Justia Civil Procedure Opinion Summaries

Over the course of a few years, an employee of Severin Mobile Towing Inc. (Severin) took about $157,000 in checks made payable to Severin’s d/b/a, endorsed them with what appears to be his own name or initials, and deposited them into his personal account at JPMorgan Chase Bank N.A. (Chase). Because the employee deposited all the checks at automated teller machines (ATM’s), and because each check was under $1,500, Chase accepted each check without “human review.” When Severin eventually discovered the embezzlement, it sued Chase for negligence and conversion under California’s version of the Uniform Commercial Code (UCC), and for violating the unfair competition law. Severin moved for summary judgment on its conversion cause of action, and Chase moved for summary judgment of all of Severin’s claims, asserting affirmative defenses under the UCC, and that claims as to 34 of the 211 stolen checks were time- barred. The trial court granted Chase’s motion on statute of limitations and California Uniform Commercial Law section 3405 grounds; the court did not reach UCL section 3406. The court denied Severin’s motion as moot, and entered judgment for Chase. On appeal, Severin argued only that the court erred in granting summary judgment to Chase on Severin’s conversion cause of action (and, by extension, the derivative UCL cause of action). Specifically, Severin argued the court erroneously granted summary judgment under section 3405 because Chase failed to meet its burden of establishing that Severin’s employee fraudulently indorsed the stolen checks in a manner “purporting to be that of [his] employer.” Severin further argued factual disputes about its reasonableness in supervising its employee precluded summary judgment under section 3406. The Court of Appeal agreed with Severin in both respects, and therefore did not reach the merits of Chase’s claim that its automated deposit procedures satisfied the applicable ordinary care standard. Accordingly, judgment was reversed and the matter remanded for further proceedings. View "Severin Mobile Towing, Inc. v. JPMorgan Chase etc." on Justia Law

Beginning in the 1980s and 1990s, two Idaho businesses did roofing work under substantially similar names: one, Gem State Roofing, Inc., performed work primarily in Blaine County (Gem State-Blaine); the other was a corporation operating under the name Gem State Roofing and Asphalt Maintenance, which also did business as Gem State Roofing. The latter was based in Boise, Idaho, and performed work in a significantly larger area. In 2011, Gem State Roofing and Asphalt Maintenance was succeeded in interest by United Components, Inc. (UCI.) Notwithstanding its change of name, it continued to do business as Gem State Roofing. In 2005, prior to UCI’s name change, the two businesses with similar names entered into a Trademark Settlement Agreement (TSA), prohibiting UCI from advertising, soliciting, or performing business in Blaine County, with exceptions for certain services (i.e., warranty, maintenance work, or work performed for previous customers). In addition, UCI agreed that if it received a request for work it was contractually unable to fulfil because of the TSA, it would refer the work to Gem State-Blaine. In 2018, Gem State-Blaine sued UCI, alleging it had breached the TSA when it advertised, solicited, bid on, and performed roofing work in Blaine County, and had failed to refer requests for work as required under the TSA. After a bench trial, the district court concluded that, despite UCI’s breach of the TSA and the implied covenant of good faith and fair dealing, Gem State-Blaine had failed to prove damages or that it was entitled to a permanent injunction. The district court further found that Gem State-Blaine had no protectable common-law trademark. Finally, the district court concluded that there was no prevailing party and declined to award attorney fees and costs. Gem State-Blaine timely appealed. UCI timely cross-appealed the district court’s denial of its request for attorney fees and costs. After review, the Idaho Supreme Court reversed in part, affirmed in part, vacated in part, and remanded for further proceedings. The district court’s refusal to enter a permanent injunction was reversed, and the court directed to enter a permanent injunction to enjoin UCI from any further breach of the TSA. The district court’s refusal to award attorney fees and costs as a sanction for UCI’s discovery violations, and the district court’s conclusion that Gem State-Blaine did not have a protectable common-law trademark against UCI were also reversed. The Supreme Court vacated the district court’s determination that neither party prevailed. The matter was remanded for the district court to determine whether there was a prevailing party, and to determine if attorney fees and costs should be awarded. The district court’s decision denying damages was affirmed. View "Gem State Roofing, Incorp. v. United Components, Inc." on Justia Law

In 1986 Deibel, Hoeg, and Steffen founded Hy-Pro Corporation. Deibel, its president, received 2,500 shares, representing 12.5% of the authorized stock. Deibel guaranteed Hy-Pro’s payment of a $100,000 debt to a bank. Within a year Deibel demanded that Hoeg leave. When Hoeg refused, Deibel quit but held onto his stock even. A state court suit settled, but the settlement was not reduced to writing. Deibel insists that under the settlement Hy-Pro would pay $15,000 and arrange with the bank to release his guarantee. Hoeg and Steffen assert that Deibel was also to surrender his shares.Almost 30 years later, Deibel filed a federal suit. HyPro was sold in 2017 for about $20 million; a 12.5% share would exceed $2.5 million. Indiana has a two-year period of limitations for such claims. The Seventh Circuit affirmed the dismissal of the suit as untimely, rejecting Deibel’s claims that he was still an investor when the firm was sold, and, if not, that a firm’s refusal to recognize him as an investor was a “continuing wrong.” When Deibel did not return his shares, Hy-Pro canceled Deibel’s stock. Deibel has not been on the company’s books as a shareholder since 1992. Deibel received multiple letters from various parties, including the IRS, notifying him of that fact; his claim accrued no later than 1998. View "Deibel v. Hoeg" on Justia Law

