Justia Civil Procedure Opinion Summaries

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In the summer of 2014, Mark and Jennifer Porcello sought to purchase property In Hayden Lake, Idaho. After making various pre-payments, the amount the couple was still short on a downpayment. Mark and Jennifer could not qualify for a conventional loan themselves. They hoped another property in Woodinville, Washington, owned by Mark’s parents, in which Mark and Jennifer claimed an interest, could be sold to assist in the purchase of the Hayden Lake property. In an effort to help Mark and Jennifer purchase the property, Mark’s parents, Annie and Tony Porcello, obtained financing through a non-conventional lender. "In the end, the transaction became quite complicated." Annie and Tony’s lawyer drafted a promissory note for Mark and Jennifer to sign which equaled the amount Annie and Tony borrowed. In turn, Mark signed a promissory note and deed of trust for the Hayden Lake house, in the same amount and with the same repayment terms as the loan undertaken by his parents. In mid-2016, Annie and Tony sought non-judicial foreclosure on the Hayden Lake property, claiming that the entire balance of the note was due and owing. By this time Mark and Jennifer had divorced; Jennifer still occupied the Hayden Lake home. In response to the foreclosure proceeding, Jennifer filed suit against her former in-laws seeking a declaratory judgment and an injunction, arguing that any obligation under the note had been satisfied in full when the Woodinville property sold, notwithstanding the language of the note encumbering the Hayden Lake property. Annie and Tony filed a counter-claim against Jennifer and a third-party complaint against Mark. A district court granted Jennifer’s request for a declaratory judgment. However, by this time, Annie and Tony had died and their respective estates were substituted as parties. The district court denied the estates’ request for judicial foreclosure, and dismissed their third-party claims against Mark. The district court held that the Note and Deed of Trust were latently ambiguous because the amount of the Note was more than twice the amount Mark and Jennifer needed in order to purchase the Hayden Lake property. Because the district court concluded the note and deed of trust were ambiguous, it considered parol evidence to interpret them. Ultimately, the district court found the Note and Deed of Trust conveyed the Hayden Lake property to Jennifer and Mark “free and clear” upon the sale of the Woodinville property. Annie’s and Tony’s estates timely appealed. Finding that the district court erred in finding a latent ambiguity in the Note and Deed of Trust, and that the district court's interpretation of the Note and Deed of Trust was not supported by substantial and competent evidence, the Idaho Supreme Court vacated judgment and remanded for further proceedings. View "Porcello v. Estates of Porcello" on Justia Law

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Plaintiff-appellant Nicole Packer was injured when she fell from an unlit loading dock at the Kingston Plaza in Idaho Falls, Idaho. Packer, working as a vendor at a Christmas-themed exposition, alleged she had been directed to use the rear exit by a representative of Riverbend Communications, LLC, the organizer of the exposition and the occupier of the property at the heart of this litigation. The rear exit was unlit, and when Packer left the building, she was unable to re-enter. Because of the lack of light, Packer did not realize she was on a loading dock which was five feet above the adjoining pavement. When she proceeded towards the lit parking lot, she fell to the asphalt and was seriously injured. Packer sued Kingston Properties (owner of the property), as well as Riverbend Communications, LLC. Following discovery, the defendants sought and were granted summary judgment. Packer unsuccessfully moved for reconsideration. She timely appealed the district court’s decision granting summary judgment in favor of Riverbend. After review, the Idaho Supreme Court determined the district court erred in granting summary judgment in favor of Riverbend because Packer was an invitee; the district court erred as a matter of law in determining Packer was a licensee. Because Packer was an invitee, Riverbend owed her the duty to warn her of hidden or concealed dangers and to keep the property in reasonably safe condition. On these facts, the Supreme Court concluded a jury could have reasonably concluded that Riverbend breached either or both of the duties it owed to Packer. Accordingly, the district court’s decision granting summary judgment was reversed. View "Packer v. Riverbend Communications" on Justia Law

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RYZE, an Indiana business, employs remote workers across the U.S., including Billings, who signed an employment agreement with a forum‐selection clause providing for litigation in an Indiana state court or in the Southern District of Indiana. Billings filed suit in California state court. alleging state law claims and violations of the Fair Labor Standards Act, on behalf of himself and other current and former RYZE employees nationwide. RYZE removed the action to the Eastern District of California, which concluded that Billings had failed to show why the forum‐selection clause should not control and transferred venue under 28 U.S.C. 1404(a) to the Southern District of Indiana. That court granted RYZE summary judgment on Billings’s federal claims. The district court then, sua sponte, returned the case to the Eastern District of California, explaining that its docket was congested and that the California court was familiar with California labor law. When the case was docketed again in the Eastern District of California, RYZE petitioned the Seventh Circuit for a writ of mandamus directing the Southern District of Indiana to request that the Eastern District of California return the action to the Southern District of Indiana. The Seventh Circuit granted that petition, noting that forum‐selection clauses should be given “‘controlling weight in all but the most exceptional cases.’” No exceptional circumstances exist here. View "Ryze Claims Solutions, LLC v. Magnus-Stinson" on Justia Law

