Justia Business Law Opinion Summaries

The appellant in this case was a member of two limited liability companies, holding approximately a 33% interest. After disputes arose concerning the operation of the LLCs, the appellant initiated litigation seeking dissolution and other relief. Subsequently, he was expelled as a member. The LLCs’ operating agreement required immediate compensation for expelled members’ interests, but the appellant was not paid. While the case was ongoing, the district court enjoined the LLCs from harming the appellant’s interests and appointed a special master to value those interests. Despite the injunction, the appellant’s membership interests were assigned and sold to a third party without his knowledge. The appellant amended his complaint to assert conversion and defamation claims.A jury in the District Court of Park County found for the appellant, awarding $1,784,640 for conversion and $75,000 for defamation per se. Defendants moved post-judgment under Wyoming Rules of Civil Procedure 50(b), 59, and 60, arguing the conversion damages should not exceed the special master’s valuation and that defamation damages lacked evidentiary support. The district court initially denied the Rule 50(b) motion, affirming the jury’s findings. Later, under Rule 60(b), the court reduced conversion damages to $293,017 (the special master’s value) and defamation damages to $500, citing the appellant’s rightful expulsion and lack of proof of reputational harm or economic loss.The Supreme Court of Wyoming reviewed the district court’s reductions. It held that the appellant retained a property interest in the LLCs after expulsion until compensated, and the jury’s conversion award was proper based on fair market value at the time of conversion. For defamation per se, the Court clarified that Wyoming law allows presumed damages above nominal amounts, and sufficient evidence supported the jury’s $75,000 award. The Supreme Court reversed the district court’s reductions and reinstated the original jury awards. View "Mccall v. Best of the West Productions, LLC" on Justia Law

Several individuals formed a corporation, each contributing initial capital and later making additional cash contributions to meet the company’s needs. These later contributions were documented as promissory notes, including three notes issued to one founder, which were subsequently held by a trust after his death. The notes specified a 24-month term, a fixed interest rate, and repayment terms, but did not explicitly state they were payable on demand. After the founder’s death, the trust demanded payment on the notes, but the company refused, arguing the notes were not yet due, were actually capital contributions, or were subordinate to other shareholder loans.The District Court of Albany County dismissed claims by other shareholders seeking priority repayment, finding no justiciable controversy, and resolved the remaining issues on summary judgment. The court determined the notes were loans, not capital contributions, and that all founders’ notes should be repaid equitably if any were repaid. However, it found the notes were not immediately due and payable, as they lacked a demand provision, and denied the trust’s request for immediate payment. The court did award attorney fees to the trust under the terms of the notes.The Supreme Court of Wyoming reviewed the case and reversed the district court’s finding that the notes were not due and payable, holding that the notes matured after 24 months and were enforceable at that time. The court affirmed that the notes were loans, not capital contributions, and declined to give priority to other shareholder loans, finding no contractual basis for subordination. The court also affirmed the award of attorney fees to the trust and upheld the dismissal of the other shareholders’ claims for lack of a justiciable controversy. The case was remanded for entry of judgment in favor of the trust and determination of reasonable attorney fees and costs. View "King v. Sheesley" on Justia Law

Barbie Jean Schwinn and Deborah Schwinn Bailey filed a lawsuit against Robert Schwinn, TJ Schwinn, and Terry Ann Palazzo to wind up and terminate the Ignaz Schwinn Family Partnership Co. The district court found that the appellants wrongfully dissociated from the partnership, there were no grounds to terminate or wind up the partnership, and the appellants could no longer participate in the management of the partnership. The court granted the appellants a lien against the partnership’s assets for their interests, to be satisfied when the partnership eventually wound up.The district court held a bench trial and dismissed the appellants' claims for breach of contract, breach of fiduciary duty, and breach of the duty of good faith and fair dealing. The court also dismissed the appellants' claims to dissolve and wind up the partnership, finding it was a partnership for a definite term or particular undertaking under Illinois law. The court determined the appellants' dissociation was wrongful and that they were not entitled to payment for their interests until the completion of the undertaking. The court denied the appellees' other counterclaims.The Wyoming Supreme Court reviewed the case and found that the partnership was an at-will partnership, not one for a particular undertaking. The court held that the appellants' dissociation was not wrongful and that their withdrawal triggered the dissolution and winding up of the partnership under Section 801(1) of the Revised Uniform Partnership Act (RUPA). The court reversed the district court's decision and remanded the case for further proceedings to determine if the partnership agreement varied the RUPA's default rules and whether winding up was required under Section 801(5)(iii) due to a deadlock in management. The court also instructed the district court to determine if judicial supervision of the winding up was warranted. View "Schwinn v. Schwinn" on Justia Law

