Justia Business Law Opinion Summaries

Plaintiffs, a group of restaurants, filed claims through their respective insurance policies seeking coverage for losses and expenses related to the COVID-19 pandemic. Insurers denied Plaintiffs' claims and, upon Plaintiff's filing suit, the district court granted the insurance companies' motion for summary judgment.On appeal to the Eighth Circuit, the court held that under either Kansas or Missouri law, Plaintiffs' claims fail. Under both states' laws, there is a "physical loss or damage" which requires some form of "physical alteration" to the insured's property. Here, Plaintiffs did not prove that the presence of COVID-19 resulted in any physical alteration to their property. The court also rejected Plaintiffs' argument that their claims were covered under the "Limited Extension for Food-Borne Illness," finding that this claim also required a showing that there was a "direct physical loss of or damage to property," which Plaintiffs did not allege. View "Planet Sub Holdings, Inc. v. State Auto Property & Casualty" on Justia Law

Dukes Clothing, LLC (“Dukes”) operated two clothing stores. As a result of the state orders and a customer’s exposure to COVID-19, Dukes was forced to close its doors. These closures resulted in lost business income for Dukes. Dukes’s insurer, The Cincinnati Insurance Company (“Cincinnati”), had issued an all-risk commercial insurance policy to Dukes. Dukes submitted a claim under its policy to recover its loss of business income due to its store closures caused by COVID-19. Cincinnati denied the claim on the basis that Dukes’s income loss was not caused by a direct physical loss or damage to the insured’s property.   The Eleventh Circuit affirmed the district court’s dismissal of Plaintiff’s claims holding that Plaintiff’s income loss was not caused by a direct physical loss or damage to the insured’s property. The court explained that when examining insurance policies, Alabama courts consider the language of the policy as a whole, not in isolation. There are no Alabama appellate court decisions interpreting the relevant terms here—physical loss or damage—or interpreting these types of all-risk policies in the COVID-19 context so the court looked to its’ decisions interpreting nearly identical terms under Florida and Georgia law. Ultimately, the court found that since COVID-19 does not cause a “tangible alteration of the property” such that the property could not be used in the future or needed repairs to be used, lost business income resulting from COVID-19 could not constitute a “physical loss of or damage to” the property necessary for insurance coverage. View "Dukes Clothing, LLC v. The Cincinnati Insurance Company" on Justia Law

The Supreme Court held that the application the Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act, Tex. Bus. & Com. Code 57.001-.402, in this case did not violate the constitutional prohibition against retroactive laws in Tex. Const. art. I, 16.In the 1990s, Fire Protection Service, Inc. (FPS), orally agreed to be an authorized dealer and servicer of the life rafts manufactured by Survitec Survival Products, Inc. Nearly six years after the promulgation of the Act, which prohibits a supplier from terminating a dealer agreement without good cause, Survitec notified FPS that it was terminating their relationship. FPS sued for a violation of the Act. The district court entered judgment for Survitec. On appeal, the Fifth Circuit certified a question to the Supreme Court. The Supreme Court answered that the application of the Act to the parties' agreement does not violate the retroactivity clause in article I, section 16. View "Fire Protection Service, Inc. v. Survitec Survival Products, Inc." on Justia Law

The Supreme Court vacated the decision of the court of appeals reversing the judgment of the district court affirming the decisions of the administrative law judge (ALJ) and the Iowa Department of Transportation (DOT) that good cause existed to permit a franchiser to create dueling franchises in a geographic area under Iowa Code 322A.4, holding that the district court did not err in its judgment.At issue was whether, in considering if the establishment of an additional franchisee in a geographic area is in the public interest, the DOT must consider the investment and impacts across the entire geographic area of the existing franchisee. The ALJ and DOT concluded that the twenty-three county area where the additional franchisee would compete with the existing franchisee was the relevant geographic area to consider when determining the presence of good cause under section 322A.4. The court of appeals reversed, arguing that the relevant geographic area to consider was the entire seventy-one county area in which the existing franchise conducted business. The Supreme Court vacated the decision below and affirmed the trial court, holding that the proper focus was the area in which the existing franchisee and the proposed new franchise would be in direct competition. View "Sioux City Truck Sales, Inc. v. Iowa Department of Transportation" on Justia Law

Plaintiff Aleice Jeter filed a negligence claim against Sam’s Club after sustaining injuries when she slipped on one or more grapes. Plaintiff stated that she fell while walking away from the checkout area, “halfway past” the fruit and vegetable aisle. Sam’s Club asserted several defenses, including lack of actual or constructive notice of the hazardous condition -- loose grapes on the floor. The trial court, after acknowledging that no party had moved for summary judgment, sua sponte conducted an N.J.R.E. 104(a) hearing to determine whether the "mode of operation" rule applied and, if not, whether plaintiff could provide some evidence of actual or constructive notice. The court agreed with Sam’s Club that the mode of operation rule did not apply, then proceeded to analyze the case under traditional negligence principles that require actual or constructive notice of the dangerous condition -- grapes on the floor. Finding that there was no evidence as to “how long this particular grape [was] on the floor,” the court held that plaintiff failed to meet her burden of proving actual or constructive notice and dismissed the case with prejudice. Finding no reversible error in the trial court's judgment, the New Jersey Supreme Court affirmed. View "Jeter v. Sam's Club" on Justia Law