AAAPC and UAS filed suit against Quest for conspiring to force them out of the market of providing allergy and asthma testing. The district court dismissed plaintiffs' claims under Federal Rule of Civil Procedure 12(b)(6).The Fifth Circuit concluded that plaintiffs' claims alleging that Quest violated sections 1 and 2 of the Sherman Act and the Texas antitrust law are not time-barred. The court explained that plaintiffs' allegations about Phadia and Quest's continued meetings with providers and payors do not restart the statute of limitations; plaintiffs' allegations regarding the June 2015 policy change does not suffice to restart the statute of limitations; but plaintiffs have sufficiently alleged that Phadia and Quest were involved in the alleged conspiracy and that the allegation regarding Phadia's May 2014 email reset the statute of limitations. Therefore, the court reversed the district court's dismissal as to the state and federal antitrust claims. The court also reversed the dismissal of plaintiffs' misappropriation of trade secrets claim, concluding that plaintiffs have sufficiently pled they could not have discovered their misappropriation injury using reasonable diligence. Moreover, nothing in the complaint forecloses their potential rejoinder to the statute of limitations defense. The court affirmed the district court's dismissal of the civil conspiracy and tortious interference claims. Finally, the court affirmed the district court's denial of plaintiffs' request for leave to amend their complaint. View "Academy of Allergy & Asthma in Primary Care v. Quest Diagnostics, Inc." on Justia Law

Edward Wrenn ("Edward") and David Wrenn ("David") petitioned the Alabama Supreme Court for a writ of mandamus to direct a circuit court to vacate an order requiring Edward and David to disclose their personal income-tax returns to plaintiff Jeffrey Wright, and to enter a protective order shielding the tax returns from production. Wright alleged he contracted with A-1 Exterminating Company, Inc. ("A-1 Exterminating"), for periodic termite treatments of his house. Over the course of several decades of treatments, Wright says, A-1 Exterminating used a "watered-down pesticide so weak that it may only kill ants and 'maybe' spiders." A-1 Exterminating allegedly concealed this practice from him. As a result, Wright contended his house was infected with and damaged by termites. Wright sued Edward, David, A-1 Exterminating, A-1 Insulating Company, Inc., and Wrenn Enterprises, Inc., alleging breach of warranty, breach of contract, negligence and wantonness. Wright sought to represent a class consisting of himself and other A-1 Exterminating customers allegedly harmed by defendants' actions. In support of his request to certify a class, Wright alleged that a "limited fund" existed that would support a class action under Rule 23(b)(1)(B), Ala. R. Civ. P. The Supreme Court held that for tax returns to be discoverable, they must be highly relevant, the litigant seeking their disclosure must show a compelling need for them, and their disclosure must be clearly required in the interests of justice, and that those standards have not been met in this case. Accordingly, the Court granted the petition and issued the writ to direct the trial court vacate its order requiring disclosure of the tax records. View "Ex parte Edward Wrenn & David Wrenn." on Justia Law

Ford, incorporated in Delaware and headquartered in Michigan, markets, sells, and services its products across the U.S. and overseas and encourages a resale market for its vehicles. Montana and Minnesota courts exercised jurisdiction over Ford in products-liability suits stemming from car accidents that injured state residents. The vehicles were designed and manufactured elsewhere, and originally were sold outside the forum states.The Supreme Court affirmed the rejection of Ford's jurisdictional arguments. The connection between the claims and Ford’s activities in the forum states is close enough to support specific jurisdiction. A state court may exercise general jurisdiction only when a defendant is “essentially at home” in the state. Specific jurisdiction covers defendants less intimately connected with a state if there was “some act by which [defendant] purposefully avails itself of the privilege of conducting activities within the forum State” and the claims “must arise out of or relate to the defendant’s contacts” with the forum.Ford purposefully availed itself of the privilege of conducting activities in both states. There is no requirement of a causal link locating jurisdiction only in the state where Ford sold the car in question or the states where Ford designed and manufactured the vehicle. Specific jurisdiction attaches in cases in which a company cultivates a market for a product in the forum state and the product malfunctions there. Ford advertises and markets its vehicles in Montana and Minnesota and fosters ongoing connections to Ford owners. Because Ford systematically served a market in Montana and Minnesota for the very vehicles that the plaintiffs allege malfunctioned and injured them in those states, there is a strong “relationship among the defendant, the forum, and the litigation.” View "Ford Motor Co. v. Montana Eighth Judicial District Court" on Justia Law

