Justia Civil Procedure Opinion Summaries

After the collapse of a federally chartered credit union in Ohio in 2010, the National Credit Union Administration Board (the Board) was appointed as liquidating agent. The Board sued Eddy Zai, his wife Tina Zai, and related entities to recover tens of millions of dollars allegedly owed to the credit union. The parties settled, with the Zais agreeing to transfer a promissory note to the Board, which would collect $22 million and then transfer the note to Tina Zai. Years later, Tina Zai alleged that the Board breached the settlement by failing to timely transfer the note after collecting the agreed sum. She, along with Stretford, Ltd., filed suit against the Board for breach of contract and unjust enrichment.The United States District Court for the Northern District of Ohio dismissed the case for lack of subject-matter jurisdiction, without reaching the merits of Zai’s claims. The district court reasoned that the Federal Credit Union Act’s jurisdiction-stripping provision barred the court from hearing the case, as Zai had not exhausted administrative remedies with the Board.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed whether the district court had jurisdiction. The Sixth Circuit held that the Federal Credit Union Act’s jurisdiction-stripping and administrative-exhaustion provisions apply only to claims that arise before the Board’s claims-processing deadline. Because Zai’s claim for breach of the settlement agreement arose years after the deadline, she was not required to exhaust administrative remedies, and the jurisdictional bar did not apply. The Sixth Circuit vacated the district court’s dismissal and remanded the case for further proceedings. View "Zai v. National Credit Union Administration Board" on Justia Law

Adriana Ramirez and her family were involved in litigation with third parties, including Harvey Miller and Stockdale Villa Mobile Home Park, where Ramirez was a property manager. After settling employment and unlawful detainer claims, Ramirez alleged that opposing counsel, attorney Sandra McCormack and her law firm, interfered with the settlement by, among other things, disputing the mailing address for settlement checks and failing to ensure the dismissal and sealing of the unlawful detainer action as required by the settlement. Ramirez claimed these actions caused her significant damages and brought several tort and contract-related claims against McCormack and other attorneys involved.The Superior Court of Los Angeles County denied McCormack’s special motion to strike under California’s anti-SLAPP statute. The trial court relied on precedents involving non-attorney defendants and found that the alleged conduct did not constitute protected petitioning activity under the statute. The court did not address the applicability of Thayer v. Kabateck Brown Kellner LLP, which specifically addressed claims against attorneys for litigation-related conduct.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case and reversed the trial court’s order. The appellate court held that McCormack’s actions as opposing counsel—such as negotiating settlements, communicating with other attorneys, and advising clients—were protected petitioning activities under the anti-SLAPP statute. The court found that Ramirez’s claims arose from McCormack’s representation of her clients in litigation, fitting squarely within the statute’s protections as articulated in Thayer. Furthermore, Ramirez failed to present evidence of minimal merit for her claims on appeal, effectively forfeiting the issue. The appellate court remanded the case for the trial court to grant the anti-SLAPP motion and determine the fees and costs Ramirez must pay. View "Ramirez v. McCormack" on Justia Law

Caterpillar Financial Services Corporation and Venequip Machinery Sales Corporation Miami entered into an inventory loan agreement governed by Tennessee law, under which Venequip Miami could borrow funds by executing promissory notes. Venequip Miami executed six such notes, totaling approximately $4.77 million. The agreement specified that default would occur if Venequip Miami failed to repay principal or interest when due, or if there was a material adverse change in its financial condition. After a related affiliate defaulted on a separate loan in Curaçao, Caterpillar Financial declared an event of default under the inventory loan agreement, accelerated the debt, and demanded repayment. Venequip Miami did not repay, and Caterpillar Financial alleged that the outstanding amount exceeded $10 million.Caterpillar Financial filed a breach of contract suit in the United States District Court for the Southern District of Florida. Venequip Miami moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), arguing that Caterpillar Financial failed to specify which provision of the inventory loan agreement was breached. The district court agreed, finding the complaint insufficient because it did not identify the specific provision breached among several possible events of default, and dismissed the case with prejudice. Caterpillar Financial’s subsequent motion to amend the judgment and file an amended complaint was denied.The United States Court of Appeals for the Eleventh Circuit reviewed the dismissal de novo. The court held that under federal pleading standards, a breach of contract plaintiff is not required to identify the specific contractual provision breached, but must plausibly allege nonperformance. The court found that Caterpillar Financial’s complaint sufficiently alleged the existence of a contract, nonperformance by Venequip Miami, and resulting damages. The Eleventh Circuit reversed the district court’s judgment and remanded the case for further proceedings. View "Caterpillar Financial Services Corp. v. Venequip Machinery Sales Corp." on Justia Law

