Justia Business Law Opinion Summaries

Christine Berger and Brian Repnow were in a decade-long relationship but never married. During their relationship, they accumulated various properties and businesses. In August 2021, Berger filed a lawsuit seeking partition, conversion, promissory estoppel, and unjust enrichment, requesting an equitable division of their accumulated real and personal property or monetary damages. Repnow claimed sole ownership of the properties and requested denial of Berger's claims.The District Court of Mercer, South Central Judicial District, held a two-day bench trial in October 2023. The court granted Berger's partition claim for the Expansion Drive property, awarding her sole ownership, and determined that the other properties and vehicles were solely owned by Repnow. The court also granted Berger's unjust enrichment claim, awarding her $64,000 for her contributions to Repnow's properties, and denied the claims of conversion and promissory estoppel. The court awarded the Dream Girls Boutique business to Repnow and Powerhouse Nutrition to Berger.The North Dakota Supreme Court reviewed the case. The court affirmed the district court's finding that the parties intended to share ownership of the Expansion Drive property and the award of Powerhouse Nutrition to Berger. However, it reversed the decision to award 100% of the Expansion Drive property to Berger, stating that the district court should have considered the parties' respective ownership interests and made an equitable division. The court also found that the district court failed to complete the unjust enrichment analysis and adequately explain the $64,000 award.The North Dakota Supreme Court remanded the case for the district court to determine the parties' respective ownership interests in the Expansion Drive property and make an award consistent with those interests. The court also instructed the district court to complete the unjust enrichment analysis and provide a clear explanation for the $64,000 award if necessary. View "Berger v. Repnow" on Justia Law

Charles Youree, Jr. filed a lawsuit against two business entities, Recovery House of East Tennessee, LLC and RHT Holdings, LLC, seeking to hold them liable for a judgment he previously obtained against another entity, Recovery Solutions Network, LLC (RSN), by piercing the corporate veil. When the defendants did not respond, a default judgment was entered against them. The defendants moved to vacate the default judgment, arguing that the complaint did not plead the necessary elements for piercing the corporate veil and that their failure to respond was due to excusable neglect, though they later withdrew the excusable neglect argument. The trial court denied the motion to vacate, finding that the complaint stated a claim under the Allen factors.The Court of Appeals reversed the trial court's decision, holding that the correct standard for piercing the corporate veil was the three-element test from Continental Bankers Life Insurance Co. of the South v. Bank of Alamo, rather than the Allen factors. The appellate court found that the complaint failed to plead the necessary elements under the Continental Bankers standard and remanded the case to the trial court for further proceedings.The Supreme Court of Tennessee reviewed the case and affirmed the Court of Appeals' decision. The court held that the Continental Bankers elements are the correct framework for piercing the corporate veil in all cases, whether involving a parent-subsidiary relationship or a corporation-shareholder relationship. The court found that the plaintiff's complaint did not sufficiently allege the elements required under the Continental Bankers standard, specifically the elements of control used to commit fraud or wrong and causation of injury. Consequently, the trial court erred in denying the motion to vacate the default judgment. The case was remanded to the trial court for further proceedings consistent with this opinion. View "Youree v. Recovery House of East Tennessee, LLC" on Justia Law

In 2015, Jesus Rodriguez-Morelos began offering Certified Nursing Assistant (CNA) classes, falsely claiming they were affiliated with the nonprofit organization United with Migrants. He charged students for these classes, which were not state-approved, and used the nonprofit's name and tax-exempt document without authorization. Complaints about the classes led to an investigation by the Colorado Department of Regulatory Agencies (DORA), revealing that Rodriguez-Morelos was unlawfully receiving money for the unapproved classes.Rodriguez-Morelos was charged with several crimes, including identity theft under section 18-5-902(1)(a), C.R.S. (2024). A jury convicted him on all charges. On appeal, the Colorado Court of Appeals affirmed the theft and criminal impersonation convictions but vacated the identity theft conviction. The court concluded that the identity theft statute's definition of "personal identifying information" pertains to individuals, not organizations, and thus did not apply to Rodriguez-Morelos's use of the nonprofit's name and document.The Supreme Court of Colorado reviewed the case and affirmed the Court of Appeals' decision. The court held that the identity theft statute's reference to "personal identifying information" applies only to information concerning single, identified human beings, not organizations. Therefore, Rodriguez-Morelos's actions did not constitute identity theft under the statute. View "People v. Rodriguez-Morelos" on Justia Law

