Justia Civil Procedure Opinion Summaries

In a dispute concerning a construction company’s liability for contributions to the Benefits Fund, the Fund unilaterally scheduled arbitration. The company sought to enjoin arbitration, alleging fraud in the execution of the agreement it signed. The district court concluded that the court had the primary power to decide whether fraud in the execution vitiated the formation or existence of the contract containing the arbitration provision. The court enjoined arbitration pending resolution of factual issues that bear upon that claim.The Third Circuit affirmed. Under the Federal Arbitration Act (FAA), 9 U.S.C. 4, questions about the “making of the agreement to arbitrate” are for the courts to decide unless the parties have clearly and unmistakably referred those issues to arbitration in a written contract whose formation is not in issue. Here, the formation of the contract containing the relevant arbitration provision is at issue. View "MZM Construction Co. Inc. v. NJ Building Laborers Statewide BenefitsFunds" on Justia Law

When a lessee does not timely exercise an option contained in a lease agreement, special circumstances may warrant granting them extra time to exercise the option. In this case, petitioner Burbank Properties LLC mailed its notice shortly after the deadline had passed, and the trial court awarded Burbank an equitable grace period to exercise the option on summary judgment where it was undisputed that no valuable permanent improvements were made. The Washington Supreme Court granted review to decide valuable permanent improvements to the property were a necessary prerequisite to granting the equitable grace period. The Court held that granting an equitable grace period was proper only when a lessee made valuable improvements to property that would result in an inequitable forfeiture if the lessee was not given a grace period. View "Borton & Sons, Inc. v. Burbank Properties, LLC" on Justia Law

William Crenshaw, a tenured professor of English at Erskine College, filed suit claiming he was wrongfully fired. A jury found in favor of Dr. Crenshaw and awarded him $600,000. However, after review of the College's appeal, the South Carolina Supreme Court determined the trial court properly granted Erskine's motion for judgment notwithstanding the verdict because, as a matter of law, Erskine did not breach its contract with Dr. Crenshaw. View "Crenshaw v. Erskine College" on Justia Law

Caliber Paving Company, Inc. (Caliber) sued Rexford Industrial Realty and Management, Inc. (Rexford) for intentional interference with a contract between Caliber and Steve Fodor Construction (SFC). The trial court granted Rexford’s motion for summary judgment on the ground that Rexford, although not a party to the contract, had an economic interest in it and therefore could not be liable in tort for intentional interference with contract. Caliber appealed. In a case of first impression, the Court of Appeal held that under Applied Equipment Corp. v. Litton Saudi Arabia Ltd., 7 Cal.4th 503 (1994), a defendant who is not a party to the contract or an agent of a party to the contract is a noncontracting party or stranger to the contract and, regardless whether the defendant claims a social or economic interest in the contractual relationship, may be liable in tort for intentional interference with contract. Applied Equipment did not confer immunity for intentional interference with contract on noncontracting parties having a social or economic interest in the contractual relationship from liability. The Court also concluded Caliber submitted admissible evidence sufficient to meet its burden of raising a triable issue of fact as to whether Rexford interfered with the contract between SFC and Caliber. Judgment was reversed and the matter remanded for further proceedings. View "Caliber Paving Co. v. Rexford Industrial Realty and Management" on Justia Law

A jury awarded plaintiff $1 million on his claims against Sparrows Point for nonpayment of a commission on the sale of a large parcel of industrial property located on the Sparrows Point peninsula. Defendants contend that the evidence is insufficient to support the jury's verdict as to all claims. In the alternative, they seek a new trial, contending that the district court erred in admitting evidence of an alleged effort to compromise plaintiff's claim to a commission and in granting plaintiff a jury trial.The Fourth Circuit held that the evidence of defendants' effort to compromise plaintiff's claim was not admissible for any purpose under Federal Rule of Evidence 408 and the error was not harmless. The court explained that, even assuming that the evidence is sufficient as a matter of law to support the jury's verdict, the court cannot be confident that the jury was not substantially swayed by the evidentiary error. Therefore, the court held that defendants are entitled to a new trial. Finally, the court found that the district court enjoyed ample discretion to grant plaintiff's untimely request for a jury trial under Federal Rule of Civil Procedure 39(b), and thus the new trial may remain before a jury. View "Macsherry v. Sparrows Point, LLC" on Justia Law

Todd and Melissa Muller appealed a superior court decision granting summary judgment to their insurer, Progressive Northern Insurance Company. The Mullers challenged the court’s conclusions on how the setoff provision of their insurance policy should have been applied when there were multiple claimants. The Vermont Supreme Court agreed with the trial court that, construing the insurance policy as a whole, the setoff provision is unambiguous: It clearly provided that Progressive was entitled to reduce “all sums . . . paid” regardless of the number of claims made. View "Progressive Northern Insurance Company v. Muller" on Justia Law

After Buyers purchased two care facilities from Sellers, Buyers filed suit alleging that Sellers made fraudulent or, at best, negligent misrepresentations in the parties' sale agreements. Buyers also brought claims against Sellers' representatives in their individual capacities.The Fifth Circuit affirmed the district court's dismissal of Buyers' claims with prejudice for failure to state a claim. The court held that the district court properly dismissed Buyers' non-fraud claims for negligent misrepresentation and breach of contractual representations and warranties because these claims were subject to arbitration. In regard to the remaining claims, the court held that Buyers have not adequately pleaded a misrepresentation with respect to both facilities and thus they failed to meet the particularity requirements of Federal Rule of Civil Procedure 9(b). Therefore, because there was no misrepresentation, there was no fraud. View "Colonial Oaks Assisted Living Lafayette, LLC v. Hannie Development, Inc." on Justia Law

The Court of Chancery held that management of a Delaware corporation does not have the authority unilaterally to preclude a director of the corporation from obtaining the corporation's privileged information.This dispute concerned obtaining access to privileged communications among management of a company, its in-house counsel, and its outside counsel. The company, acting by and under the direction of a special committee of the company's board of directors, filed an action against a corporation and an L.P. alleging that the defendants breached contractual obligations they owed to the company. The special committee sought access to the privileged communications in order to oppose the company's motion for leave to voluntarily dismiss the complaint. The Court of Chancery held that the members of the special committee were entitled to discovery of the privileged communications. View "In re WeWork Litigation" on Justia Law

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