Justia Civil Procedure Opinion Summaries

In this action arising from a contract dispute between the parties, Navy Federal Credit Union filed suit in federal district court against Advantage Assets, asserting only state law claims and invoking diversity jurisdiction. For establishing diversity jurisdiction, Congress provides that, pursuant to 28 U.S.C. 1332(c)(1), a corporation "shall be deemed a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business."The Fourth Circuit held that Navy Federal, a federally chartered credit union, is a citizen of its principal place of business, Virginia. The court explained that 28 U.S.C. 1332(c)(1)'s text, structure, and context support Navy Federal's contention that a corporation shall be deemed a citizen of the state or foreign state where it has its principal place of business. In this case, section 1332(c)(1) requires the court to interpret and to give effect to the second clause of the statute even when the first clause does not specify a citizenship; the district court's and defendants' understanding of "and" conflicts with circuit precedent; and this approach to section 1332(c)(2) is supported by the Supreme Court's holding in Bankers Trust Co. v. Texas & Pacific Railway Co., 241 U.S. 295 (1916). View "Navy Federal Credit Union v. LTD Financial Services, LP" on Justia Law

In 2014, Brembo, an Italian joint-stock corporation, headquartered in Italy, and TAW, a California LLC with its principal office in North Carolina, entered into an “Exclusive Distribution Agreement” covering brake systems manufactured by Brembo. The parties consented “to the exclusive jurisdiction of the state and federal courts of the State of New York.” In 2016, Brembo sent a termination notice to TAW in North Carolina. TAW filed suit in New York federal court but voluntarily dismissed its lawsuit. Brembo filed a New York state lawsuit seeking damages for TAW’s alleged failure to pay for products shipped to TAW in North Carolina. TAW filed a counterclaim seeking damages based on Brembo’s alleged failure to enforce the agreement’s exclusivity provisions and its termination of the agreement without explanation.While Brembo’s New York lawsuit was pending, TAW filed this California lawsuit, alleging wrongful termination of the agreement. The court of appeal affirmed the trial court in granting Brembo’s motion to quash service of the summons for lack of personal jurisdiction. Brembo’s contacts with the U.S. were already directed away from California before the parties entered into the agreement. The agreement’s choice of law and forum selection clauses reinforce that Brembo did not have fair warning and could not have reasonably anticipated being brought into a California court to defend against TAW’s lawsuit. View "T.A.W. Performance, LLC v. Brembo, S.P.A." on Justia Law

After encountering problems with their used 2011 Dodge Grand Caravan, plaintiffs Dina C. and Pastor O. Felisilda brought an action against Elk Grove Auto Group, Inc., doing business as Elk Grove Dodge Chrysler Jeep (Elk Grove Dodge) and the manufacturer, FCA US LLC (FCA) for violation of the Song-Beverly Consumer Warranty Act. Relying on the retail installment sales contract signed by the Felisildas, Elk Grove Dodge moved to compel arbitration. FCA filed a notice of nonopposition to the motion to compel. The trial court ordered the Felisildas to arbitrate their claim against both Elk Grove Dodge and FCA. In response, the Felisildas dismissed Elk Grove Dodge. The matter was submitted to arbitration, and the arbitrator found in favor of FCA. The trial court confirmed the arbitrator’s decision. The Felisildas appealed, contending: (1) the trial court lacked jurisdiction to compel them to arbitrate their claim against FCA for lack of notice that the motion to compel included FCA; and (2) the trial court lacked discretion to order the Felisildas to arbitrate their claim against FCA because FCA was a nonsignatory to the sales contract. After review, the Court of Appeal concluded the Felisildas forfeited their claim regarding lack of notice by arguing against FCA’s participation in arbitration. Furthermore, the Court concluded the trial court correctly determined the Felisildas’ claim against FCA was encompassed by the arbitration provision in the sales contract. View "Felisilda v. FCA US LLC" on Justia Law

