Justia Business Law Opinion Summaries

Article III is satisfied so long as a party with standing to prosecute the specific claim in question exists at the time the pleading is filed. If that party (the real party in interest) is not named in the complaint, then it must ratify, join, or be substituted into the action within a reasonable time. Only if the real party in interest either fails to materialize or lacks standing itself should the case be dismissed for want of subject-matter jurisdiction.Two Cayman Islands investment funds filed a class action in 2016, alleging that numerous banks had conspired to manipulate certain benchmark interest rates. A year later, the banks discovered that the two plaintiff funds had been dissolved years earlier, and that the case was actually being prosecuted by a separate entity, Fund Liquidation. Fund Liquidation maintains that it was assigned the dissolved entities' claims, but the district court dismissed the case with prejudice.The Second Circuit vacated, concluding that although the dissolved funds lacked standing at the time the case was commenced, Article III was nonetheless satisfied because Fund Liquidation, the real party in interest, has had standing at all relevant times and may step into the dissolved entities' shoes without initiating a new action from scratch. The court explained that its precedent and Article III does not require application of the nullity doctrine. Accordingly, the court remanded for further proceedings. View "Fund Liquidation Holdings LLC v. Bank of America Corp." on Justia Law

Dansko conducted due diligence to replace the trustee for its employee stock ownership plan. Benefit falsely denied having been recently been investigated by the Department of Labor. Dansko’s board passed a resolution appointing Benefit as the new trustee under the Trust Agreement. Around that time, Dansko decided to refinance its debt. Benefit never agreed in writing to help with the refinance but allegedly said it would “be able to do the [deal]” and estimated that it would need a month or more to do due diligence for the trust. Dansko thought Benefit would be the trustee for the deal. In December 2014, Benefit told Dansko that it would not serve as trustee for the debt deal, which delayed the deal and allegedly cost Dansko more than $2 million in extra interest.Dansko sued Benefit, alleging breach of the trust agreement, breach of an implied promise (promissory estoppel), and that Benefit fraudulently induced Dansko to hire it by falsely denying the DOL investigation. Benefit counterclaimed for its defense costs under an indemnification clause in the trust agreement. The district court rejected Dansko’s claims but held that Dansko did not have to indemnify Benefit for its defense costs. Applying Pennsylvania law, the Third Circuit vacated. The court erred in rejecting Dansko’s contract, estoppel, and fraud claims but under the trust agreement, Dansko must advance the trustee’s reasonable litigation expenses. View "Dansko Holdings Inc. v. Benefit Trust Co." on Justia Law

The Supreme Court affirmed the judgment of the circuit court denying the motions filed by both sides for reasonable attorney fees and expenses after a settlement left each side convicted that the other side had behaved in bad faith, holding that the circuit court acted within its discretion in denying Michael Harlow's motion for attorney fees and expenses.Harlow was one of three members of Eastern Electric, LLC when Eastern lost almost $400,000 in a prevailing wage case. Thereafter, Harlow dissociated from Eastern. Eastern made an offer to purchase Harlow's interest, but Harlow rejected the offer. Harlow then sued to enforce his statutory right to receive fair value for his interest. The parties eventually settled. Both sides then sought to recover their attorney fees and expenses. The circuit court rejected both parties' motions, and Harlow appealed. The Supreme Court affirmed, holding that the circuit court did not abuse its discretion in refusing an award of fees. View "Harlow vs. Eastern Electric, LLC" on Justia Law

In this appeal arising from a dispute concerning the parties' respective membership interests in three related LLCs the Supreme Court affirmed in part and reversed in part the judgment of the trial court, holding that none of Defendants' challenges to the trial court's judgment and related orders had merit and that, with one exception, the same was true of Plaintiff's challenges to the judgment and orders.Plaintiff filed a complaint alleging claims for conversion, unfair and deceptive trade practices, unjust enrichment, a declaration that he continued to own interests in each of the LLCs and a claim seeking judicial dissolution of the LLCs. The trial court entered judgment in favor of Plaintiff as to certain claims and in favor of Defendants as to other claims. The parties cross-appealed. The Supreme Court affirmed, holding (1) the trial court erred in deciding to direct a verdict in favor of Defendants with respect to Plaintiff's claims related to Carolina Coast Holdings, LLC; and (2) the remaining claims on appeal were without merit. View "Chisum v. Campagna" on Justia Law

The Court of Appeals held that a change in life insurance beneficiary constitutes a conveyance under the Maryland Uniform Fraudulent Conveyance Act (MUFCA), Md. Code Comm. Law 15-201(c), and that a guardian of property is not granted the authority to change a life insurance beneficiary on a policy of the ward under section 15-102(t) of the Estates and Trusts Article (ET).In a case arising from a decade-long dispute between the adult children of the Buckingham family and United Bank, the United States District Court for the District of Maryland certified two questions of law to the Court of Appeals regarding whether the children intentionally defrauded the Bank when they successfully diverted significant amounts of life insurance proceeds away from the declining family business and to their personal use. The Court of Appeals answered the questions as follows: (1) a change of the beneficiary designation of a life insurance policy constitutes a conveyance under MUFCA; and (2) the guardian of property does not have the authority to change the beneficiary on a life insurance policy of a ward under ET 15-102(t). View "United Bank v. Buckingham" on Justia Law

Azarax filed suit against defendant and his law firm, alleging legal malpractice and breach of fiduciary duty. Azarax claimed that defendant and his firm were negligent in their representation of Convey Mexico and that Azarax had claims against defendant and his firm as a successor by merger to Convey Mexico.The Eighth Circuit affirmed the district court's dismissal of the complaint and agreed with the district court that Azarax was not a valid successor in interest to Convey Mexico. In this case, the summary judgment record established that the shareholders of Convey Mexico did not unanimously provide written consent for the merger with Azarax Holding, so the merger was not valid. Therefore, Azarax lacked standing to sue defendant and his law firm. The court modified the judgment to dismiss the complaint without prejudice. View "Azarax, Inc. v. Syverson" on Justia Law

