Justia Business Law Opinion SummariesArticles Posted in Iowa Supreme Court
Larew v. Hope Law Firm, P.L.C.
The Supreme Court affirmed in part and reversed in part the judgment entered by the district court in this action involving former co-counsel on a contingent-fee case, holding that the district court erred in finding insufficient evidence that the Hope Law Firm's new entity, Hope Law Firm & Associates, P.C., was a successor entity to Hope Law Firm, P.L.C.Lawyer James Larew had an of-counsel arrangement with the Hope Law Firm and agreed to work on a particular client's case in exchange for a portion of the firm's fee. Larew and the firm later ended the of-counsel arrangement, and Larew ultimately won a large judgment at trial. This litigation concerned the disposition of the fee. On appeal, Larew appealed the district court's determination on the terms of an implied-in-fact contract, quantum meruit calculation, successor liability, and other causes of action. The Supreme Court reversed the district court's ruling as to successor liability and otherwise affirmed, holding that Larew showed that Hope Law Firm & Associates, P.C. was a successor entity to Hope Law Firm, P.L.C. View "Larew v. Hope Law Firm, P.L.C." on Justia Law
Sioux City Truck Sales, Inc. v. Iowa Department of Transportation
The Supreme Court vacated the decision of the court of appeals reversing the judgment of the district court affirming the decisions of the administrative law judge (ALJ) and the Iowa Department of Transportation (DOT) that good cause existed to permit a franchiser to create dueling franchises in a geographic area under Iowa Code 322A.4, holding that the district court did not err in its judgment.At issue was whether, in considering if the establishment of an additional franchisee in a geographic area is in the public interest, the DOT must consider the investment and impacts across the entire geographic area of the existing franchisee. The ALJ and DOT concluded that the twenty-three county area where the additional franchisee would compete with the existing franchisee was the relevant geographic area to consider when determining the presence of good cause under section 322A.4. The court of appeals reversed, arguing that the relevant geographic area to consider was the entire seventy-one county area in which the existing franchise conducted business. The Supreme Court vacated the decision below and affirmed the trial court, holding that the proper focus was the area in which the existing franchisee and the proposed new franchise would be in direct competition. View "Sioux City Truck Sales, Inc. v. Iowa Department of Transportation" on Justia Law
Meade v. Christie
The Supreme Court reversed the ruling of the Iowa Business Specialty Court denying Appellants' motion to dismiss this action involving a shareholder's challenge to a corporate merger involving the purchase of a publicly traded company's shares in a "going private transaction," holding that Appellee's claims must be dismissed.Appellee, a shareholder, brought this action alleging that Appellants, the corporation's directors, breached their fiduciary duties by agreeing to a flawed merger process that resulted in an unsatisfactory price for the minority shareholders' stock. Appellants filed a motion to dismiss, arguing that Appellee failed to plead around the statutory defenses available to the directors. The business court denied the motions to dismiss filed by Appellants. The Supreme Court reversed, holding that Appellant's allegations were insufficient to establish "intentional infliction of harm on the corporation or the shareholders" by the directors. View "Meade v. Christie" on Justia Law
Goche v. WMG, L.C.
The Supreme Court reversed the decision of the district court ordering an Iowa limited liability company (LLC) to pay its former manager the attorney fees he incurred litigating against the LLC pursuant to Iowa Code 489.408(1), holding that, under the plain language of the statute, a manager or former manager cannot recover from the LLC fees incurred litigating against the company.The district court ruled that the LLC was liable to the manager for indemnification of attorney fees and expenses he incurred defending himself against claims brought against him by the LLC for alleged breach of his duties as manager. The district court awarded the manager attorney fees and expenses but declined to award him "fees on fees," or the additional fees incurred enforcing the statutory fee claim. The Supreme Court reversed the award of attorney fees, holding that the the fees and expenses at issue were not incurred on behalf of the LLC, and therefore, the manager could not recover them from the LLC under section 489.408(1). View "Goche v. WMG, L.C." on Justia Law
Guge v. Kassel Enterprises, Inc.
