Justia Civil Procedure Opinion Summaries

The Callawassie Island Members Club, Inc. ("the Club"), brought separate actions against three couples—the Martins, the Freys, and the Quinns—following a dispute over membership dues. The circuit court granted the Club's motion for summary judgment. The court of appeals consolidated the parties' appeals and affirmed. The South Carolina Supreme Court granted a petition for certiorari review filed by Michael Frey, who challenged the award of summary judgment. Frey contended material questions of fact existed as to whether the Club improperly billed him for continuing membership dues, particularly where his membership was suspended over a decade ago and membership was undisputedly optional when he joined. To this the Court concurred, reversed and remanded for further proceedings. View "Callawasie Island Members Club v. Frey" on Justia Law

Shao Yan Chen, Han Lin Liu, Zhi Hua Mo, Yuk Yee Cheng, Hui Zhen Hu, Ruizhao Wu, and Qi Di Wu (collectively, tenants) had a dispute with Valstock Ventures, LLC and 371 Broadway Street, LLC (together, Valstock) over which of two documents was the operative lease governing the tenants’ tenancies in two of Valstock’s apartment buildings. The tenants filed suit against Valstock seeking a declaratory judgment on this question, alleging a civil conspiracy, and stating claims for violations of the Fair Employment and Housing Act (FEHA), Unfair Competition Law (UCL), and section 37.10B of the San Francisco Rent Ordinance. The trial court awarded the tenants approximately $1.1 million in attorney’s fees under Civil Code section 1717 after granting their motion for summary adjudication of the sole cause of action on the contract in this case, before trial or disposition of the remaining non-contract causes of action. The defendants appealed, arguing the award of attorney’s fees was premature because the litigation as a whole had not yet ended. To this the Court of Appeal agreed and therefore reversed. View "Chen v. Valstock Ventures, LLC" on Justia Law

Luis Munoz and LR Munoz Real Estate Holdings, LLC (together, Munoz) bought a hotel from a company owned and managed by Rajesh Patel and his son, Shivam. Before escrow closed, the parties negotiated a leaseback arrangement requiring Munoz to lease the hotel back to the Patels’ company after the sale. Escrow closed and the parties thereafter executed the previously-negotiated lease. However, Munoz contended the Patels secretly swapped out the agreed-upon lease for a lease substantially more beneficial to the Patels and worse for Munoz, and then tricked him into signing it. Munoz filed suit against the Patels, an alleged alter ego entity of the Patels called Inn Lending, LLC, and other defendants involved in the sale, asserting causes of action for breach of contract, breach of the covenant of good faith and fair dealing, promissory fraud, and elder financial abuse, among other causes of action. Rajesh and Inn Lending demurred to the operative second amended complaint, the trial court sustained the demurrer without leave to amend. In a prior opinion, the Court of Appeal reversed the judgment and determined, among other things, that Munoz alleged a viable fraud cause of action based on a theory of fraud in the execution. The California Supreme Court granted review and remanded the case back to the appellate court, ordering a rehearing of the parties arguments for fraud. After reconsideration, the Court of Appeal concluded operative complaint alleged facts sufficient to state a viable cause of action for fraud in the execution against Rajesh, but not against Inn Lending. Additionally, the Court concluded the complaint plead facts sufficient to state an elder financial abuse cause of action against both Rajesh and Inn Lending. The Court concluded Munoz failed to establish that the trial court erred in dismissing his breach of contract and bad faith causes of action. In light of these determinations, the appeals court reversed the trial court judgment and remand the matter with instructions that the trial court vacate its order sustaining the demurrer to the entire complaint, and enter a new order. View "Munoz v. Patel" on Justia Law

Defendant, a neurosurgeon, chose to use implants distributed by DS Medical, a company wholly owned by his fiancée. Physicians in other practices grew suspicious and filed various claims under the False Claims Act. The jury returned a verdict for the government on two of the three claims. The district court then awarded treble damages and statutory penalties in the amount of $5,495,931.22. Following the verdict, the government moved to dismiss its two remaining claims without prejudice, see Fed. R. Civ. P. 41(a)(2), on the ground that any recovery would be “smaller and duplicative of what the [c]ourt ha[d] already awarded.”   The Eighth Circuit reversed and remanded for a new trial. The court explained that are several ways to prove that a claim is “false or fraudulent” under the False Claims Act. One of them is to show that it “includes items or services resulting from a violation” of the anti-kickback statute. This case required the court to determine what the words “resulting from” mean. The court concluded that it creates a but-for causal requirement between an anti-kickback violation and the “items or services” included in the claim. Thus, the court reversed and remanded because district court did not instruct the jury along these lines. View "United States v. Midwest Neurosurgeons, LLC, et al" on Justia Law

