Justia Business Law Opinion Summaries

The Supreme Court reversed the judgment of the circuit court granting partial summary judgment in favor of Smith Angus Ranch Inc. (SAR) on its claims for breach of fiduciary duty and self-dealing, holding that the circuit court erred by excluding extrinsic oral evidence in this case.In its complaint, SAR alleged that Travis Hurst, while serving as a director and officer of SAR, wrongfully acquired SAR assets and made improper purchases using SAR funds. After the court prohibited Hurst from presenting extrinsic oral evidence to show he was authorized to carry out the contested transactions, SAR moved for partial summary judgment on its claims for breach of fiduciary duty and self-dealing. The court granted partial summary judgment for SAR. The Supreme Court affirmed, holding (1) the circuit court erred by excluding extrinsic oral evidence; and (2) questions of fact existed precluding summary judgment. View "Smith Angus Ranch v. Hurst" on Justia Law

In these consolidated appeals concerning whether shareholders had a right to dissent from a corporate merger and seek fair value for their shares the Supreme Court reversed the decision of the district court granting summary judgment in favor of Respondent, holding that Appellants had the right to obtain an appraisal of the fair value of their shares.Appellants held shares of Respondent's stock and sought to exercise dissenters' rights when Respondent commenced a corporate merger offering per-share compensation that Appellants concluded were inadequate. The district court granted summary judgment for Respondent, finding that Respondent was a covered security and thus the market-out exception applied. The Supreme Court reversed, holding that Appellants had a right to dissent from the merger and obtain an appraisal of the fair value of their shares because the Board, in its resolution, approved a right to dissent for dissenting shareholders. View "Pope Investments, LLC v. China Yida Holding, Co." on Justia Law

Gradei’s withdrew from a multi-employer pension plan, asserting that it had ceased all operations covered by the governing multi-employer collective bargaining agreement and was no longer required to contribute to the Fund, which sought to collect $221,932.55 in withdrawal liability. Gradei’s did not respond to payment demands and filed for bankruptcy. The Fund sued the Pitellos (Gradei’s owners) and another corporation owned by the Pitellos (GX), on the theory that they were businesses under common control. The district court found that Gradei’s and GX were conducting business rent-free on property owned by the Pitellos, which was enough to establish common control.The Seventh Circuit affirmed. Under the Employee Retirement Income Security Act, 29 U.S.C. 1381(a), 1404(a) withdrawal liability applies to the withdrawing employer and to “all trades or businesses ... under common control” with that employer. The court rejected Pitello’s argument that the property was only a passive investment. It is possible to rebut the presumption that leasing property to a withdrawing employer is a business but the Pitellos failed to do that. The court noted the economic equivalence between a return on investment in the form of rent collection and return on investment in the form of dividends or salaries made possible by the absence of any rent obligation. The land is part of the business. View "Local 705 International Brotherhood of Teamsters Pension Fund v. Pitello" on Justia Law

After he sent a sexually explicit text message to a customer, the other members of Synergies expelled Jeffery White as a member of the company. White and White Communications filed suit against Synergies, claiming that the expulsion was a breach of the assumption agreement and the operating agreement between the parties. At trial, the jury found in favor of White Communications on its breach of implied contract claim, but found in favor of Synergies on all other claims.The Eighth Circuit affirmed the district court's denial of White's motion for judgment as a matter of law because the jury had a legally-sufficient basis to find that Synergies terminated him for cause. In this case, it was within the purview of the jury to determine whether White's actions led to instant or deferred irreparable harm to Synergies' reputation or its economic interests. The court also concluded that the district court did not abuse its discretion in permitting prior bad acts evidence of defendant's previously-sent texts of the same nature. Furthermore, there was no abuse of discretion in permitting alleged hearsay evidence to show its impact on the listener. The court further concluded that the district court did not err by denying White's motion for a new trial where there is more than sufficient evidence to support the finding in favor of Synergies on the breach of contract claim. Finally, the court upheld the jury's award of damages on plaintiff's breach of implied contract claim. View "White Communications, LLC v. Synergies3 Tec Services, LLC" on Justia Law

Adamo filed several tort claims, alleging that it requested the Union to provide 47 operators for a demolition job, indicating that the project was time-sensitive and that the Union willfully refused to provide Adamo contact information for proposed workers, refused to give reasonable assurances that operators were experienced, trained and qualified, and refused to fulfill Adamo’s request to verify their qualifications. Adamo alleged that the Union sent unqualified workers, who created unsafe working conditions and caused damage for which Adamo was liable. Adamo partially staffed the project with its own workers; the Union allegedly ordered these workers to stop work and used “intimidation” to displace the experienced workers with unqualified workers. As a result of the Union’s interference, Adamo claims it breached its contractual obligations. Adamo also contends that the Union and its president have been “intentionally and maliciously" made "unprivileged, injurious, false and defamatory statements concerning Adamo,” which are affecting Adamo’s good reputation in the community.The district court concluded that section 301 of the Labor Management Relations Act, 29 U.S.C. 185, preempted all Adamo’s claims and dismissed them. The Sixth Circuit affirmed. Whether the defendants’ conduct was justified or improper is inextricably intertwined with and dependent upon the terms of the collective bargaining agreement. The only allegedly defamatory statements were published in the context of a labor dispute, and required a showing of actual malice; the falsity of those statements defends on the terms of the agreement. View "Adamo Demolition Co. v. International Union of Operating Engineers" on Justia Law

