Justia Business Law Opinion Summaries

TSG Real Estate, LLC (“TSG”) was a real estate company that owned a commercial property in Montgomery County, Pennsylvania (the “Property”). Initially, TSG hired New Hart Corporation d/b/a Hart Corporation (“Hart”) as its broker to market the Property. As TSG’s agreement with Hart was to expire, TSG began considering replacement brokers, one of which was Binswanger of Pennsylvania, Inc. (“Binswanger”). Two days before TSG informed Binswanger of its decision to hire it as its broker, TSG received a written offer from TWA Holdings, LLC (“TWA”) to purchase the Property for $3.7 million. TSG negotiated an agreement with Binswanger culminating in a September 27, 2013 “Exclusive Right To Sell Or Lease Agreement” (“Broker Agreement”) with Binswanger. The Broker Agreement permitted TSG to continue using other brokers in connection with any sale to TWA, and provided, inter alia, (1) if Binswanger sold the Property, it would be entitled to a 5% commission; (2) all commissions would be considered to be earned and payable “at the time scheduled for closing on a sale;” (3) a “carve-out period” which allowed that if another broker “completed” a sale, exchange, or transfer of the Property to TWA on or before January 5, 2014, Binswanger would earn no commission; (4) if another broker completed a sale of the Property to TWA after January 5, 2014, the other broker and Binswanger would split a 5% commission; and (5) the duration of the agreement was for one year; however, TSG had the right to terminate the agreement after 6 months with 30 days prior written notice to Binswanger. Two days prior to the expiration of the carve-out period contained in the Broker Agreement, TSG, via Hart and another broker, Gelcor Realty (“Gelcor”), entered into an Agreement of Sale with TWA, selling the Property for $3.4 million. In this appeal by allowance, the Pennsylvania Supreme Court considered the entitlement to broker commissions for the sale of commercial property. Applying the plain and unambiguous language of the Broker Agreement, the Supreme Court found the sale of the Property was completed at the time of closing, i.e., on April 24, 2014. As the sale was not completed on or before January 5, 2014, but only after the carve-out period had expired, Binswanger was entitled to a commission pursuant to the Broker Agreement fee schedule. View "Binswanger of PA Inc v. TSG Real Estate LLC." on Justia Law

In 2008, Appellants, Gamesa Energy USA, LLC and Gamesa Technology Corporation, Inc. (Gamesa), entered into a commercial lease agreement (the Lease) to rent 35,000 square feet of office space in Philadelphia (the Premises) from Appellees, Ten Penn Center Associates, L.P. and SAP V Ten Penn Center NF G.P. L.L.C. (collectively Ten Penn Center). In May 2011, following Gamesa’s submission of the information required under Article 20.2 of the Lease, Ten Penn Center approved a request to sublease approximately 15,000 square feet, or forty percent of the Premises, to Viridity Energy, Inc. (Viridity) through August of 2018. In April 2012, Gamesa informed Ten Penn Center it would be moving out of the Premises as part of a corporate consolidation, and would continue to pay its monthly rent and attempt to find a sub-lessee for the open space. Viridity remained in the Premises under the terms of its sublease with Gamesa. Gamesa was twice late with the rent after it moved out, but still paid amounts due. In 2012, Gamesa submitted a request to Ten Penn Center for consent to sublease 5,200 square feet of the Premises to Business Services International, LLC (BSI), a business entity comprised of two foreign corporations formed for the particular purpose of subleasing office space through Gamesa. Ten Penn Center responded on June 26th, informing Gamesa it was in default of the Lease for vacating the Premises and, as a result, Ten Penn Center had no obligation to entertain the request to sublease. Ten Penn Center proposed it would grant consent to the BSI sublease if Gamesa forfeited its remaining tenant improvement allowance. Thereafter, negotiations between the parties stalled, and the proposed sublease with BSI never materialized. In 2013, Gamesa filed a complaint against Ten Penn Center, asserting claims of breach of contract, tortious interference in business relationships, and unjust enrichment. The Pennsylvania Supreme Court granted discretionary review of this commercial landlord and tenant dispute to determine whether the Superior Court erred in holding the tenant was limited to damages for breach of contract and could not also recover the rent it paid following the landlord’s breach, despite prevailing on its claims for both remedies at trial. After careful review, the Supreme Court found no reversible error and affirmed the Superior Court. View "Gamesa Energy USA, Aplt. v. Ten Penn Center, et al" on Justia Law

