Justia Business Law Opinion Summaries

Avnet Inc. was a New York corporation, headquartered in Arizona, and a major distributor of electronic components and computer technology worldwide. Avnet sold products through its headquarters in Arizona and through its many regional sales offices, including one in Redmond, Washington. Following an audit, the Washington State Department of Revenue (Department) determined that from 2003 to 2005, Avnet underreported its business and operations (B&O) tax liabilities by failing to include its national and drop-shipped sales in its tax filings. At issue in this appeal was whether national and drop-shipped sales were subject to Washington's B&O tax under the dormant commerce clause and the Department former "Rule 193." The Washington Supreme Court concluded that neither the dormant commerce clause nor Rule 193 barred the imposition of a B&O tax to Avnet's national and drop-shipped sales delivered in Washington. View "Avnet, Inc. v. Dep't of Revenue" on Justia Law

Alsco, Inc. was a textile rental and sales company that supplied uniforms, linens, and other products to other businesses in industrial, hospitality, health care, and other fields. Alsco did not provide products or services for resale. Alsco and its employees were covered by a collective bargaining agreement (CBA). The issue this case presented for the Supreme Court's review turned on whether Alsco was a "retail or service establishment" (RSE) under chapter 49.46 RCW for purposes of an exemption to the overtime pay requirement. The trial court granted the employees' motion for summary judgment regarding entitlement to overtime pay, finding that Alsco was not an RSE for purposes of the overtime pay exception. In granting the employees' subsequent motion for summary judgment on the issue of calculating the amount of overtime due, the court calculated the "regular rate of pay" by dividing the total weekly compensation actually paid by 40 hours, not by hours actually worked. The Washington Supreme Court accepted direct review and reversed the trial court. The Supreme Court held that Alsco was an RSE for purposes of the overtime pay requirement. View "Cooper v. Alsco, Inc." on Justia Law

The State of Washington sued more than 20 foreign electronics manufacturing companies (including petitioners) for price fixing. The State claimed the foreign companies conspired to fix prices by selling CRTs (cathode ray tubes) into international streams of commerce intending they be incorporated into products sold at inflated prices in large numbers in Washington State. The trial court dismissed on the pleadings, finding it did not have jurisdiction over the foreign companies. The Court of Appeals reversed, concluding the State alleged sufficient minimum contacts with Washington to satisfy both the long arm statute and the due process clause. After review, the Washington Supreme Court affirmed the Court of Appeals. View "Washington v. LG Elecs., Inc." on Justia Law

Petitioner Albert Boogaard argued that the comprehensive marine liability insurance policy he purchased from International Marine Underwriters (IMU) for his general partnership, ABCD Marine, covered bodily injuries he suffered while working as an independent contractor for Northland Services Inc. (NSI). Specifically, petitioner claimed that even as a general partner he qualified and was covered as a third party under the "insured contract" provision of the policy. IMU contended that as a general partner and insured, Boogaard was not a third party under the insured contract provision. The Supreme Court affirmed summary judgment in favor of IMU. As a general partner, Boogaard did not qualify as a third party under the "insured contract" provision in accordance with Washington partnership law. View "Int'l Marine Underwriters v. ABCD Marine, LLC" on Justia Law

Chicago Title Insurance Company (CTIC) appointed Land Title Insurance Company as its agent for the purpose of soliciting and effectuating CTIC's insurance policies. Land Title violated the anti-inducement laws. The Supreme Court held that CTIC was responsible for Land Title's regulatory violations, pursuant to statutory and common-law theories of agency. "When the statute forbids the insurer or its agent from certain conduct, it means that the insurer may not do indirectly-through its agent-what it may not do directly." View "Chi. Title Ins. Co. v. Office of Ins. Comm'r" on Justia Law

Newman Park, LLC was formed for the sole purpose of developing a piece of property. In 2004, it took out a loan to purchase the property at issue in this suit. In 2008, without knowledge of the other owners in Newman Park, one member went to Columbia Community Bank and requested a loan for his 95%-owned company, Trinity. Trinity had nothing to do with Newman Park, but the Bank's loan to Trinity was secured by a second deed of trust on the Newman Park property. The issue before the Supreme Court in this case was whether the Bank, who was tricked into refinancing the property that the borrower lacked authority to pledge as security, could benefit from equitable subrogation when that Bank had no preexisting interest in the property. The property-owner/debtor argued that the Bank's lack of the preexisting interest barred it from equitable subrogation because of the "volunteer rule" which would characterize it as an intermeddler. The Court rejected the volunteer rule as a bar to equitable subrogation. The Court affirmed the appellate court which held that the defrauded Bank was entitled to be equitably subrogated as first priority lienholder. View "Columbia Cmty. Bank v. Newman Park, LLC" on Justia Law

