Justia Business Law Opinion Summaries

In 2014, Don McBroom, grandson of Rufus Call Willey, founder of R.C. Willey, filed a petition with the Second District Court to review his motion under Utah R. Civ. P. 60(b) seeking to set aside two Second District Court orders relating to McBroom’s interests in the business. The orders were entered in 1973 and 1975, respectively. The district court denied McBroom’s Rule 60(b) motion. The Supreme Court affirmed, holding that the district court did not err in denying McBroom’s Rule 60(b) motion because (1) McBroom did not appropriately file for relief under paragraph (6), and, instead, his claims fall under paragraphs (3) and (4); (2) McBroom’s claims under paragraph (b)(3) are untimely; and (3) McBroom’s claims under paragraph (b)(4) fail on their merits. View "In re Estate of Rufus C. Willey" on Justia Law

Attorney Donald Gilbert represented the Utah Down Syndrome Association and several of its founders in litigation between the Association and the Utah Down Syndrome Foundation, Inc. Gilbert filed this petition for extraordinary relief challenging (1) a 2008 district court judgment ordering Gilbert to disgorge $30,000 taken from Foundation bank accounts to pay his attorney fees, (2) an injunction that originally barred Gilbert’s clients from paying him with Foundation funds, (3) an order denying Gilbert’s motion to vacate the 2008 judgment, and (4) an order denying Gilbert’s motion for relief from the 2008 judgment. The Supreme Court denied Gilbert’s petition for extraordinary relief, holding (1) Gilbert unreasonably delayed seeking extraordinary relief from the injunction, the disgorgement order, and the denial of his motion to vacate; and (2) Gilbert failed to pursue the plain, speedy, and adequate remedy of direct appeal from the denial of his motion for relief from judgment. View "Gilbert v. Third Dist. Court Judges" on Justia Law

Plaintiff ClearOne is a Utah corporation and Defendant Revolabs is a competitor incorporated in Delaware with its principal place of business in Massachusetts. The underlying dispute arose when Revolabs recruited and hired Timothy Mackie while he was still employed by ClearOne. ClearOne brought this suit in Utah district court, alleging intentional interference with a contractual relationship, predatory hiring, and aiding and abetting a breach of fiduciary duty. Revolabs filed a motion to dismiss for lack of personal jurisdiction. The trial court granted the motion. The Supreme Court affirmed, holding (1) ClearOne failed to allege that Revolabs had sufficient minimum contacts to subject it to specific personal jurisdiction in Utah; and (2) the trial court did not abuse its discretion in denying discovery to determine whether Revolabs was subject to general personal jurisdiction in Utah. View "ClearOne, Inc. v. Revolabs, Inc." on Justia Law

Plaintiffs, property owners in a development, filed a derivative suit against Defendants, the directors of the non-profit homeowners association that provided road maintenance and other services to the development, alleging that the directors favored their own properties in their allocation of road construction and maintenance funds. Instead of defending the suit on the merits, Plaintiffs appointed an independent committee to evaluate whether maintenance of the derivative suit was in the best interest of the nonprofit corporation pursuant to Utah Code 16-6a-612(4). Based on the committee's report, the district court dismissed the suit. The Supreme Court reversed, holding that the district court erred in concluding that the members of the committee, all of whom owned property allegedly receiving preferential treatment, were "independent" under section 612(4). Remanded to allow the district court to assess whether the directors were independent, applying the definition of independence clarified by the Court in this opinion. View "Hi-Country Prop. Rights Group v. Emmer" on Justia Law

In 2010, Plaintiff was negotiating the sale of three limited liability companies of which he was the sole shareholder. The companies were S Corporations. Plaintiff retained an Accounting Firm to advise him on his tax liability from the contemplated sale. Altaview Concrete, one of the companies, was named as the client. Jeffrey Bickel, a partner at the Accounting Firm, advised Plaintiff that he could restructure the deal to reduce his tax liability to $663,000. The buyer agreed to the restructuring proposals, and the sale closed. Later Bickel and the Accounting Firm (collectively, Defendants) discovered they had greatly underestimated Plaintiff's tax liability. Plaintiff filed a professional negligence claim in district court. The district court granted Defendants' motion for summary judgment, finding that Plaintiff's claim failed to satisfy the writing requirement of Utah Code 58-26-602, which provides that accountants are not liable to third parties unless the accountant identified in writing to the client that the professional services were intended to be relief upon by the third party. The Supreme Court reversed, holding that Defendants were liable to Plaintiff as a third party under section 602 because Defendants identified in writing that the professional services were intended to be relied upon by Plaintiff. View "Reynolds v. Bickel" on Justia Law

