Justia Business Law Opinion Summaries

Navient serviced the student loans of Matthew Panzarella. Matthew listed his mother (Elizabeth) and brother (Joshua) as references on student loan applications and promissory notes and provided their cell phone numbers. He became delinquent on his loans and failed to respond to Navient’s attempts to communicate with him. Call logs show that over five months, Navient called Elizabeth's phone number four times (three calls were unanswered) and Joshua's number 15 times (all unanswered), using “interaction dialer” telephone dialing software developed by ININ.The Panzarellas filed a putative class action, alleging violation of the Telephone Consumer Protection Act, 47 U.S.C. 227, by calling their cellphones without their prior express consent using an automatic telephone dialing system (ATDS). Navient argued that its ININ System did not qualify as an ATDS because the system lacked the capacity to generate and call random or sequential telephone numbers. The Third Circuit affirmed summary judgment for Navient, without deciding whether Navient’s dialing equipment qualified as an ATDS. Despite the text’s lack of clarity, Section 227(b)(1)(A)’s context and legislative history establish it was intended to prohibit making calls that use an ATDS’s auto-dialing functionalities; the record establishes that Navient did not rely on random- or sequential number generation when it called the Panzarellas. View "Panzarella v. Navient Solutions Inc" on Justia Law

Competing trade associations offered memberships to home inspectors, who typically inspect homes prior to home sales. Benefits of membership in the International Association of Certified Home Inspectors (InterNACHI) and the American Society of Home Inspectors (ASHI) included online advertising to home buyers, educational resources, online training, and free services such as logo design. From 2015 to 2020, ASHI featured the slogan “American Society of Home Inspectors. Educated. Tested. Verified. Certified” on its website. Contending that tagline mislead consumers, InterNACHI sued ASHI under the federal Lanham Act, claiming the line constituted false advertising because it inaccurately portrayed ASHI’s entire membership as being educated, tested, verified, and certified, even though its membership includes so-called “novice” inspectors who had yet to complete training or become certified. InterNACHI argued this misleading advertising and ASHI’s willingness to promote novice inspectors to the public caused InterNACHI to lose potential members and dues revenues. The district court granted summary judgment in favor of ASHI, concluding no reasonable jury could find that InterNACHI was injured by ASHI’s allegedly false commercial advertising. To this, the Tenth Circuit Court of Appeals concurred: because InterNACHI did not present any evidence from which a reasonable jury could find that InterNACHI was injured by ASHI’s slogan, the district court did not err in granting summary judgment for ASHI. View "Examination Board, et al. v. International Association, et al." on Justia Law

Cal-Am, a developer and operator of RV and mobile-home parks leased the Yuma Sundance RV Resort from its owner, intending to construct a new banquet and concert hall on the property. The property owner provided the funding for the construction. Cal-Am managed the project. Cal-Am hired a contractor, Nickle, to design and construct the hall, who then hired Edais Engineering to survey the property and place construction stakes to mark the Hall’s permitted location. No contract existed between Edais and Cal-Am. Edais acknowledges that its placement of the stakes was defective. Cal-Am was forced to adjust its site plan, eliminating eight RV parking spaces. Cal-Am sued Edais for claims including negligence. The trial court granted Edais summary judgment on the negligence claim finding that Cal-Am could not recover its purely economic damages. The court of appeals affirmed.The Arizona Supreme Court affirmed, repudiating its 1984 Donnelly Construction holding that a design professional’s duty to use ordinary skill, care, and diligence in rendering professional services extends both to persons in privity with the professional and to persons foreseeably affected by a breach of that duty. Under Arizona’s current framework, which repudiated foreseeability as a basis for duty, design professionals lacking privity of contract with project owners do not owe a duty to those owners to reimburse purely economic damages. View "Cal-Am Properties, Inc. v. Edais Engineering, Inc." on Justia Law

