Justia Civil Procedure Opinion Summaries

This diversity case arises out of the theft—possibly by a group of third-party contractors—of 1,380 memory cards that belonged to Global Network Management, LTD., and were stored in a data center operated by Centurylink Latin American Solutions, LLC. Global Network sued Centurylink for implied bailment, breach of contract implied in law, and breach of contract implied in fact to hold Centurylink liable for the theft of the memory cards. The district court dismissed all of the claims with prejudice, and Global Network now appeals.   The Eleventh Circuit affirmed in part and reversed in part. The court held that the district court correctly dismissed the contract implied in law and contract implied in fact claims. But Global Network plausibly alleged that Centurylink possessed the memory cards at the time of the theft, and as a result, the implied bailment claim survives at the Rule 12(b)(6) stage. The court explained that according to Centurylink, Global Network’s ability to visit the servers means that it did not possess the servers exclusively, and as a result, no bailment relationship was formed. But this argument does not carry the day at this stage of the proceeding, where the standard is plausibility and not probability. The court noted that it does not hold there was an implied bailment as a matter of fact or law; it only held that Global Network plausibly alleged an implied bailment. View "Global Network Management, Ltd. v. CenturyLink Latin American Solutions, LLC" on Justia Law

Elkside Development, LLC (Elkside) owned and operated the Osprey Point RV Resort in Lakeside, Oregon. Part of Elkside’s business model involved selling membership contracts that conferred free use of the campground, among other benefits. In April 2017, Barnett Resorts LLC, an Oregon limited liability company operated by member-managers Stefani and Chris Barnett, purchased Elkside. Shortly after the purchase, the Barnetts sent a letter to all campground members, identifying them as “owners” of the resort, and indicating that they would not honor Elkside’s membership contracts. Plaintiffs, a group of 71 people who, collectively, were party to 39 membership contracts with Elkside, brought suit alleging a variety of claims against Stefani and Chris Barnett individually, and against the company, Barnett Resorts LLC. On appeal, this case raised three issues relating to: (1) a breach of contract claim; (2) an intentional interference with contract claim; and (3) a statutory claim of elder abuse, based on the fact that the majority of the membership contracts had been held by plaintiffs over the age of 65. As to the claims against the Barnetts individually, the trial court granted summary judgment for defendants, relying on ORS 63.165 and Cortez v. Nacco Materials Handling Group, 337 P3d 111 (2014). Plaintiffs argued, in part, that whether ORS 63.165 shielded the Barnetts from liability required considering whether their actions were entirely in support of the LLC, or whether they were, instead, in furtherance of a non-LLC individual motive. The Court of Appeals affirmed without opinion. The Oregon Supreme Court allowed review and reversed in part the Court of Appeals and the trial court. Specifically, the Supreme Court reversed as to the elder abuse claim, affirmed as to the breach of contract claim, and affirmed the intentional interference claim by an equally divided court. View "Adelsperger v. Elkside Development LLC" on Justia Law

Taunton Properties, LLC owned 63 townhomes and 3.8 acres of adjacent land in Eagle, Idaho. In 2020, Commercial Northwest, Taunton’s property manager and agent, provided Geringer Capital with documents regarding the property. The documents identified the townhomes as “Woodside Villas,” and included financial statements and tenant information. Geringer sent a written offer (“Offer Letter”) to Taunton Properties, proposing to purchase the 63 townhomes; the Offer Letter identified the Seller only as “Title Holder.” The Offer Letter also stated that, “Buyer and Seller agree to execute a more formal Agreement of Purchase and Sale within thirty (30) days containing market specific terms and the items set forth in this Agreement.” The Offer Letter contained sections for “Title Insurance,” “Proration’s [sic] and Closing Costs,” and “Seller’s Deliveries,” but stated those terms were “to be specified in the Agreement of Purchase and Sale.” Peter Taunton, the manager of Taunton Properties, electronically signed the Offer Letter through DocuSign, which presumably returned it to Geringer. One day after signing and returning the Offer Letter, Taunton Properties received a different purchase offer from LCA-CA I, LLC (“LCA”), with a proposed sale price that was $400,000 more than Geringer’s offer. That same day, Peter Taunton advised Geringer that Taunton Properties considered Geringer’s Offer Letter unenforceable and that Taunton Properties would be selling the properties to LCA. Geringer filed a complaint for specific performance, breach of contract, and breach of preliminary agreement against Taunton Properties. The district court granted Respondents’ motions to dismiss. The district court determined: (1) the Offer Letter lacked material terms and represented an agreement to agree; (2) the property description was insufficient under the statute of frauds; and (3) Geringer’s claims for breach of preliminary agreement, tortious interference with contract, and civil conspiracy failed to state claims upon which relief could be granted. The Idaho Supreme Court concurred with the district court: the Offer Letter failed to satisfy the statute of frauds and was so vague, uncertain, and indefinite that it was unenforceable. As a result, there was no enforceable contract with which to tortiously interfere. View "Geringer Capital v. Taunton Properties, LLC" on Justia Law

