Justia Business Law Opinion Summaries

This case involves a dispute between members of Black Gold Enterprises, LLC, a company formed in 2013, including plaintiff Adam Pummill, plaintiff Kurtis Robertson, and defendant Joshua T. Patterson. The source of the dispute was the payment of rent from Patterson's businesses to Black Gold for the use of a property. Patterson eventually stopped paying rent, leading to the involvement of a receiver, James Galipeau, to manage the property.The Supreme Court of the State of Montana considered the appeal by Patterson against the award of fees to the receiver and his attorney from interplead funds held by the Clerk of Court, arguing that the District Court abused its discretion. Patterson also contested the District Court's decision that the lien on the property, arising from a loan agreement between Patterson's business and Black Gold, was invalid.The Supreme Court, applying the Hickey factors to assess the reasonableness of the receiver's fees, found no abuse of discretion by the District Court. The court concluded that the receiver's work in the complex, time-consuming case was essential, and the sale of the property (Black Gold's only asset) was reasonably executed. The court also found that the District Court had the inherent power to distribute interplead funds for services related to the receivership, rejecting Patterson's claim that the dispersal should have waited until a final disposition.Thus, the Supreme Court affirmed the District Court's decisions regarding the award of the receiver and attorney fees and the method of their payment. The court did not address the issue of the validity of the lien on the property. View "Pummill v. Patterson" on Justia Law

In the case before the Supreme Court of the State of Montana, the plaintiff, Billy Ann Merila, sought the expulsion of her business partner, Daniel Brian Burke, from their partnership, MBC. MBC is a business entity that owns a single piece of real property and rents it out for income. Merila alleged that Burke engaged in conduct that made it not reasonably practicable for her to carry on the business in partnership with him. Burke, a certified public accountant, was convicted on six charges of aiding and assisting tax fraud, unrelated to MBC, and sentenced to prison. He also unilaterally changed the partnership's depository without Merila's consent, limited her authority over MBC funds, refused to communicate with her directly, and appointed a third-party agent to act on his behalf. He also attempted to amend the partnership's tax returns and capital accounts without Merila's consent or knowledge.The District Court granted summary judgment in favor of Merila, finding that Burke's conduct made it not reasonably practicable for her to carry on the business in partnership with him. The court also ordered the parties to negotiate a purchase price for Burke's interest in MBC. Burke appealed the decision.Upon review, the Supreme Court of the State of Montana affirmed the District Court's decision. The Supreme Court noted that the relevant standard for expelling a partner is whether the partner's conduct has made it not reasonably practicable for the other to carry on the business in partnership, not whether the partnership suffered damages or harm. The Court found that Burke's refusal to interact with Merila, his unilateral decisions affecting the partnership, and his conviction of tax fraud constituted conduct that made it not reasonably practicable for Merila to carry on the business with him as a partner. It affirmed the lower court's decision to expel Burke from the partnership and order him to negotiate a purchase price for his interest in MBC. View "Merila v. Burke" on Justia Law

The Supreme Court accepted supervisory control in the underlying action, holding that Montana had specific personal jurisdiction over Melissa Groo regarding Triple D Game Farm, Inc.'s intentional tort claims when the tortious activity allegedly accrued in Montana despite Groo interacting only with the forum via social media.At issue was Groo's purposeful and substantial use of social media to affect Triple D's business operations. Triple D brought this lawsuit alleging tortious interference with contractual relations and tortious interference with prospective economic advantage claims. Groo moved to dismiss the claims for lack of personal jurisdiction, arguing that her statements did not create the necessary minimum contacts with Montana as a forum. The district court denied the motion to dismiss, condoling that Groo had the requisite minimum contacts with the state and that the court's exercise of personal jurisdiction over her did not violate due process principles. The Supreme Court affirmed, holding that the district court was not proceeding under a mistake of law, and the court had personal jurisdiction to resolve this dispute. View "Groo v. Eleventh Judicial District Court" on Justia Law

The Supreme Court affirmed the judgment of the district court holding that J.C. O'Brien & Sons, Inc. (JCO) was entitled to purchase Michael O'Brien's (Mike) shares in JCO at the value set pursuant to a 1973 shareholder agreement, holding that the district court did not err.Plaintiffs initiated this litigation alleging, among other claims, that Defendants breached the 1973 agreement in its efforts to purchase Mike's shares and seeking valuation of his shares by current appraisal. The district court ruled against Plaintiffs after a bench trial and ordered that JCO was entitled to purchase Mike's shares at the price designated by directors in 2017 pursuant to paragraph two of the 1973 agreement. The Supreme Court affirmed, holding that the district court did not err. View "O'Brien v. O'Brien" on Justia Law

