Justia Civil Procedure Opinion Summaries

This case involved an issue of whether the purchaser of a lien release bond was an indispensable party in an action under chapter 60.04 RCW by a lien claimant against the surety of the release bond. Inland Empire Dry Wall Supply Company entered into an agreement to supply drywall materials to Eastern Washington Drywall & Paint (EWD&P). EWD&P contracted with Fowler General Construction to work on an apartment complex in Richland, Washington. Inland Empire claims EWD&P never paid it for the materials supplied. To pursue payment, Inland Empire filed a preclaim notice and timely recorded a mechanics' lien against the construction project under RCW 60.04.091. To release the project property from the lien. Fowler obtained a lien release bond in the amount of $186,979.57 from Western Surety Company. The lien release bond identified Fowler as the "Principal," Western as the "Surety," and Inland Empire as the "Obligee." The Court of Appeals, in a divided opinion, reversed the trial court's grant of summary judgment in favor of the surety and held that a claim against a lien release bond could be pursued solely against the surety. Finding no reversible error in that decision, the Washington Supreme Court affirmed. View "Inland Empire Dry Wall Supply Co. v. W. Sur. Co." on Justia Law

The Ninth Circuit reversed the district court's dismissal based on lack of subject matter jurisdiction of an action alleging a claim of legal malpractice. The panel held that what little business Lincoln One conducted was done in Missouri—its state of incorporation—making both Lincoln One and its wholly-owned subsidiary, plaintiff, putative citizens of that state alone. Therefore, there was complete diversity between the parties because defendant was a California citizen. The panel conditionally reversed the district court's jurisdictional dismissal and remanded so that it may consider in the first instance whether Lincoln One and plaintiff were alter egos or there was jurisdictional manipulation that would warrant treating plaintiff as a California citizen. In regard to the issue of classifying the citizenship of a holding company such as Lincoln One that has engaged in no activity other than incorporation, the panel held that a recently-formed holding company's principal place of business is the place where it has its board meetings, regardless of whether such meetings have already occurred, unless evidence shows that the corporation is directed from elsewhere. View "3123 SMB LLC V. Horn" on Justia Law

The charging order at issue here was issued over limited partnerships’ and limited liability company’s objections that ancillary provisions included in the charging order, which required them to refrain from certain kinds of transactions and provide extensive financial information to the judgment creditor, were not authorized under the controlling statutes. On appeal, the Court of Appeals held that some, but not all, of the ancillary provisions were authorized. The Oregon Supreme Court held a trial court has either general or specific statutory authority to include, in a charging order, ancillary provisions that it finds necessary to allow a judgment creditor access to a debtor-partner’s distributional interest in a company, as long as those provisions do not unduly interfere with the company’s management. Furthermore, the Court held that in this case, the record did not establish that that standard was met and, therefore, that the trial court erred in imposing the challenged ancillary provisions. The Court reversed the Court of Appeals and vacated the circuit court order, and remanded to the circuit court for further proceedings. View "Law v. Zemp" on Justia Law

Debra Sands appealed the grant of summary judgment in favor of Menard, Inc. Sands and John Menard, Jr., were involved in a romantic relationship from late 1997 to April 2006. Sands alleged that from 1998 until 2006 she cohabitated with Menard and they engaged in a "joint enterprise" to work together and grow Menard's businesses for their mutual benefit. Menard and his affiliated entities argued that by failing to comply with Supreme Court Rule 20:1.8(a), which regulated business transactions between lawyers and their clients, Sands was precluded from seeking an ownership interest in any of Menard's various business ventures. As to the claim she characterized as a “Watts” unjust enrichment claim, the Wisconsin Supreme Court concluded Sands failed to allege facts which, if true, would support her legal conclusion that she and Menard had a joint enterprise that included accumulation of assets in which both she and Menard expected to share equally. Furthermore, the Court held SCR 20:1.8(a) could guide courts in determining required standards of care generally; however, it could not be used as an absolute defense to a civil claim involving an attorney. Finally, the Court concluded the court of appeals properly granted summary judgment to Sands on Menard, Inc.'s counterclaim for breach of fiduciary duty, and to the Trustees on their motion for summary judgment dismissing Sands' claim. View "Sands v. Menard, Jr." on Justia Law

Lincoln Land Company, LLC (“Lincoln Land”) appealed a district court’s judgment which dismissed Lincoln Land’s complaint. LP Broadband cross-appeals the district court’s denial of LP Broadband’s motion for attorney fees. The dispute arose over LP Broadband’s placement and use of antenna equipment on the rooftop of a grain silo owned by Lincoln Land, but leased to General Mills. General Mills had allowed MicroServ Computer Technologies, Inc., (“MicroServ”) (which merged with LP Broadband in 2013) to utilize the rooftop space on the property since March 2000, in exchange for $50 per month. Lincoln Land subsequently purchased the grain silos and, in 2010, executed a lease agreement with General Mills, which specifically prohibited a sublease of the property without prior written consent from Lincoln Land. Notwithstanding the lease provision, General Mills continued to sublease the rooftop space to LP Broadband. Upon discovering that LP Broadband was using the rooftop space, Lincoln Land filed a complaint against LP Broadband for unjust enrichment. Therein, Lincoln Land argued that it had conferred a benefit to LP Broadband and that it would be inequitable for LP Broadband to retain such a benefit without compensating Lincoln Land. The district court dismissed the complaint after concluding that Lincoln Land failed to establish that it, not General Mills, had conferred the benefit to LP Broadband. Finding no reversible error in the district court judgment, the Idaho Supreme Court affirmed. View "Lincoln Land Co v. LP Broadband" on Justia Law

