Justia Civil Procedure Opinion Summaries

In this venue dispute, the Supreme Court denied a petition for mandamus relief, holding that the trial court did not abuse its discretion in transferring the case to the parties' agreed venue.This case stemmed from a lawsuit alleging wrongful disposition of a limited partnership's assets. A group of the limited partners (collectively, Fox River) sued William Carlson, who owned and controlled the partnership's general partner, claiming that Carlson fraudulently misappropriated groundwater leases, breached the limited partnership agreement, and violated fiduciary duties. Fox River filed the lawsuit in Washington County where Carlson was domiciled. Carlson moved to transfer venue to Harris County, citing a venue-selection clause in the limited partnership agreement. The trial court granted the motion, enforcing the parties' venue agreement in accordance with Tex. Civ. Prac. & Rem. Code 15.020. Fox River sought mandamus relief, arguing that Tex. Civ. Prac. & Rem. Code 65.023(a) mandates venue in a defendant's county of domicile for cases primarily seeking injunctive relief. The Supreme Court denied mandamus relief, holding that section 15.020 requires enforcement of the parties' venue-selection agreement not because it is a "super mandatory" venue provision that supersedes section 65.023(a) but because section 65.023(a) does not apply in suits like this where injunctive relief is not the primary and principal relief requested. View "In re Fox River Real Estate Holdings, Inc." on Justia Law

Plaintiff-appellant Germaninvestments Aktiengesellschaft (AG) (“Germaninvestments”) was a Swiss holding company formed to manage assets for the Herrling family. Defendant Allomet Corporation (“Allomet”) was a Delaware corporation that manufactured high-performance, tough-coated metal powders using a proprietary technology for coating industrial products. Defendant Yanchep LLC (“Yanchep”), was also a Delaware limited liability company with Mirta Hereth as its sole member (together, Allomet and Yanchep are referred to as “Appellees”). Allomet struggled with declining performance as early as 2002. In mid-2016, Tanja Hausfelder, an insurance professional who apparently knew or worked with the Herrlings and Hereth, advised Herrling that Hereth was looking for a joint venture partner to join Allomet. After a meeting in Switzerland, Herrling and Hereth discussed a general structure for their joint venture to raise capital for Allomet. The issue this case presented for the Delaware Supreme Court’s review centered on whether the Court of Chancery correctly determined that a provision in a Restructuring and Loan Agreement between the parties was a mandatory, as opposed to a permissive, forum selection clause. The Court of Chancery held that Austrian law governed the analysis of the forum selection provision, and determined that the provision is governed by Article 25 of the European Regulation on Jurisdiction and Recognition and Enforcement of Judgments in Civil and Commercial Matters. Based upon these conclusions, the court granted Defendants’ motion to dismiss in favor of the Austrian forum. The Delaware Supreme Court held that Appellees, who raised Austrian law as a basis for their motion to dismiss, had the burden of establishing the substance of Austrian law, and that the Court of Chancery erred in determining that Appellees had carried that burden. Accordingly, the forum selection provision analysis should have proceeded exclusively under Delaware law. Applying Delaware law, the Delaware Court determined the forum selection provision was permissive, not mandatory. “As such, the forum selection provision is no bar to the litigation proceeding in Delaware.” The Court affirmed the Court of Chancery’s holding that 8 Del. C. section 168 was not the proper mechanism for the relief Appellants sought. Therefore, this matter was affirmed in part, reversed in part, and remanded to the Court of Chancery for further proceedings. View "Germaninvestments AG v. Allomet Corporation" on Justia Law

In consolidated appeals, garnishees N.Starr, LLC; Lee Finstad; and Jeff Trosen appealed from a Grand Forks County, North Dakota district court order dismissing their counterclaims in a garnishment proceeding, and Johnston Law Office, P.C. appealed from a Cass County district court order dismissing its action. Both orders dismissed their respective claims in each case against PHI Financial Services, Inc. (“PHI”) and Jon Brakke and the Vogel Law Firm, Ltd. (collectively, “Vogel Law”). Finding no reversible error, the North Dakota Supreme Court affirmed dismissal as to all claims. View "PHI Financial Services v. Johnston Law Office, et al." on Justia Law

