lacked personal jurisdiction over the defendant, and the plaintiffs’ claims for breach of contract, unjust enrichment, and other causes of action against the defendant were properly dismissed. The Court of Chancery determined that neither transaction document was enforceable, and dismissed the case for lack of personal jurisdiction, even after finding one of the parties in contempt of its status quo order. In this case, the Supreme Court found evidence within the four corners of the documents and other powerful, contemporaneous evidence, including the execution of the agreements, that suggested the parties intended to be bound. "But we acknowledge that there is also evidence that cuts the other way. Given that this is a question of fact, we remand to the Court of Chancery to make such a finding." If either document is enforceable, then the forum selection provisions were also enforceable. The Court of Chancery erred in finding that its jurisdiction to enforce the previously issued contempt order depended on the enforceability of the transaction documents. It had jurisdiction to enforce its order regardless of the transaction documents’ enforceability. View "Eagle Force Holdings, LLC, et al. v. Campbell" on Justia Law

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Federal law does not prevent a bona fide shareholder from exercising its right to vote against a bankruptcy petition just because it is also an unsecured creditor. The Fifth Circuit affirmed the bankruptcy court's dismissal of the bankruptcy petition as unauthorized. The court held that, under these circumstances, the issue of corporate authority to file a bankruptcy petition was left to state law. In this case, the debtor was a Delaware corporation, governed by that state's General Corporation Law, and the court found nothing that would nullify the shareholder's right to vote against the bankruptcy petition. View "Franchise Services of North America, Inc. v. United States Trustee" on Justia Law

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The DC Circuit affirmed the Tax Court's holding that Mellow was subject to the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), 26 U.S.C. 6221–6234 (2012), proceedings. The court held that the record made clear that Mellow's partners were the single-member LLCs, not their individual owners; the court deferred to the IRS's reasonable interpretation of its own regulation that a partnership with pass-thru partners was ineligible for the small-partnership exception and that single-member LLCs constitute pass-thru partners; and the court lacked jurisdiction over Mellow's challenge to the penalties because Mellow failed to raise its claim and waived its claim by consenting to a decision applying penalties. View "Mellow Partners v. Commissioner of Internal Revenue Service" on Justia Law

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Following the Court of Appeals’ decision in RL BB ACQ I-GA CVL, LLC v. Workman, 798 SE2d 677 (2017), the Georgia Supreme Court granted certiorari to consider two questions: (1) whether attorney fees and costs are available under OCGA 9-15-14 for conduct that occurs during the course of post-judgment discovery; and (2) whether an entity is barred from seeking sanctions under OCGA 9-11-37 by failing to request sanctions at the time it sought and obtained a protective order under OCGA 9-11-26. The Court of Appeals reversed that portion of the order awarding fees pursuant to OCGA 9-15-14, concluding that the statute spoke only to conduct occurring during the course of a “lawsuit,” which concludes at judgment, and, thus, did not apply to post-judgment discovery proceedings. The appellate court also noted, without discussion, that OCGA 9-15-14 did not apply to non-parties. With respect to the fee award made pursuant to OCGA 9-11-37(a)(4)(A), the Court of Appeals questioned whether Appellants’ “failure to request their expenses at the time they sought the protective order barred them from seeking those expenses by way of a separate motion, filed more than 40 days after the protective order was entered,” and remanded the case to the trial court to consider the waiver issue. The Supreme Court answered the first question in the affirmative, the second in the negative, and, in so doing, affirmed in part and reversed in part the decision of the Court of Appeals. View "Workman et al. v. RL BB ACQ I-GA CVL, LLC et al." on Justia Law

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Plaintiff and cross-defendant Duncan Prince obtained a judgment of $647,706.48 against defendant and cross-complainant Invensure Insurance Brokers, Inc. (Invensure). Invensure took nothing on its cross-complaint against Prince and his related business entity, cross-defendant ERM Insurance Brokers, Inc. (ERM). Invensure appealed, arguing the trial court wrongly decided issues related to the statute of limitations and numerous issues with respect to substantial evidence to support the judgment. It also claimed the court abused its discretion when admitting certain evidence. Prince and ERM also appealed two postjudgment orders, arguing the court erroneously granted a motion to tax costs and to deny them attorney fees. In the published portion of its opinion, the Court of Appeal found the trial court erred with respect to the validity of Prince’s offer to compromise under Code of Civil Procedure section 998, and remanded that issue for further consideration. In the unpublished portion of its opinion with respect to attorney fees, Prince argued he was entitled to attorney fees under Penal Code section 502. Invensure asserted a cause of action against him for violating this section, which included an attorney fee provision. The court denied the motion, deciding the attorney fees under the Penal Code section 502 cause of action and the cross-complaint’s remaining claims could not be apportioned. The Court of Appeal disagreed, concluding the causes of action in the cross-complaint all related to a common core of facts. Accordingly, the Court reversed the order denying attorney fees. View "Prince v. Invensure Ins. Brokers" on Justia Law