Frankie Ware died in 2011, survived by his wife, Carolyn Ware, and their three children, Dana Ware, Angela Ware Mohr, and Richard Ware. Richard was married to Melisa Ware. Carolyn was appointed executor of Frankie’s estate. At the time of his death, Frankie owned 25 percent of four different family corporations. Carolyn owned another 25 percent of each, and Richard owned 50 percent of each. Frankie’s will placed the majority of Frankie’s assets, including his shares in the four family corporations, into two testamentary trusts for which Carolyn, Richard, Angela, and Dana were appointed trustees. The primary beneficiary of both trusts was Carolyn, but one trust allowed potential, limited distributions to Richard, Angela, and Dana. Prolonged litigation between Carolyn and Richard ensued over disagreements regarding how to dispose of Frankie’s shares in the four corporations and how to manage the four corporations. Richard eventually filed for dissolution of the four corporations. The trial court ultimately consolidated the estate case with the corporate dissolution case, and denied Angela and Dana’s motions to join/intervene in both cases. It also appointed a corporate receiver (Derek Henderson) in the dissolution case by agreed order that also authorized dissolution. The chancery court ultimately ordered that the shares be offered for sale to the corporations, and it approved the dissolution and sale of the corporations. Angela and Dana appealed the trial court’s denial of their attempts to join or intervene in the two cases. Carolyn appeals a multitude of issues surrounding the trial court’s decisions regarding the corporations and shares. Richard cross-appealed the trial court’s net asset value determination date and methodology. The Receiver argued the trial court’s judgment should have been affirmed on all issues. In the estate case, the Mississippi Supreme Court reversed the chancery court’s determination that the estate had to offer the shares to the corporation prior to transferring them to the trusts; the corporations filed their breach of contract claim after the expiration of the statute of limitations. The Court affirmed the chancery court’s denial of Angela and Dana’s motions to intervene, and it affirmed the chancery court’s decision in the dissolution case. The Court reversed the judgment to the extent that it allowed the corporations to purchase shares from the estate. The cases were remanded to the chancery court for a determination of how to distribute the money from the corporate sales, in which the estate held 25 percent of the corporate shares. View "In The Matter of The Estate of Frankie Don Ware" on Justia Law

In 2014, Elizabeth Elting, a co-founder of TransPerfect Global, Inc. (“TPG”), asked the Delaware Court of Chancery to appoint a custodian to sell the Company because of a hopeless deadlock between Elting and fellow co-founder, Philip Shawe. More than eight years later, Elting sold her shares to Shawe, who won a court-ordered auction supervised by Robert Pincus, a custodian duly appointed by the Court of Chancery. The parties executed the sale agreement (the “SPA”) in November 2017. A contentious relationship emerged between Shawe and Pincus, resulting in "seemingly endless" litigation in Delaware, New York and Nevada, millions in contested legal fees, and an inability to agree on any material aspect of Pincus' tenure as Custodian, up to and including his discharge. This case consolidated three challenges brought by Shawe and TPG to orders of the Court of Chancery, each implicating Pincus’ right to petition the trial court for reimbursement of fees and expenses under the SPA and various court orders. In sum, the Delaware Supreme Court: (1) reversed and vacated the Court of Chancery’s October 17, 2019 Contempt Order and Sanction only as they applied to Shawe; affirmed the Contempt Order and Sanction as they applied to TPG; (3) affirmed the court’s April 14, 2021 Discharge Order terminating the custodianship of Pincus; and (4) affirmed the April 30, 2021 Fee Order awarding Pincus $3,242,251 in fees, subject to the qualification that TransPerfect Global, Inc. was the only party liable for the $1,148,291 Contempt Sanction. View "Transperfect Global, Inc., et al. v. Pincus, et al." on Justia Law

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

The Supreme Court reversed the judgment of the court of appeals dismissing a pending appeal as moot without resolving a jurisdictional issue, holding that remand was required.Defendants, a Taiwanese company and its CEO who were sued under various tort theories, specially appeared and challenged personal jurisdiction. The trial court denied the special appearances, and Defendants filed an interlocutory appeal. The trial court then rendered final judgment against Defendants. When the deadline for filing an appeal had expired, Plaintiff moved to dismiss the interlocutory appeal. The court of appeals granted the motion, holding that, following rendition of final judgment, the jurisdictional issue could only be challenged by filing a separate notice of appeal. The Supreme Court reversed, holding that a second notice of appeal from the final judgment was unnecessary for the appellate court to maintain its pre-existing jurisdiction over the still-live jurisdictional dispute. View "Chen v. Razberi Technologies, Inc." on Justia Law

The Supreme Court reversed the ruling of the Iowa Business Specialty Court denying Appellants' motion to dismiss this action involving a shareholder's challenge to a corporate merger involving the purchase of a publicly traded company's shares in a "going private transaction," holding that Appellee's claims must be dismissed.Appellee, a shareholder, brought this action alleging that Appellants, the corporation's directors, breached their fiduciary duties by agreeing to a flawed merger process that resulted in an unsatisfactory price for the minority shareholders' stock. Appellants filed a motion to dismiss, arguing that Appellee failed to plead around the statutory defenses available to the directors. The business court denied the motions to dismiss filed by Appellants. The Supreme Court reversed, holding that Appellant's allegations were insufficient to establish "intentional infliction of harm on the corporation or the shareholders" by the directors. View "Meade v. Christie" on Justia Law