Justia Civil Procedure Opinion Summaries

This case arose out of a stabbing that took place outside of an Idaho Falls bar. Steven and Audra Fell were patrons of the First Street Saloon, owned and operated by Fat Smitty’s L.L.C. (Fat Smitty’s). Towards the end of the evening, an altercation took place that resulted in Steven Fell being stabbed by another patron, LaDonna Hall. The Fells filed a complaint against Fat Smitty’s, alleging Fat Smitty’s breached its duty to: (1) warn the Fells, as invitees, of any hidden or concealed dangers in the bar; (2) keep the bar in a reasonably safe condition; and (3) protect the Fells from reasonably foreseeable injury at the hands of other patrons at the bar. The district court granted summary judgment in favor of Fat Smitty’s, ruling that the Fells’ claims were barred by Idaho’s Dram Shop Act because the Fells failed to give Fat Smitty’s timely notice of their claims. The Fells appealed the district court’s grant of summary judgment. Finding no reversible error, the Idaho Supreme Court affirmed. View "Fell v. Fat Smitty's" on Justia Law

This appeal arose from a contractual dispute between the Christopher W. James Trust (“the Trust”) and Idaho Mineral Springs, LLC, a water bottling company owned by Helmut Tacke. In 2000, Tacke built Idaho Mineral Springs’ bottling facility on approximately 10 acres of a 374 acre parcel he owned in Lemhi County, Idaho. He installed a high-density polyester pipeline running about eight-tenths of a mile from a spring on the property to the water-bottling plant. From 2000 to 2013, Tacke sold little to no bottled water. By March 2013, Tacke owed on two promissory notes secured by mortgages on the property. That same year, Tacke’s machinery malfunctioned and he needed to obtain new equipment. Tacke negotiated an agreement with Christopher James (“James”), who, with his wife, Debra, were trustees of the Trust and the Firstfruits Foundation (“Firstfruits”), a 501(c)(3) nonprofit foundation. The Agreement called for Firstfruits to pay off the outstanding loans on the property. In exchange, Tacke transferred title to 364 acres of the property, retaining the 10 acres of land where Idaho Mineral Springs’ operations were conducted. The Agreement further provided that the Trust would loan Idaho Mineral Springs $500,000 for two years with a 5% interest rate. Because James expected that the U.S. dollar would depreciate against the Australian dollar and precious metals, the Agreement called for the loan to be repaid in specified quantities of gold, silver and Australian dollars (“the commodity basket”). The Agreement also called for quarterly interest payments of 1.25% based upon the value of the commodity basket. Firstfruits entered into a joint venture with another nonprofit, Youth Employment Program, which sought to develop and manage the 364 acres. A conflict arose between the parties over Tacke’s waterline: Adams removed Tacke’s mainline and replaced it with a new PVC system. Adams reduced the flow to Idaho Mineral Springs from 91 gallons per minute (a discharge rate that Adams believed “could collapse the mainline”) to 30 gallons per minute. Tacke claimed that the new water system prohibited a direct flow of water from the spring to his plant and operated at a dramatically lower pressure than Tacke needed for Idaho Mineral Springs’ operations. Tacke appealed the district court’s ultimate judgment in favor of the Trust for $653,793.40. The Idaho Supreme Court reversed and remanded, finding that the awards of contract damages and prejudgment interest had to be vacated because the Trust failed to prove the value of the commodity basket. The matter was remanded for further proceedings. View "Christopher W. James Trust v. Tacke" on Justia Law

In 2006, Ram’s Gate purchased a Sonoma County winery from the Roches. Ram’s Gate later sued the Roches for breach of contract, fraud, and negligent nondisclosure, claiming they withheld seismic information about the property and made misstatements concerning the ability to build on an existing building pad. Protracted litigation ultimately ended with Ram’s Gate dismissing the action, Roche paying nothing to Ram’s Gate, and Ram’s Gate paying most but not all of Roche’s attorney fees. Roche then brought a malicious prosecution suit against Ram’s Gate, two of its members, and their attorney, Hyde, alleging they withheld documents in discovery that would have proved they knew or should have known the seismic information they claimed was kept from them when they bought the property from Roche. The defendants filed unsuccessful special motions to strike the complaint as a strategic lawsuit against public participation (anti-SLAPP motions). The court of appeal affirmed the denial of the motion under Code Civ. Proc., 425.16(b)(1). A cause of action for malicious prosecution fits by definition into the scope of the anti-SLAPP statute but Roche is likely to succeed on the merits and is now entitled to proceed to trial. View "Roche v. Hyde" on Justia Law

