Justia Civil Procedure Opinion Summaries

A dispute arose over the ownership of real property located at 829 Yale Street in Houston, Texas. In 2019, Nicholas Fugedi, acting as trustee for the Carb Pura Vida Trust, initiated a quiet title action against several defendants. The central issue became whether the trust, and specifically Fugedi’s appointment as trustee, was used as a device to create diversity jurisdiction in federal court, given that Fugedi was a citizen of Michigan while the underlying parties were Texas residents.Initially, the United States District Court for the Southern District of Texas ruled against Fugedi, finding the deed void under Texas law. On appeal, the United States Court of Appeals for the Fifth Circuit reversed that decision but noted that the district court could consider new evidence on remand regarding whether the trust was a sham created to manufacture diversity jurisdiction. On remand, the district court found that Fugedi had been appointed as a sham trustee solely to create diversity jurisdiction, and dismissed the case for lack of subject matter jurisdiction under 28 U.S.C. § 1359.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s dismissal de novo, and its factual findings for clear error. The Fifth Circuit held that 28 U.S.C. § 1359 applies to trusts and that a trust can be used as a device to improperly manufacture diversity jurisdiction. The court found no clear error in the district court’s factual findings that Fugedi was appointed as a sham trustee for the purpose of creating federal jurisdiction. Accordingly, the Fifth Circuit affirmed the district court’s dismissal for lack of subject matter jurisdiction. View "Fugedi v. Initram" on Justia Law

A dispute arose between two companies, one a contractor and the other a developer, over a construction project in Maui. The disagreement was submitted to binding arbitration, resulting in an award in favor of the developer. The developer sought to confirm the award in the Circuit Court of the First Circuit, but the contractor challenged the award, alleging the arbitrator was evidently partial due to undisclosed relationships. The circuit court initially confirmed the award, but on appeal, the Supreme Court of Hawai‘i remanded the case for an evidentiary hearing on the partiality claim. After the hearing, the circuit court found evident partiality, denied confirmation, vacated the award, and ordered a rehearing before a new arbitrator.Following this, the contractor moved for taxation of costs incurred on appeal, which the circuit court granted. The developer sought to appeal the costs order, but the circuit court denied an interlocutory appeal. A new arbitration was held, again resulting in an award for the developer, which was confirmed in a new special proceeding with a final judgment entered. The developer then appealed the earlier costs order from the first special proceeding.The Intermediate Court of Appeals (ICA) dismissed the appeal as untimely, reasoning that the circuit court’s order vacating the first arbitration award and ordering a rehearing was an appealable final order under Hawai‘i Revised Statutes (HRS) § 658A-28(a)(3), making the subsequent costs order also immediately appealable.The Supreme Court of Hawai‘i reviewed the case and held that an order vacating an arbitration award and directing a rehearing is not an appealable order under HRS § 658A-28(a). The court clarified that such orders lack finality, regardless of whether the rehearing is full or partial, and reaffirmed the majority rule previously adopted in State of Hawaii Organization of Police Officers (SHOPO) v. County of Kauai. The Supreme Court vacated the ICA’s dismissal and remanded the case for entry of a final judgment, so the merits of the appeal could be addressed. View "Nordic PCL Construction, Inc. v. LPIHGC, LLC" on Justia Law