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Two counties sued Sherwin-Williams in state court, seeking abatement of the public nuisance caused by lead-based paint. Anticipating suits by other counties, Sherwin-Williams sued in federal court under 42 U.S.C. 1983. Sherwin-Williams claimed that “[i]t is likely that the fee agreement between [Delaware County] and the outside trial lawyers [is] or will be substantively similar to an agreement struck by the same attorneys and Lehigh County to pursue what appears to be identical litigation” and that “the Count[y] ha[s] effectively and impermissibly delegated [its] exercise of police power to the private trial attorneys” by vesting the prosecutorial function in someone who has a financial interest in using the government’s police power to hold a defendant liable. The complaint pleaded a First Amendment violation, citing the company’s membership in trade associations, Sherwin-Williams’ purported petitioning of federal, state, and local governments, and its commercial speech. The complaint also argued that the public nuisance theory would seek to impose liability “that is grossly disproportionate,” arbitrary, retroactive, vague, and “after an unexplainable, prejudicial, and extraordinarily long delay, in violation of the Due Process Clause.” The Third Circuit affirmed the dismissal of the suit. Sherwin-Williams failed to plead an injury in fact or a ripe case or controversy because the alleged harms hinged on the County actually filing suit. View "Sherwin Williams Co. v. County of Delaware" on Justia Law

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Dr. Dominick Lembo employed Arlene Marchese in his dental practice as his office manager, and Karen Wright, a dental hygienist. Sometime before December 2011, Marchese and Wright unlawfully took possession of numerous checks totaling several hundred thousand dollars, forged Lembo’s indorsement on the checks, and deposited the proceeds from the forged checks into their personal accounts at TD Bank. In February 2015, Lembo filed a complaint against TD Bank, alleging that “TD Bank knew or should have known that Marchese and/or Wright were not permitted to negotiate checks made payable to [Lembo].” The complaint also alleged that by permitting them to negotiate checks with forged indorsements, TD Bank “aided and abetted Marchese and Wright in their fraudulent scheme and conduct.” The complaint did not assert that Lembo had a banking relationship with TD Bank. And Lembo did not file an action for conversion under the Uniform Commercial Code (UCC) within the three-year limitations period. Had Lembo done so, TD Bank would have been strictly liable for depositing or cashing those checks, subject to the defenses in N.J.S.A. 12A:3-405 or N.J.S.A. 12A:3-406. The trial court granted the Bank's motion to dismiss, finding that the UCC governed Lembo's remedies against the Bank, and “common law negligence is not such a remedy” in the absence of a “special relationship” between Lembo and the bank. The court also rejected Lembo’s argument that the Uniform Fiduciaries Law (UFL) provided an affirmative cause of action against the bank. The Appellate Division reversed, reading into the complaint the basis for an affirmative UFL claim, and remanded to allow Lembo to amend the complaint to assert such a claim. The New Jersey Supreme Court concluded the Appellate Division misconstrued the purpose of the UFL, finding the Legislature enacted the UFL not to create an affirmative cause of action against a bank but to provide a defense when the bank is sued for failing to take notice of and action on the breach of a fiduciary’s obligation. "The UFL confers a limited immunity on a bank, unless the bank acts in bad faith or has actual knowledge of a fiduciary breach." The Supreme Court found no affirmative cause of action arose under the statute; whether a UFL claim was adequately pled was therefore moot. Recognizing the predominant role the UCC plays in assigning liability for the handling of checks, the Supreme Court also found Lembo had no “special relationship” with the bank to sustain the common law causes of action. View "Lembo v. Marchese" on Justia Law

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Since 2010, appellant Mark Spanakos has tried to gain control over and revive Hawk Systems, Inc., a void Delaware corporation, by filing a series of direct and derivative actions in Florida against former Hawk Systems insiders and taking several steps outside of court to establish himself as the Company’s majority stockholder and sole director. Spanakos was successful in his direct Florida litigation, having won a Partial Final Judgment in one action and favorable Summary Judgment rulings in another. Spanakos’s derivative claims in the third Florida action, however, were stayed to allow Spanakos to clarify his standing to pursue those claims. Accordingly, in 2018 Spanakos filed suit in the Delaware Court of Chancery seeking: (1) a declaration that he controlled a majority of the voting shares of Hawk Systems and that he was the validly elected, sole director and officer of Hawk Systems; or (2) in the alternative, an order compelling the company to hold an annual election of directors under 8 Del. C. sections 223(a) and 211(c). Following a trial, briefing, and post-trial argument, the Court of Chancery denied both of Spanakos’s requests for relief, ruling that he had not carried his burden of proof to obtain any of the relief that he sought. On appeal, Spanakos argues that the Court of Chancery abused its discretion when it declined to order a stockholders’ meeting for the election of directors despite the fact that Spanakos satisfied the elements of Section 211. Having reviewed the record on appeal and the court’s opinion below, the Delaware Supreme Court found the Court of Chancery did not abuse its discretion when it declined to compel a stockholders’ meeting given the unique facts of this case. View "Spanakos v. Page, et al." on Justia Law