The FDIC removed Calcutt, a bank executive and director, from his position, prohibited him from participating in the conduct of the affairs of any insured depository institution, and imposed civil money penalties. Calcutt challenged the conduct and findings in his individual proceedings and brought constitutional challenges to the appointments and removal restrictions of FDIC officials. His first hearing occurred before an FDIC ALJ in 2015. Before the ALJ released his recommended decision, the Supreme Court decided Lucia v. SEC (2018), which invalidated the appointments of similar ALJs in the Securities and Exchange Commission. The FDIC Board of Directors then appointed its ALJs anew, and in 2019 a different FDIC ALJ held another hearing in Calcutt’s matter and ultimately recommended penalties.The Sixth Circuit denied Calcutt’s petition for review, concluding that his 2019 hearing satisfied Lucia’s mandate. Even if he were to establish a constitutional violation with respect to FDIC Board of Directors and ALJs being shielded from removal by the President, he would not be entitled to relief. Any error by the ALJ in curtailing cross-examination about bias of the witnesses was harmless. Substantial evidence supports the FDIC Board’s findings regarding the elements of 12 U.S.C. 1818(e)(1). View "Calcutt v. Federal Deposit Insurance Corp." on Justia Law

Karen McGee was the president of a collections agency. When the company ran into financial trouble, she directed her business administrator to delay remitting the money it had collected for Comprehensive Radiology Services, PLLC. Meanwhile, the agency still billed for (and received commissions on) the money collected. When McGee’s scheme was discovered, her company had withheld almost $800,000 of Comprehensive Radiology’s money. McGee was sued for conversion and fraud. And the chancellor found her individually and personally liable to the radiology group for $785,549.71. On appeal, McGee argued she could not have committed conversion because, as a matter of Mississippi law, funds collected and deposited into a bank account cannot be the subject of conversion. The Mississippi Supreme Court disagreed with McGee's contention: "While the tort of conversion cannot be used to recover a mere debt, it can be used to recover identifiable money belonging to the plaintiff. ... McGee’s company had no right to keep this money to cover its own expenses but instead was obligated to remit it at the end of the month in which it was collected. By directing her employee to delay remittance of Comprehensive Radiology’s money, McGee committed conversion and is thus liable to Comprehensive Radiology for $785,549.71." View "McGee v. Comprehensive Radiology Services, PLLC" on Justia Law

Evans served as CEO and a director of Avande, a privately held Delaware corporation that provides medical claims management services to insurance companies and healthcare organizations. Following Evans’s termination, Avande performed an audit and discovered suspect transactions undertaken by Evans while he was serving as CEO. Avande filed suit, alleging breach of fiduciary duty based on alleged self-dealing transactions and improper expenditures and tortious interference, defamation, and conversion based on acts that Evans allegedly committed after his termination. Evans was found liable for about $65,000 in damages, plus interest. Evans demanded advancement for expenses incurred in connection with the action.The Delaware Chancery court entered judgment in favor of Avande. Avande established that there is no causal link between Evans’s status as a former officer of Avande and the tortious inference and defamation claims; those claims solely concerned Evans’s post-termination conduct. Avande demonstrated that Evans did not succeed but was found liable. View "Evans v. Avande, Inc." on Justia Law

Robinson purchased grain bin monitoring equipment for his Spink County farm, financed through an Equipment Lease Agreement with Northland. Northland’s place of business is in Minnesota. The Lease included a forum selection clause requiring any suit filed by either party to be filed in Stearns County, Minnesota. After Robinson stopped making payments, Northland filed suit in Spink County, South Dakota, where Robinson resided. Robinson objected, claiming that he intended to pursue claims against Northland and others in Minnesota for the defective equipment. In granting Northland summary judgment., the circuit court treated Robinson’s objection as a question of venue and determined that Robinson failed to make a timely objection in Spink County.The South Dakota Supreme Court reversed and remanded, ordering the dismissal of the Spink County action. The court applied Minnesota law consistent with the Lease's choice of law provision and stated that the statutory venue provisions have no application to the question of the enforceability of the contractual forum selection clause. Robinson’s actions in responding to the suit do not support a waiver determination under the Rules of Civil Procedure. The Lease does not indicate that the forum selection clause was intended to solely benefit Northland, or that the mandatory language requiring “any suit by either of the parties” could be unilaterally waived. View "Northland Captial v. Robinson" on Justia Law

