Justia Civil Procedure Opinion Summaries

This appeal from summary judgment in favor of Sequoia Insurance Company (Sequoia) was one of thousands of cases nationwide involving a claim for business interruption coverage arising out of the COVID-19 pandemic. The outcome here turned on whether there was evidence creating a triable issue that the insured, Best Rest Motel, Inc. (Best Rest), sustained lost business income “due to the necessary ‘suspension’ ” of its operations “caused by direct physical loss of or damage” to the insured property. Best Rest contended its case fell directly within the exception discussed by the Court of Appeal in Inns-by-the-Sea v. California Mut. Ins. Co., 71 Cal.App.5th 688 (2021). Though the Court found Inns might undermine, if not entirely foreclose Best Rest’s case, the Court limited its holding by positing in dicta a “hypothetical scenario” where “an invisible airborne agent would cause a policyholder to suspend operations because of direct physical damage to property.” Here, the Court determined Best Rest's argument failed because the record contained no evidence creating a triable issue that the hotel “could have otherwise been operating” but for the presence of COVID-19 on the premises. Best Rest’s own evidence established the exact opposite was true: its vice president and operating partner testified that the phones were “ringing off the hook[ ]” with cancellations—not because of COVID-19 in the hotel, but because of government shut down orders and travel restrictions that shuttered tourism. Accordingly, the Court affirmed summary judgment in the insurance company's favor because there was no evidence creating a triable issue that COVID-19 in the hotel caused the claimed lost income. View "Best Rest Motel, Inc. v. Sequoia Insurance Co." on Justia Law

Todd Destafino had a longstanding business relationship with his (now former) mother-in-law, Georgia Lay, that soured after Destafino and Lay's daughter divorced. In the aftermath of the divorce, Lay began interfering with Destafino's property and business interests. Destafino eventually sued, claiming that Lay had trespassed on his property, interfered with his business operations, created a nuisance, and improperly failed to acknowledge his ownership interest in a company that he and Lay had jointly formed. After a bench trial, the circuit court entered judgment in Destafino's favor, awarding him $167,369.03. Lay appealed. Finding no reversible error in that judgment, the Alabama Supreme Court affirmed. View "Lay v. Destafino" on Justia Law

Brian and April Szostak appealed a district court’s order granting a second motion for sanctions, and the court’s finding of facts, conclusions of law, and order for judgment and judgment. Panther Pressure Testers Inc., and Kirk Wold sued the Szostaks alleging the Szostaks and Wold formed a company named Szostak Services, LLC. Panther and Wold alleged Wold was a member of Szostak Services and the company breached their contract by failing to recognize him as a member. Panther and Wold claim the Szostaks were unjustly enriched after Panther and Wold erroneoysly deposited funds into a Szostak Services bank account and the Szostaks refused to return the funds. The Szostaks answered and counterclaimed. The Szostaks served discovery responses, but did not provide requested documents. Panther and Wold moved for sanctions due to Szostaks’ non-compliance with the district court’s order compelling discovery. At a deposition, for which a subpoena duces tecum was issued, April Szostak revealed she and her husband had 12 boxes of documents pertaining to Szostak Services, but Szostak Services did not bring any documents to the deposition. Panther and Wold moved again for sanctions, requesting the district court enter a default judgment against the Szostaks and dismiss their counterclaims. The Szostaks argued the court abused its discretion by granting Panther and Wold’s second motion for sanctions and entering default judgment. The Szostaks also argued the court erred in its determination of damages. Finding no reversible error, the North Dakota Supreme Court affirmed the default judgment. View "Panther Pressure Testers, et al. v. Szostak, et al." on Justia Law

