Justia Business Law Opinion Summaries

The junior creditor, WBL SPO, LLC (WBL), claimed it was entitled to sue the foreclosing creditor, West Town Bank & Trust (West Town), for not bidding a high enough price for an encumbered property. In 2015, West Town loaned $4.4 million to DIA Lodging and DJ Lodging (collectively, DJ Lodging). The loan was secured not only by the Biloxi hotel but also by another hotel in Forrest City, Arkansas. At the time of the loan, the preloan appraisal valued the Biloxi hotel at $5.45 million. WBL had the second mortgage on the Biloxi hotel; both loans were secured by the Biloxi and Arkansas hotels. DJ Lodging quickly fell behind on its weekly payments to WBL. It also defaulted on its payments to West Town. Based on the default, West Town informed WBL of its intention to commence a nonjudicial foreclosure. West Town had obtained an appraisal of the hotel in January 2020 that indicated the fair market value of the property was $2.75 million. The year before, in February 2019, West Town had obtained an appraisal from a different firm valuing the property at just $1.7 million. West Town decided to split the difference between the two appraisals and make a $2.195 credit bid at the foreclosure sale. West Town averred that, at the time of foreclosure, DJ Lodging still owed $4.5 million. WBL was owed half a million dollars. The foreclosure sale proceeded in March 2020, and West Town’s $2.195 million credit bid was the only bid. West Town transferred its interest in the hotel to Patriarch, LLC, a single-purpose entity established to hold properties West Town acquired in foreclosure. Patriarch then sold the property to a third party for $1.9 million. WBL claimed it was entitled to an “equitable credit” in the form of money damages for the difference between the amount West Town purchased the hotel at the foreclosure sale and the allegedly higher commercially reasonable value of the property. The trial court rejected WBL’s equitable-credit claim. Because WBL’s claims against West Town were based on an asserted legal right that did not exist, the Mississippi Supreme Court concurred West Town was entitled to summary judgment as a matter of law. View "WBL SPO I, LLC v. West Town Bank & Trust" on Justia Law

After receiving frequent criticism from tourists and residents alike, the City of Myrtle Beach, South Carolina became concerned that the proliferation of smoke shops and tobacco stores were repelling families from the area due to those stores' merchandise and advertising practices. More specifically, the city was troubled with those shops' sale of sexually explicit items, cannabidiol (CBD)-infused products, and tobacco paraphernalia. In an effort to improve the "family friendly" nature of the downtown area, the city created a zoning overlay district that prohibited the operation of smoke shops and tobacco stores, among others, in the city's downtown. Appellants, nine of the twenty-five affected stores located in the area, were each issued a citation by the city's zoning administrator for failing to comply with the zoning overlay ordinance. Following a complicated legal battle, appellants raised a host of constitutional challenges to the zoning overlay ordinance. The circuit court found the ordinance survived appellants' complaints, and appellants directly appealed that decision to the South Carolina Court. The Supreme Court held that, under its long-standing precedent, the overlay ordinance did not impermissibly spot zone the city's historic downtown area. Additionally, the Court found the overlay ordinance was a constitutional exercise of the city's police powers. The Court therefore affirmed the decision of the circuit court and upheld the validity of the ordinance. View "Ani Creation, Inc., et al. v. City of Myrtle Beach" on Justia Law

The Supreme Court affirmed the order of the superior court entering a preliminary injunction enjoining the enforcement of certain amendments to the New Shoreham General Ordinance, entitled Motorized Cycle Rental, holding that the hearing justice did not err in her decision granting in part Plaintiff's motion for preliminary injunction.Plaintiffs, businesses in the Town of New Shoreham that rented mopeds, filed a complaint against the Town requesting declaratory and injunctive relief and alleging that the Town had attempted to amend the ordinance at issue in contravention of a settlement agreement reached by the parties and in contravention of Mass. Gen. Laws ch. 31-19.3-5. the hearing justice granted Plaintiffs' motion to enjoin preliminarily enforcement of the amendments. The Supreme Court affirmed, holding that Plaintiffs were not entitled to relief on their allegations of error. View "Finnimore & Fisher Inc. v. Town of New Shoreham" on Justia Law

