Justia Civil Procedure Opinion Summaries

Beginning in 2005, petitioner San Joaquin Regional Transit District (District) began discussing with real parties in interest DSS-2731 Myrtle LLC and Sardee Industries, Inc. (collectively, "Sardee") the possible acquisition through negotiated purchase or eminent domain of a two-acre parcel in Stockton on which Sardee operated a manufacturing facility. Correspondence regarding appraisal of the property and Sardee’s rights in eminent domain took place in 2008, but efforts to negotiate a purchase ultimately failed, leading to the filing of an eminent domain complaint in 2010. In April 2011 a stipulated order of possession gave legal possession of the parcel to District with a right of Sardee to occupy a portion of the property as it explored options for a new facility, to wind down its operations and move elsewhere. Sardee undertook to move its Stockton operations to its facility in Lisle, Illinois, which it upgraded to handle ongoing work from its Stockton plant. Under the stipulated order Sardee could occupy the property without charge until March 2012 and until June 30, 2012, by payment of rent. By March 2012 most of its equipment and operations had been relocated; in April 2012 the District abandoned its condemnation action. Following dismissal of the action, Sardee sought damages under Code of Civil Procedure section 1268.620, which permitted an award of damages “after the defendant moves from property in compliance with an order or agreement for possession or in reasonable contemplation of its taking.” District argued the costs involved in closing down Sardee’s Stockton facility and moving all but the items remaining for shipment in March could not be recovered. The trial court disagreed with this all-or-nothing interpretation of the statutory language and concluded Sardee should have been permitted to present its damage claim to a jury, whereupon District filed its petition for writ of mandate, prohibition or other appropriate relief, and sought a stay of the damages trial. The Court of Appeal concurred with the trial court that sufficient evidence supported the court’s finding that Sardee had moved from the property, supporting application of section 1268.620. The District's petition was denied. View "San Joaquin Regional Transit Dist. v. Superior Court" on Justia Law

This case arose from a dispute over the ownership of Treasure Valley Manufacturing & Recycling, Inc., (“TVM”). Daniel Weitz appealed a district court order granting summary judgment in favor of David Weitz and John Tavares and declaring them the exclusive owners of TVM. The district court granted summary judgment after determining that Daniel Weitz failed to produce any evidence demonstrating a genuine dispute of material fact and that they were entitled to judgment as a matter of law. Finding no reversible error, the Idaho Supreme Court affirmed the district court's judgement. View "Weitz v. Weitz" on Justia Law

The Court of Chancery issued a memorandum opinion in an action brought under Delaware's Corporation Law, section 220 (the "DGCL"). The opinion ordered AmerisourceBergen Corporation to produce certain books and records to Lebanon County Employees Retirement Fund and Teamsters Local 443 Health Services & Insurance Plan (“Plaintiffs”) and granting Plaintiffs leave to take a Rule 30(b)(6) deposition “to explore what types of books and records exist and who has them.” The Company claimed Plaintiffs’ inspection demand, which, among other things, was aimed at investigating possible breaches of fiduciary duty, mismanagement, and other wrongdoing, was fatally deficient because it did not disclose Plaintiffs’ ultimate objective, which was what they intended to do with the books and records in the event that they confirmed their suspicion of wrongdoing. The Company also contended the Court of Chancery erred by holding Plaintiffs were not required to establish a credible basis to suspect actionable wrongdoing. And finally, the Company argued the Court of Chancery erred as a matter of law when it allowed Plaintiffs to take a post-trial Rule 30(b)(6) deposition. After review, the Delaware Supreme Court held that when a Section 220 inspection demand stated a proper investigatory purpose, it did not need to identify the particular course of action the stockholder will take if the books and records confirm the stockholder’s suspicion of wrongdoing. In addition, the Court held that, although the actionability of wrongdoing can be a relevant factor for the Court of Chancery to consider when assessing the legitimacy of a stockholder’s stated purpose, an investigating stockholder was not required in all cases to establish the wrongdoing under investigation was actionable. Finally, the Court found the Court of Chancery’s allowance of the post-trial deposition was not an abuse of discretion. View "Amerisourcebergen Corp v. Lebanon County Employees' Retirement Fund" on Justia Law