In May 2022, Garry Douglas Seaman shot and killed James Preston Freeman and seriously wounded Heidi Gabert, following the end of his romantic relationship with Gabert, with whom he shares a minor child. Seaman was criminally charged, and Gabert and Dawn Freeman, James’s spouse, filed a civil suit for damages. To prevent Seaman from transferring or selling assets during the litigation, Gabert and Freeman successfully sought a receivership over all of Seaman’s property. After negotiations, the parties reached a settlement memorialized in a memorandum of understanding (MOU), which included $10 million judgments for Gabert and Freeman, liquidation of Seaman’s assets, and a homestead exemption for Seaman.The Nineteenth Judicial District Court, Lincoln County, approved the creation of a designated settlement fund (DSF) to facilitate asset liquidation. Initially, the court’s DSF Order required the Liquidation Receiver to reserve funds from asset sales to pay Seaman’s capital gains taxes, interpreting the MOU’s tax payment provision as unambiguous. Gabert and Freeman moved to amend this order under Montana Rule of Civil Procedure 59(e), arguing the court erred in its interpretation and that the parties did not intend to reserve funds for Seaman’s capital gains taxes. After an evidentiary hearing, the District Court agreed, finding the MOU ambiguous and, based on extrinsic evidence, concluded the parties did not intend to reserve such funds. The court amended its order, striking the provision requiring reservation for capital gains taxes.The Supreme Court of the State of Montana reviewed whether the District Court abused its discretion in amending the DSF Order. The Supreme Court held that the District Court did not abuse its discretion, correctly found the MOU ambiguous, and its factual finding regarding the parties’ intent was not clearly erroneous. The Supreme Court affirmed the District Court’s amended order. View "Gabert v. Seaman" on Justia Law

An elderly plaintiff with significant disabilities inherited her home and, facing a tax sale due to unpaid property taxes, responded to a flyer offering help. She met with the defendant, who had her sign documents that transferred ownership of her home to him, allegedly under the pretense of providing a loan. The documents did not provide for any payment to the plaintiff, only that the defendant would pay the back taxes. The plaintiff later attempted to cancel the transaction, believing it had been voided when the defendant returned her documents and she received no loan. Several years later, the defendant served her with an eviction notice, prompting her to file suit alleging fraud, undue influence, financial elder abuse, and other claims, seeking cancellation of the transfer and damages.The case was heard in the Superior Court of Los Angeles County. The defendant, representing himself, filed an answer and a cross-complaint, asserting that he had purchased the property and that the plaintiff had lived rent-free for years. The litigation was marked by extensive discovery disputes, with the plaintiff filing nine motions to compel and for sanctions due to the defendant’s repeated failures to provide timely and adequate discovery responses, appear for depositions, and pay court-ordered sanctions. The court issued incremental sanctions, including monetary and issue sanctions, before ultimately imposing terminating sanctions by striking the defendant’s answer and cross-complaint, leading to a default judgment in favor of the plaintiff.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. It held that the trial court did not abuse its discretion in imposing terminating sanctions after the defendant’s persistent and willful noncompliance with discovery orders. The court also found that the plaintiff’s complaint provided sufficient notice of damages, and that the award of damages and attorney fees was supported by substantial evidence. The judgment of the trial court was affirmed in all respects. View "Atlas v. Davidyan" on Justia Law

After failing to pay property taxes on her home in Maricopa County, Arizona, the plaintiff’s tax liens were sold to a private entity, which later foreclosed on the property. The plaintiff did not respond to the foreclosure action, resulting in a default judgment that extinguished her rights to the property. The property was then deeded to the private purchaser, who transferred it to another private party. The plaintiff subsequently challenged the foreclosure, the retention of surplus equity from the sale, and the constitutionality of the Arizona statute that allowed private parties to enforce tax liens without providing just compensation.The United States District Court for the District of Arizona dismissed the plaintiff’s claims, finding that the Rooker-Feldman doctrine deprived it of subject matter jurisdiction. The court reasoned that the plaintiff’s injuries stemmed from the state court’s foreclosure judgment, which had already extinguished her property rights, and thus her federal claims amounted to an impermissible appeal of a state court decision. The court also dismissed her state law claims, except for one over which it declined supplemental jurisdiction.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed in part and reversed in part. The Ninth Circuit held that the Rooker-Feldman doctrine barred the plaintiff’s claims that directly attacked the state court foreclosure judgment, such as those alleging the foreclosure was an unconstitutional taking or excessive fine. However, the court held that claims challenging the defendants’ post-judgment retention of surplus equity were not barred, in light of the Supreme Court’s decision in Tyler v. Hennepin County, which recognized a property owner’s right to excess equity after a tax foreclosure. The court also found that the plaintiff’s facial challenge to the statute was not barred by Rooker-Feldman but was moot due to legislative amendments. The case was remanded for further proceedings on the surviving claims. View "SEARLE V. ALLEN" on Justia Law

