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The Supreme Court affirmed the district court’s grant of summary judgment in favor of Defendant, the Pike and Susan Sullivan Foundation (the Foundation), on this action seeking a declaratory judgment and a judicial dissolution of the Foundation. Susan Sullivan and her late-husband Pike Sullivan established and funded the Foundation. The Sullivans and George Harris served as directors of the Foundation until Pike died, at which time his position on the board was filled by Mr. Harris’s wife. Susan later filed suit requesting that the court enter a declaration judgment to void Mrs. Harris’s election to the board and seeking judicial dissolution of the Foundation on the grounds that management of the Foundation would be deadlocked after Mrs. Harris’s election was invalidated. The district court granted summary judgment for the Foundation. The Supreme Court affirmed, holding that the district court did not err by (1) concluding that Susan cannot sustain a claim for judicial dissolution of the Foundation based upon board deadlock; and (2) denying Susan’s request for a continuance of the summary judgment proceeding until discovery was complete. View "Sullivan v. Pike & Susan Sullivan Foundation" on Justia Law

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In this appeal, the issue before the Tenth Circuit Court of Appeals was whether the district court correctly held that ACE American Insurance Company (ACE) had no duty to defend and indemnify DISH Network (DISH) in a lawsuit alleging that DISH’s use of telemarketing phone calls violated various federal and state laws. The primary question centered on whether statutory damages and injunctive relief under the Telephone Consumer Protection Act were “damages” under the insurance policies at issue and insurable under Colorado law, or were uninsurable “penalties.” The Court concluded they were penalties under controlling Colorado law, and affirmed the district court’s grant of summary judgment in favor of ACE. View "ACE American Insurance Company v. Dish Network" on Justia Law

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Diamond Resorts International’s board of directors recommended to its stockholders that they sell their shares to a private equity buyer, Apollo Global Management, for cash in a two-step merger transaction involving a front-end tender offer followed by a back-end merger. The proxy statement had a detailed recitation of the background leading to the merger, and the reasons for and against it. But notably absent from that recitation was that the company’s founder, largest stockholder, and Chairman, had abstained from supporting the procession of the merger discussions, and from ultimately approving the deal, because he was "disappointed with the price and the Company’s management for not having run the business in a manner that would command a higher price, and that in his view, it was not the right time to sell the Company." On a motion to dismiss, the Court of Chancery held that the complaint challenging the merger should have been dismissed because the stockholders’ acceptance of the first-step tender offer was fully informed, rejecting the plaintiffs’ argument that the omission of the Chairman’s reasons for abstaining rendered the proxy statement materially misleading. The issue this case presented for the Delaware Supreme Court's review was whether that ruling was correct. The Supreme Court agreed with the plaintiffs that it was not, and that the defendants’ argument that the reasons for a dissenting or abstaining board member’s vote can never be material was incorrect. "Precisely because Delaware law gives important effect to an informed stockholder decision, Delaware law also requires that the disclosures the board makes to stockholders contain the material facts and not describe events in a materially misleading way." Here, the Court found the founder and Chairman’s views regarding the wisdom of selling the company were ones that reasonable stockholders would have found material in deciding whether to vote for the merger or seek appraisal, and the failure to disclose them rendered the facts that were disclosed misleadingly incomplete. View "Appel v. Berkman, et al." on Justia Law

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An indenture may seek recovery on behalf of noteholders for Defendants’ alleged fraudulent redemptions intended to siphon off assets, leaving corporate obligators unable to pay the noteholders. Appellate Division denied Defendants’ motion to dismiss insofar as asserted by the indenture trustee, concluding that the relevant language of the indenture conferred standing on the trustee to pursue the fraudulent conveyance claims and other claims seeking recovery for the amounts due under the notes and that the complaint sufficiently stated a cause of action against Defendants under a veil-piercing theory. The Court of Appeals affirmed, holding (1) the language of the indenture gave the trustee authority to pursue the causes of action at issue in this appeal; and (2) the alleged facts in the complaint and inferences drawn from them established the basic elements of the doctrine of piercing the corporate veil. View "Cortlandt Street Recovery Corp. v. Bonderman" on Justia Law

