Justia Business Law Opinion Summaries

Terex USA, LLC ("Terex"), petitioned the Alabama Supreme Court for a writ of mandamus directing the Circuit Court to enforce an outbound forum-selection clause contained in a distributorship agreement between Terex and Cowin Equipment Company, Inc. ("Cowin"), and to dismiss Cowin's action against Terex based on improper venue pursuant to Rule 12(b)(3), Ala. R. Civ. P. Before August 2015, Cowin, a heavy-equipment dealer, had served as an authorized dealer of heavy equipment manufactured by the Liebherr Group for approximately 30 years. Cowin alleged Terex, a heavy-equipment manufacturer, began aggressively recruiting Cowin to become a dealer of its equipment in Alabama, Georgia, and Florida. At the time, Warrior Tractor & Equipment Company, Inc. ("Warrior"), was serving as the dealer for Terex's equipment in the region. Based on assurances from Terex that Cowin would be the only Terex dealer in the territory, Cowin allowed its relationship with Liebherr Group to expire. In August 2015, Cowin entered into a distributorship agreement with Terex to sell Terex heavy equipment in Alabama, Georgia, and Florida. Subsequent to entering into the distributorship agreement with Cowin, Terex entered into a new distributorship agreement with Warrior without providing notice to Cowin that Warrior would be reentering the heavy-equipment market. Cowin alleged Terex's failure to give it notice that Warrior would be reentering the market was contrary to common industry practices. Cowin sued Terex and Warrior, asserting various claims arising from Terex's alleged violation of the Alabama Heavy Equipment Dealer Act, sec. 8-21B-1 et seq., Ala. Code 1975 ("the AHEDA"). Terex moved the trial court pursuant to Rule 12(b)(3), Ala. R. Civ. P., to dismiss Cowin's complaint, arguing that venue in Jefferson County was improper because of the forum-selection clause in the distributorship agreement designating either the United States District Court for the Northern District of Georgia or the Georgia state court in Atlanta as the proper forum for any dispute between the parties arising from the distributorship agreement. "An outbound forum-selection clause is exactly the type of provision the legislature intended to prohibit because it would undermine the remedial measures and protections the legislature clearly intended to afford heavy-equipment dealers under the AHEDA; this is especially so as to the outbound forum-selection clause in this case, which also contains a choice-of-law provision designating Georgia law as controlling." The Alabama Supreme Court concluded Terex failed to establish a clear legal right to the relief it sought, so the Court denied its petition for a writ of mandamus. View "Ex parte Terex USA, LLC." on Justia Law

The district court granted DIRECTV’s motion to reverse pierce the corporate veil, finding that Randy Coley's limited liability companies were alter egos of Mr. Coley and were therefore subject to execution of DIRECTV's judgment against him. At issue was whether application of Delaware law in this case permitted the remedy of reverse piercing a corporate veil of an LLC, when the LLC has been determined to be the alter ego of its sole member. The Fourth Circuit affirmed the district court's decision to allow this remedy, based on the court's consideration of existing Delaware law and of the overwhelming evidence that the LLCs at issue were alter egos of Mr. Coley. The court also affirmed the balance of the district court's judgment. View "Coley v. DIRECTV, Inc." on Justia Law

Plaintiff filed a putative class action against TAXI and its CEO, alleging that TAXI operated a talent listing service without procuring the bond California's Fee-Related Talent Services Law (FTSL) requires. The Court of Appeal affirmed the trial court's grant of summary judgment for defendants, holding that plaintiff's FTSL claim amounted to no more than an assertion that he was injured by TAXI's noncompliance with the FTSL. However, mere noncompliance was not an injury caused "by a violation" of the FTSL. The court also held that plaintiff's evidence also failed to raise a triable issue of material fact as to whether he suffered an economic injury caused by TAXI's alleged violations of the FTSL, which he must have to establish standing to sue under California's Unfair Competition Law. View "Demeter v. Taxi Computer Services" on Justia Law

The agreement establishing a partnership in this case dictated that Defendant, a partner, wrongfully dissolved the partnership, but it was error to include the legal fees incurred by the remaining partners in the damages owed to them by Defendant.In 1985, Defendant and seven others entered into a written agreement to form a general partnership. In the mid-2000s, Defendant withdrew from the partnership. Plaintiffs, as the partnership’s executive committee and on behalf of the partnership, brought this breach of contract action seeking a declaratory ruling that Defendant had wrongfully dissolved the partnership, as well as damages. Supreme Court granted summary judgment to Plaintiffs, determining that the partnership was not an “at-will” partnership and therefore could not be dissolved without violation of the partnership agreement. The Appellate Division upheld Supreme Court’s ruling, concluding that Defendant wrongfully dissolved the partnership. On remand for the second time, Supreme Court awarded attorneys’ fees and experts’ fees. The Court of Appeals held (1) the lower courts erred in applying N.Y. P'ship Law 62(1)(b) to decide that Defendant violated the agreement, but they correctly concluded that Defendant’s dissolution was wrongful; but (2) Supreme Court erred in awarding fees to Plaintiffs as part of the statutory damages. View "Congel v. Malfitano" on Justia Law