A family leased a home within military housing at the Naval Amphibious Base Coronado in California. Shortly after moving in, they experienced persistent water intrusion and mold contamination, which they alleged damaged their property and affected their health. The family reported these issues to the property manager and the public-private entity responsible for the housing, but claimed that remediation efforts were inadequate and that their concerns were dismissed. After further testing confirmed hazardous mold, the family vacated the property and brought state law claims, including negligence and breach of contract, against the property manager, the public-private housing entity, and a mold remediation company.The defendants removed the case from California state court to the United States District Court for the Southern District of California, asserting federal enclave, federal officer, and federal agency jurisdiction. The district court denied the defendants’ motion to dismiss based on derivative sovereign immunity and, after further proceedings, found that it lacked subject matter jurisdiction on all asserted grounds. Specifically, the court determined there was no evidence that the United States had accepted exclusive jurisdiction over the property, that the defendants failed to show a causal nexus between their actions and federal direction, and that the public-private entity was not a federal agency. The district court remanded the case to state court.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the remand order under an exception allowing appellate review when federal officer removal is asserted. The Ninth Circuit held that the district court correctly found no federal enclave jurisdiction because there was no evidence of federal acceptance of exclusive jurisdiction over the property. The court also held that the defendants did not meet the requirements for federal officer or agency jurisdiction. The Ninth Circuit affirmed the district court’s remand to state court. View "CHILDS V. SAN DIEGO FAMILY HOUSING, LLC" on Justia Law

A general contractor was hired to oversee the construction of a hotel in Vermont and subcontracted with a firm to install metal siding panels manufactured by a third party. The subcontractor relied on installation instructions available on the manufacturer’s website, which did not specify the use of a splice plate to connect the panels. The panels were installed without splice plates, and after construction, the panels began to detach from the building, causing some to fall and damage nearby property. The contractor later discovered that the manufacturer had created an instruction sheet in 2006 recommending splice plates, but this information was not publicly available at the time of installation.The contractor initially sued the installer for breach of contract, warranty, and negligence in the Vermont Superior Court, Chittenden Unit, Civil Division. The complaint was later amended to add a product liability claim against the manufacturer. After further discovery, the contractor sought to amend the complaint a third time to add new claims against the manufacturer, arguing that new evidence justified the amendment. The trial court denied this motion, citing undue delay and prejudice to the manufacturer, and granted summary judgment to the manufacturer on the product liability claim and on a crossclaim for implied indemnity brought by the installer, finding both barred by the economic-loss rule.On appeal, the Vermont Supreme Court affirmed the trial court’s decisions. The Court held that the trial court did not abuse its discretion in denying the third motion to amend due to undue delay and prejudice. It also held that the economic-loss rule barred the contractor’s product liability claim, as neither the “other-property” nor “special-relationship” exceptions applied. Finally, the Court found the contractor lacked standing to appeal the summary judgment on the installer’s implied indemnity claim. View "PeakCM, LLC v. Mountainview Metal Systems, LLC" on Justia Law