A business owner formed a brewing company with plans to open a brewpub. He signed a lease that provided rent-free access to a commercial unit for a period of time to allow him to prepare the rental space prior to opening for business. But the brewing company encountered numerous delays during construction and did not open for business as planned. It also did not pay rent once the rent-free period ended. After the property owner received no rent for several months, it entered the property and changed the locks. The business owner then sued, claiming the property owner breached the lease, tortiously interfered with a business relationship, and breached the implied covenant of good faith and fair dealing. The property owner counterclaimed that the brewing company breached the lease. On cross-motions for summary judgment, the superior court dismissed all claims against the property owner and ruled in the property owner’s favor on its counterclaim. The court also denied the business owner’s request to compel discovery and awarded the property owner over $200,000 in damages. The business owner appealed the superior court’s grants of summary judgment, its denial of his motion to compel discovery, and its award of damages. Finding no reversible error, the Alaska Supreme Court affirmed. View "Kimp v. Fire Lake Plaza II, LLC" on Justia Law

In 2014, appellant and cross-appellee LCT Capital, LLC (“LCT”) helped appellee and cross-appellants NGL Energy Partners, LP and NGL Energy Holdings LLC (collectively, “NGL”) acquire TransMontaigne, a refined petroleum products distributor. LCT played an "unusually" valuable role in the transaction. The transaction generated $500 million in value for NGL, more than double the $200 million price that NGL paid to acquire TransMontaigne. NGL’s CEO Mike Krimbill represented on several occasions that LCT would receive an unusually large investment banking fee, but the parties failed to reach an agreement on all of the material terms. After negotiations broke down completely, LCT filed suit seeking compensation for its work under several theories, including quantum meruit and common law fraud. At trial, LCT presented a unitary theory of damages that focused on the value of the services that it provided, measured by the fee that Krimbill proposed for LCT’s work. Nonetheless, the jury verdict sheet had two separate lines for damages awards, one for the quantum meruit claim and another for the fraud claim. The jury found NGL liable for both counts, awarded LCT an amount of quantum meruit damages equal to a standard investment banking fee, and awarded LCT a much larger amount of fraud damages approximately equal to the unusually large fee that Krimbill proposed. Following post-trial briefing, the superior court set aside the jury’s awards and ordered a new trial on damages. LCT and NGL both filed interlocutory appeals of the superior court’s order. On appeal, LCT argued that benefit-of-the-bargain damages were available without an enforceable contract. On cross-appeal, NGL argued the superior court erred by ordering a new trial on damages because the jury’s quantum meruit award fully compensated LCT for its harm. NGL also argued it was entitled to judgment as a matter of law on the fraud claim. Finally, NGL argued the superior court provided the jury with erroneous fraudulent misrepresentation jury instructions. After review, the Delaware Supreme Court found LCT was not entitled to benefit-of-the-bargain damages and that the Superior Court did not abuse its discretion by ordering a new trial on quantum meruit damages. Nonetheless, the Supreme Court also held the superior court abused its discretion by ordering a new trial on fraud damages because LCT did not assert any independent damages to support its fraud claim. Accordingly, the Court affirmed in part and reversed in part the superior court’s judgment. View "LCT Capital, LLC v. NGL Energy Partners LP" on Justia Law

The Eleventh Circuit affirmed the district court's grant of summary judgment against ACS and in favor of its competing distributor, White Cap, on ACS's Sherman Antitrust Act and Georgia state law claims. ACS argues that summary judgment was erroneously granted because the evidence demonstrates that White Cap agreed with Meadow Burke to have Meadow Burke stop supplying ACS projects in Florida.The court held that the evidence is at least equally consistent with Meadow Burke having made an independent decision to terminate ACS as it is with an inference of concerted action. Furthermore, the evidence is at least equally consistent with White Cap having made an independent decision to continue distributing the Meadow Burke product as it is with it having engaged in concerted action. Therefore, the court cannot conclude that White Cap acted in a manner rising to the level of anticompetitive conduct necessary for a claim under section 1 of the Sherman Antitrust Act. The court also held that the district court did not err in granting summary judgment on ACS's monopolization and attempted monopolization claims pursuant to section 2 of the Sherman Antitrust Act. Finally, the court held that the district court properly granted summary judgment on the tortious interference claim. View "American Contractors Supply, LLC v. HD Supply Construction Supply, Ltd." on Justia Law

In March 2020, Congress created the Paycheck Protection Program (PPP), which authorized the SBA to guarantee favorable loans to certain business affected by the COVID-19 pandemic. The SBA Administrator promulgated regulations imposing several longstanding eligibility requirements on PPP loan applicants, including that no SBA guarantee would be given to businesses presenting "live performances of a prurient sexual nature." Pharaohs, a business featuring nude dancing, sought a preliminary injunction directing the SBA to give it a PPP loan guarantee.The Second Circuit affirmed the district court's denial of Pharaoh's motion, holding that the district court did not abuse its discretion in finding that Pharaohs has failed to show that it is substantially likely to succeed on its claims that (1) the SBA exceeded its statutory authority to promulgate eligibility restrictions, and (2) the exclusion of nude-dancing establishments from the Program violates the First or Fifth Amendments. The court need not address the remaining preliminary injunction factors in light of its conclusion. View "Pharaohs GC, Inc. v. United States Small Business Administration" on Justia Law