Justia Business Law Opinion SummariesArticles Posted in Wisconsin Supreme Court
Casanova v. Polsky
In this dispute between the residents of a senior-living facility in a receivership over the proceeds generated by the sale of the facility the Supreme Court reversed the decision of the court of appeals reversing the conclusion of the circuit court that Bondholders' mortgage lien was superior to Residents' entrance fee claims, holding that Bondholders' mortgage lien was superior to Residents' contract claims.After Atrium, the subject senior-living facility, defaulted on debt service payments to Bondholders, it filed a petition for receivership. The receiver sold the assets for more than $4 million in proceeds. Atrium owed Bondholders more than $6 million secured by a valid mortgage lien on the facility's estate, but many of the facility's Residents claimed they were owed reimbursement of the entrance fees they paid to Atrium. The circuit court entered judgment for Bondholders, and the court of appeals reversed. The Supreme Court reversed, holding that Bondholders were entitled to first payment from the proceeds of the sale of Atrium's assets. View "Casanova v. Polsky" on Justia Law
Colectivo Coffee Roasters, Inc. v. Society Insurance
The Supreme Court reversed the judgment of the district court denying the motion to dismiss this complaint brought by Colectivo Coffee Roasters against Society Insurance, holding that the district court erred.Collective, which experienced substantial monetary losses as a result of the COVID-10 pandemic and related government restrictions on in-person dining, brought this class action complaint against Society seeking declaratory and injunctive relief and damages for breach of contract, alleging that Society was required to compensate it for the business income it lost during the pandemic. Society filed a motion to dismiss, arguing that none of the policy's coverage provisions applied. The circuit court denied the motion. The Supreme Court reversed, holding that Colectivo failed to state a claim for coverage under the Society policy's business income, extra expense, civil authority, or contamination provisions. View "Colectivo Coffee Roasters, Inc. v. Society Insurance" on Justia Law
Friendly Village Nursing and Rehab, LLC v. State, Department of Workforce Development
The Supreme Court affirmed the decision of the Department of Workforce Development rejecting Eden Senior Care's application to succeed the unemployment insurance account of Friendly Village Nursing and Rehab's previous owner, holding that Eden failed to demonstrate excusable neglect for the untimely filing of its application.After purchasing Friendly Village, Eden untimely filed its successorship application. The Labor and Industry Review Commission concluded that the record was insufficient to establish that Eden's application was late because of excusable neglect. Eden appealed, arguing that the Commission erred in failing to consider whether the interests-of-justice factors supported a finding of excusable neglect. The circuit court affirmed. The Supreme Court affirmed, holding (1) the Commission applied the correct legal standard; and (2) there was no basis on which to excuse Eden's neglect in filing its successorship application after the statutory deadline. View "Friendly Village Nursing and Rehab, LLC v. State, Department of Workforce Development" on Justia Law
Hennessy v. Wells Fargo Bank, N.A.
The Supreme Court affirmed the judgment of the court of appeals affirming an order of the circuit court that domesticated a Mexican judgment in favor of Wells Fargo Bank, N.A., and against Daniel and Jane Hennessy, holding that Wells Fargo's judgment against the Hennessys was properly domesticated.On appeal, the Hennessys asserted that the circuit court erred in holding that the foreign judgment was valid and personally enforceable against them under Mexican law and erred in domesticating the Mexican judgment under principles of comity. The Supreme Court affirmed, holding (1) the Wisconsin principle that a foreign country's law must be proven before a circuit court as a question of fact is hereby affirmed; (2) the circuit court's interpretation of Mexican law was not clearly erroneous; and (3) the circuit court did not abuse its discretion by choosing to recognize the Mexican judgment in Wisconsin. View "Hennessy v. Wells Fargo Bank, N.A." on Justia Law
Veritas Steel, LLC v. Lunda Construction Co.
