Justia Business Law Opinion Summaries

The case revolves around the estate of Merle Almer, who passed away in 2016. Almer owned a construction business and a farm, and his will named his daughter, Linda Moe, as the personal representative. The will contained bequests to various individuals, including a life estate in the farm and farming assets to Casey Almer, Merle Almer's grandson. The will also directed the personal representative to use harvested and unharvested grain to pay costs of administration and taxes for the estate. However, at the time of Merle Almer's death, the grain discovered in his grain bins was less than expected, leading to a dispute between the personal representative and Casey Almer.The dispute led to a lawsuit, where the personal representative accused Almer of conversion of grain and other farm assets. Almer counterclaimed with allegations of conversion and breach of fiduciary duty. The counterclaims were dismissed, and a jury found that Almer did not convert property. Almer then filed a petition alleging that the personal representative breached her fiduciary duties. The district court heard testimony and took evidence over five days.The Supreme Court of North Dakota affirmed the district court's decision. The court found that the personal representative did not breach her fiduciary duties while administering the estate. The court also found that the will's abatement provisions were ambiguous due to the will's nonstandard use of the term "specific devise." The court made findings concerning the testator's intent based on testimony from the attorney who prepared the will. The court denied Almer's application for surcharge, granted the personal representative's motion to approve final distribution, and approved approximately $760,000 in attorney’s fees. Almer appealed, challenging the court's interpretation of the will, the court’s findings concerning the personal representative’s conduct during administration, and the court’s approval of attorney’s fees. The Supreme Court affirmed the judgment. View "In re Estate of Almer" on Justia Law

The case revolves around a dispute between Patrick Boyle, a trustee and unit owner of the Ocean Club Condominium (OC Condominium), and the Ocean Club Condominium Association (Association). After a disagreement over the Association's financial management, the Board of Trustees (Board) expelled Boyle. Boyle filed a complaint challenging his removal and sought indemnification for his legal fees and costs based on a provision in the Association's bylaws. The trial court reinstated Boyle as a trustee and held that the bylaws entitled Boyle to counsel fees and costs. Boyle later filed an amended complaint, adding additional claims including for indemnification, and a third amended complaint, bringing a derivative claim on behalf of the Association and alleging that the trustee defendants breached their fiduciary duties.The trial court ruled in Boyle's favor, holding that the bylaws entitled him to counsel fees and costs. The Appellate Division affirmed the trial court's decision but limited the indemnification to the fees and costs Boyle incurred in his action to be reinstated as trustee, not in his derivative action claim.The Supreme Court of New Jersey reversed the Appellate Division's judgment. The court found the indemnification provision in the Association's bylaws to be ambiguous and, therefore, strictly construed it against Boyle, the indemnitee. The court held that the provision did not cover Boyle's first-party claim for attorneys' fees and costs against the Association. The court clarified that while indemnification may apply to first-party claims if that is the clear intent of the parties, any ambiguity will be construed against the indemnitee. The court encouraged parties seeking to permit indemnification of first-party claims to include express language to do so. View "Boyle v. Huff" on Justia Law

The case involves Tammy O’Connor and Michael Stewart (the Sellers) who sold their company, Red River Solutions, LLC, to Atherio, Inc., a company led by Jason Cory, Greg Furst, and Thomas Farb (the Executives). The agreement stipulated that the Sellers would receive nearly half of their compensation upfront, with the rest—around $3.5 million—coming in the form of ownership units and future payments. However, Atherio went bankrupt and the Sellers received none of the promised $3.5 million. The Sellers sued the Executives, alleging fraud under federal securities law, Delaware common law, and the Texas Securities Act.The district court granted summary judgment to the Executives on all claims. The Sellers appealed the decision, arguing that the district court erred in applying the summary-judgment standard to the federal securities law and Delaware common law claims.The United States Court of Appeals for the Fifth Circuit affirmed the district court's decision on the extracontractual and Texas Securities Act fraud claims, but reversed the summary judgment grants on the federal securities law and Delaware common law claims. The court found that there was a genuine dispute as to whether the Executives' misrepresentation of Farb's role as CFO was a substantial factor in the Sellers' loss. The case was remanded for further proceedings. View "Cory v. Stewart" on Justia Law