The parties to this appeal were a Bolivian company, Compania de Inversiones Mercantiles S.A. (“CIMSA”), and Mexican companies known as Grupo Cementos de Chihuahua, S.A.B. de C.V. and GCC Latinoamerica, S.A. de C.V. (collectively “GCC”). Plaintiff-appellant CIMSA brought a district court action pursuant to the Federal Arbitration Act to confirm a foreign arbitral award issued in Bolivia against Defendant-appellee GCC. The underlying dispute stemmed from an agreement under which CIMSA and GCC arranged to give each other a right of first refusal if either party decided to sell its shares in a Bolivian cement company known as Sociedad Boliviana de Cemento, S.A. (“SOBOCE”). GCC sold its SOBOCE shares to a third party after taking the position that CIMSA failed to properly exercise its right of first refusal. In 2011, CIMSA initiated an arbitration proceeding in Bolivia. The arbitration tribunal determined that GCC violated the contract and the parties’ expectations. GCC then initiated Bolivian and Mexican court actions to challenge the arbitration tribunal’s decisions. A Bolivian trial judge rejected GCC’s challenge to the arbitration tribunal’s decision on the merits. A Bolivian appellate court reversed and remanded. During the pendency of the remand proceedings, Bolivia’s highest court reversed the appellate court and affirmed the original trial judge. But as a result of the simultaneous remand proceedings, the high court also issued arguably contradictory orders suggesting the second trial judge’s ruling on the merits remained in effect. GCC filed a separate Bolivian court action challenging the arbitration tribunal’s damages award. That case made its way to Bolivia’s highest court too, which reversed an intermediate appellate court’s nullification of the award and remanded for further proceedings. Invoking the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, CIMSA filed a confirmation action in the United States District Court for the District of Colorado. After encountering difficulties with conventional service of process in Mexico under the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents, CIMSA sought and received permission from the district court to serve GCC through its American counsel pursuant to Federal Rule of Civil Procedure 4(f)(3). The district court then rejected GCC’s challenges to personal jurisdiction, holding (among other things) that: (1) it was appropriate to aggregate GCC’s contacts with the United States; (2) CIMSA’s injury arose out of GCC’s contacts; (3) exercising jurisdiction was consistent with fair play and substantial justice; and (4) alternative service was proper. The district court rejected GCC's defenses to CIMSA's claim under the New York Convention. Before the Tenth Circuit Court of Appeals, the Court affirmed the district court: the district court properly determined that CIMSA’s injury arose out of or related to GCC’s nationwide contacts. "The district court correctly decided that exercising personal jurisdiction over GCC comported with fair play and substantial justice because CIMSA established minimum contacts and GCC did not make a compelling case to the contrary." The Court also affirmed the district court's confirmation of the arbitration tribunal's decisions. View "Compania De Inversiones v. Grupo Cementos de Chihuahua" on Justia Law

The First Circuit vacated the decision of the district court dismissing Plaintiff's breach of contract claim, holding that the court erred in concluding that Plaintiff did not assert a breach of contract claim and abused its discretion when it employed the Fed. R. Civ. P. 12(b)(6) standard in dismissing the breach of contract claim instead of the summary judgment standard.Plaintiff filed a breach of contract action and asserted a secondary theory of liability related to deceit or "dolo." Defendant moved for summary judgment. The district court granted summary judgment for Defendant but dismissed the breach of contract claim under Fed. R. Civ. P. 12(b)(6) for failure to state a claim to relief that was "plausible on its fact." Applying the test for deceit in the formation of the contract, the court found that Plaintiff was not entitled to relief. The First Circuit vacated the judgment in part, holding that the district court (1) erred in concluding that Plaintiff did not assert a breach of contract claim and abused its discretion when it evaluated Defendant's motion for summary judgment with respect to the claim as if were a Rule 12(b)(6) motion to dismiss; and (2) did not err in granting summary judgment as to Plaintiff's fallback theory of dolo. View "Feliciano-Munoz v. Rebarber-Ocasio" on Justia Law

Plaintiffs Rafi Ghazarian and Edna Betgovargez had a son, A.G., with autism. A.G. received applied behavior analysis (ABA) therapy for his autism under a health insurance policy (the policy) plaintiffs had with defendant California Physicians’ Service dba Blue Shield of California (Blue Shield). Mental health benefits under this policy are administered by defendants Magellan Health, Inc. and Human Affairs International of California (collectively Magellan). By law, the policy had to provide A.G. with all medically necessary ABA therapy. Before A.G. turned seven years old, defendants Blue Shield and Magellan approved him for 157 hours of medically necessary ABA therapy per month. But shortly after he turned seven, defendants denied plaintiffs’ request for 157 hours of therapy on grounds only 81 hours per month were medically necessary. Plaintiffs requested the Department of Managed Health Care conduct an independent review of the denial. Two of the three independent physician reviewers disagreed with the denial, while the other agreed. As a result, the Department ordered Blue Shield to reverse the denial and authorize the requested care. Plaintiffs then filed this lawsuit against defendants, asserting breach of the implied covenant of good faith and fair dealing against Blue Shield, and claims for intentional interference with contract and violations of Business and Professions Code section 17200 (the UCL) against defendants. Defendants each successfully moved for summary judgment. As to the bad faith claim, the trial court found that since one of the independent physicians agreed with the denial, Blue Shield acted reasonably as a matter of law. As to the intentional interference with contract claim, the court found no contract existed between plaintiffs and A.G.’s treatment provider with which defendants could interfere. Finally, the court found the UCL claim was based on the same allegations as the other claims and thus also failed. After its review, the Court of Appeal concluded summary judgment was improperly granted as to the bad faith and UCL claims. "[I]t is well established that an insurer may be liable for bad faith if it unfairly evaluates a claim. Here, there are factual disputes as to the fairness of defendants’ evaluation. . . .There are questions of fact as to the reasonability of these standards. If defendants used unfair criteria to evaluate plaintiffs’ claim, they did not fairly evaluate it and may be liable for bad faith." Conversely, the Court found summary judgment proper as to the intentional interference with contract claim because plaintiffs failed to show any contract with which defendants interfered. View "Ghazarian v. Magellan Health" on Justia Law