The Supreme Court affirmed in part and reversed in part the special master's determination in the district court that resolved a dispute between PF2 Leasing, LLC and Jim Galipeau, the receiver for Black Gold Enterprises, LLC, holding that the special master exceeded the scope of his authority when he granted Galipeau immunity for actions Galipeau took regarding PF2's personal property.Specifically, the Supreme Court held that the special master (1) correctly concluded that a court-appointed receiver is protected by judicial immunity from liability; (2) properly determined that it was not necessary for Galipeau to require a release or indemnification agreement to return PF2's personal property; but (3) exceeded the scope of his authority in further granting Galipeau immunity for the actions Galipeau took regarding PF2's personal property. View "PF2 Leasing, LLC v. Galipeau" on Justia Law

The Supreme Court affirmed the order of the district court providing for the dissolution of the Johns Brothers Farms partnership, accounting of the partners' capital accounts, and settlement and distribution of partnership assets, holding that the district court did not err.Brothers Jerry Johns and Jule Nathan "Butch" Johns began farming together as a partnership in 1980. In 1994, the brothers each formed a corporation to hold their individual interests, and the corporations became the partners in Johns Brothers Farms. In 2013, the brothers agreed to dissolve the partnership and distribute the assets between the partners. The next year, Jerry commenced this action to dissolve Johns Brothers Farms, for settlement of capital accounts, and for distribution of partnership assets. In 2020, the district court issued its findings of fact, conclusions of law, and judgment. Butch appealed. The Supreme Court affirmed, holding that the district court (1) did not err by concluding that Jerry did not breach his fiduciary duty to Butch and the partnership; (2) did not err in its calculation of the capital account balances for Jerry and Butch; and (3) did not err by awarding Jerry the forty-acre parcel in its distribution of partnership assets. View "Jackpot Farms, Inc. v. Johns Farms, Inc." on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment in favor of Barbara Needham in her capacity as the personal representative of the Estate of Charles Kelly Kluver (Estate) and denying the cross-motion for summary judgment filed by Karson Kluver and Genie Land Company (collectively, Kluver), holding that the district court did not err in granting summary judgment.The Estate filed a complaint for declaratory judgment and for dissolution of Genie against Kluver, alleging declaratory judgment, breach of contract, promissory estoppel, and judicial dissolution of corporation. The Estate filed a petition for partial summary judgment. The district court granted partial summary judgment in favor of the Estate in Counts I and II and denied Kluver's cross-motion for summary judgment in its entirety. The Supreme Court affirmed, holding that the district court did not err in granting partial summary judgment in favor of the Estate. View "Needham v. Kluver" on Justia Law

The Supreme Court affirmed the order of the district court awarding punitive damages against Farmers State Financial Corporation for fraudulent stock conversion, holding that there was no error.Specifically, the Court held (1) the district court order restoring John Cote, Jr.’s converted stock constituted an award of compensatory damages, which enabled the district court to consider punitive damages against Farmers; (2) the district court did not err in awarding punitive damages against Farmers and did not abuse its discretion in determining the amount of the award; and (3) the award of punitive damages was not excessive and fell within acceptable constitutional and statutory parameters. View "In re Estate of Cote" on Justia Law

The Supreme Court affirmed in part, reversed in part, and remanded in part the order of the district court that awarded Kevin DeTienne $1,291,635 in lost profits, prejudgment interest accruing from September 11, 2015, $150,000 in punitive damages, and $42,009 in attorney fees and costs, holding that remand was necessary on a portion of the judgment and reversal was required on another portion.DeTienne filed suit against Bryan Sandrock seeking a declaratory judgment that Sandrock’s transfer of certain property was unlawful. A default judgment was entered awarding damages. The Supreme Court remanded to the district court for an order setting forth evidence supporting its determination of damages. After the district court entered its judgment, Sandrock appealed. The Supreme Court held (1) remand was necessary to clarify the compensatory damages award; (2) the district court did not err in awarding punitive damages; (3) remand was necessary to recalculate the prejudgment interest on a portion of the damages award, and reversal was required on a portion of the prejudgment interest award; and (4) the district court properly awarded attorney fees to DeTienne, and DeTienne was entitled to an award of reasonable costs and attorney fees incurrent during the litigation on remand, as well as attorney fees on appeal. View "DeTienne v. Sandrock" on Justia Law

The Supreme Court affirmed the district court’s entry of judgment as a matter of law in favor of Defendants, corporate entities and individuals, at the close of Plaintiff’s case-in-chief in the bench trial held on her claims, holding that there was no prejudicial error in the proceedings below.On the scheduled day for trial, the district court noted that Plaintiff’s claims were “not entirely clear” but understood them to constitute a derivative action seeking forced dissolution of the corporations. Plaintiff’s evidence in support of her case focused primarily on allegations of corporate records mismanagement. At the close of Plaintiff’s case-in-chief, the district court granted judgment as a matter of law for Defendants. The court then granted an individual defendant attorney fees pursuant to the equity exception to the American Rule. The Supreme Court affirmed and granted Defendants’ request to declare Plaintiff a vexatious litigant, holding (1) the district court did not err in granting judgment in favor of Defendants; (2) the district court did not err in granting attorney fees; (3) Plaintiff was not denied a fair trial; and (4) the district court did not abuse its discretion in the administration of the trial. View "McCann v. McCann" on Justia Law