A borrower misrepresented his authority to act on behalf of two corporations he intended to acquire, providing false documents to a lender. Despite having documents contradicting the borrower's claims, the lender proceeded with a $7 million loan, including a confession-of-judgment affidavit naming the corporations as additional borrowers. When the borrower defaulted, the lender sought a confessed judgment against all borrowers, including the corporations, whose true officers were unaware of the transaction until served with notice of the judgment.The Superior Court of Delaware conducted a hearing and entered judgment in favor of the lender, finding that the borrower had apparent authority to bind the corporations. The court focused on the borrower's conduct and representations, concluding that they created the impression of authority sufficient to warrant the entry of a confessed judgment against the corporations.The Supreme Court of Delaware reviewed the case and found that the Superior Court's formulation of the test for apparent authority was flawed. The Supreme Court emphasized that apparent authority must be based on the principal's manifestations, not solely on the agent's conduct. The evidence did not support a finding that the corporations acted in a way that created a reasonable belief in the lender that the borrower was authorized to bind them. Consequently, the Supreme Court reversed and vacated the Superior Court's judgment, concluding that the borrower lacked apparent authority and that the corporations did not effectively waive their due process rights. View "Caribbean Sun Airlines Inc. v. Halevi Enterprises LLC" on Justia Law

The case involves the certification process for Surgical Technologists and Surgical Assistants, who assist surgeons in the operating room. The Association of Surgical Technologists (AST) represents Technologists, and the Association of Surgical Assistants (ASA) represents Assistants. The National Board of Surgical Technology and Surgical Assisting (NBSTSA) certifies both professions. To maintain certification, professionals must either log continuing education credits or retake a certification exam. NBSTSA has only authorized AST to provide continuing education services, and ASA sought to become an authorized provider but was denied.ASA sued NBSTSA and AST in the United States District Court for the District of Colorado, alleging antitrust violations and tortious business interference. The district court dismissed ASA’s complaint, finding that ASA failed to establish a relevant market, monopoly power, a plausible conspiracy, and antitrust injuries.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court affirmed the district court’s dismissal, agreeing that ASA did not define the relevant market with reference to reasonable interchangeability and cross-elasticity of demand. The court noted that ASA’s proposed market definition was too narrow and did not consider competing certifications or the option to recertify by examination. Additionally, the court found that ASA failed to allege a plausible conspiracy between NBSTSA and AST, as the allegations were conclusory and lacked specific factual support. The court also concluded that ASA did not demonstrate a cognizable antitrust injury, as the alleged harm was derivative and did not stem from a competition-reducing aspect of the defendants' behavior. View "Association of Surgical Assistants v. National Board of Surgical Technology" on Justia Law

Oracle Corporation acquired NetSuite Inc. in 2016. Following the acquisition, Oracle stockholders filed a derivative suit against Oracle directors and others, alleging that Lawrence Ellison, a co-founder and substantial equity holder in both companies, forced Oracle to overpay for NetSuite. After the Court of Chancery denied the defendants’ motion to dismiss, the Oracle board formed a special litigation committee (SLC) to review the plaintiffs’ derivative claims. The SLC investigated and tried to settle the suit but eventually returned the case to the plaintiffs to pursue. The parties litigated over five years, and the Court of Chancery held a ten-day trial, ultimately entering judgment for the remaining defendants.The Court of Chancery found that the special committee negotiated the NetSuite transaction untainted by Ellison’s or Oracle management’s influence. The court concluded that Ellison did not exercise general control over Oracle or specific control over the transaction. The court also found that neither Ellison nor Catz withheld material information or misled the Oracle board and special committee.On appeal, the stockholders contended that the court erred by allowing the SLC to withhold its interview memos, applying business judgment review to a transaction involving an alleged controlling stockholder, employing the wrong legal standard when evaluating whether Ellison misled the special committee, and finding that Ellison’s alleged undisclosed future operational plans were immaterial.The Supreme Court of Delaware affirmed the Court of Chancery’s judgment. The court held that the SLC did not waive work product protection during mediation and that the plaintiffs did not demonstrate substantial need or undue hardship for the interview memos. The court also affirmed the application of business judgment review, finding that Ellison did not exercise actual control over Oracle or the transaction. Finally, the court agreed that Ellison’s undisclosed post-closing plans were immaterial to the special committee’s evaluation and negotiation of the transaction. View "In re Oracle Corporation Derivative Litigation" on Justia Law

In this case, the plaintiff, a Chapter 11 Trustee for BK Racing, LLC, initiated an adversary proceeding against multiple defendants, including Ronald and Brenda Devine, various family trusts, and corporate entities. The defendants were accused of obstructing the bankruptcy process by failing to comply with discovery obligations, including not producing required financial documents and records, despite multiple court orders.The bankruptcy court found that the defendants willfully disregarded their discovery obligations and engaged in a pattern of obstruction and delay. As a result, the court entered a default judgment against the defendants as a discovery sanction, awarding the plaintiff $31,094,099.89. The district court affirmed this decision, noting the defendants' repeated noncompliance and the necessity of deterrence.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court upheld the lower courts' decisions, finding no abuse of discretion in the entry of default judgment. The court applied the Wilson factors, determining that the defendants acted in bad faith, caused significant prejudice to the plaintiff, necessitated deterrence, and that lesser sanctions would be ineffective. The court also affirmed the decision to pierce the corporate veil, holding the defendants jointly and severally liable, based on evidence that the corporate entities were mere instrumentalities of the Devines, lacking proper corporate formalities and used to siphon funds.The Fourth Circuit concluded that the bankruptcy court's findings were not clearly erroneous and that the default judgment and the amount awarded were appropriate given the defendants' egregious conduct. The decision of the district court was affirmed. View "Smith v. Devine" on Justia Law

