Justia Civil Procedure Opinion Summaries

Shawn Kluver and Little Knife Disposal, LLC, appeal from a district court judgment ordering them to pay $140,042.83 to Titan Machinery, Inc., and $100,731.62 to Renewable Resources, LLC. In 2016, Kluver was the general manager of Renewable Resources, which was in the business of oilfield waste disposal. “At Kluver’s request and direction,” Renewable Resources leased a Case excavator and other equipment from Titan. The rental agreement for the Case excavator showed an estimated return date of June 28, 2016. Kluver also executed a credit application and personal guaranty with Titan to ensure Renewable Resources’ payment obligations under the rental agreement. Renewable Resources made all payments under the rental agreement from June 21, 2016, to December 6, 2016. No additional rental payments were made. In February 2017, while still employed by Renewable Resources, Kluver executed the operating agreement of Little Knife Disposal, LLC, as its sole member. Little Knife was also in the business of oilfield waste disposal. After Renewable Resources failed to make rental payments, Titan retrieved the Case excavator in October 2017. The excavator was damaged during the lease, and the excavator’s bucket was missing. In November 2017, Titan sued Renewable Resources for damaging the equipment and failing to pay the balance due under the rental agreement. In January 2018, Renewable Resources filed a third-party complaint against Kluver and Little Knife, claiming they wrongfully used the equipment leased from Titan and did not reimburse Renewable Resources. Renewable Resources requested that Kluver and Little Knife indemnify Renewable Resources for their use of the equipment. In October 2018, Titan obtained a $140,042.83 money judgment against Renewable Resources. In January 2019, Titan sued Kluver, claiming that under the personal guaranty he was liable for Renewable Resources’ debt to Titan. Kluver denied Titan’s allegations and brought a third-party complaint against Renewable Resources, asserting Renewable Resources should indemnify him for any amounts he was required to pay to Titan. Kluver and Little Knife argued the district court erred in finding they benefited from the equipment leased by Renewable Resources. They claimed there was no evidence they received a benefit from the Case excavator leased by Renewable Resources and the court erred in ordering them to indemnify Renewable Resources. Finding no reversible error in the district court's judgment, the North Dakota Supreme Court affirmed the order in favor of Titan Machinery and Renewable Resources. View "Titan Machinery v. Kluver" on Justia Law

Bismarck Financial Group, LLC, and its individual members (together “BFG”) appeal from an order granting James Caldwell’s Rule 12(b)(6) motion to dismiss their complaint. According to BFG’s complaint, Bismarck Financial Group, LLC, was formed in 2009 as a limited liability company. After Caldwell became a member, the parties executed various governing documents, including an operating agreement. While Caldwell was a member, the company entered into a 10-year office lease. The company also had one salaried employee. In 2019, Caldwell informed the other members he was dissociating from the company. BFG subsequently brought this lawsuit requesting a declaration that Caldwell’s dissociation was wrongful and damages in excess of $137,879.55 based on Caldwell’s pro rata share of the company’s debt obligations, employee salary, office overhead, and other expenses. Caldwell moved to dismiss for failure to state a claim upon which relief could be granted. Caldwell argued that he could not be held personally liable for company expenses and obligations under principles of corporate law. Caldwell also asserted BFG had not incurred any damages caused by his dissociation because, according to the terms of the operating agreement, the members have no obligation to contribute capital to cover company expenditures. The district court granted Caldwell’s motion. The court assumed Caldwell wrongfully dissociated from the company, but concluded BFG had not pleaded a cognizable claim for damages because Caldwell could not be held liable for future company expenses and obligations. Finding only that the district court erred in dismissing BFG's complaint as a matter of law in its entirety, the North Dakota Supreme Court reversed in part, "BFG’s allegation that Caldwell’s withdrawal caused additional, currently-unidentifiable damages, if proven, is sufficient to support recovery against Caldwell." The Court affirmed in all other respects, and remanded for further proceedings. View "Bismarck Financial Group, et al. v. Caldwell" on Justia Law