Lake Charles Rubber and Gasket Co., L.L.C. ("Lake") and its sole owner, Vesta Balay Johnston (collectively, Plaintiffs), and Gulf Coast Rubber and Gasket, L.L.C. ("Gulf') and Bryan Vincent (collectively, Defendants), both appealed certain court of appeal rulings. Defendants asserted the court of appeal failed to correctly apply the manifest error standard of review in reversing the district court's findings that certain Lake information in Gulf's possession did not constitute "trade secrets" or that their misappropriation was not otherwise a violation of the Louisiana Unfair Trade Secrets Act ("LUTSA"). They further argued the court of appeal erred in increasing the damages award from $700,000 to $19,574,884, i.e., a multiple of nearly 28, where ample evidence in the record supported the district court's judgment as to damages. Plaintiffs argued the court of appeal erred on rehearing by eliminating the treble damages applied to its award for unjust enrichment and dismissing Johnston's claim for diminution in value of her ownership interest in Lake. The Louisiana Supreme Court reversed the court of appeal in part as to its finding that Lake's parts numbering system and descriptions constituted a trade secret under LUTSA. Furthermore, the Court reversed the court of appeal as to the increase in the amount of lost profit damages. The case was remanded to the district court for a recalculation of lost profit damages giving consideration to the violations of LUTSA related to Gulf's misappropriation of Lake's customer lists and inventory usage history with respect to the Sasol customer contract. The Court affirmed in all other respects and remanded for further proceedings. View "Johnson, et al. v. Vincent, et al." on Justia Law

Six months after United States and global health authorities declared COVID-19 a public health emergency, the city of Seattle (City) passed an ordinance (Seattle Ordinance 126094) authorizing hazard pay for certain workers who delivered food to consumers’ homes. By that time, Governor Inslee had issued stay-at-home orders requiring Washingtonians to leave home only for the most essential of trips. Among some of the conditions in the ordinance were that food delivery network companies could not reduce workers’ compensation or otherwise limit their earning capacity as a result of the ordinance, and they were prohibited from reducing the areas of the City they served or to pass on the cost of the premium pay to customers’ charges for groceries. The Washington Food Industry Association and Maplebear Inc., d/b/a Instacart, challenged the ordinance, seeking a declaration invalidating the ordinance on statutory and state and federal constitutional grounds. The trial court dismissed the statutory claim under chapter 82.84 RCW but permitted all remaining claims to proceed. After review of the limited record, the Washington Supreme Court affirmed in part and reversed in part: (1) affirming dismissal of the 82.84 RCW claim; (2) reversing dismissal of the equal protection claim; and (3) reversing the trial court’s dismissal of the privileges and immunities claim. The Court affirmed in all other respects and remanded for further proceedings. View "Wash. Food Indus. Ass'n v. City of Seattle" on Justia Law

This appeal arose from a district court’s decision denying a motion for sanctions and attorney fees against Roy Gilbert’s former attorney, William Mitchell. The underlying litigation giving rise to the sanctions request stemmed from a dispute over a medical transport business and the business relationship between Gilbert and Richard Radnovich. Gilbert was the sole member of two LLCs: Resilient Transportation Leasing, LLC, and Resilient Transport LLC. According to Gilbert’s complaint, Radnovich was allegedly the owner of two business entities: Injury Care Emergency Medical Services (ICEMS) LLC and “Injury Care EMS,” as well as other entities not at issue in this appeal. In 2017, Gilbert executed an agreement purporting to sell Resilient Transport, LLC, to Injury Care EMS, LLC. According to Gilbert, Injury Care EMS, LLC, was never formed. Gilbert alleged that this “fictitious” LLC was an alter ego of Radnovich. The parties signed a supplement to the agreement which amended the business name for ICEMS, LLC to ICEMS, P.C, and clarified that Resilient Transport, LLC, would be subsumed by ICEMS, P.C. into another fictitious business called “Resilient Transport Operated by Injury Care EMS,” and that Resilient Transport, LLC would later be dissolved. Following a breakdown in both the agreement and the relationship, Gilbert sued Radnovich and the business entities. Mitchell filed the initial and amended complaint on behalf of Gilbert against Radnovich. Later in the proceedings, a second attorney substituted for Mitchell and soon after, both sides stipulated to dismiss the case with prejudice. A few weeks later, Radnovich filed a motion for sanctions and attorney fees against Mitchell. The district court denied the motion. Radnovich appealed, arguing the district court abused its discretion in denying sanctions and attorney fees against Mitchell. Finding no reversible error or abuse of discretion, the Idaho Supreme Court affirmed the district court’s decision. View "Gilbert v. Radnovich" on Justia Law