The Supreme Court affirmed in part and reversed in part the ruling of the district court making a "fair value" determination of Plaintiffs' shares in an election to purchase in lieu of dissolution proceeding, holding that the district court erred in determining the fair value of the shares without any discount for transaction costs or built-in gain taxes.This case concerned the three children of Lawrence and Georgia Kassel - Susan Guge, Peggy McDonald, and Craig Kassel. After their parents died, Susan and Peggy (together, Plaintiffs) filed a lawsuit against Craig, Craig's wife, two of Craig's corporations, and Kassel Enterprises, the family farming operation that the parents incorporated. Plaintiffs sought judicial dissolution of Kassel Enterprises under Iowa Code 490.1430(1)(b)(2) and 490.1430(1)(b)(4). Kassel Enterprises elected to purchase Plaintiffs' shares for fair value in lieu of a judicial dissolution of the corporation. Both sides appealed the district court's determination of fair value. The Supreme Court reversed in part, holding (1) remand was required for the court to determine and apply the appropriate deduction of transaction costs to the value of the corporation's assets in setting the fair value of Plaintiffs' shares; and (2) the district court's judgment was otherwise affirmed. View "Guge v. Kassel Enterprises, Inc." on Justia Law
EMC Insurance Group, Inc. v. Shepard
The Supreme Court affirmed the judgment of the district court granting summary judgment against an investor on grounds that he failed to exercise his appraisal rights in a merger, holding that the investor failed validly to exercise his appraisal rights that had been extinguished.The investor, the beneficial owner of 1.1 million shares, received $39.6 million when the merger transaction closed. The investor objected to the merger and sought to exercise his appraisal rights, but he never obtained the written consent of the record shareholder. The corporation brought this declaratory judgment action. The district court granted summary judgment for the corporation. The Supreme Court affirmed, holding (1) lacking the record shareholder's consent, the investor lost his right to an appraisal; and (2) the investor's waiver and estoppel arguments failed. View "EMC Insurance Group, Inc. v. Shepard" on Justia Law
Barkalow v. Clark
The Supreme Court affirmed in part and reversed in part the judgment of the district court decreeing dissolution of a limited liability company (LLC), holding that, for the most part, the district court properly adjudicated the parties' rights but erred in ordering dissolution of the LLC.Plaintiffs filed suit seeking an order expelling three individuals as members of the LLC, an order dissolving the LLC, an order appointing a receiver for the LLC, and damages for breach of contract, breach of fiduciary duty, economic duress, and civil conspiracy. After a nonjury trial, the district court adjudicated the parties' rights and granted the request to dissolve the LLC based on the impracticability of continuing business. The Supreme Court reversed in part, holding that judicial dissolution should not have been ordered under Iowa Code 489.701(d)(2). View "Barkalow v. Clark" on Justia Law
Anderson v. Anderson Tooling, Inc.
The Supreme Court affirmed in part and vacated in part the decision of the court of appeals affirming the judgment of the district court modifying a judgment for civil conspiracy following a jury trial, holding that the district court did not abuse its discretion in granting the motion to amend the judgment.Jeffrey Anderson commenced an action against Dean and Carol Anderson and Anderson Tooling, Inc. (ATI) alleging, among other claims, tortious discharge. Dean, Carol, and ATI filed several counterclaims. ATI sued Lori and brought a claim against Lori and Fabrication & Construction Services Inc. (FabCon) for, among other claims, conspiracy. Damages against Jeff totaled $772,297.72. The district court subsequently granted ATI's motion to modify the judgment to make Lori and FabCon jointly and severally liable for the $772,297.72 judgment. As relevant to this appeal, the court of appeals reversed the district court's order imposing joint and several liability on Lori and FabCon, determining that a conspiracy did not exist for Lori and FabCon to join. The Supreme Court vacated the court of appeals's judgment in part, holding that the district court did not abuse its discretion in granting the motion to amend the judgment. View "Anderson v. Anderson Tooling, Inc." on Justia Law
Wells Fargo Equipment Finance Inc. v. Retterath
The Supreme Court affirmed the judgment of the district court granting summary judgment for a judgment creditor and dismissed the petition filed by the judgment debtor and his wife to vacate a charging order to execute foreign judgments in Iowa district court against the judgment debtor's membership interests in an Iowa limited liability company (LLC), holding that there was no reason to reverse the judgment of the district court.The judgment debtor and his wife sought to vacate the charging order on the grounds that the creditor could not attach the debtor's interests in the Iowa LLC since the debtor and his wife owned them as a tenancy by the entireties in their domicile of Florida. The Supreme Court affirmed the district court's judgment in favor of the creditor, holding (1) the district court properly applied Iowa law because membership interests in an LLC are located in the state where the LLC is formed; (2) the district court correctly dismissed the petition to vacate the charging order since Iowa law does not recognize the ownership of property by a married couple as tenants in the entireties; and (3) the foreign judgments were properly registered, and the charging order was properly issued. View "Wells Fargo Equipment Finance Inc. v. Retterath" on Justia Law
Cote v. Derby Insurance Agency, Inc.
A corporation does not have family members and therefore cannot qualify for the family-member exception to the employee-numerosity requirement in the Iowa Civil Rights Act (ICRA).Plaintiff worked for Defendant, a small insurance agency, and alleged that she was sexually harassed by her supervisor, the sole owner’s husband. Defendant, a subchapter S corporation, employed the owner, the owner’s husband and two other family members, Plaintiff, and another nonfamily member. Defendant moved for summary judgment on the ICRA claims on the grounds that it employed fewer than four individuals, not counting the family members. The district court denied summary judgment, concluding that a corporate employer is ineligible for the family-member exception to the ICRA contained in Iowa Code 216.6(6)(a). The court of appeals affirmed. The Supreme Court affirmed, holding that Defendant could not avail itself of the family-member exception. View "Cote v. Derby Insurance Agency, Inc." on Justia Law