Plaintiffs-appellants were two of three founding owners, investors, and directors of Energy Efficient Equity, Inc. (“E3” or the “Corporation”), a Delaware corporation operating in the property-assessed, clean-energy financing industry. After a series of financing transactions with WR Capital Partners, LLC (“WR Capital”), plaintiffs filed suit against WR Capital and its representatives. Among other claims, plaintiffs alleged that defendants breached their fiduciary duties and were unjustly enriched when they negotiated and approved the financing transactions that allowed them to take control of E3 from the founders. During the litigation, plaintiffs entered into a settlement agreement and two stock repurchase agreements. Plaintiffs settled with some of the defendants in exchange for payments and the sale of the plaintiffs’ stock to E3. The Settlement Agreement contained a release, but carved out claims that the plaintiffs wanted to continue to pursue against the non-settling WR Capital and its representatives. An inconsistency between the agreements arose, however, because the Stock Repurchase Agreements transferred “all of Seller’s right, title, and interest” in E3 stock while only the Settlement Agreement contained a carve out for claims against the non-settling defendants (the “Release Carve Out”). After the partial settlement, the Court of Chancery granted defendants’ motion to dismiss, finding plaintiffs could not import the Settlement Agreement’s Release Carve Out into the Stock Repurchase Agreements; plaintiffs lost standing to pursue their direct breach of fiduciary duty claims when they sold their E3 stock; and plaintiffs’ unjust enrichment claims were duplicative of their breach of fiduciary duty claims and traveled with the sale of E3 stock. On appeal, plaintiffs argued the Court of Chancery should have found that the Stock Repurchase Agreements incorporated by reference the Settlement Agreement. If that was the case, plaintiffs claimed they could preserve their claims against the remaining defendants. In the alternative, plaintiffs fell back on the argument that their breach of fiduciary duty claims were personal and did not attach to the stock sold as part of the settlement. In addition, they argued the unjust enrichment claims were independent of the breach of fiduciary duty claims. The Delaware Supreme Court affirmed the Court of Chancery: while plaintiffs had an argument that the parties intended to treat the three agreements as a unitary transaction through incorporation by reference, the Settlement Agreement’s Release Carve Out confilcted with the complete transfer of all right, title, and interest in the plaintiffs’ E3 stock under the Stock Repurchase Agreements. In the event of a conflict, the Stock Repurchase Agreements plainly stated their terms controlled. Plaintiffs’ remaining claims were also part of the rights accompanying the E3 stock sale, and the unjust enrichment claim traveled with the E3 stock when repurchased by E3. View "Urdan v. WR Capital Partners, LLC" on Justia Law

The Supreme Court reversed the orders of the circuit court granting Respondents' motions to dismiss, holding that Petitioners' pleading stated a sufficient basis upon which relief could be granted and that Respondents failed to show beyond a reasonable doubt that Petitioners could prove no set of facts in support of their claims that would entitle them to relief.On appeal, Petitioners argued that in granting Respondents' motions to dismiss pursuant to Rule 12(b)(6) the circuit court failed to consider all the Petitioners' factual allegations. Further, Petitioners alleged that for the few allegations it did consider, the circuit court improperly imputed inferences favorable to Respondents. The Supreme Court reversed, holding (1) Respondents failed to establish beyond doubt that Petitioners' pleading did not state a claim upon which relief may be granted; and (2) Petitioners sufficiently alleged a claim for aiding and abetting tortious interference. View "Mountaineer Fire & Rescue Equipment, LLC v. City National Bank of West Virginia" on Justia Law

The Court of Appeal affirmed the trial court's order amending a judgment to add alter ego judgment debtors. After Triyar entered into a contract to purchase a hotel property from WSI, Triyar filed suit against WSI for causes of action including fraud and specific performance. The trial court found that WSI had not breached the contract, because Triyar's failure to learn of the Hyatt agreement's termination was due to Triyar's fault in failing to conduct a sufficient investigation. The trial court then awarded WSI $2,172,615 in attorney fees and costs. After Triyar appealed, the trial court awarded an additional $193,273.20 in fees and costs. After WSI was unable to collect any amount of the judgment, WSI made a motion to amend the judgment to add Steven Yari and Shawn Yari. The trial court found that Triyar is not capitalized for buying major hotels, and the finding that the Yaris were alter egos was a fair outcome. The trial court also found that even if the alter ego doctrine does not strictly apply, the inequities are such that an exception can be made.Under either de novo or abuse of discretion review, the court held that WSI prevailed on its motion to add the Yaris as judgment debtors. In this case, the Yaris concede that they had control of the underlying litigation and were virtually represented in that proceeding. The court also concluded that there is overwhelming evidence of a unity of interest and ownership such that the separate personalities of the entity and the owners do not exist. Furthermore, it would be inequitable to preclude WSI from collecting its judgment by treating Triyar as a separate entity. View "Triyar Hospitality Management v. WSI (II) – HWP, LLC" on Justia Law