Lowe's Home Centers sought reimbursement of state sales taxes and Business and Occupation ("B&O") taxes from the Washington Department of Revenue ("DOR") because it contracted with banks to offer private-label credit cards to its customers, and agreed to repay the banks for losses it sustained when customers defaulted on their accounts. RCW 82.08.050 provided that a seller must collect and remit sales taxes to the State; for sellers unable to recoup sales taxes from buyers, RCW 82.08.037(1) provided that sellers could claim a deduction "for sales taxes previously paid on bad debts." In a split decision, the Court of Appeals affirmed the trial court's denial of reimbursement. After its review, the Washington Supreme Court held that although banks were involved in the credit transaction, Lowe's was still the seller burdened with the loss from its customers' defaults, including their nonpayment of the sales taxes. Accordingly, the Supreme Court reversed the Court of Appeals. View "Lowe's Home Ctrs., LLC v. Dep't of Revenue" on Justia Law

At issue was the promulgation of a novel rule by the Washington Department of Ecology addressing climate change. Specifically, the Washington Supreme Court was asked to determine whether the Washington Clean Air Act granted the Department broad authority to establish and enforce greenhouse gas emission standards for businesses and utilities that did not directly emit greenhouse gases, but whose products ultimately did. The Department claimed and exercised such authority in promulgating the rule at issue. The Supreme Court held that by its plain language and structure, the Act limited the applicability of emissions standards to actual emitters. "Ecology's attempt to expand the scope of emission standards to regulate nonemitters therefore exceeds the regulatory authority granted by the Legislature." The Court invalidated the Rule to the extent that it exceeded the Department's regulatory authority, while recognizing the Department could continue to enforce the Rule in its authorized applications to actual emitters. View "Ass'n of Wash. Bus. v. Dep't of Ecology" on Justia Law

In 2016, Uber Technologies, Inc. acquired Ottomotto LLC to gain more traction in the autonomous vehicle space, hiring key employees from Google's autonomous vehicle program. Though steps were taken to ensure the former Google employees did not misuse Google's confidential information, it eventually came to light Google's proprietary information had indeed been misused. Uber settled Google's misappropriation claims by issuing additional Uber stock to Google, valued at $245 million. An Uber stockholder and former Uber employee filed suit in the Delaware Court of Chancery against the directors who approved the Otto acquisition. Plaintiff claimed the directors ignored the alleged theft of Google’s intellectual property and failed to investigate pre-closing diligence that would have revealed problems with the transaction. According to plaintiff, the board should not have relied on the CEO’s representations that the transaction had the necessary protections because he and Uber had a history of misusing the intellectual property of others. Defendants responded by moving to dismiss the complaint under Court of Chancery Rule 23.1. As they asserted, the plaintiff first had to make a demand on the board of directors before pursuing litigation on the corporation’s behalf. The Court of Chancery found that a majority of the Uber board of directors could have fairly considered the demand, and dismissed the complaint. The Delaware Supreme Court found, as did the Court of Chancery, that a majority of the board was disinterested because it had no real threat of personal liability due to Uber’s exculpatory charter provision. And a majority of the board was also independent of the one interested director. Therefore, the Supreme COurt affirmed the Court of Chancery's judgment dismissing the complaint with prejudice. View "McElrath v. Kalanick, et al." on Justia Law

At issue in this case was whether a federal court sitting in Oklahoma had specific jurisdiction over Dr. Scott Jolly, a dentist and Arkansas resident, and his Limited Liability practice, Jolly Dental Group, LLC. Dental Dynamics, LLC argued that three isolated business transactions and an allegedly fraudulent contract were sufficient to establish federal court jurisdiction over its breach of contract and fraud claims. The Tenth Circuit disagreed, finding Jolly Dental's contacts with Oklahoma were "too random, fortuitous, and attenuated" to establish personal jurisdiction there. With respect to Denta; Dynamics' fraud claim, the Court concluded Dental Dynamics failed to show conduct sufficiently targeted to Oklahoma to establish personal jurisdiction there. View "Dental Dynamics v. Jolly Dental Group" on Justia Law