While living in California, Jefri and Debbie Davis sought to purchase a home in northern Idaho, and hired Charles Tuma and Tuma’s broker, Donald McCanlies, to help them. Tuma and McCanlies both worked for Johnson House Company, which in turn was doing business as Coldwell Banker Resort Realty. Some years after purchasing the property in question, the Davises learned that the road they believed provided access to their home, did not in fact do so. The Davises filed suit against Tuma, McCanlies, and Coldwell Banker Resort Realty (collectively, the Defendants), alleging fraud and constructive fraud. The Defendants moved for summary judgment against the Davises. The Davises responded, filing several declarations, portions of which the Defendants moved to strike. The Davises also sought to amend their complaint to add claims for unlicensed practice of law, surveying, or abstracting; and breach of contract and violation of contractual duties. The district court granted the Defendants’ motions for summary judgment and to strike, but did not specifically identify which statements were being stricken. The district court also denied the Davises’ motion to amend their complaint without explanation of the reasoning behind the decision. The Idaho Supreme Court found genuine issues of material facts to preclude the grant of summary judgment to Defendants. Further, the Court concluded the district court abused its discretion in denying the Davises' motion to amend their complaint. The Court vacated the trial court judgment entered and remanded for further proceedings. View "Davis v. Tuma" on Justia Law

Michael Montgomery, an employee of Taylor Construction working as a truck dispatcher, called Superior Mat Company, Inc. to rent mats for Taylor Construction’s use. From June 9, 2017, to June 27, 2017, Taylor employees drove to Superior’s location in Covington County, Mississippi, and picked up several hundred mats. Taylor Construction trucks returned the mats to Covington County on July 17, 2017. Superior alleged the mats came back in varying degrees of dirtiness or, in some cases, damaged beyond repair. Taylor Construction paid Superior for the mats until Superior additionally billed Taylor Construction for the mats it alleged Taylor Construction did not return. Taylor Construction later stopped payment on all invoices from Superior. Superior filed suit against Taylor Construction at the Covington County Circuit Court, alleging breach of contract, open account, quantum meruit, and bad-faith breach of contract. Taylor Construction filed its answer along with a motion to transfer venue under Rule 82(d). After hearing arguments, the circuit court denied Taylor Construction’s motion. Taylor Construction appealed, but finding the record demonstrated credible evidence that substantial events or acts occurred in Covington County, the Mississippi Supreme Court affirmed. View "Taylor Construction Company, Inc. v. Superior Mat Company, Inc." on Justia Law

Defendants-tenants John and Rosa Castro (the tenants) leased a residential property from plaintiff-landlord Fred Graylee. The landlord brought an unlawful detainer action against the tenants, alleging they owed him $27,100 in unpaid rent. The day of trial, the parties entered into a stipulated judgment in which the tenants agreed to vacate the property by a certain date and time. If they failed to do so, the landlord would be entitled to enter a $28,970 judgment against them. The tenants missed their move-out deadline by a few hours and the landlord filed a motion seeking entry of judgment. The trial court granted the motion and entered a $28,970 judgment against the tenants under the terms of the stipulation. The tenants appealed, arguing the judgment constituted an unenforceable penalty because it bore no reasonable relationship to the range of actual damages the parties could have anticipated would flow from a breach of the stipulation. To this, the Court of Appeal agreed, and reversed and remanded this matter for further proceedings. View "Graylee v. Castro" on Justia Law

Plaintiff-appellant Aaron Jensen sued defendant-appellees West Jordan City and Robert Shober for Title VII retaliation, First Amendment retaliation, malicious prosecution, and breach of contract. At trial, the jury returned a verdict in favor of Jensen on all his claims and awarded $2.77 million in damages. The trial court discovered the jury did not properly fill out the verdict form, so the court instructed the jury to correct its error. When the jury returned the corrected verdict, it had apportioned most of the damages to Jensen’s Title VII claim. Because the district court concluded that Title VII’s statutory damages cap applied, the court reduced the total amount of the award to $344,000. Both parties appealed. They raised nine issues on appeal, but the Tenth Circuit concluded none of them warranted reversal and affirmed. View "Jensen v. West Jordan City" on Justia Law