The Supreme Judicial Court affirmed the order of the motion judge denying Defendants' special motion to dismiss Plaintiffs' defamation claim pursuant to the anti-SLAPP statute, Mass. Gen. Laws ch. 231, 59H, holding that the motion judge did not err in concluding that Plaintiffs' colorable defamation claim was not a SLAPP suit.Plaintiffs, nine nurses who had been fired from Steward Carney Hospital, Inc., filed this defamation action against the hospital and others (collectively, Defendants). Defendants filed a special motion to dismiss the defamation claim under the anti-SLAPP statute. A superior court judge denied the motion. The Supreme Judicial Court affirmed in Blanchard v. Steward Carney Hospital, Inc., 477 Mass. 141 (2017), after augmenting the anti-SLAPP framework devised in Duracraft Corp. v. Holmes Products Corp., 247 Mass. 156 (1998) (Duracraft) and remanded for further proceedings. On remand, the motion to dismiss was again denied. The Supreme Judicial Court affirmed after applying the newly augmented framework, holding that the defamation claim was not a SLAPP suit because it was not brought with the primary motivation of chilling the hospital defendants' right to petition. View "Blanchard v. Steward Carney Hospital, Inc." on Justia Law

The Court of Chancery denied Defendants' motion to dismiss breach of fiduciary duty claims brought by a Tesla, Inc. stockholder against Telsa's chief executive officer, Elon Musk, and members of Tesla's board of directors regarding a stockholder vote approving an incentive-based compensation plan for Musk, holding that, on the pled facts, it was reasonably conceivable that the award was unfair.After approving the award, the Board submitted the award to Tesla's stockholders for approval. The stockholders approved the award, after which Tesla implemented the award. Thereafter, Plaintiff brought direct and derivative claims against Musk and members of the Board alleging that the award was excessive and the product of breaches of fiduciary duty. Defendants moved to dismiss the complaint. The Court of Chancery denied the motion, holding (1) entire fairness is the standard by which the award must be reviewed; and (2) under the circumstances of this case, Defendants' motion to dismiss the breach of fiduciary duty claims must be denied. View "Tornetta v. Musk" on Justia Law

The Ninth Circuit certified the following question of state law to the Supreme Court of the State of Delaware: In a Delaware limited partnership, does a general partner's request to a limited partner for a one-time capital contribution constitute a request for "limited-partner action" such that the general partner has a duty of disclosure, and, if the general partner fails to disclose material information in connection with the request, may the limited partner prevail on a breach-of-fiduciary-duty claim without proving reliance and causation? View "Goodman v. Dohmen" on Justia Law

Jerome Speegle and Anthony Hoffman, two members of Zieman Speegle, LLC, a law firm based in Mobile, petitioned for approval of dissolution of the firm. Thomas Zieman, Jr., previously a member of the law firm, appeared in the action, asserting a counterclaim against the law firm and a third-party complaint against Speegle and Hoffman. Without holding a hearing, the trial court entered a summary judgment on Zieman's counterclaim and third-party complaint in favor of the law firm, Speegle, and Hoffman. The trial court also identified the equity-holding members of the law firm and provided for the distribution of the assets of the law firm. Because the Alabama Supreme Court held the trial court should have held a hearing, it reversed the trial court's judgment and remanded the case for further proceedings. View "Zieman v. Zieman Speegle, LLC" on Justia Law

The federal district court for the Western District of Washington certified a question of state law to the Washington Supreme Court. Money Mailer, LLC and Wade Brewer entered into a franchisor/franchisee relationship. In 2015, Money Mailer sued Brewer alleging breach of contract and for nearly $2 million in damages. Brewer counterclaimed, arguing among other things that Money Mailer violated the Franchise Investment Protection Act (FIPA) by selling him "products and services ... at more than a fair and reasonable price," contrary to RCW 19.100.180(2)(d). Brewer moved for partial summary judgment on the alleged FIPA violation. The district court found undisputed Money Mailer sold printed advertisements to Brewer at twice the price at which Money Mailer obtained and/or produced them. The court determined this markup violated RCW 19.100.180(2)(d) as a matter of law, and on this ground, granted in part Brewer's motion. In concluding Money Mailer's behavior violated the FIPA, the district court relied on two conclusions regarding Washington law: (1) the Court impliedly found that a franchisee may generally rely on the price at which a franchisor purchased a particular good or service to show what the "fair and reasonable price" for that service is; and (2) that selling a franchisee a particular good or service for twice what it cost the franchisor was not a "fair and reasonable price" and violated FlPA as a matter of Washington law. The federal court certified those conclusions as questions, asking the Washington Supreme Court to clarify whether those two rules of law were correct. After review, the Supreme Court answered "no" to both. A "fair and reasonable price" in RCW 19.100.180(2)(d) was a question of fact involving what prudent franchisors and franchisees in similar circumstances would regard as an appropriate price. "The circumstances must take into account the forces of the marked...whether Money Mailer violated the FIPA remains a question of fact to be determined by the district court." View "Money Mailer, LLC v. Brewer" on Justia Law