The agreement establishing a partnership in this case dictated that Defendant, a partner, wrongfully dissolved the partnership, but it was error to include the legal fees incurred by the remaining partners in the damages owed to them by Defendant.In 1985, Defendant and seven others entered into a written agreement to form a general partnership. In the mid-2000s, Defendant withdrew from the partnership. Plaintiffs, as the partnership’s executive committee and on behalf of the partnership, brought this breach of contract action seeking a declaratory ruling that Defendant had wrongfully dissolved the partnership, as well as damages. Supreme Court granted summary judgment to Plaintiffs, determining that the partnership was not an “at-will” partnership and therefore could not be dissolved without violation of the partnership agreement. The Appellate Division upheld Supreme Court’s ruling, concluding that Defendant wrongfully dissolved the partnership. On remand for the second time, Supreme Court awarded attorneys’ fees and experts’ fees. The Court of Appeals held (1) the lower courts erred in applying N.Y. P'ship Law 62(1)(b) to decide that Defendant violated the agreement, but they correctly concluded that Defendant’s dissolution was wrongful; but (2) Supreme Court erred in awarding fees to Plaintiffs as part of the statutory damages. View "Congel v. Malfitano" on Justia Law

Aerotek provided temporary employees to Bay Bread. The temporary employees worked “under [Bay Bread’s] management and supervision.” Bread agreed to comply with federal, state, and local laws. Aerotek’s meal break policies were contained in an employee handbook, which stated that any problems should be discussed with supervisors. Bread set the temporary employees' schedules; they took their meal breaks to “ensur[e] that everyone got an uninterrupted meal break by the time five hours of their shift elapsed” based on “when things needed to come in and out of the oven.” Aerotek’s on-site account manager, Scott, visited the production facility twice daily but did not look for meal break issues. Aerotek hired Serrano as a temporary Bread employee; she acknowledged receipt of Aerotek’s employee handbook and signed forms waiving a meal period on days she worked no more than six hours. When she worked more than six hours, she sometimes took her meal breaks more than five hours after beginning work or did not take them. She never discussed the issue with Scott. Serrano filed a putative class action for failure to provide meal periods (Labor Code 226.7, 512), failure to pay wages upon termination, unfair competition, and Private Attorneys General Act penalties. The court of appeal affirmed a judgment for Aerotek. Proof that an employer had knowledge of employees working through meal periods will not alone subject the employer to liability; an employer is not required to “police” meal breaks. View "Serrano v. Aerotek, Inc." on Justia Law

Aerotek provided temporary employees to Bay Bread. The temporary employees worked “under [Bay Bread’s] management and supervision.” Bread agreed to comply with federal, state, and local laws. Aerotek’s meal break policies were contained in an employee handbook, which stated that any problems should be discussed with supervisors. Bread set the temporary employees' schedules; they took their meal breaks to “ensur[e] that everyone got an uninterrupted meal break by the time five hours of their shift elapsed” based on “when things needed to come in and out of the oven.” Aerotek’s on-site account manager, Scott, visited the production facility twice daily but did not look for meal break issues. Aerotek hired Serrano as a temporary Bread employee; she acknowledged receipt of Aerotek’s employee handbook and signed forms waiving a meal period on days she worked no more than six hours. When she worked more than six hours, she sometimes took her meal breaks more than five hours after beginning work or did not take them. She never discussed the issue with Scott. Serrano filed a putative class action for failure to provide meal periods (Labor Code 226.7, 512), failure to pay wages upon termination, unfair competition, and Private Attorneys General Act penalties. The court of appeal affirmed a judgment for Aerotek. Proof that an employer had knowledge of employees working through meal periods will not alone subject the employer to liability; an employer is not required to “police” meal breaks. View "Serrano v. Aerotek, Inc." on Justia Law