Cahill was the office administrator for the Family Vision optometry practice and handled insurance billings. She left her employment and filed for bankruptcy protection. About 90% of Family’s revenue came from claims submitted to VSP, which covers claims from optometrists only if they have “majority ownership and complete control” of their medical practices. VSP disburses payments after the provider signs an agreement certifying itself as “fully controlled and majority-owned” by an optometrist. At the time Cahill was submitting Family’s claims, the practice was actually owned by a practice management company with more than 150 surgery centers and other medical practices.About a year after Cahill left Family, the trustee of Cahill’s bankruptcy estate sued under the Insurance Claims Fraud Prevention Act, 740 ILCS 92/1, which added civil penalties to existing criminal remedies for fraud against private insurance companies and allows a claim to be raised on the state’s behalf by a private person (relator), in a qui tam action. The relator becomes entitled to remuneration if the lawsuit succeeds. A relator must be an “interested person” but the Act does not define that term.The Illinois Supreme Court affirmed the reinstatement of the case. A former employee-whistleblower with personal, nonpublic information of possible wrongdoing qualifies as an “interested person” under the Act and need not allege a personal claim, status, or right related to the proceeding. The state need not suffer money damages to partially assign its claim to a relator. The Act is intended to remedy fraud against private insurers, where the only injury to the state is to its sovereignty, based on a violation of criminal law. View "Leibowitz v. Family Vision Care, LLC" on Justia Law

Trevor Jones contended he was entitled to a percentage of the successful Pura Vida bracelet business established with his former friends and colleagues, defendants Paul Goodman and Griffin Thall. He claimed the parties had formed a partnership regarding a bracelet business and sued Goodman and Thall seeking (among other things) a partnership buyout under California Corporations Code section 16701. Defendants denied Jones’s claims, and judgment was entered in their favor. After trial, Defendants sought to recover attorney fees pursuant to section 16701, which authorized an equitable award of attorney and expert fees “against a party that the court finds acted arbitrarily, vexatiously, or not in good faith.” The trial court denied Defendants’ motion on two grounds: (1) the motion was untimely under applicable rules; and (2) on the merits, the court declined to find that Jones acted arbitrarily, vexatiously, or not in good faith. Defendants appealed, contesting the trial court's sua sponte determination the motion was untimely, and they further challenged the court’s refusal to find Jones acted arbitrarily, vexatiously, or not in good faith. After review, the Court of Appeal concurred with the trial court, rejected Defendants’ claims of error, and affirmed the order. View "Jones v. Goodman" on Justia Law

Plaintiffs Hillarie and Keith Levy appealed the dismissal of their lawsuit filed against defendant, Only Cremations for Pets, Inc. Plaintiffs alleged it agreed to cremate individually two of their dogs, but then intentionally sent them random ashes instead. Plaintiffs sought recovery of emotional distress damages under contract and tort law. The Court of Appeal determined: the complaint failed to state a cause of action under any contract theory; and there were no factual allegations showing the existence of any contract between plaintiffs and defendant. Plaintiffs’ veterinarian, not plaintiffs, contracted with defendant. However, the complaint adequately pled two tort theories: trespass to chattel and negligence. The Court found allegations here "fit comfortably" in a cause of action for trespass to chattel claim, which permitted recovery of emotional distress damages. The allegations also supported a negligence cause of action because defendant advertised its services as providing emotional solace, and thus it was foreseeable that a failure to use reasonable care with the ashes would result in emotional distress. The Court reversed and remanded, giving plaintiffs an opportunity to plead more fully a third-party beneficiary cause of action. View "Levy v. Only Cremations for Pets, Inc." on Justia Law

Quidel Corporation (Quidel) petitioned for a writ of mandate and/or prohibition to direct the trial court to vacate its order granting summary adjudication. Quidel contended the trial court incorrectly concluded a provision in its contract with Beckman Coulter, Inc. (Beckman) was an invalid restraint on trade in violation of Business and Professions Code, section 16600. Quidel argued the trial court improperly extended the holding from Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008) beyond the employment context to a provision in the parties’ 2003 BNP Assay Agreement (the Agreement). In its original, published opinion, the Court of Appeal concluded it was not, granted the petition and issued a writ instructing the trial court to vacate the December 2018 order granting summary judgment on the first cause of action. The California Supreme Court then granted review of the Court of Appeal's opinion and ordered briefing deferred pending its decision in Ixchel Pharma, LLC v. Biogen, Inc., S256927. On August 3, 2020, the Supreme Court issued Ixchel Pharma, LLC v. Biogen, Inc., 9 Cal.5th 1130 (2020), which held “a rule of reason applies to determine the validity of a contractual provision by which a business is restrained from engaging in a lawful trade or business with another business.” The Quidel matter was transferred back to the Court of Appeals with directions to vacate its previous opinion and reconsider the case in light of Ixchel. The appellate court issued a new opinion in which it concluded the trial court’s decision was incorrect. The trial court was directed to vacate the December 7, 2018 order granting summary adjudication on the first cause of action. View "Quidel Corporation v. Super. Ct." on Justia Law