Consolidated appeals arose from of a commercial dispute between Southern Lift Trucks, LLC ("Southern"), and Hyundai Construction Equipment Americas, Inc. ("Hyundai Construction") -- an alleged subsidiary of Hyundai Heavy Industries Co., Ltd. ("Hyundai Heavy Industries"). Southern was a heavy-equipment dealer for Hyundai Construction. Southern filed suit against Hyundai Construction and Hyundai Heavy Industries (collectively, as "Hyundai") asserting various claims, including claims under the Alabama Heavy Equipment Dealer Act ("the AHEDA"). Southern also sought a preliminary injunction to prevent Hyundai: (1) from unlawfully terminating one of the dealer agreements at issue in these appeals; and (2) from unlawfully adding a second dealer in the territory that was covered under another dealer agreement at issue. In response, Hyundai moved to compel arbitration. The circuit court granted Southern's request for a preliminary injunction and denied Hyundai's motion to compel arbitration. In appeal no. SC-2022-0675, the Alabama Supreme Court affirmed the trial court's order insofar as it granted Southern's motion for a preliminary injunction as to the forklift agreement. However, the Court reversed the trial court's order insofar as it issued a preliminary injunction related to the construction-equipment agreement, and remanded the case for the trial court to enter an order consistent with the Supreme Court's opinion. In case no. SC-2022-0676, the Supreme Court affirmed the trial court's order insofar as it denied Hyundai's motion to compel arbitration as to any provisions of Southern's declaratory-judgment claim relating to the "enforceability of any provision" of the dealer agreement. However, the Court reversed the trial court's order insofar as it denied Hyundai's motion to compel arbitration as to Southern's other claims, and that case was remanded for further proceedings. View "Hyundai Construction Equipment Americas, Inc., et al. v. Southern Lift Trucks, LLC" on Justia Law

Alabama Somerby, LLC, d/b/a Brookdale University Park IL/AL/MC; Brookdale Senior Living, Inc.; and Undrea Wright (collectively, Brookdale) appealed a circuit court's order denying their motion to compel arbitration of the claims asserted against them by plaintiff, L.D., as the next friend of her mother, E.D. Brookdale operated an assisted-living facility for seniors ("the nursing home") in Jefferson County, Alabama; Wright was the administrator of the nursing home. In March 2022, L.D. filed on E.D.'s behalf, a complaint against Brookdale and Wright and others, asserting various tort claims and seeking related damages premised on allegations that, following her admission to the nursing home, E.D. had been subjected to multiple sexual assaults both by other residents and by an employee of Brookdale. The Brookdale defendants jointly moved to compel arbitration of L.D.'s claims against them or, alternatively, to dismiss the action without prejudice to allow those claims to proceed via arbitration. Following a hearing, the trial court, denied the motion seeking to dismiss the action or to compel arbitration. The Brookdale defendants timely appealed, asserting that the trial court had erred by failing to order arbitration. The Alabama Supreme Court concluded the Brookdale defendants established that an agreement providing for arbitration existed and that the agreement affected interstate commerce. The trial court erred in denying the Brookdale defendants' request to compel arbitration. The Supreme Court reversed the trial court's order and remanded the case for further proceedings. View "Alabama Somerby, LLC, et al. v. L.D." on Justia Law

Elia Companies, LLC, filed suit against the University of Michigan Regents, alleging breach of contract; violations of Michigan’s anti-lockout statute; breach of covenant for quiet possession; constructive eviction; conversion; and unjust enrichment. In 2013, plaintiff entered into a 10-year lease with defendant to obtain space at the Michigan Union for establishing a coffee shop. In March 2017, defendant disclosed its plans to renovate the Union. Plaintiff’s complaint alleged that the parties’ lease required that they negotiate a relocation of the leased premises. However, defendant terminated the lease on April 20, 2018, based on plaintiff’s alleged default and ordered plaintiff to vacate the premises. Plaintiff filed this action in August 2018, and defendant, over plaintiff’s objection, filed a notice of transfer removing the case to the Court of Claims pursuant to MCL 600.6404(3) and MCL 600.6419(1) of the Court of Claims Act (the COCA). Defendant moved for summary disposition, arguing that plaintiff’s action had to be dismissed because plaintiff failed to comply with the notice and verification requirements of MCL 600.6431 of the COCA. The Court of Claims agreed and dismissed plaintiff’s case. Plaintiff appealed, and the Court of Appeals affirmed in part and reversed in part. The panel affirmed the dismissal of plaintiff’s ancillary claims on governmental-tort-immunity grounds but reversed the dismissal of plaintiff’s contract claim. The Michigan Supreme Court determined the Court of Appeals erred when it excused plaintiff’s failure to timely comply with MCL 600.6431. “All parties with claims against the state, except those exempted in MCL 600.6431 itself, must comply with the requirements of MCL 600.6431.” Judgment was reversed and the matter remanded to the Court of Claims for reinstatement of summary judgment granted in defendant’s favor. View "Elia Companies, LLC v. University Of Michigan Regents" on Justia Law