At issue in this appeal was whether a cross-complaint filed by Connor Callanan against Charles Menken, Steven Menken, and Grizzly Designs, LLC, dba Brotherly Love (collectively “the Menkens”) was a SLAPP suit subject to a special motion to strike under Code of Civil Procedure section 425.16 (known as the anti-SLAPP statute). The Menkens were “engaged in the research and development of various cannabis based products intended for marketing in the burgeoning cannabis market space.” Marino and Callanan owned and operated a business called UHSE Media LLC that provided media, marketing, and consulting services to the cannabis industry. In May 2019, the Menkens entered into an “oral agreement” with Marino and Callanan for such consulting services and agreed to pay them $30,000 each. The Menkens claimed that Marino and Callanan were independent contractors rather than employees. Marino and Callanan were “permitted” to live at the Menkens’ “business location” “as they deemed necessary” in order to do their consulting work, but they “were at all times free to come and go as they determined necessary and for their own purposes.” They began living and working at the Menkens’ business location in late May 2019. The Menkens contended “the substantial majority” of the work Marino and Callanan did on the farm was related to their independent media and consulting business, but that by November 2019, Marino and Callanan were failing to perform media and consulting services and were instead spending most of their time harvesting and processing cannabis. Marino and Callanan also began demanding sums of money “they believed they were entitled to under California’s wage and hour laws.” At this point, the parties’ relationship “became openly hostile” and Marino and Callanan (allegedly) set fire to a building that was used as an office and sleeping quarters, causing over $100,000 in damages. The Menkens contended Callanan’s cross-complaint was a SLAPP suit because it was filed in retaliation for a cross-complaint they filed against Callanan, and they filed a motion under section 425.16 seeking to strike it. The trial court granted the motion, and Callanan appealed. After review, the Court of Appeal concluded Callanan’s cross-complaint was not a SLAPP suit because none of his claims arose from the filing of the Menkens’ cross-complaint. View "Callanan v. Grizzly Designs, LLC" on Justia Law

Plaintiff entered into a share purchase agreement with Defendants for the sale of her business, which agreement the parties later amended (the contract, or the amended agreement). Plaintiff filed suit in December 2019 in North Carolina state court, alleging that Defendants had not made interest and earnout payments as required under the amended agreement. Defendants removed the case to federal district court in the Middle District of North Carolina, where they argued that the state or federal courts in New York were the exclusive forums for Plaintiff’s complaint under the contract’s forum selection clause. Defendants also argued that Plaintiff’s claims were not yet ripe because, at the time the complaint was filed, all payments that were due under the contract had been made. The district court remanded the case to the North Carolina state court, and Defendants appealed.   The Fourth Circuit initially concluded that Plaintiff’s claims are ripe, both as originally pleaded and under the facts developed prior to the district court’s judgment. The court also agreed with the magistrate judge that Plaintiff’s claims do not relate to a setoff and that under the contract’s forum selection clause, the state or federal courts in New York are the exclusive forums for Plaintiff’s  claims. The court therefore vacated and remanded with instructions that the district court transfer this case to the Southern District of New York. View "Pamela Whitaker v. Monroe Staffing Services, LLC" on Justia Law

The issue this case presented for the Pennsylvania Supreme Court's review centered on whether Appellant’s legal malpractice claims against Appellees, her former attorneys, were barred under the Court’s decision in Muhammad v. Strassburger, McKenna, Messer, Shilobod & Gutnick, 587 A.2d 1346 (Pa. 1991), which held that a plaintiff could not sue his attorney on the basis of the adequacy of a settlement to which the plaintiff agreed, unless the plaintiff alleged the settlement was the result of fraud. Appellant, Dr. Ahlam Kahlil, owned a unit in the Pier 3 Condominiums in Philadelphia; the unit was insured by State Farm Fire and Casualty Company (“State Farm”). The Pier 3 Condominium Association (“Pier 3”) was insured under a master policy issued by Travelers Property Casualty Company of America (“Travelers”). In May 2007, Appellant sustained water damage to her unit as a result of a leak in the unit directly above hers, which was owned by Jason and Anne Marie Diegidio. Due to the water damage, Appellant moved out of her unit and stopped paying her condominium fees. Appellant filed suit against State Farm and Travelers, alleging breach of contract and bad faith, and against the Diegidios, alleging negligence. A year later, Pier 3 filed a separate lawsuit against Appellant for her unpaid condominium fees and charges. In affirming in part and reversing in part the trial court, the Supreme Court found that by finding Appellant’s claims were barred under Muhammad, the lower courts ignored other averments in Appellant’s complaint which did not allege fraud, but, rather, alleged legal malpractice by Appellees in allowing Appellant to enter into a settlement agreement in the Water Damage Case that subsequently precluded her from raising her desired claims in the Fees Case, while repeatedly advising Appellant that the settlement agreement would not preclude those claims. "[A]s our review of Appellant’s complaint demonstrates that she was not merely challenging the amount of her settlement in the Water Damage Case, but rather alleged that Appellees provided incorrect legal advice regarding the scope and effect the Travelers Release, we hold that Muhammad’s bar on lawsuits based on the adequacy of a settlement is not implicated in this case." View "Khalil v. Williams" on Justia Law