In 1999, Greg Schenk purchased shares in Cookietree, Inc. in violation of a 1991 shareholder agreement (agreement). In 2005, Cookietree's board of directors, including Schenk, voted to waive the provisions of the agreement that precluded the stock purchase. Shareholders representing ninety percent of Cookietree's shares, including Schenk, ratified the 1991 stock purchase (collectively, the 2005 waivers). A minority shareholder, Samuel McLaughlin, brought suit challenging the stock purchase. The Supreme Court held that the 2005 waivers were tainted by Schenk's participation in the votes and remanded for a fairness hearing. Cookietree then took several corporate actions it intended to have the same effect of a fairness hearing. Thereafter, the district court held that McLaughlin was still entitled to a fairness hearing. When the case was reassigned to another district court judge, the replacement judge disagreed with the determination that a fairness hearing was necessary and entered summary judgment in favor of Cookietree and Schenk. The Supreme Court affirmed, holding (1) the district court did not violate the law of the case doctrine; (2) the court did not violate the Court's mandate in McLaughlin I by declining to hold a fairness hearing; and (3) post-remand corporate action mooted the need for a fairness hearing. View "McLaughlin v. Schenk" on Justia Law

This appeal centered a film created by SummitWorks and Supernova Media. SummitWorks and Supernova formed LLCs in several states. Supernova and SummitWorks later litigated the issue of who had the right to control the LLCs. The law firm PADRM served as counsel for the LLCs. After PADRM stopped receiving legal fees it tried to foreclose on two liens on the film. PADRM sued SummitWorks and the LLCs (the first case) seeking a declaration the liens were valid. In response, SummitWorks filed a separate action (the second case) against PADRM seeking a declaration that the liens were invalid and a preliminary injunction against the sale of the firm. Supernova moved to intervene in both cases. In the second case, SummitWorks and PADRM were granted a motion to close the preliminary injunction hearing and to seal the related records. Supernova filed a motion to unseal the record. PADRM and SummitWorks subsequently signed a settlement agreement, and the district court dismissed both cases. The court also denied Supernova's motions. The Supreme Court reversed the denial of the motions to intervene and set aside the sealing order, holding (1) Supernova had a right to intervene in this litigation; and (2) the public had a right to access the court records related to the preliminary injunction hearing until they were properly sealed. View "Supernova Media, Inc. v. Pia Anderson Dorius Reynard & Moss, LLC" on Justia Law

This appeal arose from a disgorgement order issued by the district court requiring Attorney to disgorge $30,000 in legal fees he received for his representation of the Utah Down Syndrome Association and its founders and the Utah Down Syndrome Foundation. The order stemmed from a dispute between the founders of the Association and the Foundation. In the second of two lawsuits, the Foundation sued the Association and its founders. After discovering that some of the funds taken from the Foundation's disputed accounts were used to pay Attorney for his representation of the Association and its founders, the Foundation filed successive motions for disgorgement. The motion was granted. Attorney filed a motion to vacate the disgorgement order, which the district court dismissed. The Supreme Court dismissed Attorney's appeal for lack of appellate jurisdiction because, as a nonparty to this lawsuit, Attorney was not entitled to an appeal as of right. View "Utah Down Syndrome Found., Inc. v. Utah Down Syndrome Ass'n" on Justia Law

Appellant brought suit against his former employer, EnvironMax, and its directors to recover the value of shares he received to offset wages owed to him by the company - shares he claimed were diluted by corporate misdeeds. The district court dismissed Appellant's suit on summary judgment, concluding that the claim was derivative in nature and that Appellant lacked standing to assert it directly. In so ruling, the court concluded that EnvironMax was not a closely held corporation subject to an exception to the general rule requiring shareholder suits to be filed derivatively and that Appellant's direct claims were otherwise foreclosed by his failure to utilize the Utah dissenters' rights statute. The Supreme Court reversed, holding (1) because Appellant's alleged injury was an individual and not a collective one in common with all shareholders, Appellant was entitled to sue individually and not required to pursue his claim derivatively; and (2) the dissenters' rights statute does not preempt direct actions rooted in breach of fiduciary duty, such as the one brought by Appellant. View "Torian v. Craig" on Justia Law

After Michael G. Kampros's death, Mark Green and Sophie Gibson became trustees of the Michael G. Kampros Family Trust. Willow Rapela, Kampros's daughter and the successor trustee, requested removal of Green and Gibson pursuant to section 75-7-706(2)(d) of the Utah Trust Code. The district court granted her request with respect to Gibson but declined to remove Green. The district court held that Green had more experience and better qualifications than Rapela to manage the Trust's assets. As a result the district court concluded that Green's removal would not serve the best interests of the Trust's beneficiaries. The Supreme Court affirmed, holding (1) the district court properly concluded that removal of Green did not serve the beneficiaries' best interests; (2) the district court correctly held that Green's personal interests the LLCs in which the Trust also owned interests did not constitute an impermissible conflict of interest because Kampros knew about Green's interests at the time he appointed Green trustee; and (3) the district court permissibly compared Green's and Rapela's experience and qualifications when evaluating whether removal would serve the beneficiaries' best interests. View "Rapela v. Green" on Justia Law