In 2016, plaintiff-appellee Isaac Sutton went shopping for a vehicle at the defendant-appellant David Stanley Chevrolet, Inc.'s (hereafter DSC) car dealership. He agreed to purchase a 2016 Chevy Silverado on credit and he agreed to trade-in his 2013 Challenger. He was informed by DSC that his credit was approved. In addition, he was given $22,800.00 for the Challenger for which he still owed $25,400.00. The documents for the purchase of the vehicle amounted to approximately eighty-six pages, which included a purchase agreement and a retail installment sale contract (RISC). He left the dealership that evening with the Silverado and left his Challenger. Several days later he was informed by DSC that his financing was not approved and he would need a co-signor to purchase the Silverado. Sutton visited DSC but was then told he did not need a co-signor and there was no need to return the vehicle. At the end of June his lender for his 2013 Challenger contacted him about late payments. Sutton contacted DSC who said it was not their responsibility to make those payments since they did not own the Challenger he traded-in. A few days later, he was notified by DSC that his Challenger had been stolen and the matter was not the responsibility of DSC. Sutton had to make an insurance claim on his Challenger and DSC took back the Silverado. In the meantime, Sutton continued to make payments on the Challenger. Plaintiff and his wife Celeste Sutton sued DSC over the whole transaction involving the Challenger. DSC moved to compel arbitration. Plaintiffs alleged they were fraudulently induced into entering the arbitration agreement. The trial court found there was fraudulent inducement and overruled the motion to compel arbitration. The Oklahoma Court of Civil Appeals reversed the trial court and remanded for further proceedings concerning the unconscionability of the arbitration agreement. The Oklahoma Supreme Court granted certiorari, and found the trial court's order was fully supported by the evidence. The opinion of the Oklahoma Court of Civil Appeals was therefore vacated and the matter remanded to the trial court for further proceedings. View "Sutton v. David Stanley Chevrolet" on Justia Law

In 2017, Sibanye Gold Ltd. (“Sibanye”) acquired Stillwater Mining Co. (“Stillwater”) through a reverse triangular merger. Under the terms of the merger agreement, each Stillwater share at closing was converted into the right to receive $18 of merger consideration. Between the signing and the closing of the merger, the commodity price for palladium (which Stillwater mined) increased by nine percent, improving Stillwater’s value. Certain former Stillwater stockholders dissented to the merger, perfected their statutory appraisal rights, and pursued this litigation. During the appraisal trial, petitioners argued the flawed deal process made the deal price an unreliable indicator of fair value and that increased commodity prices raised Stillwater’s fair value substantially between the signing and closing of the merger. In 2019, the Delaware Court of Chancery issued an opinion, holding that the $18 per share deal price was the most persuasive indicator of Stillwater’s fair value at the time of the merger. The court did not award an upward adjustment for the increased commodity prices. Petitioners appealed the Court of Chancery’s decision, arguing that the court abused its discretion when it ignored the flawed sale process and petitioners’ argument for an upward adjustment to the merger consideration. After review of the parties’ briefs and the record on appeal, and after oral argument, the Delaware Supreme Court found no reversible error and affirmed the Court of Chancery. View "Brigade Leveraged Capital Structures Fund Ltd v. Stillwater Mining Co." on Justia Law

Two months before trial, appellant Reales Investment, LLC’s attorney moved to withdraw from the case. Reales did not retain counsel until a few days before trial began, and it did not participate in any of the pretrial proceedings mandated by Riverside County Superior Court Local Rule 3401. On the morning of the first day of trial, Reales’ new attorney orally requested a continuance. The trial court denied the request, and also excluded all documents and witnesses Reales did not disclose in pretrial exchanges between the parties as required by Rule 3401. Because Reales did not disclose anything under Rule 3401, it was precluded from offering any evidence or testimony at trial, so the trial court granted a nonsuit for respondent Thomas Johnson. On appeal, Reales argued the trial court’s pretrial rulings were an abuse of discretion. After review, the Court of Appeal found no abuse of discretion and affirmed the judgment. View "Reales Investment, LLC v. Johnson" on Justia Law

After plaintiffs were unable to collect on a $55 million judgment against Dynex Commercial, Inc., plaintiffs filed a lawsuit against Dynex Commercial, Inc. and Dynex Capital, Inc., alleging fraudulent-transfer and alter-ego claims.The Fifth Circuit affirmed the district court's dismissal of plaintiffs' second amended complaint with prejudice based on the grounds that the fraudulent transfer claim is time-barred and the alter ego claim is barred by res judicata. In this case, plaintiffs knew of or reasonably could have discovered the transfers at least by February 2004, if not earlier, and plaintiffs reasonably could have discovered the allegedly fraudulent nature long before April 2016. Furthermore, plaintiffs' failure to raise an alter-ego claim against Dynex Capital during the state-court litigation does not mean that they can raise such a claim now. The court also stated that the district court appropriately used judicial notice of the Form 10-K and state court record. View "Basic Capital Management, Inc., v. Dynex Capital, Inc." on Justia Law

Defendant the City of Tulsa (City), passed an ordinance creating a tourism improvement district that encompassed all properties within City which had hotels or motels with 110 or more rooms available for occupancy. Plaintiff-appellee Toch, LLC owned Aloft Downtown Tulsa (Aloft) with 180 rooms. Toch petitioned for a declaratory judgment that the ordinance was invalid for a variety of reasons, including that the district did not include all hotels with at least 50 rooms available. The court granted summary judgment to Toch based on its determination that City exceeded the authority granted in title 11, section 39-103.1. The question before Oklahoma Supreme Court was whether section 39-103.1 granted authority to municipalities to limit a tourism improvement district to a minimum room-count of a number larger than 50. To this, the Court answered in the affirmative, reversed the trial court, and remanded for further proceedings. View "Toch, LLC v. City of Tulsa" on Justia Law