In this case, Four Thirteen, LLC filed a complaint against three corporate entities and several individuals, including Joshua Wearmouth, Larry Stephens, Edmond X. Moriniere, Ronald G. Meyers, and David C. Norton. The complaint alleged that Wearmouth and Stephens solicited funds from Four Thirteen for a business venture involving Brazilian carbon credits, which turned out to be fraudulent. Four Thirteen claimed that the corporate entities did not own the carbon credits and that Wearmouth and Stephens made numerous misrepresentations. The complaint included claims of breach of contract, fraud, negligent misrepresentation, and other related allegations.The District Court of Laramie County reviewed the case and rejected the affidavits of non-involvement filed by Moriniere, Meyers, and Norton, who sought dismissal from the suit. The court found that there were factual issues regarding their involvement in the alleged fraud. Additionally, the district court imposed discovery sanctions and entered a default judgment against all defendants, including the individual appellants, for failing to comply with discovery orders.The Wyoming Supreme Court reviewed the case and affirmed the district court's decision regarding the affidavits of non-involvement. The Supreme Court determined that the district court correctly found that there were factual disputes about the involvement of Moriniere, Meyers, and Norton, which precluded their dismissal from the case.However, the Supreme Court reversed the district court's decision to impose discovery sanctions against the individual appellants. The Supreme Court found that the appellants were not given proper notice that they were subject to sanctions under Wyoming Rule of Civil Procedure 37(b) and that there was no evidence they violated any prior discovery order. The court held that the sanctions against the individual appellants were not justified and remanded the case for further proceedings consistent with its opinion. View "Stephensv. Four Thirteen, LLC" on Justia Law

In this case from the Supreme Court of Wyoming, LFP Consulting, LLC (LFP), a financial advisory company, sued former employee David Edward Leighton for breach of contract and various torts after his resignation. The key issue was a clause in the parties' contract that selected Minnesota as the forum for disputes (a forum selection clause). LFP had filed the lawsuit in Wyoming and attached a waiver of the forum selection clause. However, the Wyoming chancery court dismissed LFP’s complaint for improper venue, concluding that LFP did not have the right to unilaterally waive the forum selection clause. The Supreme Court of Wyoming disagreed with the lower court, ruling that LFP, as the assignee of the contract, had the right to unilaterally waive the forum selection clause because it was included in the contract for the sole benefit of Ameriprise Financial, the original party to the contract with Leighton. The court also noted that Leighton had no relationship with Minnesota, which further supported the decision to allow LFP to waive the forum selection clause. The court reversed the decision of the chancery court and remanded the case for further proceedings. View "LFP Consulting, LLC v. Leighton" on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment for Defendants and denying relief in this class action, holding that the district court did not err.In 2014, over two-thirds of the members of the Try County Telephone Association, Inc., a Wyoming cooperative utility providing telecommunication services on a non-profit basis, voted to sell the Cooperative, including its for-profit subsidiaries, to entities owned by Neil Schlenker. Schlenker converted the Cooperative into a for-profit corporation (TCT). After the sale, Class Representatives filed a class action lawsuit against TCT, Schlenker and his entities, and others, alleging fraud conversion and other claims and requesting that the sale be set aside. The district court granted summary judgment in favor of Defendants. The Supreme Court affirmed, holding that the district court did nor err in granting summary judgment on all claims. View "Campbell v. Davidson" on Justia Law