The Pennsylvania Supreme Court granted discretionary review to consider whether a notice of appeal filed at a single docket number corresponding to the lead case of multiple consolidated civil cases should have been quashed for failing to satisfy the requirements of Pa.R.A.P. 341(a) as interpreted in Commonwealth v. Walker, 185 A.3d 969 (Pa. 2018). The Superior Court relied on Walker to quash the appeal below at one docket number, but the Supreme Court held Walker was inapplicable to the particular facts of this case and therefore reversed. View "Always Busy Consulting v. Babford & Company" on Justia Law

Shawn Kluver and Little Knife Disposal, LLC (“Little Knife”), appealed an amended judgment entered after a bench trial that awarded Command Center, Inc., monetary damages, interest, attorney’s fees and costs against Renewable Resources, LLC, and Kluver, jointly and severally. The amended judgment also awarded Renewable Resources damages and interest against Kluver and Little Knife, jointly and severally, and ordered them to indemnify Renewable Resources for all damages, interest, attorney’s fees, and costs awarded to Command Center. Command Center provided temporary labor services. Command Center sued Renewable Resources in small claims court, claiming unpaid amounts totaling $14,631.20, relating to temporary labor services that Command Center provided under agreements with Renewable Resources. Renewable Resources removed the case to district court. Command Center obtained leave of court to file an amended complaint, naming Kluver and Little Knife as additional defendants. Kluver had been the manager of Renewable Resources. Although Renewable Resources was billed and had paid Command Center $20,000 for the temporary labor services, Renewable Resources alleged that the temporary labor services were provided for the benefit of Little Knife, and that Kluver did not have authority to contract on behalf of Renewable Resources for the temporary labor services that benefited Little Knife. On review, the North Dakota Supreme Court concluded that evidence presented at trial supported the district court’s findings of fact and, further, that Kluver and Little Knife were rearguing the evidence and challenging the district court’s weight and credibility determinations. "We will not second-guess the district court’s clear findings on appeal. On this record, we conclude the district court’s findings are not clearly erroneous." View "Command Center v. Renewable Resources, et al." on Justia Law

In 2007 and 2008, AgStar Financial Services (AgStar), now Compeer Financial FLCA (Compeer), loaned substantial sums of money to Northwest Sand and Gravel, Inc., Gordon Paving Company, Inc., and Blackrock Land Holdings, LLC (collectively, "Gordon Paving.") As a result of financing these loans, AgStar became a secured creditor of Gordon Paving. In 2012, Gordon Paving defaulted on its $10 million obligation to AgStar, which then resulted in AgStar obtaining a judgment of foreclosure on various parcels of real property Gordon Paving owned. The district court also entered an order allowing the sale of virtually all of Gordon Paving’s business equipment to further satisfy the debt. Gordon Paving appealed the district court’s decision which allowed AgStar to sell the business equipment. In "AgStar I," the Idaho Supreme Court reversed the district court’s order allowing AgStar to liquidate Gordon Paving’s business equipment, but this decision came long after the business equipment had already been sold at auction. On remand, the district court determined that the correct remedy for Gordon Paving was an award of restitution in the amount of the gross proceeds of the sale plus interest from the date of the sale based on its interpretation of Idaho Code section 28-22-104. Compeer appealed the district court’s order denying it an offset for expenses its predecessor, AgStar, incurred in liquidating Gordon Paving’s business equipment. Compeer also appealed the district court’s order awarding Gordon Paving prejudgment interest on the restitution award from the date the collateral was sold. After review, the Supreme Court reversed the district court’s order denying Compeer an offset for the auctioneer’s expenses incurred which were never received by AgStar. The Court affirmed the district court’s order awarding Gordon Paving prejudgment interest; however, the district court’s decision allowing prejudgment interest to run from the date of the sale was vacated. View "Agstar Financial Services v. Northwest Sand & Gravel" on Justia Law

The Contractors’ State License Law (Bus. & Prof. Code 7031), allows any person who utilizes the services of unlicensed building contractors to sue for disgorgement of all compensation paid for the performance of any act or contract, even when the work performed is free of defects. CDC brought a section 7031(b) claim for disgorgement against Obayashi in 2017, more than eight years after the completion of construction of the InterContinental Hotel in San Francisco. The issue of licensure came to light during litigation concerning construction defects.The trial court dismissed, citing Code of Civil Procedure 340(a), the one-year limitations period for statutory forfeiture or penalty causes of action. The court of appeal affirmed. The one-year statute of limitations applies to disgorgement claims brought under section 7031, and the discovery rule and other equitable doctrines do not. Even if such doctrines applied to statutory disgorgement claims, they would not apply under the circumstances presented under the pleadings. The court also upheld the trial court’s award of $231,834 in contractual attorney fees; the parties’ agreement contemplated the recovery of attorney fees for non-contractual causes of action that are initiated because of an alleged breach of the parties’ contract. View "San Francisco CDC LLC v. Webcor Construction L.P." on Justia Law