Justia Business Law Opinion Summaries

Articles Posted in Supreme Court of Virginia
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Regulus, an LLC solely owned by Klug, is the holding company for all the rights, transactions, and income related to Klug’s literary works, which include several internationally-received legal fiction novels. In 2018, Klug filed a Virginia income tax return, attaching thereto a Schedule C to indicate that he derived business income in Charlottesville. The city could not locate a business license issued to Klug or to Regulus and requested information about Klug’s business and his income therefrom for the tax years 2015-2018. Klug responded that Charlottesville’s Ordinance does not apply to him because he “offer[s] no goods or services to the public[,]” has “no physical storefront or shingle[,]” “do[es] not advertise[,]” has no employees, has no inventory, and offers a “product” that is intangible intellectual property.The Virginia Supreme Court held that a freelance writer’s business does not provide a service and is not covered by the ordinance’s catchall provision. The court did not reach the question of whether the ordinance is unconstitutionally vague as applied to the freelance writer. The court affirmed the circuit court’s decision to order the city to refund Klug his tax payments but concluded that the circuit court erred by awarding costs not essential for the prosecution of the suit. View "City of Charlottesville v. Regulus Books, LLC" on Justia Law

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The Supreme Court affirmed in part and reversed in part the latest decision of the trial court in this third appeal addressing remaining contests between the parties in this case, holding that the trial court erred in part.World Telecom Exchange Communications, LLC, a wholly owned American subsidiary of a Dubai parent company, sued Yacoub Sidya, alleging tortious interference with a business expectancy, misappropriation of protected trade secrets, and civil conspiracy. On two prior occasions the case was before the Supreme Court, which reversed in part the rulings at issue and remanded the cause. In this latest appeal, the Supreme Court held (1) there was no error or abuse of discretion in the trial court's partial final judgment; (2) the trial court did not err in refusing to strike the evidence in support of a claim for attorney fees; and (3) the trial court erred in awarding post-judgment interest on the punitive and treble damages. View "Sidya v. World Telecom Exchange Communications, LLC" on Justia Law

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The Supreme Court reversed the judgment of the circuit court dismissing Petitioners' amended complaint against iTech AG, LLC and Robbins Law Group, PLLC (collectively, Appellees) alleging malicious abuse of process, slander of title, tortious interference with contractual relations, and civil conspiracy arising out of the filing of a lis pendens, holding that the circuit court erred in sustaining Appellees' demurrers.In their demurrers to Petitioners' complaint, Appellees argued that the filing of a lis pendens is entitle to absolute privilege and that the complaint dd not plead valid claims for slander of title, tortious interference with contractual relations, or civil conspiracy. The circuit court sustained the demurrers on the basis that the information contained in a memorandum of lis pendens is subject to absolute privilege. The Supreme Court reversed, holding that the information contained in the lis pendens was not sufficiently "relevant and pertinent to the matter under inquiry" for absolute privilege to apply in this case. View "Givago Growth, LLC v. iTech AG, LLC" on Justia Law

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The Supreme Court reversed the judgment of the circuit court finding that laches barred Plaintiff’s motion for a temporary injunction, sustaining a special plea in bar, and entering judgment in favor of a Corporation, holding that the circuit court erred in its interpretation of Va. Code. 13.1-724.Plaintiff sought a declaratory judgment that a letter of intent to sell assets of the Corporation to a third party buyer for $10 million were null and void because they violated section 13.1-724, which requires more than two-thirds shareholder approval for a disposition of of corporate assets that leaves a corporation without a significant continuing business. Plaintiff also sought a temporary injunction to stop the proposed sale until the circuit court could address the merits of the complaint. The Corporation responded by filing a special plea in bar. The circuit court denied Plaintiff’s emergency motion for an injunction, granting the plea in bar, and entered judgment in favor of the Corporation. The Supreme Court reversed, holding (1) the circuit court erred in its interpretation of section 13.1-724 and thus erred in entering judgment in favor of the Corporation; and (2) the circuit court abused its discretion when it found that laches barred Plaintiff’s request for a temporary injunction. View "May v. R.A. Yancey Lumber Corp." on Justia Law