A resident of a memory-care facility in Massachusetts alleged that the facility’s court-appointed receiver, KCP Advisory Group, LLC, conspired with others to unlawfully evict residents, including herself, by falsely claiming that the local fire department had ordered an emergency evacuation. The resident, after being transferred to another facility, filed suit in the United States District Court for the District of Massachusetts, asserting several state-law claims against KCP and other defendants. The complaint alleged that KCP’s actions violated statutory and contractual notice requirements and were carried out in bad faith.KCP moved to dismiss the claims against it, arguing that as a court-appointed receiver, it was entitled to absolute quasi-judicial immunity. The district court granted the motion in part and denied it in part, holding that while quasi-judicial immunity barred claims based on negligent performance of receivership duties, it did not bar claims alleging that KCP acted without jurisdiction, contrary to law and contract, or in bad faith. The court thus denied KCP’s motion to dismiss several counts, including those for violation of the Massachusetts Consumer Protection Act, intentional infliction of emotional distress, civil conspiracy, fraud, and breach of fiduciary duty. KCP appealed the denial of immunity as to these counts.The United States Court of Appeals for the First Circuit reviewed the district court’s denial of absolute quasi-judicial immunity de novo. The appellate court held that KCP’s alleged acts—removing residents from the facility—were judicial in nature and within the scope of its authority as receiver. Because KCP did not act in the absence of all jurisdiction, the court concluded that quasi-judicial immunity barred all of the resident’s claims against KCP. The First Circuit therefore reversed the district court’s denial of KCP’s motion to dismiss the specified counts. View "Suny v. KCP Advisory Group, LLC" on Justia Law

The dispute centers on approximately 930 acres of agricultural land owned by two trusts near Pocatello, Idaho. The trusts entered into a purchase and sales agreement with a developer, Millennial Development Partners, to sell a strip of land for a new road, Northgate Parkway, which was to provide access to their property. The trusts allege that Millennial and its partners, along with the City of Pocatello, failed to construct promised access points and infrastructure, and that the developers and city officials conspired to devalue the trusts’ property, interfere with potential sales, and ultimately force a sale below market value. The trusts claim these actions diminished their property’s value and constituted breach of contract, fraud, interference with economic advantage, regulatory taking, and civil conspiracy.After the trusts filed suit in the District Court of the Sixth Judicial District, Bannock County, the defendants moved for summary judgment. The trusts sought to delay the proceedings to complete additional discovery, arguing that the defendants had not adequately responded to discovery requests. The district court denied both of the trusts’ motions to continue, struck their late response to the summary judgment motions as untimely, and granted summary judgment in favor of the defendants, dismissing the case with prejudice and awarding attorney fees to the defendants. The trusts appealed these decisions.The Supreme Court of the State of Idaho affirmed the district court’s denial of the trusts’ motions to continue, finding no abuse of discretion. However, it reversed the grant of summary judgment, holding that the district court erred by failing to analyze whether the defendants had met their burden under the summary judgment standard and appeared to have granted summary judgment as a sanction for the trusts’ untimely response. The Supreme Court vacated the judgment and remanded the case for further proceedings, and declined to award attorney fees on appeal. View "Rupp v. City of Pocatello" on Justia Law

Two children of a decedent alleged that their late stepmother wrongfully transferred assets belonging to their father to herself, depriving them of property they would have received under his will. The assets in question included a house and shares in a corporation. The stepmother, who had married their father after both had children from previous marriages, allegedly used a power of attorney to transfer the property to herself during the father’s cognitive decline. After both the father and stepmother died, the children claimed they were not notified of the stepmother’s estate proceedings and that the disputed property was distributed to the stepmother’s descendants.The District Court for Lincoln County dismissed the children’s complaint, citing the doctrine of jurisdictional priority because a similar proceeding was pending in county court. After the county court dismissed the children’s petition for lack of standing, the district court denied the children’s motion to alter or amend its dismissal, without further explanation. The children appealed, arguing that the district court’s reliance on jurisdictional priority was no longer justified after the county court’s dismissal.The Nebraska Supreme Court held that the children had standing to pursue relief under the Nebraska Uniform Power of Attorney Act, which specifically allows a principal’s issue to petition a court to review an agent’s conduct under a power of attorney. The court found that the doctrine of jurisdictional priority no longer applied once the county court proceeding was dismissed. However, the Supreme Court also determined that the complaint failed to state a claim upon which relief could be granted, as the children would not have inherited the disputed property under the will or by operation of law, even if the transfers were invalid. Nevertheless, the court ruled that the children should be given leave to amend their complaint and reversed and remanded the case with directions to allow amendment. View "Kimball v. Rosedale Ranch" on Justia Law