Plaintiffs, ParaFi Digital Opportunities LP, Framework Ventures, L.P., and 1kx LP, invested in Curve, a decentralized cryptocurrency trading platform developed by Mikhail Egorov. They allege that Egorov fraudulently induced them to invest by making false promises about their stake in Curve and then canceled their investment, leading to claims of fraud, conversion, and statutory violations. Egorov, who developed Curve while living in Washington and later moved to Switzerland, formed Swiss Stake GmbH to manage Curve. The investment agreements included Swiss law and forum selection clauses.The San Francisco County Superior Court granted Egorov’s motion to quash for lack of personal jurisdiction, finding that Egorov did not purposefully avail himself of California’s benefits. The court noted that the plaintiffs initiated contact and negotiations, and the agreements specified Swiss jurisdiction. The court also denied plaintiffs’ request for jurisdictional discovery, concluding that plaintiffs did not demonstrate that discovery would likely produce evidence establishing jurisdiction.The California Court of Appeal, First Appellate District, Division Two, affirmed the lower court’s decision. The appellate court agreed that Egorov’s contacts with California were insufficient to establish specific jurisdiction, as the plaintiffs had solicited the investment and Egorov had not directed any activities toward California. The court emphasized that the plaintiffs’ unilateral actions could not establish jurisdiction and that the agreements’ Swiss law and forum selection clauses further supported the lack of jurisdiction. The court also upheld the denial of jurisdictional discovery, finding no abuse of discretion by the trial court. View "ParaFi Digital Opportunities v. Egorov" on Justia Law

Innovative Waste Management (IWM) entered into a joint venture with Dunhill Products in 2009 and 2010, which led to allegations of breach of contract, fraud, and misappropriation of trade secrets. IWM accused Dunhill Products, Crest Energy Partners, and Henry Wuertz of stealing trade secrets, interfering with business relationships, and theft of petroleum products. IWM sought $12 million in economic damages and punitive damages. The defendants responded with affirmative defenses and counterclaims. IWM served discovery requests in 2012, but the defendants failed to comply, leading to multiple motions to compel and sanctions.The Circuit Court of Dorchester County found the defendants in contempt for violating discovery orders and sanctioned them by striking their answer and counterclaims. The defendants appealed to the South Carolina Court of Appeals, which affirmed the circuit court's decision in an unpublished opinion. The defendants then sought review by the South Carolina Supreme Court.The South Carolina Supreme Court reviewed whether the Court of Appeals erred in finding that the defendants waived review of the trial court's interlocutory discovery orders and whether the circuit court abused its discretion by striking the defendants' pleadings. The Supreme Court agreed with the Court of Appeals, holding that the defendants waived their right to review the discovery orders by not complying with them and that the circuit court did not abuse its discretion in striking the pleadings due to the defendants' deliberate pattern of discovery abuse. The Supreme Court affirmed the decision of the Court of Appeals. View "Innovative Waste Management, Inc. v. Crest Energy Partners GP, LLC" on Justia Law

Frank Harmon Black and his securities investment firm, Southeast Investments, N.C., Inc., are involved in an ongoing disciplinary proceeding initiated by the Financial Industry Regulatory Authority, Inc. (FINRA) in September 2015. The proceedings were based on allegations that Black and Southeast failed to establish and maintain an adequate broker supervisory system, failed to preserve business-related electronic correspondence, and submitted false documents and testimony to FINRA examiners, violating FINRA rules and federal securities laws. In March 2017, a FINRA hearing panel found Black and Southeast in violation of these rules and imposed fines and sanctions, including barring Black from associating with other FINRA member firms.Black and Southeast appealed the FINRA decision to the National Adjudicatory Council (NAC), which affirmed the findings but reduced the fines in May 2019. They then petitioned the Securities and Exchange Commission (SEC) for review. On December 7, 2023, the SEC affirmed the NAC's decision regarding the supervisory and record retention violations but remanded the false testimony and fabricated documents issues to FINRA for further proceedings, determining that FINRA's failure to produce certain investigatory notes was not a harmless error.The United States Court of Appeals for the Fourth Circuit reviewed the SEC's decision. The court concluded that the SEC's decision was not a final order because it remanded part of the case to FINRA for further proceedings. As a result, the court determined that it lacked jurisdiction to review the petition and dismissed it. The court emphasized that a final order must mark the consummation of the agency's decision-making process and result in legal consequences, which was not the case here. View "Black v. Securities and Exchange Commission" on Justia Law