Regulus, an LLC solely owned by Klug, is the holding company for all the rights, transactions, and income related to Klug’s literary works, which include several internationally-received legal fiction novels. In 2018, Klug filed a Virginia income tax return, attaching thereto a Schedule C to indicate that he derived business income in Charlottesville. The city could not locate a business license issued to Klug or to Regulus and requested information about Klug’s business and his income therefrom for the tax years 2015-2018. Klug responded that Charlottesville’s Ordinance does not apply to him because he “offer[s] no goods or services to the public[,]” has “no physical storefront or shingle[,]” “do[es] not advertise[,]” has no employees, has no inventory, and offers a “product” that is intangible intellectual property.The Virginia Supreme Court held that a freelance writer’s business does not provide a service and is not covered by the ordinance’s catchall provision. The court did not reach the question of whether the ordinance is unconstitutionally vague as applied to the freelance writer. The court affirmed the circuit court’s decision to order the city to refund Klug his tax payments but concluded that the circuit court erred by awarding costs not essential for the prosecution of the suit. View "City of Charlottesville v. Regulus Books, LLC" on Justia Law

Plaintiff appealed a summary judgment entered in favor of Defendant in her lawsuit for damages against Defendant based on his alter ego liability for a $157,370 judgment against a corporation. Plaintiff claimed that Magnolia Funding, Inc., the subject of a prior lawsuit that provided the original loan, and Magnolia Home Loans, Inc. “were the same company”; and that Defendant was “the sole owner, officer, and director of each.” Magnolia Funding closed when Magnolia Home Loans got up and running.   The Second Appellate district concluded, among other things, that (1) the trial court erred by granting summary judgment in favor of the corporation; there are triable issues of fact concerning Defendant’s alter ego liability, and (2) Plaintiff’s civil action does not violate Defendant’s right to due process.   The court explained that under the alter ego doctrine, the corporate veil may be lifted to show the corporate form is fiction and determine who controls the corporate entity and who is liable for its debts. Courts look to the totality of circumstances to determine who actually owns or controls the corporate entity and who is using it as “a mere shell or conduit” for his or her own personal interests. When Magnolia Funding, Inc. dissolved, Magnolia Home Loans, Inc. received its remaining physical assets. At the end of the fiscal year 2009, Magnolia Home Loans, Inc. held cash and all that money was paid to Defendant. This is a triable issue of fact concerning Escamilla’s alter ego liability. View "Lopez v. Escamilla" on Justia Law

CCC and Tractable use algorithms and data generated by repair centers to provide estimates of the cost to repair damaged vehicles. Tractable dispatched its employee to obtain a license for CCC’s software. Using a false name, the employee purported to represent “JA,” a small, independent appraiser. CCC issued a license. The contract forbids assignment of the license without consent and represents that JA is acting on its own behalf, not as an agent for any third party, and forbids disassembly of the software or its incorporation into any other product. Tractable disassembled the software and incorporated some features into its own product. In CCC’s subsequent suit, Tractable moved for arbitration under the agreement between CCC and JA., arguing that “JA” is a name that Tractable uses for itself. The Seventh Circuit affirmed the denial of the motion. Tractable is not a party to the agreement. CCC could not have discovered that Tractable uses the name “JA.” Contractual meaning reflects words and signs exchanged between the negotiators, not unilateral, confidential beliefs. If a misrepresentation as to the character or essential terms of a proposed contract induces conduct that appears to be a manifestation of assent by one who neither knows nor has reasonable opportunity to know of the character or essential terms of the proposed contract, his conduct is not effective as a manifestation of assent.. The identity of CCC’s trading partner was a vital element of the deal. View "CCC Intelligent Solutions Inc. v. Tractable Inc." on Justia Law