The case revolves around Justin Keener, who operated under the name JMJ Financial. Keener's business model involved purchasing convertible notes from microcap issuers, converting those notes into common stock, and selling that stock in the public market at a profit. This practice, known as "toxic" or "death spiral" financing, can harm microcap companies and existing investors by causing the stock price to drop significantly. Keener made over $7.7 million in profits from this practice. However, he never registered as a dealer with the Securities and Exchange Commission (SEC).The SEC filed a civil enforcement action against Keener, alleging that he operated as an unregistered dealer in violation of the Securities Exchange Act of 1934. The United States District Court for the Southern District of Florida granted summary judgment for the SEC, enjoining Keener from future securities transactions as an unregistered dealer and ordering him to disgorge the profits from his convertible-note business.In the United States Court of Appeals for the Eleventh Circuit, Keener appealed the district court's decision. He argued that he did not violate the Securities Exchange Act because he never effectuated securities orders for customers. He also claimed that the SEC violated his rights to due process and equal protection.The Court of Appeals affirmed the district court's decision. It held that Keener operated as an unregistered dealer in violation of the Securities Exchange Act. The court rejected Keener's argument that he could not have been a dealer because he never effectuated securities orders for customers. It also dismissed Keener's claims that the SEC violated his rights to due process and equal protection. The court upheld the district court's imposition of a permanent injunction and its order for Keener to disgorge his profits. View "Securities and Exchange Commission v. Keener" on Justia Law

The plaintiff, Deutsche Bank AG, sought to recover damages from the defendants, Alexander Vik and his daughter, Caroline Vik, for their alleged interference with a business expectancy. The plaintiff was attempting to collect an approximately $243 million foreign judgment from a company, Sebastian Holdings, Inc. (SHI), which the plaintiff claimed was controlled by Alexander. The plaintiff alleged that the defendants had attempted to interfere with a Norwegian court’s order requiring the sale of SHI’s shares in a Norwegian software company, Confirmit, to partially satisfy the foreign judgment. The defendants filed a motion to dismiss the action for lack of subject matter jurisdiction, arguing that the plaintiff’s claims were barred by the litigation privilege because they were based on communications made and actions taken in prior judicial proceedings. The trial court denied the motion to dismiss, and the defendants appealed to the Appellate Court, which reversed the trial court’s decision and remanded with direction to dismiss the plaintiff’s complaint in its entirety.The Supreme Court of Connecticut reversed the Appellate Court’s judgment and remanded with direction to affirm the trial court’s denial of the defendants’ motion to dismiss. The Supreme Court held that the defendants could not prevail on their claim that the plaintiff’s appeal was rendered moot by virtue of the court’s decision in a previous case. The court also held that the Appellate Court incorrectly determined that the plaintiff’s claims against the defendants were barred by the litigation privilege. The court concluded that many of the tactics Alexander allegedly used to disrupt, delay, and otherwise interfere with the sale of Confirmit, including stacking Confirmit’s board of directors with family members and associates, submitting a disingenuous bid to acquire Confirmit, coordinating with his father to have the plaintiff’s execution lien deregistered, and forging and backdating the document purporting to grant Caroline a right of first refusal, occurred outside of the context of any judicial proceeding and, therefore, were not covered by the litigation privilege. View "Deutsche Bank AG v. Vik" on Justia Law

The case involves William J. Brown, the former CEO of Matterport, Inc., a technology company that creates 3D digital representations of physical spaces. Brown held almost 1.4 million shares of Matterport stock. In 2021, Matterport became a public company through a merger transaction. Bylaws adopted in connection with the merger included transfer restrictions thought to apply to all legacy Matterport stockholders, including Brown. Brown challenged the lockup in court as illegal and inequitable.In the lower courts, Brown argued that his shares were excluded from the lockup. The court agreed, ruling that the restriction applied only to public Matterport shares held “immediately following” the close of the merger. The court held that Brown never held lockup shares and was free to trade. Brown then sold his shares for total proceeds of approximately $80 million.In the Court of Chancery of the State of Delaware, Brown pursued a recovery of losses caused by his inability to sell sooner. He sought damages under the highest intermediate price method. The court concluded that Brown was entitled to damages, but declined to award them using the highest intermediate price. Instead, the court measured Brown’s damages using the average price of Matterport stock during a reasonable time that Brown would have traded if able. Brown’s net damages were approximately $79 million. View "Brown v. Matterport, Inc." on Justia Law

The case involves a dispute over the validity of certain provisions in a governance agreement between BRP Group, Inc. and its founder. The founder sought to maintain control over the company while selling a significant portion of his equity stake. The agreement stipulated that as long as the founder and his affiliates owned at least 10% of the outstanding shares, the corporation had to obtain the founder's prior written approval before engaging in a list of actions. A stockholder plaintiff challenged three of these pre-approval requirements as invalid.The corporation argued that the plaintiff had waited too long to sue and had implicitly accepted the terms of the agreement by purchasing shares. However, the court rejected these arguments, stating that equitable defenses could not validate void acts. The corporation also claimed that a subsequent agreement, in which the founder agreed to consent to any action approved by an independent committee of directors, rendered the plaintiff's claims moot. The court disagreed, finding that the plaintiff's claims were not moot because the corporation had modified but not eliminated the challenged provisions.On the merits, the court found that the challenged provisions were invalid because they contravened sections of the Delaware General Corporation Law. The court granted the plaintiff's motion for judgment on the pleadings as to those provisions and denied the company's cross motion for judgment on the pleadings to a reciprocal degree. View "Wagner v. BRP Group, Inc." on Justia Law