William West, the founder of Access Control Related Enterprises, LLC (“ACRE”), was forced out as an officer of the company by its majority owners, LLR Equity Partners, IV, L.P. and LLR Equity Partners Parallel IV, L.P. (collectively, “LLR”). He filed a wrongful termination suit against ACRE and others in California state court. The California court stayed the case based on the forum selection provisions in the controlling agreements that designated Delaware as the exclusive forum for disputes arising out of the agreements. After a failed detour to Delaware District Court, West filed the same claims in the Delaware Superior Court. A Delaware jury eventually found against West on his breach of contract claim. West did not appeal the jury’s adverse verdict. Instead, he sought to undo his loss in Delaware by challenging the Superior Court’s procedural rulings, arguing: (1) the Superior Court no longer had jurisdiction once it issued the order transferring the case to the Court of Chancery; (2) the Superior Court improperly denied his motions for voluntary dismissal; and (3) if the Superior Court had applied forum non conveniens, it would have dismissed the Delaware case in favor of the California litigation. Finding no reversible error, the Delaware Supreme Court affirmed the Superior Court's decisions. View "West v. Access Control Related Enterprises, LLC" on Justia Law

Plaintiff was on active duty with the United States Army. He bought a car from Select Cars of Thornburg in Fredericksburg, Virginia, and financed his purchase with a loan from United Auto Credit Corporation. The loan financed not only the car’s cost but also the cost of Guaranteed Asset Protection. Guaranteed Asset Protection is like extra insurance, covering any amount still due on the car loan after auto insurance is paid out if the car is totaled or stolen. Plaintiff’s claims arise from this single loan. This loan, Plaintiff alleged, violated the Military Lending Act because the loan agreement mandated arbitration and failed to disclose certain information. The district court dismissed the case, holding that the loan was not covered by the Act at all.   The Fourth Circuit affirmed. The court explained that a statutory provision must be given the ordinary meaning it had when it was enacted. Relevant dictionaries, carefully considered, sometimes shed light on that ordinary meaning. Yet here, dueling dictionaries provide more than one linguistically permissible meaning.  But by examining the relevant phrase in its statutory context. This context shows that while “the express purpose” can be used in different senses, it is best read in Section 987(i)(6) to mean the specific purpose. This loan was offered for the specific purpose of financing Plaintiff’s car purchase. And that satisfies Section 987(i)(6)’s relevant condition and the Act is inapplicable. View "Jerry Davidson v. United Auto Credit Corporation" on Justia Law

In a matter of first impression, the issue presented for the Tenth Circuit's review centered on whether a district court could appropriately dismiss part of an action pursuant to the forum non conveniens doctrine while allowing the other part to proceed before it. Reasoning that the forum non conveniens doctrine was fundamentally concerned with the convenience of the venue the Court concluded the answer to that question was “no:” a district court clearly abuses its discretion when, as here, it elects to dismiss an action as to several defendants under a theory of forum non conveniens while simultaneously allowing the same action to proceed against other defendants. View "DIRTT Environmental Solutions, et al. v. Falkbuilt, et al." on Justia Law

Coast Restaurant Group appealed the dismissal of its case. The trial court sustained respondent AmGUARD Insurance Company’s demurrer to the operative complaint without leave to amend. Appellant contended the court erred in sustaining the demurrer because it showed business income losses resulting from governmental orders prohibiting on-site dining at its restaurant due to the COVID-19 virus were covered under the relevant insurance policy. The Court of Appeal concluded appellant did show there was potential coverage under the policy, but respondent showed that an exclusion in the policy applied to preclude coverage as a matter of law. View "Coast Restaurant Group, Inc. v. AmGUARD Insurance Company" on Justia Law

