Justia Business Law Opinion Summaries

The Supreme Court affirmed the judgment of the trial court dismissing for lack of personal jurisdiction this complaint against Defendants, Board and More GmbH (B&M) and Emeram Capital Partners GmbH (Emeram), holding that Plaintiff, North Sales Group, LLC, failed to demonstrate that Defendants had sufficient minimum contacts with Connecticut.B&M was a limited liability company chartered under the laws of Austria, with its principal place of business in Austria. Emeram was a private equity investment limited liability company, with its principal place of business in Germany. Neither company had maintained an agent for service of process in Connecticut, nor did the companies maintain offices or transact business in Connecticut. At issue on appeal was whether Plaintiff advanced sufficient allegations and evidence to establish minimum contacts with Defendants. The Supreme Court held that Plaintiff did not and that the trial court correctly dismissed the case for lack of personal jurisdiction. View "North Sails Group, LLC v. Boards & More GmbH" on Justia Law

The Supreme Court affirmed the judgment of the business court determining the fair value of shares held by shareholders in Reynolds American Inc. (RAI), holding that the dissenters' challenges to the business court's judgment were without merit.RAI sought judicial appraisal after it was acquired by British American Tobacco. The business court determined that the $59.64 per share plus interest RAI paid the dissenters after they notified RAI of their intent to seek judicial appraisal equaled or exceeded the fair value of RAI shares as of the date of the merger and that no further payments to the dissenters was required. The Supreme Court affirmed, holding that the business court correctly concluded that the dissenters were paid fair value for their shares. View "Reynolds Am. Inc. v. Third Motion Equities Master Fund Ltd." on Justia Law

The Court of Appeals answered questions certified by the Second Circuit Court of Appeals regarding the validity of tort claims brought by a judgment debtor against its judgment creditors, holding that a judgment debtor's exclusive avenue for relief under the circumstances set forth in this case is to bring an appropriate action pursuant to N.Y. C.P.L.R. 52.In two cases brought in federal court, the judgment debtor asserted tort claims against its judgment creditors and a New York City marshal, alleging violations of the C.P.L.R. article 52 service requirements committed in the execution of valid judgments issued by New York courts. The Second Circuit certified questions as to the validity of such tort claims, particularly with respect to damages the judgment debtor could show under such circumstances. The Court of Appeals held that the better course is to require that such claims be brought pursuant to article 52. View "Plymouth Venture Partners, II, L.P. v GTR Source, LLC" on Justia Law

Mashallah sells handcrafted jewelry at its Chicago store. Ranalli’s operates a bar and restaurant. Both purchased West Bend all-risk commercial property insurance policies. In March 2020, in response to the COVID-19 pandemic, Illinois Governor Pritzker ordered all individuals to stay at home except to perform specified “essential activities” and ordered “non-essential” businesses to cease all but minimum operations. Restaurants were considered essential businesses and permitted to sell food solely for off-premises consumption. Ranalli’s was restricted to filling takeout and delivery orders. Mashallah was not classified as an essential business and had to cease its retail activities. Both businesses sustained heavy financial losses. Their West Bend policies are materially identical. West Bend agreed to pay for actual business income lost and necessary extra expenses incurred if they were caused by “direct physical loss of or damage to” the businesses’ properties. Both policies contain virus exclusions. West Bend denied their claims.The Seventh Circuit affirmed the dismissal of contract and bad faith claims and a claim that West Bend’s retention of full premiums—despite decreased risks occasioned by the reduction in insureds’ business operations—constituted unjust enrichment, requiring rebates. The virus exclusions barred coverage for the purported losses and expenses and the businesses failed to allege viable legal bases for rebate of premiums. View "Mashallah, Inc v. West Bend Mutual Insurance Co." on Justia Law

In March 2020, in response to the rapidly expanding COVID-19 pandemic, Illinois Governor Pritzker issued an order mandating the temporary closure to the public of restaurants, bars, and movie theaters; a subsequent order required all non-essential businesses to shut down partially and temporarily. Bradley operates a Quality Inn & Suites with a restaurant, bar, and general event space and suspended in-person dining at the restaurant and bar, and canceled previously scheduled weddings and meetings.Bradley’s general business property insurance policy from Aspen requires “direct physical loss of or damage to” covered property; its loss of use exclusion bars coverage for “loss or damage caused by or resulting from … [d]elay, loss of use or loss of market” and another exclusion bars coverage for “loss or damage caused directly or indirectly by … [t]he enforcement of or compliance with any ordinance or law: (1) Regulating the construction, use or repair of any property; or (2) Requiring the tearing down of any property.”Affirming the district court, the Seventh Circuit held that the term “direct physical loss of or damage to” property does not apply to a business’s loss of use of the property without any physical alteration. The loss of use exclusion and the ordinance or law exclusion in this policy provide separate bars to coverage. View "Bradley Hotel Corp. v. Aspen Speciality Insurance Co." on Justia Law