A corporation that acquires substantially all the assets of an unrelated competitor at a secured creditor's private foreclosure sale, in an agreement that declines to assume the competitor's liabilities, is not liable as the competitor’s successor for unpaid pre-acquisition inventory purchases from a third party. The Eighth Circuit affirmed the district court's grant of summary judgment dismissing Westfeldt's counterclaims for successor liability, unfair trade practices, conversion, and unjust enrichment, primarily on the ground that Westfeldt failed to submit evidence that the foreclosure and asset sale were anything but bona fide business transactions.The court held that buying USR assets from Great Western at a foreclosure sale in an agreement that disclaimed assumption of USR liabilities protected Ronnoco from claims that the asset purchase was tainted by commercially inadequate consideration. In this case, Westfeldt offered no evidence that it was prejudiced by the asset sale. Furthermore, there was no evidence that, absent the alleged fraud by Ronnoco, USR would have been able to pay off its entire debt to Great Western and then make payment to Westfeldt. Finally, the district court properly rejected Westfeldt's remaining claims. View "Ronnoco Coffee, LLC. v. Westfeldt Brothers, Inc." on Justia Law

Plaintiffs purchased a recreational vehicle (RV) from Vacationland for $26,000.25. When it leaked during a rainstorm, they brought it in for repair. When it leaked again, causing extensive damage, they brought it back. A little more than two weeks after they dropped it off the second time and without a timetable for when the vehicle would be repaired, they told the seller that they no longer wanted the RV and asked for their money back. Plaintiffs sued, citing revocation of acceptance under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, 15 U.S.C. 2310(d); breach of implied warranty of merchantability under the Magnuson-Moss Act; revocation of acceptance and cancellation of contract under Illinois’s adoption of the Uniform Commercial Code; and return of purchase price under the UCC. Defendant argued that plaintiffs’ failure to give it a reasonable opportunity to cure was fatal to their claims. The circuit court granted the defendant summary judgment. The appellate court affirmed. Plaintiffs sought review of the revocation of acceptance claim under the UCC (810 ILCS 5/2- 608(1)(b)). The Illinois Supreme Court reversed. The plain language of subsection 2-608(1)(b) does not require that the buyer give the seller an opportunity to cure a substantial nonconformity before revoking acceptance. View "Accettura v. Vacationland, Inc." on Justia Law

For the 100th Indianapolis 500 race in 2016, organizers engaged Karma, an event-planning company, to host a ticketed party. The party was a disappointment. Poor ticket sales prevented Karma from covering its expenses. Karma sued the racetrack for breach of contract, accusing it of failing to adequately promote the party. Karma sought $817,500 in damages, a figure apparently gleaned from conversations with Speedway officials who speculated that the party would generate $1 million in gross revenue “from ticket and table sales only.” The Speedway filed a counterclaim alleging that Karma failed to place the promised banner advertisement on Maxim’s website or provide marketing support on Maxim’s social-media channels. Karma is a licensee of Maxim’s, a men’s magazine. The district judge rejected Karma’s claim at summary judgment, ruling that the damages theory rested on speculation. A jury found Karma liable on the counterclaim, awarding $75,000 in damages. The Seventh Circuit affirmed. Karma’s evidence of damages was speculative, so its claim failed under Indiana law. The jury could award objectively foreseeable damages; it didn’t need to hear testimony on the subjective expectations of Speedway officials before awarding damages. View "Karma International, LLC v. Indianapolis Motor Speedway, LLC" on Justia Law