This case concerned attorney fees under the dissenters' rights provisions of the Washington Limited Liability Company Act (LLC Act). The issue was first considered two years ago when the Supreme Court reversed the award of attorney fees imposed on Humphrey Industries Ltd. (Humphrey) and remanded to the trial court to reconsider an award of attorney fees in Humphrey's favor. On remand, the trial court awarded Humphrey part of its fees but also reinstated part of the attorney fee award against Humphrey that the Supreme Court had reversed. Humphrey appealed directly to the Supreme Court, contending that the trial court on remand failed to follow the Supreme Court's order. Upon review, the Supreme Court held that the trial court erred by imposing fees on Humphrey. View "Humphrey Indus., Ltd. v. Clay St. Assocs." on Justia Law

Doctor's Associates Inc. (DAI) franchises Subway sandwich shops across the country. Waqas Saleemi and Farooq Sharyar operated three Subway franchises in Washington State. Their franchise agreements provided that any disputes would be arbitrated in Bridgeport, Connecticut, under Connecticut law, except for Connecticut franchise law. After a dispute arose, a Washington State superior court judge found the choice of law and forum selection clause unenforceable and entered an order compelling Washington arbitration. DAI did not seek discretionary review at the time. Saleemi and Sharyar prevailed at arbitration. DAI appealed to the Washington Supreme Court, asking the Court to vacate the trial court's order compelling arbitration that would require this dispute to be arbitrated, again, but in Connecticut. The Supreme Court concluded that DAI failed to show that it has been prejudiced by the trial court's order compelling arbitration. Accordingly, the Court affirmed the order compelling arbitration in Washington. View "Saleemi v. Doctor's Assocs., Inc." on Justia Law

P.E. Systems, LLC (PES) offered to analyze and reduce the credit card processing costs of CPI Corp. (CPI). The parties signed an agreement that appeared to be a contract. CPI later repudiated the contract, disputing its validity. PES sued for breach. CPI attached a copy of the contract to its answer to PES's complaint, and then filed a motion for judgment on the pleadings, arguing the "contract" was a mere agreement to agree and therefore unenforceable. PES responded to the motion and attached an identical copy of the contract and a PowerPoint presentation it had given to CPI. The trial court found the contract was not binding but merely an agreement to agree and granted CPI's motion, thereby dismissing the case. PES appealed. The Court of Appeals reversed holding that both the contract was enforceable and that CPI had breached it. Upon review, the Supreme Court affirmed the Court of Appeals to the extent it held the contract was a valid with an open term, but reversed the balance of the Court of Appeals' opinion. View "P.E. Sys., LLC v. CPI Corp." on Justia Law

The Federal District Court for the Western District of Washington has asked the Washington Supreme Court to answer three certified questions relating to two home foreclosures pending in King County. In both cases, the Mortgage Electronic Registration System Inc. (MERS), in its role as the beneficiary of the deed of trust, was informed by the loan servicers that the homeowners were delinquent on their mortgages. MERS then appointed trustees who initiated foreclosure proceedings. The primary issue was whether MERS was a lawful beneficiary with the power to appoint trustees within the deed of trust act if it did not hold the promissory notes secured by the deeds of trust. A plain reading of the applicable statute leads the Supreme Court to conclude that only the actual holder of the promissory note or other instrument evidencing the obligation may be a beneficiary with the power to appoint a trustee to proceed with a nonjudicial foreclosure on real property. "Simply put, if MERS does not hold the note, it is not a lawful beneficiary." The Court was unable to determine the "legal effect" of MERS not being a lawful beneficiary based on the record underlying these cases. Furthermore, the Court was asked to determine if a homeowner had a Consumer Protection Act (CPA), chapter 19.86 RCW, claim based upon MERS representing that it was a beneficiary. The Court concluded that a homeowner may, "but it would turn on the specific facts of each case." View "Bain v. Mortg. Elec. Registration Sys." on Justia Law