The federal district court in Washington State certified a question of law to the Washington Supreme Court. Washington law required group life insurance policies to have an incontestability clause providing that “the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue.” The certified question in this case asked whether an insurer could invalidate a life insurance policy after this two-year period on grounds that the policies were void ab initio or never “in force.” New York Life Insurance (NY Life) issued two life insurance policies to Lorenzo Mitchell, naming his nephew, Simon Mitchell, as the sole beneficiary. Lorenzo died more than two years after the policies were issued, and Simon sought to collect on the policies. NY Life became aware that Lorenzo had Down syndrome and lived with significant intellectual disabilities. These facts raised questions about the circumstances under which the policies were issued. NY Life sued Simon in federal district court seeking declaratory relief that the policies were void ab initio under three possible theories: imposter fraud, incapacity, and lack of an insurable interest. The Washington Supreme Court concluded NY Life’s first and third claims were not barred by that provision. “In contrast, lack of capacity does not, on its own, render an insurance contract void; it renders it at most voidable. Because a voidable contract is not void ab initio, we hold the incontestability provision bars NY Life’s second claim.” View "New York Life Ins. Co. v. Mitchell" on Justia Law

Allied World Specialty Insurance Company issued a WaterPlus Package Insurance Policy to the Windermere Oaks Water Supply Corporation. That policy includes coverage for Public Officials and Management Liability. But it also includes various exclusions from coverage. At issue in this appeal is the exclusion of contractual liability.   The Fifth Circuit affirmed the district court’s judgment granting summary judgment in favor of the insured. The court held that a claim for breach of fiduciary duty is not a claim for breach of contract and is, therefore, not subject to exclusion from coverage under a contractual liability exclusion. The court explained that under the Texas Prompt Payment of Claims Act, Tex. Ins. Code Section 542.060, an insurer’s breach of the duty to defend constitutes a per se violation View "Windermere Oaks v. Allied World" on Justia Law

Appellant Texxon Petrochemicals, LLC (“Texxon”) filed for bankruptcy. In that proceeding, Texxon filed a motion to assume executory contract, alleging that it entered into a contract with Getty Leasing in 2018 to purchase the property. Getty Leasing objected to the motion. After an evidentiary hearing, the bankruptcy court denied the motion on the grounds that, for multiple reasons, there was no valid contract to assume. The district court affirmed, finding there was insufficient evidence to show that, as required under Texas law, the alleged contract was sufficient as to the property identity or comprised an unequivocal offer or acceptance. Texxon appealed. Getty Leasing primarily contends that the appeal is mooted by the dismissal of the underlying bankruptcy proceeding.   The Fifth Circuit affirmed. The court held that the brief email exchange did not demonstrate an offer or acceptance, as required for a contract to be binding under Texas law. Texxon fails to show that the email exchange satisfied any of the three required elements of an offer. A statement that a party is “interested” in selling a property is not an offer to sell that property—it is an offer to begin discussions about a sale. Nor were the terms of the offer clear or definite. Finally, the alleged offer failed to identify the property to be conveyed. For these reasons, Texxon is unable to show the existence of a binding contract. View "Texxon v. Getty Leasing" on Justia Law

This case involves a rare procedural maneuver called snap removal. Federated Mutual Insurance Company removed an insurance dispute to federal court before Plaintiff, M & B Oil, Inc., “properly joined and served” one of the Defendants, the City of St. Louis. The question is whether this maneuver eliminates the requirement of complete diversity.   The Eighth Circuit answered no, and vacated the order denying remand and sent the case back for a second look. The court explained that from the beginning, M & B sued two Defendants: St. Louis and Federated. One of them is a fellow Missourian, so there has never been complete diversity. And without complete diversity, there is no “original jurisdiction. Further, the court wrote that snap removal cannot cure a lack of complete diversity. Moreover, the court explained that there is reason to doubt that any fraudulent-joinder argument will succeed now that M & B has amended its complaint to include an inverse condemnation claim against St. Louis. View "M & B Oil, Inc. v. Federated Mutual Insurance Co" on Justia Law