The case involves NGL Energy Partners LP and NGL Energy Holdings LLC (collectively, "NGL") and LCT Capital, LLC ("LCT"). NGL, entities in the energy sector, engaged LCT, a financial advisory services provider, for services related to NGL's 2014 acquisition of TransMontaigne Inc. However, the parties failed to agree on payment terms, leading LCT to file a lawsuit in 2015. The Superior Court held a jury trial in July 2018, which resulted in a $36 million verdict in LCT's favor.NGL appealed the Superior Court's decision, challenging the $36 million final judgment and a set of evidentiary rulings. LCT cross-appealed, contesting the Superior Court's methodology for computing post-judgment interest. NGL argued that the Superior Court erred by admitting evidence and arguments about the value/benefit supposedly gained by NGL in the Transaction, asserting that such evidence is prejudicial and irrelevant to a quantum meruit claim. NGL also argued that the Superior Court erred by admitting evidence of benefit-of-the-bargain or expectancy damages when assessing the quantum meruit value of LCT’s services.The Supreme Court of the State of Delaware affirmed the Superior Court’s evidentiary rulings and rejected NGL's contention that the Superior Court incorrectly allowed LCT to recover benefit-of-the bargain/expectancy damages. However, the Supreme Court disagreed with the Superior Court’s post-judgment interest determination. The Supreme Court held that prejudgment interest is part of the judgment upon which post-judgment interest accrues under Section 2301(a). Therefore, the Supreme Court reversed the Superior Court as to this issue and remanded the case to the Superior Court for entry of judgment consistent with its opinion. View "NGL Energy Partners LP v. LCT Capital, LLC" on Justia Law

Five employees of The Mayo Clinic, a Minnesota non-profit corporation, filed a lawsuit alleging that the organization failed to accommodate their religious beliefs under Title VII and the Minnesota Human Rights Act (MHRA). The employees claimed that they were terminated for refusing to comply with Mayo's Covid-19 vaccination or testing policies. The plaintiffs sought religious accommodations for the vaccination requirement, citing their Christian religious beliefs. Mayo denied the accommodations for three plaintiffs who refused to get the vaccine. It granted vaccination exemptions to two plaintiffs, but required them to test for Covid-19 weekly, which they refused.The district court dismissed the claims, ruling that two plaintiffs did not exhaust their administrative remedies under Title VII, the other plaintiffs failed to plausibly plead religious beliefs that conflict with Mayo’s Covid-19 policies, and the MHRA fails to provide relief for not accommodating religious beliefs.The United States Court of Appeals for the Eighth Circuit reversed the district court's decision and remanded the case. The appellate court found that the district court erred in finding that two plaintiffs did not exhaust their administrative remedies under Title VII. The court also found that all plaintiffs adequately pled a conflict between their Christian religious beliefs and Mayo Clinic’s Covid-19 policy. Furthermore, the appellate court disagreed with the district court's finding that the MHRA does not provide a cause of action for failure to accommodate religious beliefs. The appellate court held that the MHRA, being a remedial act, should be construed liberally to secure freedom from discrimination for persons in Minnesota, and thus provides protection against failures to accommodate religious beliefs. View "Ringhofer v. Mayo Clinic Ambulance" on Justia Law

In the case before the Supreme Court of California, Another Planet Entertainment, LLC, a live entertainment venue operator, sued its insurer, Vigilant Insurance Company, for denying its claim for coverage of pandemic-related business losses. The plaintiff argued that the actual or potential presence of the COVID-19 virus at its venues constituted "direct physical loss or damage to property," triggering coverage under its insurance policy. The district court dismissed the case, and the plaintiff appealed. The Ninth Circuit Court of Appeals then asked the Supreme Court of California to clarify whether the presence of the COVID-19 virus could constitute "direct physical loss or damage to property" under California law.The Supreme Court of California concluded that allegations of the actual or potential presence of COVID-19 on an insured’s premises do not, without more, establish direct physical loss or damage to property within the meaning of a commercial property insurance policy. Under California law, direct physical loss or damage to property requires a distinct, demonstrable, physical alteration to property. The physical alteration need not be visible to the naked eye, nor must it be structural, but it must result in some injury to or impairment of the property as property. The court found that Another Planet’s allegations did not satisfy this standard. While Another Planet alleges that the COVID-19 virus alters property by bonding or interacting with it on a microscopic level, Another Planet does not allege that any such alteration results in injury to or impairment of the property itself. Its relevant physical characteristics are unaffected by the presence of the COVID-19 virus. View "Another Planet Entertainment, LLC v. Vigilant Insurance Co." on Justia Law