A "subtle" question concerning entitlement to attorney fees raised by this appeal was one of first impression for the Court of Appeal. In a separate lawsuit filed at Superior Court, plaintiffs obtained a judgment for breach of contract, including an award of attorney fees, against certain entities not parties to the present suit. Plaintiffs filed the present enforcement action against defendants, seeking to hold them liable on the judgment as alter egos of the judgment debtors. Plaintiffs lost against one of the defendants, Steve Saleen (Steve). Steve moved for attorney fees under the contract; the court granted the motion and plaintiffs appeals. Plaintiffs contended this was not an action on the contract and, therefore, fees were unavailable under Civil Code section 1717. Instead, it was an enforcement action. They cited caselaw for the proposition that a judgment on the contract subsumes and extinguishes contractual rights. On the other hand, had plaintiffs included Steve as a defendant in the Superior Court suit, making the exact same alter ego allegations they made to the Court of Appeal, undoubtedly Steve would have been entitled to contractual attorney fees under the doctrine of reciprocity established by Civil Code section 1717 and Reynolds Metals Co. v. Alperson, 25 Cal.3d 124 (1979), even though he was not a signatory on the contract. The Court of Appeal concluded the timing of an alter ego claim (either pre- or postjudgment) was too arbitrary a consideration on which to base the right to attorney fees. "When a judgment creditor attempts to add a party to a breach of contract judgment that includes a contractual fee award, the suit is essentially 'on the contract' for purposes of Civil Code section 1717." The Court therefore agreed with Steve and affirmed judgment. View "MSY Trading Inc. v. Saleen Automotive, Inc." on Justia Law

Appellant, Overstock.com, Inc. (Overstock) appealed a superior court judgment awarding Appellees/Plaintiff-Relator William French and the State of Delaware (Plaintiffs), $22,000 in civil penalties and $7,266,412.94 in treble damages for violations of the Delaware False Claims and Reporting Act (the DFCRA or the Act). Plaintiffs alleged Overstock engaged in what they described as a scam to evade its obligation to escheat balances owed on abandoned gift cards to the Delaware State Escheator. It did so, they claimed, by making it falsely appear that its gift cards were held by an Ohio company, not Overstock. It was undisputed that Overstock did not file escheat reports or pay the money value of abandoned gift cards to the Delaware Escheator during the years in question. The case was tried before a jury on a theory that Overstock violated the Act between 2010 to 2013. Overstock raised several claims on appeal, but the Delaware Supreme Court addressed only one. Overstock contended the superior court misinterpreted the Act and erred by instructing the jury that the knowing failure to file escheat reports when required to do so was no different than actively making a false statement. Overstock contended that the failure to file such reports does not satisfy the Act’s requirement that a false record or statement be made or used to avoid, conceal or decrease an obligation to pay money to the Government. Furthermore, Overstock contended it did not make or use any false record or statement in connection with gift cards that violated the Act. The Supreme Court agreed that the evidence failed to establish the making or use of a false record or statement in violation of the Act. Accordingly, the superior court’s judgment was reversed and the matter remanded for further proceedings. View "Overstock.com, Inc. v. State" on Justia Law

In 2015, the Government filed a civil action against Neldon Johnson, Gregory Shepard, and Johnson’s three companies: RaPower-3 LLC (“RaPower”), International Automated Systems, Inc. (“IAS”), and LTB1, LLC (“LTB”) (collectively, Defendants). The Government alleged Defendants promoted an abusive tax scheme. Following a bench trial, the district court found for the Government, enjoined the Defendants from further promoting their scheme, and ordered disgorgement of ill-gotten gains. In 2018, the district court appointed a receiver (Appellee) to take control of Defendants' assets and to investigate whether their affiliated entities possessed proceeds from the illicit tax scheme. On the Receiver’s recommendation, the court added 13 nonparty affiliated entities to the Receivership. Six of the added entities (“Appellant Entities”) appeals, arguing the district court included them in the Receivership without providing sufficient due process. Finding the "Receivership Expansion Order" was not immediately appealable because the Appellant Entities did not show the order was final, the Tenth Circuit dismissed the appeal for lack of jurisdiction. View "United States v. RaPower-3" on Justia Law

