Justia Business Law Opinion Summaries

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

The plaintiffs filed suit asserting federal securities claims. The Third Circuit affirmed summary judgment in favor of the defendants The district court subsequently performed a Federal Rule 11 inquiry mandated by the Private Securities Litigation Reform Act of 1995 (PSLRA) and determined that the plaintiffs violated Rule 11 but did not award attorneys’ fees or impose any other sanctions.The Third Circuit held that the plaintiffs violated Rule 11 in bringing their federal securities claims by filing for an improper purpose. The plaintiffs expressly stated that their “strategy was to file these complaints to force a settlement.” In addition, their Unregistered Securities and Misrepresentation Claims lacked factual support in violation of Rule 11(b)(3). The plaintiffs had a reasonable basis for their Rule 10b-5 Securities Fraud Claim. The court vacated in part. The PSLRA creates a presumption in favor of awarding attorneys’ fees when a complaint constitutes a “substantial failure” to comply with Rule 11 but the district court did not err in finding that the Rule 11 violations were not substantial. Nonetheless, the PSLRA makes the imposition of sanctions mandatory after a court determines that a party violated Rule 11, so the court abused its discretion in declining to impose any form of sanctions. View "Scott v. Vantage Corp" on Justia Law

Acuity operates a website that connects people looking to buy or sell homes with a local real estate agent. Acuity’s services are free to home buyers and sellers but realtors pay a fee for referrals. The real-estate broker that employed Lewis, a real estate agent, signed up to receive Acuity’s referrals. The broker required its agents (including Lewis) to pay Acuity’s fee out of their commissions from home sales. Lewis sued, alleging that Acuity makes false claims to home buyers and sellers on its website and that this false advertising violates the Lanham Act, 15 U.S.C. 1125(a)(1)(B).The Sixth Circuit affirmed the dismissal of the suit. The Lanham Act provides a cause of action only for businesses that suffer commercial injuries (such as lost product sales) from the challenged false advertising. The Act does not provide a cause of action for customers who suffer consumer injuries (such as the cost of a defective product) from false advertising. Lewis alleges that type of consumer harm as his injury from Acuity’s allegedly false advertising: He seeks to recover the referral fee (that is, the price) he paid for Acuity’s services. View "Lewis v. Acuity Real Estate Services, LLC" on Justia Law

In 2012, Ogus cofounded the SportTechie website. Bloom volunteered as a writer. Eventually, both quit their other jobs. They formed an LLC with Bloom a 55.5% member, and Ogus a 45.5% member and sole manager. They hired Kaufman. Vintage and Oak View made financial investments. In 2016-2017 Ogus converted SportTechie from an LLC to a Delaware corporation and appointed three directors: Bloom, a Vintage representative, and Bodie, Oak View’s designee. A stockholders agreement gave SportTechie the right to repurchase Ogus’s equity interest if he were terminated. Bloom—SportTechie’s CEO— recommended firing Ogus for poor performance. A quorum of the board authorized the termination of his employment. SportTechie exercised its option to repurchase Ogus’s stock.A chancellor dismissed Ogus's fiduciary duty and fraud claims challenging the stock repurchase and subsequently granted Bodie and Oak View summary judgment on a fraud claim, breach of fiduciary duty claims, an aiding and abetting claim, and a civil conspiracy claim. Those defendants had limited, innocuous roles in the relevant events. Bodie’s decision to sign the consent terminating Ogus is protected by the business judgment rule; there is no evidence of bad faith or self-interest. With no underlying breach of fiduciary duty claim, the aiding and abetting claim against Oak View and the civil conspiracy claim against Oak View and Bodie necessarily fail. As to Bloom and Kaufman, questions of material fact remain, precluding summary judgment on fraud, breach of fiduciary duty, and civil conspiracy claims. View "Ogus v. SportTechie, Inc." on Justia Law

Defendants appealed a judgment and order denying their motion for a new trial after a jury found in favor of plaintiffs on their claims of breach of contract, conversion, deceit, defamation, and unlawful interference with business. The district court quieted title in plaintiff Seven Star Holdings. Defendants argued: (1) the court erred by failing to decide whether a joint venture existed and in quieting title; (2) there was insufficient evidence supporting the jury verdict on the claims of breach of contract, conversion, defamation, and unlawful interference with business; and (3) the verdict violated the law of comparative fault. After review, the North Dakota Supreme Court affirmed, concluding defendants waived their arguments on joint venture, quiet title, breach of contract, and comparative fault; and the court did not abuse its discretion in determining the verdict was not manifestly against the weight of the evidence and rejecting the defendants’ new trial motion. View "Kluver, et al. v. SGJ Holdings, et al." on Justia Law

Two California hardware stores (Craftwood) are part of the Do It Best (DIB) hardware industry cooperative and wholesaler. Generac supplies goods to DIB for purchase by hardware retailers in the cooperative. Generac had an agreement with CMI, an independent sales and marketing representative, for assistance with promotion and marketing. CMI sent out faxes to DIB-member hardware stores advertising deals on Generac products, including three sent to Craftwood.The Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, forbids using “any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement” except where the recipient gave “prior express invitation or permission.” Generac cited the agreement that Craftwood signed when it joined the DIB cooperative, which refers to the provision of advertising and includes Craftwood’s fax number. Craftwood also opted to purchase advertising materials to send to its customers.The district court granted Generac summary judgment, finding that the contract between Craftwood and DIB evinced an agreement by Craftwood to receive faxes, including from vendors. The Seventh Circuit reversed, finding a material dispute of fact as to consent. The court noted the need to enforce the Act as written, although fax machines are now rare, and the common view that these suits are fueled primarily by plaintiffs’ attorneys looking for large fee awards that often come at the expense of small businesses. View "Craftwood II, Inc. v. Generac Power Systems, Inc." on Justia Law

Maryville College leased a building to Ruby Tuesday, which used it for corporate retreats. In financial trouble years later, Ruby Tuesday decided to sell its interest in the lease. BNA, a real estate developer, and Ruby Tuesday signed an agreement. Ruby Tuesday had previously secured a loan from Goldman Sachs that prevented Ruby Tuesday from selling its interest in the lease without Goldman’s consent. The agreement with BNA stated that Ruby Tuesday “must obtain approval from [Goldman] for the transaction.” Goldman refused to approve. Goldman later acquired the lease, after Ruby Tuesday’s bankruptcy.BNA sued Goldman under Tennessee law for intentional interference with business relations (IIBR). The Sixth Circuit affirmed the dismissal of the suit. To establish a viable IIBR claim, BNA had to adequately plead an existing business relationship with Ruby Tuesday, Goldman’s knowledge of that relationship, Goldman’s intent to cause a breach or termination of the relationship, Goldman’s improper motive or improper means, and damages from the tortious interference. BNA’s pleading did not satisfy the tort’s fourth prong: improper motive or means. The court also noted the lack of an existing business relationship between BNA and Ruby Tuesday. View "BNA Associates LLC v. Goldman Sachs Specialty Lending Group, L.P." on Justia Law