Talisker Finance, LLC and its affiliates defaulted on a $150 million loan secured by real property, which they had borrowed to develop parcels in Utah. After several loan modifications and assignments, the lenders—Wells Fargo Bank, N.A. and Midtown Acquisitions L.P.—foreclosed on the collateral and purchased it at two sheriff’s sales, where they were the only bidders. The sale proceeds did not satisfy the debt, and the lenders continued to pursue the deficiency. Later, Talisker discovered information suggesting that the lenders, in coordination with a court-appointed receiver, may have taken actions to depress the sale price, including deterring potential bidders and bundling properties in a way that made them less attractive.Talisker filed suit in the Third District Court, Summit County, seeking equitable relief from the deficiency judgments, alleging that the lenders’ conduct during the foreclosure process violated Utah Rule of Civil Procedure 69B(d) and constituted fraud or grossly inequitable conduct. The lenders moved to dismiss, arguing that Talisker had broadly waived any rights or defenses related to the foreclosure process in the loan documents. The district court accepted Talisker’s factual allegations as true for purposes of the motion but concluded that the waivers were enforceable and covered the rights Talisker sought to assert, including those under Rule 69B(d). The court found no unlawful irregularity in the sales and dismissed the complaint.On direct appeal, the Supreme Court of the State of Utah affirmed the district court’s dismissal. The court held that Talisker’s broad and explicit waivers in the loan documents encompassed all rights and defenses related to the foreclosure sales, including the right to challenge the method of sale or seek equitable relief based on alleged unfairness or irregularities. The court concluded that, regardless of the alleged conduct, Talisker had contractually relinquished any basis for relief. View "TALISKER PARTNERSHIP v. MIDTOWN ACQUISITIONS" on Justia Law

ADA Carbon Solutions (Red River), LLC ("ADA") filed a lawsuit against Atlas Carbon, LLC ("Atlas") in the United States District Court for the District of Wyoming, alleging breach of contract and breach of the implied covenant of good faith and fair dealing under Wyoming law. ADA claimed that Atlas breached their contract for the sale of activated carbon by improperly invoking the "Force Majeure" clause and failing to supply the agreed-upon quantity of carbon. ADA filed an amended complaint asserting diversity jurisdiction under 28 U.S.C. § 1332(a)(1).The district court accepted jurisdiction and, after a bench trial, awarded ADA $76,000 in damages. ADA appealed the district court's judgment, dissatisfied with the method for calculating damages. During the appeal, the Tenth Circuit Court of Appeals identified potential jurisdictional defects, specifically regarding the complete diversity of citizenship between the parties. The court ordered supplemental briefing to clarify the citizenship of Atlas's members, including trusts and limited partnerships involved.The Tenth Circuit Court of Appeals found that it lacked sufficient information to determine whether complete diversity of citizenship existed at the time of filing. The court noted that Atlas's identification of its members, including trusts and limited partnerships, was incomplete and did not provide adequate information about their citizenship. Consequently, the court vacated the judgment and remanded the case to the district court to make the necessary factual findings to determine whether it had diversity jurisdiction under 28 U.S.C. § 1332. The district court was instructed to analyze the citizenship of all members of ADA and Atlas, tracing through all layers of ownership to ensure complete diversity. View "ADA Carbon Solutions (Red River) v. Atlas Carbon" on Justia Law

The appellants, Banoka S.à.r.l. and others, sought third-party discovery under 28 U.S.C. § 1782 from Elliott Management Corp. and related entities for use in a contemplated fraud lawsuit in England. The dispute arose from a failed transaction involving the sale of a Paris hotel, where Westmont International Development Inc. was the potential buyer, and the Elliott entities were to provide funding. Banoka alleged that Westmont acted in bad faith during negotiations, leading to the collapse of the deal.The United States District Court for the Southern District of New York denied Banoka's petition for discovery from Elliott Management Corp. and its affiliates, but allowed limited discovery from the Elliott Funds. The court found that the forum-selection clause in the agreement between Banoka and Westmont, which designated English courts for dispute resolution, weighed against granting the petition. Additionally, the court determined that Banoka's discovery requests were overly broad and burdensome, particularly since the relevant documents and custodians were primarily located abroad.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the district court did not abuse its discretion in considering the forum-selection clause as a factor against granting the discovery petition. The court also found no error in the district court's conclusion that the discovery requests were unduly burdensome, given their broad scope and the foreign location of the documents and custodians. The appellate court emphasized that the district court's careful and contextual analysis of the relevant factors was appropriate and within its discretion. View "Banoka S.à.r.l. v. Elliott Mgmt. Corp." on Justia Law

Alan Juliuson rented three tracts of farmland from various owners, collectively referred to as Johnson, for over 40 years. In 2018, he contracted to farm the property until December 2021, with an option to renew and a right of first refusal to purchase the property. Towards the end of the lease, Johnson proposed new lease terms that increased the rent, removed the right of first refusal, and included a termination clause if the property was sold. Juliuson did not respond to these terms and later offered to purchase the property, which Johnson rejected, selling it instead to Bjerke Holdings, LLLP.Juliuson sued Johnson, Bjerke, and Farmers National Company (FNC) for various claims, including breach of contract, specific performance, and deceit. The district court dismissed several claims through summary judgment and ruled against Juliuson on others after a jury trial. The jury found no breach of the right of first refusal or the option to renew. Juliuson’s post-trial motions for judgment as a matter of law were denied.The North Dakota Supreme Court reviewed the case and affirmed the district court’s decisions. The court held that sufficient evidence supported the jury’s verdict that Johnson did not breach the lease renewal option or the right of first refusal. The court also upheld the dismissal of Juliuson’s claims for specific performance, finding no breach of contract to warrant such a remedy. Additionally, the court affirmed the dismissal of the claims for breach of the implied covenant of good faith and fair dealing and deceit, as these claims were not supported by independent tortious conduct separate from the alleged breach of contract. The district court’s judgment dismissing Juliuson’s claims with prejudice was affirmed. View "Juliuson v. Johnson" on Justia Law