Alabama imposed a license or privilege tax on tobacco products stored or received for distribution within the State ("the tobacco tax"). Under Alabama law, the Department of Revenue could confiscate tobacco products on which the tobacco tax had not been paid. Panama City Wholesale, Inc. ("PCW") was a wholesale tobacco-products distributor located in Panama City, Florida, and owned by Ehad Ahmed. One of PCW's customers, Yafa Wholesale, LLC ("Yafa"), was an Alabama tobacco distributor owned by Sayeneddin Thiab ("Thiab"). On October 10, 2018, Hurricane Michael destroyed the roof on PCW's warehouse. Department surveillance agents observed observed one of Thiab's vehicles being unloaded at two of the recently rented storage units. The day after that, agents observed one of Thiab's delivery vehicles being loaded with tobacco products from a recently rented unit following the storm. On October 23, 2018, the Department confiscated 1,431,819 cigars from four storage units leased by persons connected to Yafa and Thiab. It is undisputed that the tobacco tax had not been paid on the cigars. Ahmed filed an action against Vernon Barnett, as Commissioner of the Department, seeking a judgment declaring that the cigars were Ahmed's and that they were not subject to confiscation. The case was transferred to the Jefferson Circuit Court, PCW was substituted for Ahmed, and the parties were realigned to make the Commissioner of the Department the plaintiff and PCW the defendant in a civil forfeiture action. On PCW's motion, the circuit court entered a summary judgment in PCW's favor, ruling that the Commissioner failed to present substantial evidence that the cigars were in the possession of a retailer or semijobber, as the court believed was required by the confiscation statute. The Commissioner appealed. A divided Alabama Supreme Court reversed, concluding the circuit court erred in interpreting the confiscation statute to apply only to untaxed tobacco products in the possession of retailers and semijobbers, and because the Commissioner presented substantial evidence that the cigars were subject to confiscation under a correct interpretation of the statute, the Court reversed summary judgment and remanded for further proceedings. View "Alabama Department of Revenue v. Panama City Wholesale, Inc." on Justia Law

The Ritchie entities filed suit seeking to recover millions of dollars they loaned Tom Petters, a convicted fraudster, and two of his companies. The Ritchie entities alleged that defendants helped conceal the fraud so that they could recover millions they had tied up with Petters' companies. The district court dismissed the claims as time-barred.The Eighth Circuit first held that the district court had subject matter jurisdiction under the Edge Act, and the court need not decide whether the district court also had subject matter jurisdiction under 28 U.S.C. 1334(b). Furthermore, the district court was correct to apply New York choice-of-law principles to determine that Illinois law applied to the question of whether the action was time-barred.The court also held that the district court erred in concluding that Illinois's statute of limitations applied to three of the plaintiffs because the pleadings do not definitively establish their claims accrued in Illinois. The district court did not err in finding that the remaining claims were untimely under Illinois law and that the doctrines of discovery rule, equitable estoppel, and equitable tolling did not apply. The court also held that the district court did not abuse its discretion by failing to grant the Ritchie entities leave to amend their complaint yet again because the Ritchie entities failed to submit a motion to amend or indicate what a proposed amended pleading would have stated. Finally, the court reversed the dismissal of the Ritchie Cayman entities' claims against JP Morgan Europe in order for the district court to permit jurisdictional discovery if it deems necessary to determine whether it has personal jurisdiction over JP Morgan Europe. View "Ritchie Capital Management v. JP Morgan Chase & Co." on Justia Law

Subcontractor Construction Drilling, Inc. (CDI) appealed a trial court’s judgment on the merits in its breach-of-contract claim against Engineers Construction, Inc. (ECI). CDI contended the trial court erred in: (1) holding that the terms of the parties’ subcontract required CDI to request a change order before it billed ECI for “drilling in obstructions” in excess of CDI’s bid price; (2) denying CDI’s motions to reopen the evidence and for a new trial; and (3) awarding ECI $234,320 in attorneys’ fees under the Prompt Payment Act. ECI cross-appealed, arguing the trial court improperly allowed CDI’s owner to offer opinion testimony absent a finding of reliability under Vermont Rule of Evidence 702 and maintaining that his testimony could not have met this standard in any event. Therefore, should the Vermont Supreme Court reverse the trial court’s denial of CDI’s breach-of-contract claim, ECI asserted the matter had to be remanded for a new trial without such testimony. The Court affirmed the trial court, and therefore did not reach the issue raised in ECI’s cross-appeal. View "Construction Drilling, Inc. v. Engineers Construction, Inc." on Justia Law

The United States District Court for the District of South Carolina certified a question of law to the South Carolina Supreme Court. Plaintiff Johnny Thomerson alleged Defendants, the former owners of Lenco Marine (a manufacturer of boat products), failed to give him a three-percent ownership interest in Lenco that was promised to him as part of his compensation package. Plaintiff was hired by Lenco no later than May 2007. Defendant Samuel Mullinax was the CEO of Lenco and Defendant Richard DeVito was its president. Lenco was sold in December 2016 to Power Products, LLC. In his complaint, Plaintiff asserted claims against Defendants for: (1) breach of contract and the covenant of good faith and fair dealing; (2) promissory estoppel; (3) quantum meruit and unjust enrichment; (4) negligent misrepresentation; (5) constructive fraud; and (6) amounts due under the South Carolina Payment of Wages Act. Defendants moved for summary judgment, arguing the claims were time-barred. The federal court asked whether the three-year statute of limitations of S.C. Code Ann. 15-3-530 applied to claims for promissory estoppel. The Supreme Court took the opportunity to clarify state law in this regard, and held that the statute of limitations did not apply to promissory estoppel claims. View "Thomerson v. DeVito" on Justia Law