Justia Business Law Opinion Summaries

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

Lee Kathrein appealed a judgment piercing the veil of Kathrein Trucking, LLC. In May 2020, West Dakota Oil, Inc. sued Kathrein Trucking, LLC and its owner, Kathrein, for failing to pay for fuel West Dakota provided. West Dakota amended its complaint in January 2021 and alleged breach of contract, unjust enrichment and quantum meruit. A bench trial was held in June 2021. In September 2021, the district court issued a memorandum opinion finding in favor of West Dakota. The court issued its findings of fact and judgment, ordering Kathrein Trucking and Kathrein to pay $63,412.35, jointly and severally. In deciding to pierce the veil of Kathrein Trucking, the district court found Kathrein disregarded the formalities required of limited liability companies, provided West Dakota title to a trailer Kathrein personally owned as security for the company’s debt, charged items at West Dakota that Kathrein personally used, and utilized company assets for personal use. The court found Kathrein operated his company as an alter ego based on a totality of the circumstances and the rubric for factors used to pierce a veil. After reviewing the record, the North Dakota Supreme Court concluded the evidence did not support findings under the applicable factors or a conclusion the company’s veil should have been pierced. The decision to pierce the veil and hold Kathrein personally liable was reversed. View "West Dakota Oil v. Kathrein Trucking, et al." on Justia Law

The Court of Chancery denied Defendants' motion to dismiss this complaint for failure to state a claim upon which relief could be granted, holding that Plaintiff's claims were ripe and that the complaint stated claims for breach of contract, breach of fiduciary duty, and unjust enrichment.Plaintiff, a stockholder of a company, brought this lawsuit alleging that Defendants breached the terms of an equity compensation plan, that Defendants breached their fiduciary duties, and unjust enrichment. Defendants moved to dismiss the complaint in its entirety, arguing that none of Plaintiff's claims were ripe and that Plaintiff failed to state a claim. The Court of Chancery denied the motion to dismiss, holding that Defendants' attacks on the complaint were unavailing. View "Garfield v. Allen" on Justia Law

NOCO manufactures and sells battery chargers and related products. Although it sells these products itself, NOCO also authorizes resellers if they sign an agreement. NOCO discovered that OJC was selling NOCO’s products on Amazon without authorization. NOCO complained to Amazon that OJC was selling NOCO’s products in violation of Amazon’s policy. Around the same time, another company (Emson) also complained to Amazon about OJC. Amazon asked OJC for proof that it was complying with its policy concerning intellectual property rights. OJC did not provide adequate documents. Amazon temporarily deactivated OJC’s account.OJC claimed that NOCO submitted false complaints, and sued for defamation, tortious interference with a business relationship, and violation of the Ohio Deceptive Trade Practices Act. The Sixth Circuit affirmed the summary judgment rejection of OJC’s claims. To succeed on those claims, OJC must establish that NOCO was the proximate cause of its injury. It cannot do this because three intervening causes broke the causal chain, relieving NOCO of any liability: Emson’s complaint, Amazon’s independent investigation and decision, and OJC’s opportunity to prevent the harm to itself. View "NOCO Co. v. OJ Commerce, LLC" on Justia Law

The Court of Appeals held that when an employer pays premiums to a mutual insurance company to obtain a policy for its employee and the insurance company demutualizes, the employee is entitled to the proceeds from demutualization.Medical Liability Mutual Insurance Company (MLMIC) issued professional liability insurance policies to eight medical professionals who were litigants in the cases before the Court of Appeals on appeal. The premiums for the policies were paid by the professionals' employers. After MLMIC demutualized and was acquired by National Indemnity Company, MLMIC sought to distribute $2.502 billion in cash consideration to eligible policyholders pursuant to its plan of conversion. At issue was the employers' claim of legal entitlement to receive the demutualization proceeds. The Supreme Court held that, absent contrary terms in the contract of employment, insurance policy, or separate agreement, the employee, who is the policyholder, is entitled to the proceeds. View "Columbia Memorial Hospital v. Hinds" on Justia Law

Plaintiff buys and collects on delinquent healthcare accounts. Defendant sells such accounts. Business between the two soured, and Plaintiff sued for breach of contract and tortious interference. The district court dismissed Plaintiff’s claims because it believed the disputed portion of the contract was indefinite and unenforceable.   The Fifth Circuit reversed and remanded the district court’s dismissal of Plaintiff’s claims against Defendant. The court held that the term “additional Accounts” has enforceable meaning. And because the Forward Flow Amendment was binding, Plaintiff’s claims should not have been dismissed. The court reasoned that the crucial inquiry is whether the term “additional Accounts” rendered the Forward Flow Amendment unenforceable.  The court held that first read in context, the term “additional Accounts” has enforceable meaning. Taken together, the plain meaning of the word “additional,” the contract’s clear architecture, and various settled principles of interpretation reveal that “additional Accounts” refers to all qualifying accounts that accrue quarterly. Second, none of Defendant’s counterarguments were persuasive to the court.   Further, Defendant claimed damages cannot be calculated because, in its view, there is no way to determine the number of accounts they had to offer and Plaintiff was obligated to purchase. Here, Defendant partially performed in a manner consistent with its putative obligation under the Forward Flow Amendment. Such performance may make a contractual remedy appropriate even though uncertainty is not removed. View "Capio Funding v. Rural/Metro Oprt, et al" on Justia Law