For tax reasons ISN Software Corporation wanted to convert from a C corporation to an S corporation. But four of its eight stockholders, representing about 25 percent of the outstanding stock, could not qualify as S Corporation stockholders. ISN sought advice from Richards, Layton & Finger, P.A. (RLF) about its options. RLF advised ISN that before a conversion ISN could use a merger to cash out some or all of the four stockholders. The cashed-out stockholders could then accept ISN’s cash-out offer or exercise appraisal rights under Delaware law. ISN did not proceed with the conversion, but decided to use a merger to cash out three of the four non-qualifying stockholders. After ISN completed the merger, RLF notified ISN that its advice might not have been correct. All four stockholders, including the remaining stockholder whom ISN wanted to exclude, were entitled to appraisal rights. ISN decided not to try and unwind the merger, instead proceeding with the merger and notified all four stockholders they were entitled to appraisal. ISN and RLF agreed that RLF would continue to represent ISN in any appraisal action. Three of the four stockholders, including the stockholder ISN wanted to exclude, eventually demanded appraisal. Years later, when things did not turn out as ISN had hoped (the appraised value of ISN stock ended up substantially higher than ISN had reserved for), ISN filed a legal malpractice claim against RLF. The Superior Court dismissed ISN’s August 1, 2018 complaint on statute of limitations grounds. The court found that the statute of limitations expired three years after RLF informed ISN of the erroneous advice, or, at the latest, three years after the stockholder ISN sought to exclude demanded appraisal. On appeal, ISN argued its legal malpractice claim did not accrue until after the appraisal action valued ISN’s stock because only then could ISN claim damages. Although it applied a different analysis, the Delaware Supreme Court agreed with the Superior Court that the statute of limitations began to run in January 2013. By the time ISN filed its malpractice claim on August 1, 2018, the statute of limitations had expired. Thus, the Superior Court’s judgment was affirmed. View "ISN Software Corporation v. Richards, Layton & Finger, P.A." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals dismissing Appellant's complaint for a writ of prohibition and dismissed as moot the motions Appellant filed in connection with the complaint, holding that the court of appeals correctly dismissed the complaint.In his complaint, Appellant sought to vacate charging orders and receivership orders concerning his membership interests in two limited liability companies, asserting that the orders exceeded the authority of Henry County Court of Common Pleas Judge John Collier. The court of appeals dismissed the complaint, concluding that Judge Collier did not patently and unambiguously lack jurisdiction to enter a charging order or to appoint a receiver. The Supreme Court affirmed, holding that because Judge Collier had subject matter jurisdiction to enter a charging order and to appoint a receiver, Appellant did not show that the judge patently and unambiguously lacked jurisdiction. View "State ex rel. Kerr v. Collier" on Justia Law

Grayson does business under the name Gire Roofing. Grayson and Edwin Gire were indicted for visa fraud, 18 U.S.C. 1546 and harboring and employing unauthorized aliens, 8 U.S.C. 1324(a)(1)(A)(iii). On paper, Gire had no relationship to Grayson as a corporate entity. He was not a stockholder, officer, or an employee. He managed the roofing (Grayson’s sole business), as he had under the Gire Roofing name for more than 20 years. The corporate papers identified Grayson’s president and sole stockholder as Young, Gire’s girlfriend. Gire, his attorney, and the government all represented to the district court that Gire was Grayson’s president. The court permitted Gire to plead guilty on his and Grayson’s behalf. Joint counsel represented both defendants during a trial that resulted in their convictions and a finding that Grayson’s headquarters was forfeitable. Despite obtaining separate counsel before sentencing, neither Grayson nor Young ever complained about Gire’s or prior counsel’s representations. Neither did Grayson object to the indictment, the plea colloquy, or the finding that Grayson had used its headquarters for harboring unauthorized aliens.The Seventh Circuit affirmed. Although Grayson identified numerous potential errors in the proceedings none are cause for reversal. Grayson has not shown that it was deprived of any right to effective assistance of counsel that it may have had and has not demonstrated that the court plainly erred in accepting the guilty plea. The evidence is sufficient to hold Grayson vicariously liable for Gire’s crimes. View "United States v. Grayson Enterprises, Inc." on Justia Law

In this case involving a final judgment entered against a professional corporation for the fraudulent activity of one of its associates, the Supreme Judicial Court held that, in the unique circumstances of this case, Plaintiff, who was defrauded by the associate, may pursue successor liability against the sole proprietorship of Defendant, the sole shareholder and officer of the professional corporation.Plaintiff was defrauded by the corporation's associate in a mortgage scam. Defendant was the sole shareholder and officer of the corporation, RKelley-Law, P.C. (the P.C.). After the entry of final judgment against the P.C. Defendant voted to wind up the corporation and, that same day, began operating his law practice as a sole proprietorship. Thereafter, the P.C. was placed into bankruptcy proceedings. Because the P.C. had no assets, Plaintiff sought to recover from Defendant personally. The district court granted summary judgment in favor of Defendant, concluding that the doctrine of successor liability could not be applied where the successor in interest was a natural person rather than a corporate entity. The court of appeals affirmed. The Supreme Judicial Court reversed, holding that because Defendant's sole proprietorship was a mere continuation of the former professional corporation Plaintiff may pursue successor liability against the proprietorship. View "Smith v. Kelley" on Justia Law