Paul Kim, a California resident, purchased an Airstream motorhome from a dealer in California. The warranty agreement for the motorhome included an Ohio choice of law provision and an Ohio forum selection clause. Kim sued Airstream in California, alleging violations of the Song-Beverly Consumers Warranty Act. Airstream moved to stay the lawsuit in favor of the Ohio forum, citing the forum selection clause. Kim opposed, arguing that enforcing the forum selection clause would diminish his unwaivable rights under the Song-Beverly Act.The Superior Court of Los Angeles County severed the choice of law provision as illegal under the Song-Beverly Act’s waiver prohibition but granted Airstream’s motion to stay, concluding that enforcing the forum selection clause would not diminish Kim’s unwaivable California rights. The court relied on Airstream’s stipulation to apply the Song-Beverly Act in the Ohio forum.The California Court of Appeal, Second Appellate District, reviewed the case. The court affirmed the lower court’s decision to sever the choice of law provision but reversed the decision to stay the case. The appellate court held that Airstream’s stipulation was insufficient to meet its burden of proving that enforcing the forum selection clause would not diminish Kim’s unwaivable rights. The court instructed the trial court to allow Airstream the opportunity to demonstrate that Ohio conflict of law principles would require the application of the Song-Beverly Act to Kim’s claims, thereby protecting his unwaivable rights. The case was remanded for further proceedings consistent with this opinion. View "Kim v. Airstream" on Justia Law

Michael J. Kiely, an Irish resident, and MDMK Ltd., an Irish corporation, filed a lawsuit against HYPH (USA), Inc., HYPH Corporation, XHAIL, Inc., and several individual defendants. The plaintiffs alleged that the defendants conspired to fraudulently induce Kiely to sell shares of a company he founded at a significant discount, subsequently transferring most of those shares to a new company, thereby depriving Kiely of any ownership interest in the new company.The Superior Court of Los Angeles County granted the defendants' motion to stay or dismiss the action, determining that the case should be heard in Sweden based on a mandatory forum selection clause and traditional forum non conveniens grounds. The court found that Sweden was a suitable alternative forum and that both private and public interest factors weighed in favor of Sweden as the forum. The plaintiffs appealed the decision, contesting both grounds of the ruling.The California Court of Appeal, Second Appellate District, reviewed the case and concluded that the trial court did not abuse its discretion in determining that private and public interest factors favored Sweden as the forum. The appellate court held that the trial court properly stayed the action on the alternative independent ground of traditional forum non conveniens. Additionally, the appellate court addressed the impact of the California Supreme Court's decision in EpicentRx, Inc. v. Superior Court on the plaintiffs' claim that the enforcement of the forum selection clause operated as an "implied waiver" of their jury trial right. The appellate court affirmed the trial court's order, finding that the enforcement of the forum selection clause did not violate California public policy regarding the right to a jury trial. View "Kiely v. Hyph (USA), Inc." on Justia Law

In the 1950s, Goodrich Corporation built a vinyl-manufacturing complex in Calvert City, Kentucky, and used unlined ponds for hazardous waste disposal. In 1988, the EPA declared the site a Superfund site. Goodrich sold the complex to Westlake Vinyls, Inc. in the 1990s, agreeing to cover future cleanup costs. In 2000, PolyOne Corporation (now Avient Corporation) assumed Goodrich’s responsibilities. Disputes arose over cleanup costs, leading to a 2007 settlement agreement that included arbitration provisions for future cost allocations.The United States District Court for the Western District of Kentucky previously reviewed the case. Avient had twice sought arbitration under the agreement, first in 2010 and again in 2017. In 2018, Avient challenged the arbitration provisions' validity, but the district court held that Avient had waived this argument by initiating arbitration. The court enforced the arbitration award, and Avient did not challenge this decision. In 2022, Westlake demanded arbitration, and Avient again claimed the arbitration provisions were invalid. The district court granted summary judgment to Westlake, holding that Avient’s challenge was waived and barred by res judicata and judicial estoppel.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court affirmed the district court’s judgment but on different grounds. The court held that the settlement agreement’s provision for de novo judicial review of arbitration awards was invalid under the Federal Arbitration Act, as established in Hall Street Associates, L.L.C. v. Mattel, Inc. However, the court found that this invalid provision could be severed from the agreement without affecting the economic and legal substance of the transactions contemplated by the parties. Therefore, the arbitration provisions remained valid and enforceable. The court affirmed the district court’s judgment. View "Avient Corp. v. Westlake Vinyls, Inc." on Justia Law