This was the second time plaintiff-appellant Petrolink, Inc. returned to the Court of Appeal in its suit against Lantel Enterprises. Petrolink filed an action against defendant Lantel Enterprises (Lantel), seeking specific performance of a lease agreement that gave Petrolink the option to purchase a commercial property owned by Lantel at fair market value; Lantel cross-complained against Petrolink, contending that Petrolink was refusing to purchase the property for its fair market value. The parties disagreed as to the valuation of the property and were effectively seeking a judicial determination as to the fair market value of the property so that they could complete the transaction. After years of litigation in the trial court, an appeal, a partial reversal of the judgment, remand, and further litigation, the trial court ultimately concluded that the fair market value of the property was $889,854. The court then calculated a net purchase price of $948,404 by subtracting from the fair market value a credit to Petrolink for the rents that it had paid from the date the purchase should have been completed, and adding a credit to Lantel for the loss of use of the sale proceeds. In its amended judgment, the court ordered the parties to complete the transaction; Petrolink was to deposit $948,404 in escrow and Lantel was to deliver title to the property “by grant deed free and clear of all encumbrances.” Petrolink appealed the amended judgment, arguing that it was entitled to certain additional financial reductions and offsets to the purchase price. The Court of Appeal rejected Petrolink’s contentions and affirmed the amended judgment in Petrolink II. Eleven days after Petrolink II was issued, and four days after Petrolink deposited the purchase funds in escrow, the State of California Department of Transportation (Caltrans) filed an eminent domain action pertaining to the property. The filing of the Caltrans action prevented Lantel from being able to convey unencumbered title, as required by the amended judgment. Petrolink then refused to close escrow. Lantel moved to compel performance under the trial court's order, despite the encumbrance on title resulting from the Caltrans eminent domain action. The Court of Appeal concluded the trial court did not abuse its discretion in ordering Petrolink to accept title encumbered by the Caltrans eminent domain action. "[T]he trial court weighed the equities and concluded that it would be more equitable for Petrolink to bear any burden of the encumbrance created by the filing of the Caltrans action." View "Petrolink, Inc. v. Lantel Enterprises" on Justia Law

Fairway, co-owned by Johnson, who is African-American and Native-American, contracted with FedEx to deliver packages. FedEx later assigned Fairway's contract to another company. Johnson's suit under 42 U.S.C. 1981, alleged racial discrimination and breach of contract. A second complaint was voluntarily dismissed. According to FedEx, an arbitration settlement was reached, under which Johnson released all claims against FedEx. Johnson disputes that she was a party to any settlement.Johnson filed another suit against FedEx, claiming racial discrimination and that FedEx blocked a contract assignment to her as an individual and prevented an assignment to BN, a company of which she was the majority shareholder. The court dismissed her suit, rejecting Johnson’s argument that as Fairway’s business contact, she qualified as a party to the contract. Johnson was granted two weeks to amend her complaint, according to precise directions concerning the need for proof that Johnson asked FedEx to approve an assignment to Johnson. Johnson's amended complaint replaced herself as the plaintiff with a corporation, DJM, asserting she “was to be the majority shareholder” of DJM. The complaint did not allege that FedEx had blocked an attempted assignment to Johnson individually but alleged that FedEx blocked an assignment to DJM.The court dismissed, noting the “four-year statute of limitations for Johnson’s Section 1981 claim ha[d] elapsed.” The Seventh Circuit affirmed. “Given this procedural history, the district court could have done more than admonish Johnson.” FedEx could have been awarded its reasonable attorneys’ fees. View "DJM Logistics, Inc. v. FedEx Ground Package System, Inc." on Justia Law

Ila Reid appealed a district court’s summary judgment dismissal of her breach of contract claim against Primerica Life Insurance Company (“Primerica”). Reid brought her claim after Primerica filed an interpleader action to resolve competing claims to her late husband Garvin Reid’s life insurance beneficiary proceeds. She contended Primerica acted unfairly in multiple ways to create the controversy and thus the district court should not have permitted Primerica to use interpleader as a shield against her breach of contract claim. Finding no reversible error, the Eighth Circuit Court of Appeals affirmed the district court’s summary judgment order in favor of Primerica. View "Primerica Life Insurance Co. v. Reid" on Justia Law