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Qwinstar and Pro Logistics entered into an agreement wherein Qwinstar would purchase Pro Logistics and employ its owner for a term of five years. Qwinstar fired the owner a few months after the sale and filed suit alleging that it did not receive the inventory it bargained for in the sale. The owner counterclaimed, alleging breach of the employment contract by not paying him for the full five-year term. The Eighth Circuit held that Qwinstar was unable to prove that the owner breached the contract and thus affirmed the district court's grant of summary judgment to the owner and Pro Logistics. The court held that summary judgment was inappropriate on the owner's counterclaim because the contract provisions were ambiguous and reasonably susceptible to more than one interpretation. Therefore, interpretation becomes a question of fact precluding summary judgment. View "Qwinstar Corp. v. Anthony" on Justia Law

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Turtle Creek Crossing, LLC, a minority interest holder in Kimco Hattiesburg, L.P., filed an action in circuit court after it learned it would receive no distribution from the sale of the partnership’s only asset, a multimillion-dollar shopping center. In its complaint, Turtle Creek alleged its fellow partners breached their fiduciary duties and conspired with each other, the partnership, and a sister partnership to market and sell the asset in such a way as to keep Turtle Creek from profiting. According to the defendants, the predominant claim was for an accounting - an equitable claim that belonges in chancery court; had this case been filed in chancery court, there would be a strong argument for the chancery court’s original jurisdiction over the accounting claim, as well as pendant jurisdiction over the legal claims. Turtle Creek did not file this action in chancery court. It filed it in circuit court. And the circuit court also had original jurisdiction, not only over the accounting claim, but also Turtle Creek’s other legal claims. Because Turtle Creek chose a forum with proper subject-matter jurisdiction, the Mississippi Supreme Court determined that choice must be respected. The Supreme Court affirmed the circuit court’s denial of the motion to transfer and remanded for further proceedings. View "KD Hattiesburg 1128, Inc. v. Turtle Creek Crossing, LLC" on Justia Law

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CNH, which manufactures “New Holland” brand farming and construction machinery, hired the real estate services firm, JLL, to manage a corporate re-branding program that involved the replacement of signage more than 1,400 North American dealerships. The vinyl used in the new signs was defective, necessitating the re-manufacture and replacement of virtually all of the installed signs. After the vinyl manufacturer repudiated its commitment to replace, at its own cost, the defective signs, CNH sued, alleging that JLL had failed to perform adequate quality control in the manufacturing of the signs, failed to negotiate the best possible warranty on the vinyl and the signs, and failed to properly document and manage the warranties. The district court found that CNH had suffered damages of $5,482,735 but reduced JLL’s liability to $3,026.361.60—the sum CNH paid to JLL in project management fees—plus such other amounts JLL might recover from third parties (the vinyl manufacturer and the sign fabricators) in the future. The Seventh Circuit affirmed. The district court’s findings were supported by the evidence and make clear that JLL’s own failures with respect to quality control in the manufacturing process and with respect to the vinyl warranty made the defective-sign problem much worse for CNH than it otherwise would have been. View "CNH Industrial America LLC v. Jones Lang LaSalle Americas, Inc." on Justia Law