ResCap Liquidating Trust (“ResCap”) pursued indemnification claims against originator Primary Residential Mortgage, Inc. (“PRMI”), a Nevada corporation. ResCap asserted breach of contract and indemnification claims, seeking to recover a portion of the allowed bankruptcy claims for those holding units in the liquidating trust. The district court concluded that ResCap had established each element of its contractual indemnification claim. The district court awarded ResCap $10.6 million in attorney’s fees, $3.5 million in costs, $2 million in prejudgment interest, and $520,212 in what it termed “post-award prejudgment interest” for the period between entry of judgment and the order awarding attorney’s fees, costs, and prejudgment interest. Defendant appealed.   The Eighth Circuit remanded for a recalculation of postjudgment interest but otherwise affirmed. The court explained that the district court held that, as a matter of Minnesota law governed by Section 549.09, a final judgment was not “finally entered” until its Judgment in a Civil Case resolving attorney’s fees, costs, and interest was entered on April 28, 2021, and therefore Minnesota’s ten percent prejudgment rate applied in the interim period. But Section 1961(a) does not say “final judgment,” it says “money judgment.” The district court, on August 17, 2020, entered a “money judgment.” Thus, the district court erred in applying Minnesota law to calculate interest after August 17, 2020, rather than 28 U.S.C. Section 1961(a). View "ResCap Liquidating Trust v. Primary Residential Mortgage" on Justia Law

The First Circuit affirmed the judgment of the district court determining that this case could not be adjudicated and dismissing the suit, holding that there was no error.Plaintiff, a foreign counterterrorism corporation, brought this lawsuit seeking an order freezing some of its Massachusetts assets based on allegations that a former government official misappropriated billions of dollars from the corporation. Defendants argued that the funds were lawfully received in connection with clandestine operations that were sometimes undertaken alongside the United States government. The United States government then asserted the state secrets privilege and successfully got state secrets and other information excluded from the case. The district court dismissed the suit, concluding that it could not examine the claims and defenses or award the preliminary equitable relief sought without weighing the privileged information and risking disclosure of state secrets. The First Circuit affirmed, holding that Plaintiff failed to demonstrate that it was entitled to any of the relief it requested. View "Sakab Saudi Holding Co. v. Aljabri" on Justia Law

This case presented an issue of first impression for the Mississippi Supreme Court: whether an attorney’s representation of a general partnership created an implied attorney-client relationship between the attorney and the individual members of the general partnership, and, if so, whether the Mississippi Rule of Professional Conduct prohibiting communication by a lawyer with an individual represented by other legal counsel was violated. James Pettis, III, attorney for the plaintiff, appealed a chancery court order disqualifying him for a violation of Mississippi Rule of Professional Conduct 4.2, which prohibited a lawyer from communicating with a person they know to be represented about the subject of the representation. After a careful review of the law, the Supreme Court reversed the chancery court’s order, rendered judgment in favor of Pettis, and remanded for further proceedings. View "Pettis v. Simrall" on Justia Law

In this suit brought under the Racketeering Influence and Corrupt Organizations Act (RICO), the First Circuit remanded this matter for further review, holding that the district court erred in dismissing the complaint based on the doctrine of forum non conveniens.Medtronic Medical CR SRL, a Costa Rica limited liability company, brought suit under RICO alleging that Defendants, Puerto Rico residents, orchestrated fraudulent schemes. The district court granted Defendants' motion to dismiss based on the doctrine of forum non conveniens, concluding that Costa Rica was an adequate alternative forum. The First Circuit remanded the case, holding that intervening and developing circumstances required reconsideration of the most efficient, prudential path forward. View "Medtronic Medical CR SRL v. Feliciano-Soto" on Justia Law