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The district court dismissed Marc Schenkel's claims against Xyngular Corporation and various third parties as a sanction for abuse of what he claims was pre-litigation discovery. The Tenth Circuit had not previously decided whether pre-litigation conduct that did not give rise to the substantive claims in a case was sanctionable by dismissal of a party’s claims. After review of Schenkel's arguments on appeal, the Tenth Circuit concluded termination sanctions were permissible when pre-litigation conduct was aimed at manipulating the judicial process and was unrelated to the conduct that gave rise to the substantive claims in a case. Because the district court did not abuse its discretion in concluding that these conditions were met in the present case, its judgment was affirmed. View "Xyngular v. Schenkel" on Justia Law

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The trial court granted summary judgment in favor of George McKee and Brownsville Station, LLC, dismissing Monty Brown’s claims against them. Brown and McKee were former business partners. At one time they each owned a fifty percent interest in Brownsville Station, which owned and operated an apartment complex in Starkville, Mississippi. But beginning in 2003, Brown began selling his interest to McKee. From July 2003 to January 2006, through a series of four agreements, Brown transferred all his interest units to McKee in exchange for money and title to the company tractor. As part of the final agreement, both parties agreed to a full and final release of any and all claims against each other. For six years, Brown had no dealings with McKee or Brownsville Station. Then, in September 2012, Brown received notice from the Secretary of State that McKee had filed articles of reinstatement for Brownsville Station and its subsidiary, BrownE, LLC. According to Brown, the September 2012 notice prompted him to tell his boss about his former business relationship with McKee. And his boss, who was also an attorney, suggested McKee had engaged in wrongdoing. Almost ten years after the first transfer and seven years after the final transfer, Brown sued McKee and Brownsville Station, alleging McKee formed the new LLC “solely to provide a vehicle to take secret or uniformed [sic] advantage of [Brown] by enabling [McKee], among other things, to change provisions of Brownsville LLC’s Operating Agreement without [Brown’s] informed consent.” Brown further alleged that, during the 2003-2006 transactions, McKee hid important financial information and documentation about Brownsville Station and its true value, violating the fiduciary duties McKee owed as both Brown’s attorney and fellow LLC member. Brown appealed, arguing the judge wrongly granted summary judgment without first allowing discovery. The Mississippi Supreme Court disagreed, finding that had summary judgment been granted based on the clear running of the statute of limitations. “And, as the trial judge rightly found, none of Brown’s discovery requests were aimed at establishing his claims were timely. Instead, they were zeroed in on proving his untimely claims.” Therefore, the trial judge did not abuse his discretion by denying Brown’s Rule 56(f) motion for a continuance. View "Brown v. McKee" on Justia Law

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Charles Erwin appeals from an amended judgment entered in favor of Alerus Financial, N.A., for $5,265,653.09. Starting in 2012 Alerus made a series of loans totaling more than $15 million to Diverse Energy Systems, LLC. The loan agreement specified "Events of Default," including the failure to pay the indebtedness, the insolvency of the borrower or guarantor or the commencement of bankruptcy proceedings. Erwin was Diverse's chief executive officer, and he signed multiple personal guaranties, promising to be personally responsible for payment of up to $4 million of Diverse's debt owed to Alerus. In September 2015 Diverse filed for bankruptcy. In May 2016 Alerus sued Erwin for breach of contract and unjust enrichment, alleging Diverse was in default under the loan agreement and Erwin failed to make payment on the amount due under the guaranties. Alerus alleged Diverse's indebtedness exceeded $12 million and under the guaranties Erwin was liable for at least $4 million in principal and interest. On September 6, 2016, Erwin filed an answer to Alerus' complaint. Alerus moved for summary judgment, arguing Diverse defaulted on its loan obligations and Erwin breached the guaranty contracts by failing to pay the amounts due under the guaranties. Alerus also filed an affidavit in support of its motion from an Alerus employee, which it claimed showed the total outstanding principal and interest on the loans to Diverse. Erwin argued on appeal to the North Dakota Supreme Court the district court abused its discretion by failing to rule on his motion to amend his answer and entering judgment without allowing him to conduct discovery on Alerus' damage claims. Finding no reversible error, the Supreme Court affirmed the amended judgment. View "Alerus Financial, N.A. v. Erwin" on Justia Law

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The Eighth Circuit affirmed the district court's grant of summary judgment to defendant in an action alleging claims of negligent misrepresentation, unjust enrichment, and denial of equitable relief. The court held that the district court did not err in granting defendant's summary judgment motion on the negligent misrepresentation claim because Lonesome Dove had not alleged any specific damage from the misrepresentation; the district court did not err by granting summary judgment as to the unjust enrichment claim because Lonesome Dove failed to present specific facts to illustrate any benefit to defendant other than the list of things in the contract; the district court did not abuse its discretion by denying Lonesome Dove equitable relief where Lonesome Dove had an adequate remedy at law in this case; and the district court did not err by denying Lonesome Dove's motion for a new trial where the verdict was not against the clear weight of the evidence. View "Lonesome Dove Petroleum, Inc. v. Holt" on Justia Law