At issue in this appeal was Mountain Dude’s claims brought under Utah’s Fraudulent Transfer Act (“UFTA”). Mountain Dudes was the creditor to Split Rock, Inc. (“SRI”). Mountain Dudes obtained a $1.75 million judgment against SRI as the result of a dispute over a home Mountain Dudes purchased from SRI. At the same time of the Mountain Dude/SRI dispute, a land developer in St. George, Utah went over $50 million in debt during the 2008 recession. SRI transferred all of its remaining assets to a newly formed business, Split Rock Holdings, LLC (“SR Holdings”). Though the transaction occurred between two entities, many of the same individuals were involved on both sides of that deal. Mountain Dudes, as SRI’s creditor, had hoped to levy periodic payments that SR Holdings agreed to make to SRI on a $2.7 million obligation. Before any such payments were due, however, SRI and SR Holdings modified the original Sale of Asset Agreement. Ultimately, SR Holdings paid SRI a total of $188,000 under the Modification’s terms. Over approximately the same time period, SR Holdings disbursed $1.1 million to three of the individual Defendants—Platt, Bylund and Manning. Mountain Dudes filed suit relating to the Modification pursuant to the UFTA. Resolution of this appeal turned primarily on a procedural matter involving how the sufficiency of evidence presented at a civil jury trial could be challenged. The Tenth Circuit determined the district court deprived Mountain Dudes LLC of that opportunity. Instead, after the jury was unable to reach a verdict on Mountain Dudes’ UFTA claims, the district court invoked Rule 50(b) to grant Defendants judgment as a matter of law on grounds the court raised sua sponte after the jury deadlocked. That, the Tenth Circuit held, It therefore reversed the judgment the district court entered sua sponte in Defendants’ favor. However, the Court affirmed the district court’s other rulings rejecting the grounds the various parties did raise seeking judgment as a matter of law. View "Mountain Dudes v. Split Rock Holdings" on Justia Law

Valley National Bank ("VNB") petitioned the Alabama Supreme Court for a writ of mandamus to direct directing the trial court to dismiss a declaratory-judgment action filed against VNB by Jesse Blount, Wilson Blount, and William Blount. William owned a 33% interest in Alabama Utility Services, LLC ("AUS"). William also served as the president of WWJ Corporation, Inc. ("WWJ"), and WWJ managed AUS. Wilson and Jesse, William's sons, owned all the stock of WWJ. In May 2013, William transferred his 33% interest in AUS to WWJ, and WWJ then owned all the interest in AUS. In July 2015, VNB obtained a $905,599.90 judgment against William in an action separate from the underlying action. On August 31, 2015, Asset Management Professionals, LLC, purchased from WWJ all the assets of AUS for $1,600,000. On July 17, 2018, the Blounts filed a declaratory judgment action seeking a judgment declaring "that a) William's transfer of his interest in AUS to WWJ was not fraudulent as to [VNB], b) William was not the alter ego of AUS or WWJ, c) the sale of AUS did not result in a constructive trust in favor of [VNB], and d) the [Blounts] did not engage in a civil conspiracy." VNB filed an action under the Alabama Uniform Fraudulent Transfer Act against the Blounts and others in which it asserted that William had fraudulently transferred assets and sought to pierce the corporate veil of WWJ. After review of the trial court records and documents submitted by the parties, the Alabama Supreme Court determined VNB did not demonstrate a clear legal right to have claims against them dismissed. The court denied the mandamus petition insofar as it sought dismissal of the alter-ego claim and the constructive-trust claim. View "Ex parte Valley National Bank." on Justia Law

On a winter night in 2014, strong winds blew through the town of Georgia, Vermont, causing a partially constructed livestock barn to collapse. Commercial Construction Endeavors, Inc. (CCE), the contractor building the barn, sought recompense for the resulting losses from its insurer, Ohio Security Insurance Company. However, insurer and insured disagreed as to policy coverage for costs incurred by CCE in removing the remains of the collapsed barn and rebuilding it to its pre-collapse state. Ultimately, CCE sued Ohio Security for breach of contract. In successive summary-judgment rulings, the trial court held that the contractor’s rebuilding expenses were covered under the policy, but the cost of debris removal was not. Ohio Security cross-appealed the first ruling and CCE appealed the second; the Vermont Supreme Court reversed the first ruling and affirmed the second. The Court determined the additional collapse coverage applied only to “Covered Property,” which was business personal property; CCE did not dispute that the barn was not business personal property and thus was not “Covered Property.” Therefore, the court’s first summary-judgment ruling was reversed. The debris removal was not a loss involving business personal property. As a result, it was not a loss to “Covered Property” at that term was defined by the policy at issue. View "Commercial Construction Endeavors, Inc. v. Ohio Security Insurance Company" on Justia Law