The oral agreement at issue in this appeal was made in connection with a transaction by which three companies, of which Albert Kanno was the majority shareholder, were sold to two Delaware corporations. The transaction was documented principally by three writings, each of which had an integration clause. A jury found in favor of Kanno and against Marwit Capital Partners II, L.P. (Marwit Capital) and Marwit Partners, LLC (Marwit LLC) on Kanno’s claim for breach of the oral agreement. After the jury rendered its verdict, the trial court concluded the parol evidence rule did not bar Kanno’s breach of contract claim and that the oral agreement was enforceable. Marwit Capital and Marwit LLC (together, Marwit) appealed. The Court of Appeal concluded the three written agreements were at most partial integrations, and, therefore, the oral agreement was enforceable if its terms did not directly contradict and were consistent with those three agreements, and the Court found no direct contradiction or inconsistency. View "Kanno v. Marwit Capital Partners II" on Justia Law

West Central Cooperative was an agricultural cooperative owned by farmers. Westco Agronomy Co., L.L.C. was a wholly-owned subsidiary of West Central formed in 2005 for the purpose of streamlining delivery of agronomy products, including seed, fertilizer, and chemicals. In 2002, Westco hired Chad Hartzler to work in the agronomy division selling seed and eventually chemicals. He was later promoted to sales director but retained oversight of some of Westco’s largest accounts, including the Wollesens. A dispute arose over the relationships of these parties, resulting in a three-week jury trial and a substantial damages verdict in favor of the customer and against the cooperative. The Iowa Supreme Court limited its consideration of the case to three matters raised in the cooperative’s application for further review: (1) the district court properly denied the cooperative’s motion for new trial based on inconsistent verdicts; (2) the district court did not abuse its discretion in denying the cooperative’s pretrial motion to have equitable issues tried first; and (3), with respect to the constitutionality of Iowa Code section 706A.2(5) (2011), the statute unconstitutionally shifts the burden to the defendant. Specifically, any person who provides property or services that end up being used to facilitate “specified unlawful activity” must prove his or her own lack of negligence to avoid liability. However, the Supreme Court found the burden-shifting provision contained in section 706A.2(5)(b)(4) could be severed from the rest of the statute. Accordingly, while the Court otherwise affirmed the district court, it reversed the district court’s dismissal of this claim. View "Westco Agronomy Company, LLC v. Wollesen" on Justia Law

At issue was when it is appropriate for the Supreme Court to exercise its discretion to grant extraordinary relief in the form of advisory mandamus.In this petition for writ of prohibition or mandamus challenging the district court’s denial of Petitioners’ motion to dismiss, Petitioners asked the Supreme Court to direct the district court to vacate and reconsider its motion without applying the doctrine of cross-jurisdictional class-action tolling to their statute of limitations defenses. The Supreme Court declined to grant relief relief because (1) the district court did not consider the statute-based argument Petitioners made to the Supreme Court due to Petitioners’ failure to cite the statute until the hearing on their motion to dismiss; (2) this court’s clarification of the law would not alter the district court’s disposition; and (3) the district court’s decision to defer final decision on Petitioners’ statute of limitations defenses pending further factual and legal development was sound and not the proper basis for extraordinary writ relief. View "Archon Corp. v. Eighth Judicial District Court" on Justia Law

In this appeal, the issue before the Delaware Supreme Court was the limits of the stockholder ratification defense when directors make equity awards to themselves under the general parameters of an equity incentive plan. In the absence of stockholder approval, if a stockholder properly challenges equity incentive plan awards the directors grant to themselves, the directors must prove that the awards are entirely fair to the corporation. But, when the stockholders have approved an equity incentive plan, the affirmative defense of stockholder ratification comes into play. Here, the Equity Incentive Plan (“EIP”) approved by the stockholders left it to the discretion of the directors to allocate up to 30% of all option or restricted stock shares available as awards to themselves. The plaintiffs alleged facts leading to a pleading-stage reasonable inference that the directors breached their fiduciary duties by awarding excessive equity awards to themselves under the EIP. Thus, a stockholder ratification defense was not available to dismiss the case, and the directors had to demonstrate the fairness of the awards to the Company. The Supreme Court reversed the Court of Chancery’s decision dismissing the complaint and remanded for further proceedings. View "In Re Investors Bancorp, Inc. Stockholder Litigation" on Justia Law

Appellant SCF Consulting, LLC lodged a civil complaint against Appellee, the law firm of Barrack, Rodos & Bacine, in the common pleas court. Appellant averred that it had maintained a longstanding oral consulting agreement with the law firm, which the firm purportedly breached in 2014. According to Appellant, the arrangement was for the solicitation of institutional investors to participate in securities class actions, and remuneration was to be in the form of a two-and-one-half to five-percent share of the firm’s annual profits on matters “originated” by Appellant’s principal or on which he provided substantial work. Appellant claimed the consulting agreement qualified as an express exception to the anti-fee-splitting rule for an employee “compensation or retirement plan, even though the plan is based in whole or in part on a profit-sharing arrangement.” Alternatively, Appellant argued Appellee’s attempt to invoke public policy as a shield was an “audacious defense” which, if credited, would perversely reward the law firm by allowing it to profit from its own unethical conduct. The county court agreed with Appellee’s position concerning both the nonapplicability of the exception to Rule 5.4(a)’s prohibition and the unenforceability of the alleged agreement. The Pennsylvania Supreme Court concluded the ultimate outcome of this case might turn on factual findings concerning Appellant’s culpability, or the degree thereof, relative to the alleged ethical violation. The Court held only that the contract cause of action was not per se barred by the purported infraction on Appellee’s part and, accordingly, the county court’s bright-line approach to the unenforceability of the alleged consulting agreement should not have been sustained. View "SCF Consulting, LLC. v. Barrack Rodos & Bacine" on Justia Law