This appeal grew out of overpayments that lessee, Safeway Stores 46, Inc., made to its lessor, WY Plaza, L.C. The lease allowed Safeway to deduct construction costs from the payments to WY Plaza. But Safeway neglected to make these deductions for twelve years before demanding repayment. WY Plaza rejected the demand based on Safeway’s delay. Safeway responded by paying under protest and suing for restitution and a declaratory judgment. Both parties sought summary judgment. In its own motion, WY Plaza denied the availability of restitution because the parties’ obligations had been set out in a written contract. The district court agreed with WY Plaza. But the court went further, deciding sua sponte that Safeway’s delay prevented recovery under the doctrine of laches. So the court granted summary judgment to WY Plaza and denied Safeway’s motion. The Tenth Circuit disagreed as to both trial court rulings. Despite the lack of any laches argument in its motion, the district court relied on laches to grant summary judgment to WY Plaza on the claim for declaratory relief. The Tenth Circuit concluded the district court erroneously failed to notify Safeway before granting summary judgment to WY Plaza based on laches. Furthermore, the Tenth Circuit found that in granting WY Plaza’s motion for summary judgment, the district court relied on arguments that WY Plaza hadn’t raised. The district court also erroneously granted summary judgment to WY Plaza on the restitution claim: "The unilateral nature of Safeway’s mistake doesn’t prevent restitution." The Tenth Circuit held Safeway was entitled to summary judgment because WY Plaza failed to create a triable fact-issue, and Safeway was entitled to summary judgment on its claims for a declaratory judgment and restitution. View "Safeway Stores v. WY Plaza" on Justia Law

The Supreme Court affirmed the judgment of the trial court granting Defendants' motion for an award of attorneys' fees as part of their costs under N.C. R. Civ. P. 41(d) pursuant to N.C. Gen. Stat. 6-21.5 and the trial court's subsequent order awarding $599,262 in attorneys' fees as costs, holding that the trial court did not abuse its discretion.Plaintiffs, limited partners of the Fayetteville Ambulatory Surgery Center Limited Partnership (FASC), asserted five claims against Cape Fear Valley Ambulatory Surgery Center, LLC and its owner, Cumberland County Hospital System, Inc. Plaintiffs later voluntarily dismissed the case without prejudice. Defendants subsequently brought a motion for fees. The trial court granted the motion for attorneys' fees as part of Defendants' costs under Rule 41(d) pursuant to N.C. Gen. Stat. 6-21.5. The Supreme Court affirmed, holding that the trial court did not abuse its discretion granting the motion for attorneys' fees. View "Woodcock v. Cumberland County System, Inc." on Justia Law

Reliant Life Shares, LLC (Reliant or LLC) was a profitable limited liability company owned in equal parts by three members. Two of them, SM and DC, were longtime friends and business partners. After DC stopped working out of the offices of Reliant because of a medical condition, no one at Reliant expected him to return to work, but SM assured CDC he remained a loyal business partner. Before long, however, SM and the third member of Reliant, SG, tried to force out DC, splitting the company’s profits and other revenues 50/50 and paying DC nothing. The LLC sued DC, seeking a declaratory judgment that he was properly removed as a member of the LLC. DC cross-complained against the parties and the LLC, alleging breach of contract, fraud, breach of the duty of loyalty and several other causes of action, seeking damages, an accounting and imposition of a constructive trust over funds obtained through violation of fiduciary duties. The jury awarded DC damages and valued his equity interest. The LLC, SM, SG, and several of their entities appealed. They assert a multitude of arguments for reversal of the judgment.   The Second Appellate District found no merit in any of the claims and affirmed the judgment in full. The court found that the trial court acted well within its discretion when it decided alter ego claims in phase one. Further, the court found no merit in the election of remedies argument, either as it relates to prejudgment interest or anything else. View "Reliant Life Shares, LLC v. Cooper" on Justia Law