The Supreme Court dismissed for lack of jurisdiction this appeal from the order of the district court dismissing Appellant's appeal of the Natrona County Board of Commissioners' decision denying Appellant's application to transfer a liquor license to him, holding that the district court did not have subject matter jurisdiction.In a separate lawsuit, the district court ordered the CC Cowboys, Inc.'s (CCCI) liquor license be transferred to Appellant. Appellant applied to the Board for the transfer of CCCI's liquor license, but the Board denied the transfer on the grounds that the "transfer will adversely affect the welfare of the people residing in the vicinity of the proposed license address." Appellant appealed to the district court, which found that it lacked jurisdiction to review the proceedings. The Supreme Court affirmed, holding that the district court correctly determined that it was without jurisdiction. View "Elliott v. Natrona County Bd. of Commissioners" on Justia Law

The Supreme Court affirmed the judgment of the district court finding that the Spence Group lacked standing to bring the underlying derivative action, holding that the district court did not abuse its discretion in ruling that the Spence Group failed to show it did not have an adequate remedy at law.The dispute in this case was between two factions of the former Board of Directors of the Wyoming Trial Lawyers College - the Spence Group and the Sloan Group. The Spence Group brought a derivative action against the Sloan Group and the College alleging that some or all of the Sloan Group directors should be removed from the Board and seeking a declaration that the Spence Group members were the only duly acting members. The district court dismissed the case for lack of standing. The Supreme Court affirmed, holding that the district court properly granted the Sloan Group summary judgment on its claim that the Spence Group lacked standing to bring its derivative action. View "Spence v. Sloan" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the district court in this complaint against the Trustees of the Beckton Ranch Trust (BRT) seeking declaratory judgment, damages for breach of fiduciary duty, and an accounting, holding that the district court erred in part.In 2018, Waldo Forbes gifted his shares in the BRT to two of his stepsons. The Trustees exercised an option within the trust instrument to reacquire the gifted shares at "fair value." After the beneficiaries purchased their shares Forbes brought this complaint. The district court found that Forbes did not have standing to seek declaratory relief and that the Trustees did not breach their duty of loyalty and had rendered an inadequate accounting. Thereafter, the Trustees filed a new accounting, which the district court found to be sufficient. The Supreme Court reversed in part, holding (1) Forbes lacked standing to seek declaratory judgment; (2) with one exception, the Trustees did not breach their duty of loyalty by using a sealed bidding process to appraise the "fair value" of the shares; (3) one Trustee breached her duty of loyalty through impermissible self-dealing; and (4) the annual accounting contained clear, complete, and accurate information as required under common law. View "Forbes v. Forbes" on Justia Law

In this complaint brought by Black Diamond Energy and Black Diamond Energy of Delaware (together, the BDE Companies) and seventeen limited partnerships (the Limited Partnerships) the Supreme Court affirmed the judgment of the district court dismissing with prejudice the complaint, holding that the district court did not abuse its discretion in dismissing the case with prejudice.The complaint alleged that S&T Bank's lending policies in the wake of the 2008 economic recession caused severe financial loss to the seventeen limited partnerships (the Limited Partnerships) managed by Black Diamond Energy and Black Diamond Energy of Delaware (together, the BDE Companies). Daniel Groskop, the trustee of a trust formed by the Limited Partnership, was later substituted for the Limited Partnerships as the true party in interest on the condition that the BDE Companies' claims against the Bank be dismissed with prejudice. Due to Groskop's noncompliance with discovery orders and the Wyoming Rules of Civil Procedure, the district court dismissed the case with prejudice. The Supreme Court affirmed, holding that the district court did not abuse its discretion when it concluded that Groskop's violation of two court orders compelling discovery, two orders awarding attorneys' fees, and the failure to fulfill the representative duties associated with Wyo. R. Civ. P. 30(b)(6) required dismissal with prejudice. View "S&T Bank v. Groskop" on Justia Law