Plaintiff Franklin Eng appealed a judgment in favor of defendants Michael Patrick Brown and Gerald Levy following a jury trial. Eng claimed that Brown and Levy breached their fiduciary duties to him as purported partners or joint venturers in the ownership and operation of the Tin Fish Gaslamp, a seafood restaurant in San Diego. The jury found that Eng, Brown, and Levy entered into a partnership or joint venture, but it was terminated when they formed a corporation, B.L.E. Fish, Inc. to purchase and operate the restaurant. Eng's claim for breach of fiduciary duty based on a partnership or joint venture was therefore unsupportable. Eng argued on appeal that, among other things:(1) the trial court erred by denying his request, in a motion in limine, that the court find that the parties created a partnership as a matter of law; (2) the court erred by denying his motion in limine seeking to exclude any evidence or argument that B.L.E. Fish merged with or superseded the partnership; (3) the court erred by granting Brown and Levy's motion to amend their answer to assert an affirmative defense based on merger or supersession; (4) the court erred by denying Eng's motion for directed verdict; (5) the court committed instructional error (and a related error in the special verdict) regarding merger and supersession; (6) the court erred in its response to a juror question during deliberations; (7) the court erred by denying Eng's motion to amend his complaint to add a claim for breach of fiduciary duties based on the parties' corporate relationship; (8) the court erred by denying Eng's motion to strike the testimony of a defense expert witness; and (9) the court erred by denying Eng's ex parte application for the release of juror contact information. Finding no reversible errors, the Court of Appeal affirmed. View "Eng v. Brown" on Justia Law

Alcon Laboratories Holding Corporation, a developer of artificial lenses, was exploring electroactive intraocular lens (“EAIOL”) that used electric power and changes in eye pupil size to “trigger” the focus of an artificial lens. Elenza, Inc. and Alcon decided to jointly pursue the technology, first by signing a Non-Disclosure Agreement (“NDA”), followed by a Stock Purchase Agreement (“SPA”). Unfortunately, the project fizzled after Elenza failed to meet development milestones in the SPA. Much to Elenza’s surprise, two years later, Alcon filed a patent application for an EAIOL and announced that it was working with Google, Inc. to develop an EAIOL. Elenza filed suit in Delaware, claiming Alcon breached its agreements with Elenza and misappropriated Elenza’s EAIOL trade secrets. Before trial, the Superior Court granted in part Alcon’s motion for summary judgment, finding that Elenza failed to support its trade secret claims. The court also limited Elenza’s damage claims. The contract claims went to trial, and a jury found against Elenza on all claims. On appeal, Elenza argued to the Delaware Supreme Court that the Superior Court erred when it granted summary judgment on its trade secret claims. According to Elenza, at the summary judgment stage, its trade secret disclosures were sufficient to prove that trade secrets existed and that Alcon used or disclosed those secrets in its later development efforts. The Supreme Court did not reach Elenza’s claim on appeal that it raised disputed factual issues about the existence of trade secrets because the Court agreed with the Superior Court that, at summary judgment, Elenza failed to support its claim that Alcon improperly used or disclosed any of Elenza’s alleged trade secrets. View "Elenza, Inc. v. Alcon Laboratories Holding Corporation, et al." on Justia Law

Plaintiff Marlette Auto Wash, LLC claimed it had an easement through a parking lot owned by defendant Van Dyke SC Properties, LLC, for customers to access a car wash that plaintiff had purchased in 2007. Defendant counterclaimed, seeking to quiet title and obtain monetary damages for expenses relating to maintenance of the lot. The parties’ parcels were originally owned as a single unimproved tract of land; in 1988, land was to B & J Investment Company, which was owned in part by James Zyrowski, and split into two parcels. B & J opened a car wash on the corner parcel in 1989. Although the car wash was initially accessible from both the highway and the street, car wash customers generally used the parking lot of the adjoining parcel to get to and from the car wash. This adjoining parcel was sold to Marlette Development Corporation in 1988, which opened a shopping center in 1990. When Marlette Development’s deed was recorded, no easement was reserved for the benefit of the car wash property, and car wash customers continued to use the parking lot for access. In 2000, the village of Marlette closed the street entrance to the car wash. Car wash customers continued to use the parking lot for access without incident until Marlette Development sold its property to defendant in 2013. At this point, defendant’s sole owner, James Zyrowski informed plaintiff that unless it contributed money to maintain the parking lot, Zyrowski would close off access to the car wash through the parking lot. Plaintiff claimed a prescriptive easement for ingress and egress over defendant’s property on the basis of plaintiff’s open, notorious, adverse, and continuous use of that property for at least 15 years. The question presented for the Michigan Supreme Court was whether such use created a prescriptive easement that was appurtenant, without regard to whether the previous owner of the dominant estate took legal action to claim the easement. The answer to that inquiry is yes; the Supreme Court determined the Court of Appeals erred by requiring plaintiff to establish privity of estate with the previous owner, regardless of whether plaintiff could establish that the elements of a prescriptive easement were satisfactorily met by that prior owner. Moreover, the Court of Appeals erred by holding that the previous owner of the dominant estate must have taken legal action to claim the prescriptive easement in order for plaintiff to prove that a prescriptive easement had vested during the preceding property owner’s tenure. “Title by adverse possession is gained when the period of limitations expires, not when legal action quieting title to the property is brought.” View "Marlette Auto Wash, LLC v. Van Dyke SC Properties, LLC" on Justia Law