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The Supreme Court reversed the circuit court’s judgment against Defendants as to Plaintiff’s claims for tortious interference and statutory business conspiracy, holding that the circuit court erred in ruling that Defendants were liable for tortiously interfering with their own contract and in therefore finding that their tortious interference could serve as the predicate unlawful act for statutory business conspiracy.Plaintiff, Read Properties, LLC, filed a complaint against Defendants, Francis Hospitality, Inc. and Delta Educational Systems, Inc., alleging breach of contract, intentional interference with contract, and statutory business conspiracy. The circuit court found in favor of Plaintiff on all claims. The Supreme Court affirmed as to the breach of contract claim and otherwise reversed, holding (1) Defendants could not tortiously interfere with their own contract; and (2) because Plaintiff’s underlying claims of tortious interference with a contract against Defendants failed, its claims of statutory business conspiracy must also fail. View "Francis Hospitality, Inc. v. Read Properties, LLC" on Justia Law

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The Supreme Court reversed the order of the circuit court dismissing, without prejudice, this derivative action on the ground that Plaintiff failed to first make a demand for the limited liability company (LLC) to take action, holding that the 2011 amendments to Va. Code 13.1-1042 did not abolish the futility exception to the demand requirement as established by use law preceding enactment of the statute.Plaintiff, derivatively on behalf of an LLC, filed a complaint alleging that Defendants had breached their fiduciary duties towards the LLC. Defendants filed a plea in bar and demurrer, alleging that the complaint was barred because Plaintiff had not made a proper demand as required by section 13.1-1042. The circuit court granted the plea in bar and dismissed the complaint. Plaintiff appealed, arguing that a demand was not required when doing so would be futile. Defendants responded that the 2011 amendments to section 13.1-1042 abolished the futility exception. The Supreme Court reversed, holding that the General Assembly did not abrogate the futility exception when it amended section 13.1-1042 in 2011, and therefore, the circuit court erred in dismissing Plaintiff’s complaint. View "Davis v. MKR Development, LLC" on Justia Law

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The Supreme Court affirmed in part, reversed in part and remanded the judgment of the circuit court dismissing La Bella Dona Skin Care, Inc.’s (LBD) civil conspiracy claims, granting summary judgment on LBD’s claim for fraudulent conveyance, and applying a clear and convincing standard of proof to LBD’s mere continuation theory of successor liability. LBD filed this complaint against eleven defendants seeking damages and injunctive relief as a result of Defendants’ involvement in a series of allegedly fraudulent conveyances designed to avoid an outstanding judgment in favor of LBD. The court held that the circuit court (1) did not err when it dismissed LBD’s civil conspiracy claims on demurrer where a fraudulent conveyance under Va. Code 55-80 cannot serve as the predicate unlawful act needed to support a claim for statutory or common law conspiracy; (2) erred in dismissing LBD’s fraudulent conveyance claim on summary judgment where a prima facie case of fraudulent conveyance may be established when the recipient is a third party creditor with a higher security interest; and (3) erred by applying a clear and convincing standard of proof to LBD’s mere continuation theory of successor liability. View "La Bella Dona Skin Care, Inc. v. Belle Femme Enterprises" on Justia Law

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At issue in this case was a contract dispute between the purchaser (Purchaser) and the seller (Seller) of a corporation pursuant to a corporative merger agreement. The agreement provided for three different liability limitations (damage caps) in the event of Seller’s breaches. Seller breached several requirements of the agreement by failing to use certain accounting principles to accurately establish the financial condition of Seller’s corporation and, accordingly, the appropriate adjustment to the consideration to be paid by Purchaser. The amount of the adjustment was controlled by the indemnity Purchaser was entitled to receive under the relevant damage caps. The circuit court entered final judgment for Purchaser. The agent for the stockholders of Seller and former stockholders of Seller appealed, arguing that the circuit court improperly construed the merger agreement as to which damage cap was controlling under the facts of the case. The Supreme Court agreed with Appellants and reversed, holding that the circuit court applied the incorrect damage cap. View "Shareholder Representative Services v. Airbus Americas, Inc." on Justia Law