Trustees of three employee benefit funds filed suit against Charps and others, alleging that defendants breached collective bargaining agreements by not contributing to the employee benefit funds for work performed by the affiliates, in violation of the Employee Retirement Income Security Act (ERISA). The district court granted summary judgment to defendants, awarding them attorney's fees and costs.The Eighth Circuit held that defendants did not owe contributions for the affiliates' work where the trustees have not shown a genuine issue that the defendant companies formed a relationship of alter ego, joint venture, or joint enterprise. Furthermore, the collective bargaining agreements did not require defendants to contribute for the work of Charps' affiliates. The court also held that the trustees did not meet their burden in opposing summary judgment on their claim that the district court failed to address Charps' liability for contributions based on its own employees' work, and the district court did not abuse its discretion in denying, as duplicative, the trustees' motion to compel production of the spreadsheets.Accordingly, the court affirmed the judgment in 18-3007, but reversed and remanded in 19-1206. On remand, the district court should award costs that are taxable under 28 U.S.C. 1821 and 1920. In regard to the nontaxable costs, the district court may determine whether they may be awarded as attorney's fees. View "Johnson v. Charps Welding & Fabricating, Inc." on Justia Law

Plaintiff Warner Wiggins appeals a circuit court's order compelling him to arbitrate his claims against Warren Averett, LLC. Warren Averett was an accounting firm. Eastern Shore Children's Clinic, P.C. ("Eastern Shore"), a pediatric medical practice, was a client of Warren Averett. In September 2010, while Wiggins, who was a medical doctor, was a shareholder and employee of Eastern Shore, Warren Averett and Eastern Shore entered an agreement pursuant to which Warren Averett was to provide accounting services to Eastern Shore ("the contract"). The contract contained an arbitration clause. Thereafter, Wiggins and Warren Averett became involved in a billing dispute related to the preparation of Wiggins's personal income-tax returns. In 2017, Wiggins filed a single-count complaint alleging "accounting malpractice" against Warren Averett. Warren Averett filed an answer to Wiggins's complaint, asserting, among other things, that Wiggins's claims were based on the contract and were thus subject to the arbitration clause. A majority of the Alabama Supreme Court concluded the determination of whether Wiggins' claims were covered under the terms of the arbitration clause was delegated to an arbitrator to decide. Therefore, it affirmed the trial court's order. View "Warner W. Wiggins v. Warren Averett, LLC" on Justia Law

Bentley, the owner of Trucking, rear-ended the Kolchinskys’ car while driving a tractor-trailer through Illinois. The Kolchinskys were severely injured. Bentley's deliveries had been arranged by WD, which instructed Bentley to transport milk from Indiana to its destination. His route was up to him. Trucking’s agreement with WD provided that Bentley was an independent contractor. When Trucking accepted a job from WD, it agreed to call the broker daily with a status update, protect the freight, notify the broker of any damage, and inform the broker of delivery. Tucking was responsible for determining delivery times; WD reserved the right to withhold any resulting damages. The agreement required Trucking to pay its employees and provide and maintain its own tractor, fuel, insurance, licenses, and permits. The Kolchinskys sued Bentley; citing theories of respondeat superior and vicarious liability, the Kolchinskys also sued Trucking and WDThe judge granted the defendants judgment, concluding that the driver was an independent contractor so the Kolchinskys could not hold the companies responsible for his alleged negligence. The Seventh Circuit affirmed. Courts applying Illinois law consistently have declined to find an agency relationship when a company hires an independent driver to deliver a load to designated persons at designated hours but does not reserve the right to control the manner of delivery. WD had no part in the transaction leading to Bentley’s fateful trip View "Kolchinsky v. Western Dairy Transport, LLC" on Justia Law

G4, LLC, entered into a lease in 2009 with the City of Picayune, Mississippi, for land on the grounds of the Picayune Municipal Airport. After the Pearl River County Board of Supervisors assessed ad valorem taxes on the leased land, G4 paid the taxes under protest and petitioned the Board for a refund and for a refund of taxes it had paid on lots in the Tin Hill subdivision. The Board denied G4’s petition, and G4 appealed to the Circuit Court of Pearl River County, which affirmed. G4 appealed, asserting that, according to the Mississippi Supreme Court’s decision in Rankin County Board of Supervisors v. Lakeland Income Properties, LLC, 241 So. 3d 1279 (Miss. 2018), it was automatically exempt from paying ad valorem taxes on the airport property. The Supreme Court agreed, reversed and remanded the circuit court’s decision that affirmed the Board’s refusal to refund the airport property taxes. The Court affirmed the circuit court’s decision that G4 was not entitled to a refund of taxes paid on the Tin Hill subdivision lots. View "G4, LLC v. Pearl River County Board of Supervisors" on Justia Law

The First Circuit affirmed the decision of the district court entering summary judgment against Plaintiff Jay Furtado and in favor of Defendants, attorney Amy Page Oberg and the law firm DarrowEverett LLP, and dismissing Plaintiff's claims of legal malpractice, breach of fiduciary duty, and misrepresentation, holding that summary judgment was properly granted.Plaintiff was one of three members of a limited liability company (LLC) for a gym. In 2008, Plaintiff engaged Oberg to help to establish the LLC. After the LLC stopped operations, Plaintiff brought this action. The district court entered summary judgment for Defendants. The First Circuit affirmed, holding that, even if there were any doubt that Plaintiff had waived on appeal an argument that a reasonable jury could find that a breach by Defendants proximately caused his harm, this Court would still conclude that summary judgment was proper in this case. View "Furtado v. Oberg" on Justia Law

Ambassador Press filed suit against Durst Image for fraud, alleging that the printing press that was purchased from Durst Image did not have the speed or durability Durst Image represented at the time of the purchase.The Eighth Circuit affirmed the district court's grant of Durst Image's motion to dismiss, holding that the district court correctly determined that Ambassador Press did not plausibly allege common law fraud. The court also held that the district court properly determined that reliance was not pleaded with particularity and properly granted the motion to dismiss. View "Ambassador Press, Inc. v. Durst Image Technology U.S., LLC" on Justia Law