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CNH, which manufactures “New Holland” brand farming and construction machinery, hired the real estate services firm, JLL, to manage a corporate re-branding program that involved the replacement of signage more than 1,400 North American dealerships. The vinyl used in the new signs was defective, necessitating the re-manufacture and replacement of virtually all of the installed signs. After the vinyl manufacturer repudiated its commitment to replace, at its own cost, the defective signs, CNH sued, alleging that JLL had failed to perform adequate quality control in the manufacturing of the signs, failed to negotiate the best possible warranty on the vinyl and the signs, and failed to properly document and manage the warranties. The district court found that CNH had suffered damages of $5,482,735 but reduced JLL’s liability to $3,026.361.60—the sum CNH paid to JLL in project management fees—plus such other amounts JLL might recover from third parties (the vinyl manufacturer and the sign fabricators) in the future. The Seventh Circuit affirmed. The district court’s findings were supported by the evidence and make clear that JLL’s own failures with respect to quality control in the manufacturing process and with respect to the vinyl warranty made the defective-sign problem much worse for CNH than it otherwise would have been. View "CNH Industrial America LLC v. Jones Lang LaSalle Americas, Inc." on Justia Law

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Enduro Operating, LLC and Echo Production, Inc. were two of several parties to a joint operating agreement (JOA). Under the JOA, Echo, as a party wishing to undertake a new drilling project, had to provide notice of the proposed project to the other parties to the JOA, who then had thirty days to decide whether to opt in or out of the project. By opting in, a party agreed to share in the cost and risk of the project. If a party opted out of the project (as Enduro did in this case), then the party was deemed “non-consenting,” and exempt from any of the cost or risk associated with the new project, but could not share in any of the profits from the new project until the consenting parties recovered four-hundred percent of the labor and equipment costs invested in the new project. The question before us is what activities are adequate as a matter of law to 6 satisfy the contractual requirement that a consenting party actually commence the 7 drilling operation. The Court of Appeals concluded that the language in Johnson v. Yates Petroleum Corp., 981 P.2d 288, indicating that “any” preparatory activities would be sufficient was too permissive. The Court of Appeals was persuaded that Echo’s lack of on-site activity at the proposed well site, other than surveying and staking, and lack of a permit to commence drilling was evidence as a matter of law that Echo had not actually commenced drilling operations. The Court of Appeals reversed the district court’s grant of summary judgment in favor of Echo and remanded for an entry of summary judgment in favor of Enduro. The New Mexico Supreme Court reversed, holding that the failure to obtain an approved drilling permit within the relevant commencement period was not dispositive; “[a] party may prove that it has actually commenced drilling operations with evidence that it committed resources, whether on-site or off-site, that demonstrate its present good-faith intent to diligently carry on drilling activities until completion. “ View "Enduro Operating LLC v. Echo Prod., Inc." on Justia Law

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Enduro Operating, LLC and Echo Production, Inc. were two of several parties to a joint operating agreement (JOA). Under the JOA, Echo, as a party wishing to undertake a new drilling project, had to provide notice of the proposed project to the other parties to the JOA, who then had thirty days to decide whether to opt in or out of the project. By opting in, a party agreed to share in the cost and risk of the project. If a party opted out of the project (as Enduro did in this case), then the party was deemed “non-consenting,” and exempt from any of the cost or risk associated with the new project, but could not share in any of the profits from the new project until the consenting parties recovered four-hundred percent of the labor and equipment costs invested in the new project. The question before us is what activities are adequate as a matter of law to 6 satisfy the contractual requirement that a consenting party actually commence the 7 drilling operation. The Court of Appeals concluded that the language in Johnson v. Yates Petroleum Corp., 981 P.2d 288, indicating that “any” preparatory activities would be sufficient was too permissive. The Court of Appeals was persuaded that Echo’s lack of on-site activity at the proposed well site, other than surveying and staking, and lack of a permit to commence drilling was evidence as a matter of law that Echo had not actually commenced drilling operations. The Court of Appeals reversed the district court’s grant of summary judgment in favor of Echo and remanded for an entry of summary judgment in favor of Enduro. The New Mexico Supreme Court reversed, holding that the failure to obtain an approved drilling permit within the relevant commencement period was not dispositive; “[a] party may prove that it has actually commenced drilling operations with evidence that it committed resources, whether on-site or off-site, that demonstrate its present good-faith intent to diligently carry on drilling activities until completion. “ View "Enduro Operating LLC v. Echo Prod., Inc." on Justia Law