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Petitioners California Disability Services Association; Horrigan Cole Enterprises, Inc., doing business as Cole Vocational Services; Unlimited Quest, Inc.; Loyd’s Liberty Homes, Inc.; and First Step Independent Living Program, Inc. petitioned for mandamus relief and damages, and sought a declaration against the California Department of Developmental Services (Department) and its director, Nancy Bargmann (collectively respondents). Petitioners challenged the Department’s denial of their requests for a rate adjustment due to the increase of the minimum wage, which, in turn, impacted the salaries of their exempt program directors, who had to be paid twice the minimum wage. The trial court denied petitioners’ petition and complaint for declaratory relief finding providers’ classification of the program directors as exempt employees was not mandated by law, thus “there is no ministerial duty imposed on the Department to grant a wage increase request in order to accommodate continued entitlement to the exemption.” Finding no reversible error, the Court of Appeal affirmed. View "California Disability Services Assn. v. Bargmann" on Justia Law

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Mitze unsuccessfully appealed the denial of her application for social security benefits. Several years later, Mitze moved to seal her medical information and all other information pertaining to her case, citing “harassing phone calls from solicitors” who knew her personal medical information because the courts had “publicized” it by issuing opinions. She claims that she and her children have experienced social stigma and that thieves broke into her home to steal pain medication, which publicly available documents revealed that she had been prescribed. The Seventh Circuit affirmed the denial of Mitze’s motion. A strong presumption exists in favor of publishing dispositional orders, even in cases involving substantial privacy interests such as state secrets, trade secrets, and attorney-client privilege. The court acknowledged that the existing remedies of proceeding anonymously, requesting redactions, or sealing records may be inadequate in the social security context. News outlets have the right to publish information obtained from public court records and cannot be ordered to remove articles reporting on the decisions in her case. The court rejected an argument under the Health Insurance Portability and Accountability Act, 42 U.S.C. 1320d-6, which regulates the disclosure of information by only healthcare providers and their affiliates. View "Mitze v. Saul" on Justia Law

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This appeal stemmed from an attempt to hold Defendant Paul Robben liable for securities fraud. Various Plaintiffs alleged that Robben fraudulently induced them to purchase ownership interests in a Kansas limited liability company named Foxfield Villa Associates, LLC (“Foxfield”). Plaintiffs argued that those interests were securities under the Securities Exchange Act of 1934. Plaintiffs contended Robben violated section 10(b) of the 1934 Act (its broad antifraud provision) and SEC Rule 10b-5 (an administrative regulation expounding upon that antifraud provision) when engaging in his allegedly deceitful conduct. The Tenth Circuit Court of Appeals determined that the specific attributes of the LLC interests in this case lead it to conclude the interests at issue were not securities as that term was defined by the Securities Exchange Act of 1934. The Court affirmed the district court's order declining to characterize the LLC interests as securities, thus granting summary judgment to defendants on those grounds. View "Foxfield Villa Associates v. Robben" on Justia Law

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In late 2014 Andy James was working in Deadhorse for Northern Construction & Maintenance, LLC, a company owned by John Ellsworth and members of his family. Ellsworth also owned Alaska Frontier Constructors, Inc. Alaska Frontier had some kind of business relationship with Nanuq, Inc. In late December Northern Construction sent James from his usual work assignment to work in some capacity in connection with an ice road being constructed and maintained for Caelus Energy Alaska, LLC. James was instructed to work at the direction of Scott Pleas. Despite dangerous blizzard conditions, Pleas directed James to accompany another worker, Johann Willrich, to check fuel levels on equipment idling outside; James objected due to the weather, but was threatened with the loss of his job if he did not follow the direction. James complied; he climbed a large grader to fuel it, but a wind gust blew him off, resulting in shoulder and spinal injuries. James filed personal injury lawsuits, which were consolidated, against the companies. The companies sought and obtained summary judgment rulings that they had statutory employer immunity from the injury claims under the Alaska Workers’ Compensation Act’s exclusive liability provision. James appealed. The Alaska Supreme Court found that because numerous issues of material fact made it impossible to determine whether the companies were entitled to judgment as a matter of law that they were immune from liability under the Act, summary judgment was reversed, the judgment against James vacated, and the matter remanded for further proceedings. View "James v. Alaska Frontier Constructors, Inc." on Justia Law