Dr. My Tran and Dr. Ian Murray were dentists who owned a dental practice known as Bird Rock Dental. Dr. Murray worked at the practice and Dr. Tran handled the business operations through his own separate entity. About two years after they formed the practice, they had financial disputes. In the midst of these disputes, Dr. Tran accused Dr. Murray of substandard work and published his claims to several individuals and groups, mainly to people working for Dr. Tran, but also to Dr. Murray’s new employer and to one retired dentist. Both parties sued the other, and the lawsuits were consolidated. Dr. Murray’s second amended complaint asserted 22 causes of action, two of which were at issue in this appeal: defamation per se and defamation. Dr. Tran moved to dismiss the causes of action under the anti-SLAPP statute. The trial court found the defamation claims were governed by this statute, and Dr. Murray did not meet his burden to show a probability of prevailing. The court thus struck the two causes of action from the complaint. Dr. Murray appealed. After review, the Court of Appeal reversed in part. The Court found Dr. Murray alleged five separate defamation claims for purposes of anti-SLAPP analysis, and Dr. Tran met his burden to show only one of those claims alleged speech protected under the anti-SLAPP statute: the alleged defamatory statements to Dr. Murray’s new employer. As to that claim, Dr. Murray did not meet his burden to show a probability of prevailing because he did not present evidence that Dr. Tran in fact made these statements. The Court determined the alleged statements in four of the five asserted categories of defamatory statements were not made in connection with a public conversation or discussion of issues, and thus not protected by the anti-SLAPP statute. The trial court was instructed to vacate its order granting the anti-SLAPP motion and to issue another order denying the motion on all defamatory claims, except for claims listed in paragraphs 319 and 335 of Dr. Murray's second amended complaint. View "Murray v. Tran" on Justia Law

Plaintiffs' second amended complaint alleged derivative causes of action on behalf of ALI against AIG for conspiracy to commit fraud, fraud by concealment, breach of fiduciary duty, declaratory relief, conversion, and accounting.The Court of Appeal affirmed the trial court's order of dismissal entered as to the AIG defendants after the trial court sustained without leave to amend the AIG defendants' demurrer to plaintiffs' second amended complaint. The court held that, although plaintiffs' appeal is timely, their derivative claims are barred by the compulsory cross-complaint rule under Code of Civil Procedure section 426.30, subdivision (a). In this case, ALI may not assert against AIG the related causes of action not pleaded in the AIG v. Mahdavi action. Because ALI is barred from asserting the related causes of action against AIG, so are plaintiffs. The court explained that, because plaintiffs stand in the shoes of ALI in seeking redress for ALI's injuries, they are generally subject to the procedural rules that would apply to ALI as plaintiff in a direct action. The court stated that it would be inequitable to AIG to allow plaintiffs to assert claims ALI failed to assert by compulsory cross-complaint in the earlier-filed action, subjecting AIG to the precise piecemeal litigation section 426.30 was designed to prevent. View "Heshejin v. Rostami" on Justia Law

Plaintiff Mentis Sciences, Inc. appealed a superior court order dismissing its claims for damages representing the cost of recreating lost data and lost business and negligence against defendant Pittsburgh Networks, LLC. Plaintiff was an engineering firm that, among other things, designed, developed, and tested advanced composite materials for United States Department of Defense customers. Since entering this sector in 1996, plaintiff acquired “a vast amount of valuable data that was utilized in its operations.” In 2010, the defendant began providing the plaintiff with technological support or “IT” services. In August 2014, defendant notified plaintiff that a drive in one of its servers had failed and would need to be replaced; a controller malfunctioned, causing the corruption of some of plaintiff’s data. Defendant attempted to recover the corrupted data; however, the data was permanently lost because defendant had failed to properly back it up. Plaintiff filed suit against defendant, alleging breach of contract and negligence. In its complaint, plaintiff alleged that the lost data “represents valuable intellectual property compiled over many years and is of daily critical use in [the plaintiff’s] business.” Further, plaintiff alleged that, as a result of the data loss, it was required to conduct “massively expensive” testing in order to recreate the data and that, without the lost data, it was “unable to bid or participate in various projects worth potentially millions of dollars.” Plaintiff argued on appeal of the dismissal of its suit that the trial court erred by: (1) concluding that the damages representing the cost of recreating lost data and lost business were consequential; (2) concluding that the limitation of liability clause in the parties’ contract is enforceable; and (3) dismissing its claim for negligence. The New Hampshire Supreme Court affirmed because the damages sought by plaintiff were consequential and the limitation of liability clause in the parties' contract precluded plaintiff from recovering consequential damages. The Court also concluded the economic loss doctrine barred plaintiff’s negligence claim. View "Mentis Sciences, Inc. v. Pittsburgh Networks, LLC" on Justia Law