The Supreme Court affirmed the decision of the court of appeals affirming the circuit court's grant of summary judgment to Veritas Steel, LLC on Lunda Construction Company's successor liability claim, holding that neither the de facto merger nor the mere continuation exceptions to the rule against successor liability applied in this case to impose successor liability on Veritas, and Lunda forfeited its argument that the fraudulent transaction exception applied.Lunda alleged that Veritas and third-party defendants took unfair advantage of DPM Bridge LLC's loan defaults with the intent to gain ownership of PDM's steel fabrication business. The circuit court granted summary judgment to Veritas on the successor liability claim. The court of appeals affirmed. The Supreme Court affirmed, holding (1) because Lunda did not establish a genuine issue of material fact as to identity of ownership between Veritas and PDM, it could not satisfy the de facto merger or mere continuation exceptions to the rule against successor liability; and (2) by not raising the fraudulent transaction exception before the court of appeals, Lunda forfeited its claim for successor liability based on that exception. View "Veritas Steel, LLC v. Lunda Construction Co." on Justia Law
Marx v. Morris
In this case brought by two members of an LLC against another member after the LLC sold valuable assets to a company owned by the defendant, the Supreme Court affirmed the decision of the circuit court denying the defendant's motion for summary judgment on the plaintiffs' claim that the defendant willfully failed to deal fairly with them while having a material conflict of interest, holding that there were genuine issues of material fact as to whether the defendant violated Wis. Stat. 183.0402(1).Daniel Marx and Michael Murray brought this action against Richard Morris, alleging that Morris violated the Wisconsin Limited Liability Company Law, Wis. Stat. ch. 183 and alleging a number of common-law claims involving improper self-dealing. Marx and Murray brought their claims in their individual LLC and personal capacities. The circuit court denied Morris's motion for summary judgment. The Supreme Court affirmed and remanded for further proceedings, holding (1) the members of an LLC have standing to assert individual claims against other members and managers of the LLC based on harm to the members or harm to the LLC; and (2) there were genuine issues of material fact as to whether Morris violated section 183.0402(1) by dealing unfairly with Marx and Murray, and potentially with regard to the common law claims. View "Marx v. Morris" on Justia Law
Koss Corp. v. Park Bank
The Supreme Court affirmed the court of appeals’ decision affirming the circuit court’s dismissal of Koss Corporation’s claim that Park Bank acted in bad faith in processing transactions initiated by Sujata Sachdeva and affirmed the dismissal of Park Bank’s third-party claims, holding that Park Bank was not liable to Koss Corporation.The circuit court granted summary judgment in favor of Park Bank on Koss Corporation’ Uniform Fiduciaries Act (UFA) claim. The court of appeals affirmed. The Supreme Court affirmed, holding (1) Wis. Stat. 112.01(1)(c) describes the term “good faith” as honest bank acts, even when negligently done, and “bad faith” pursuant to section 112.01(9), an intentional tort, may be shown by acts evidencing bank dishonesty; and (2) Koss Corporation failed to offer evidence of bank dishonesty on the part of Park Bank, and therefore, Park Bank was not liable for the intentional tort of bad faith. View "Koss Corp. v. Park Bank" on Justia Law
Winebow, Inc. v. Capitol-Husting Co., Inc.
A wine grantor-dealer relationship is not included within the definition of a dealership in Wis. Stat. 135.02(3)(b).The United States Court of Appeals for the Seventh Circuit certified to the Supreme Court the question answered above in order to determine whether Winebow, Inc.’s attempt to end its business relationship with two wine distributors was governed by the unilateral termination limitations of the Wisconsin Fair Dealership Law (WFDL), Wis. Stat. 135.03. Winebow argued that its unilateral termination of its relationship with the distributors was permissible because the parties’ business relationship was not an “intoxicating liquor” dealership entitled to the protections of the WFDL. The Supreme Court held that the operative definition of “intoxicating liquor” for purposes of Wis. Stat. ch. 135 explicitly excludes wine, and therefore, a wine grantor-dealer relationship is not included within the definition of a dealership in section 135.02(3)(b). View "Winebow, Inc. v. Capitol-Husting Co., Inc." on Justia Law
Sands v. Menard, Jr.
Debra Sands appealed the grant of summary judgment in favor of Menard, Inc. Sands and John Menard, Jr., were involved in a romantic relationship from late 1997 to April 2006. Sands alleged that from 1998 until 2006 she cohabitated with Menard and they engaged in a "joint enterprise" to work together and grow Menard's businesses for their mutual benefit. Menard and his affiliated entities argued that by failing to comply with Supreme Court Rule 20:1.8(a), which regulated business transactions between lawyers and their clients, Sands was precluded from seeking an ownership interest in any of Menard's various business ventures. As to the claim she characterized as a “Watts” unjust enrichment claim, the Wisconsin Supreme Court concluded Sands failed to allege facts which, if true, would support her legal conclusion that she and Menard had a joint enterprise that included accumulation of assets in which both she and Menard expected to share equally. Furthermore, the Court held SCR 20:1.8(a) could guide courts in determining required standards of care generally; however, it could not be used as an absolute defense to a civil claim involving an attorney. Finally, the Court concluded the court of appeals properly granted summary judgment to Sands on Menard, Inc.'s counterclaim for breach of fiduciary duty, and to the Trustees on their motion for summary judgment dismissing Sands' claim. View "Sands v. Menard, Jr." on Justia Law
North Highland Inc. v. Jefferson Machine & Tool Inc.
The Supreme Court affirmed the grant of summary judgment in favor of Frederick Wells, holding that North Highland, Inc. failed present sufficient evidence to support either its claim of conspiracy to breach a fiduciary duty or its claim of misappropriation of a trade secret. North Highland alleged that Wells conspired to breach a fiduciary duty that a former North Highland employee owed to the company and that Wells misappropriated a trade secret. The court of appeals affirmed the circuit court order, concluding that North Highland failed to set forth facts establishing that there was a conspiracy or that a trade secret was misappropriated. The Supreme Court affirmed, holding that the record was insufficient to support a conspiracy claim or a misappropriation of a trade secret claim. View "North Highland Inc. v. Jefferson Machine & Tool Inc." on Justia Law