In March 2020, the Dallas County government issued orders restricting the operations of local businesses in light of the COVID-19 pandemic. Hotels were permitted to continue to provide lodging, and delivery and take-out food services, subject to social-distancing rules. Crescent owns the Dallas Ritz-Carlton hotel, which offers guest rooms, a restaurant and bar, general event space, a salon, spa, and fitness center. Crescent alleges that COVID-19 rendered the air in the hotel unsafe and diminished the functional space available, causing significant losses of income. Crescent also alleges that it incurred expenses to install plexiglass partitions and hand sanitizer stations, to display signs throughout the hotel, and to move furniture to permit social distancing. Crescent’s Zurich insurance policy requires “direct physical loss or damage” to covered property and includes an exclusion for losses attributable to any communicable disease, including viruses, and a microorganism exclusion, which bars coverage for losses “directly or indirectly arising out of or relating to mold, mildew, fungus, spores or other microorganisms of any type, nature, or description, including but not limited to any substance whose presence poses an actual or potential threat to human health.”The Seventh Circuit affirmed the dismissal of Crescent’s suit against Zurich. The phrase “direct physical loss or damage” requires either “a permanent [dispossession] of the property due to a physical change … or physical injury to the property requiring repair.” The microorganism exclusion independently bars coverage for the hotel’s claimed losses. View "Crescent Plaza Hotel Owner, L.P. v. Zurich American Insurance Co." on Justia Law

On March 15, 2020, in response to the rapidly expanding COVID-19 pandemic, Illinois Governor Pritzker issued an order mandating the temporary closure to the public of restaurants, bars, and movie theaters. On March 20, another order required all non-essential businesses to shut down partially and temporarily. As a result of these orders, the plaintiffs (businesses) were each required to close or dramatically scale back operations. The businesses held materially identical commercial-property insurance policies, issued by Cincinnati Insurance Company, providing coverage for income losses sustained on account of a suspension of operations caused by “direct physical loss” to covered property. The policies also provided coverage for income losses sustained as a result of an action of civil authority prohibiting access to covered property, when such action was taken in response to “direct physical loss” suffered by other property. Cincinnati denied their claims.The Seventh Circuit affirmed the dismissal of each suit. The businesses did not adequately allege that either the virus that causes COVID-19, SARS-CoV-2, or the resulting closure orders caused “direct physical loss” to property; the loss of use, unaccompanied by any physical alteration to property, does not constitute “direct physical loss” under the relevant insurance policies. View "Sandy Point Dental, P.C. v. Cincinnati Insurance Co." on Justia Law

The Supreme Court issued a writ of mandamus directing the district court to vacate its order waiving the obligation of the real party in interest stockholders (RPIs) to provide consents from their stockholders of record until step four of the four-step process outlined in Nev. Rev. Stat. 92A.410-.440 and after petitioner corporation's merger vote was held, holding that the district court erred.At issue was the statutory process by which a stockholder who objects to a proposed merger may seek the fair value of the stockholder's shares from the corporation if the stockholder believes the proposed price for those shares is inadequate. In the event stockholders own their shares indirectly, the beneficial stockholders must obtain the stockholder of record's consent before dissenting from the merger. The Supreme Court held (1) Nev. Rev. Stat. 92A.400(2)(a), when read in conjunction with the four-step process outlined in sections 92A.410-.440, unambiguously requires a beneficial holder to obtain the record holder's consent at step two before the vote on the merger is held; and (2) therefore, the district court here erred in construing the statutes as permitting RPIs to submit their consents after the merger vote was taken and in waiving RPIs statutory obligation to obtain those consents. View "Aerogrow International, Inc. v. District Court" on Justia Law

In consolidated appeals filed by Greenville County, South Carolina, the issue central to the cases involved a zoning dispute between the County and Greenville Bistro, LLC, d/b/a Bucks Racks & Ribs. Greenville Bistro filed suit against the County to enjoin the County from enforcing an ordinance to deny Greenville Bistro's desired method of operating Bucks Racks & Ribs. Citing other ordinances, the County counterclaimed and moved to enjoin Greenville Bistro from operating Bucks as a sexually oriented business. Both appeals concerned the legality of Greenville Bistro operating Bucks as a restaurant with the added feature of scantily clad exotic dancers. The circuit court granted Greenville Bistro's motion for a temporary injunction, and the County appealed. While the County's appeal was pending, another circuit court denied the County's motion for temporary injunctive relief, ruling that in light of the County's appeal it did not have jurisdiction to consider the County's motion. The South Carolina Supreme Court reversed both rulings, dissolved the injunction granted to Greenville Bistro, and held the County was entitled to injunctive relief. The case was remanded to the circuit court for further proceedings. View "Greenville Bistro, LLC. v. Greenville County" on Justia Law

Uber’s wholly-owned Dutch subsidiaries retained Rattagan, an Argentinian attorney, to serve as their legal representative in Buenos Aires in connection with a new Uber subsidiary in Argentina. Uber representatives from San Francisco allegedly assumed responsibility for communicating with Rattagan. According to Rattagan, Uber launched its platform in Argentina before its subsidiary was registered with the proper tax authority, despite knowing that Rattagan, as the entities’ legal representative, could be subject to personal liability for Uber’s violations of Argentine law. Law enforcement authorities raided Rattagan’s office and the homes of his business colleagues; his offices were surrounded by protestors and he received negative press. Rattagan later was charged with aggravated tax evasion for his perceived involvement with the Uber launch.Rattagan sued for negligence, breach of the implied covenant of good faith and fair dealing, fraudulent concealment, and aiding and abetting fraudulent concealment. Applying California law, the district court dismissed, as time-barred, Rattagan’s negligence and breach of the implied covenant claims, and held that the fraudulent concealment claims were foreclosed by the economic loss rule, which prevents a party to a contract from recovering economic damages resulting from breach of contract under tort theories. The Ninth Circuit noted that Rattagan’s appeal hinges on whether fraudulent concealment claims are exempt from California’s economic loss rule and certified that question to the California Supreme Court. View "Rattagan v. Uber Technologies, Inc." on Justia Law