The Sellers bought an Oakland property to “flip.” After Vega renovated the property, they sold it to Vera, providing required disclosures, stating they were not aware of any water intrusion, leaks from the sewer system or any pipes, work, or repairs that had been done without permits or not in compliance with building codes, or any material facts or defects that had not otherwise been disclosed. Vera’s own inspectors revealed several problems. The Sellers agreed to several repairs Escrow closed in December 2011, but the sewer line had not been corrected. In January 2012, water flooded the basement. The Sellers admitted that earlier sewer work had been completed without a permit and that Vega was unlicensed. In 2014, the exterior stairs began collapsing. Three years and three days after the close of escrow, Vera filed suit, alleging negligence, breach of warranty, breach of contract, fraud, and negligent misrepresentation. Based on the three-year limitations period for actions based on fraud or mistake, the court dismissed and, based on a clause in the purchase contract, granted SNL attorney’s fees, including fees related to a cross-complaint against Vera’s broker and real estate agent.The court of appeal affirmed. Vera’s breach of contract claim was based on fraud and the undisputed facts demonstrated Vera’s claims based on fraud accrued more than three years before she filed suit. Vera has not shown the court abused its discretion in awarding fees related to the cross-complaint. View "Vera v. REL-BC, LLC" on Justia Law

In a shareholder derivative action, two issues were presented for the Oregon Supreme Court's review: (1) whether the breach of fiduciary duty claims brought by shareholders-plaintiffs Joseph LaChapelle and James Field on behalf of Deep Photonics Corporation (DPC) against DPC directors Dong Kwan Kim, Roy Knoth, and Bruce Juhola (defendants) were properly tried to a jury, rather than to the court; and (2) whether the trial court erred in denying defendants’ motion, made during trial, to amend their answer to assert an affirmative defense against one of the claims in the complaint based on an “exculpation” provision in DPC’s certificate of incorporation. The Oregon Supreme Court concluded the case was properly tried to the jury and that the trial court did not err in denying defendants’ motion to assert the exculpation defense. Therefore the Court of Appeals and the limited judgment of the trial court were affirmed. View "Deep Photonics Corp. v. LaChapelle" on Justia Law

Caterpillar Financial Services Corporation ("CFS") petitioned the Alabama Supreme Court for mandamus relief from a circuit court order purporting to grant a motion to set aside a default judgment in favor of CFS in its action against Horton Logging, LLC ("HL"), and Gary Horton ("Horton"). Because the Supreme Court found the trial court's order purported to grant a successive postjudgment motion, over which the trial court had no jurisdiction, it granted CFS's petition and issued the writ. View "Ex parte Caterpillar Financial Services Corporation." on Justia Law

JP-Richardson, LLC (JP) appealed a court a judgment confirming an arbitration award in favor of Pacific Oak SOR Richardson Portfolio JV, LLC F/K/A KBS SOR Richardson Portfolio JV, LLC (Pacific Oak) in a business dispute. Pacific Oak removed JP as the managing member of a joint venture real estate company. JP initiated arbitration, seeking to be reinstated as the managing member. The arbitrator determined Pacific Oak’s decision to remove JP was justified, and JP owed over $1 million (the cost of arbitration). On appeal, JP argued the trial court erred by denying its petition to vacate the award and by granting Pacific Oak’s motion to confirm the award. Concluding JP’s contentions lacked merit, the Court of Appeal affirmed the judgment. View "JP-Richardson v. Pacific Oaks etc." on Justia Law

The two equal stockholders of UIP Companies, Inc. were deadlocked and could not elect new directors. One of the stockholders, Marion Coster, filed suit in the Court of Chancery and requested appointment of a custodian for UIP. In response, the three-person UIP board of directors — composed of the other equal stockholder and board chairman, Steven Schwat, and the two other directors aligned with him— voted to issue a one-third interest in UIP stock to their fellow director, Peter Bonnell, who was also a friend of Schwat and long-time UIP employee (the “Stock Sale”). Coster filed a second action in the Court of Chancery, claiming that the board breached its fiduciary duties by approving the Stock Sale. She asked the court to cancel the Stock Sale. After consolidating the two actions, the Court of Chancery found what was apparent given the timing of the Stock Sale: the conflicted UIP board issued stock to Bonnell to dilute Coster’s UIP interest below 50%, break the stockholder deadlock for electing directors, and end the Custodian Action. Ultimately, however, the court decided not to cancel the Stock Sale. The Delaware Supreme Court reversed the Court of Chancery on the conclusive effect of its entire fairness review and remanded for the court to consider the board’s motivations and purpose for the Stock Sale. "If the board approved the Stock Sale for inequitable reasons, the Court of Chancery should have cancelled the Stock Sale. And if the board, acting in good faith, approved the Stock Sale for the 'primary purpose of thwarting' Coster’s vote to elect directors or reduce her leverage as an equal stockholder, it must 'demonstrat[e] a compelling justification for such action' to withstand judicial scrutiny." View "Coster v. UIP Companies, Inc." on Justia Law