Justia Commercial Law Opinion Summaries

In this case, the plaintiff bank sought to foreclose on a residential property in Vermont after the defendant defaulted on a $365,000 loan originally issued by Countrywide Home Loans, Inc. The mortgage was assigned to the plaintiff, and the bank alleged it was the holder of the note. However, the copy of the note attached to the complaint was made out to the original lender and lacked any indorsement. Over the years, the case was delayed by mediation, bankruptcy, and various motions. At trial, the plaintiff produced the original note with an undated indorsement in blank, but could not establish when it became the holder of the note.The Vermont Superior Court, Windsor Unit, Civil Division, denied the plaintiff’s initial summary judgment motion, finding that the plaintiff had not established standing under the Uniform Commercial Code. A later summary judgment was vacated due to procedural errors. After a hearing, the court found the plaintiff was currently a holder of the note and that the defendant had defaulted, but concluded that the plaintiff failed to prove it had the right to enforce the note at the time the complaint was filed, as required by U.S. Bank National Ass’n v. Kimball. Judgment was entered for the defendant, and the plaintiff’s post-judgment motion to designate the judgment as without prejudice was denied.On appeal, the Vermont Supreme Court affirmed the lower court’s decision. The Court held that a foreclosure plaintiff must demonstrate standing by showing it had the right to enforce the note at the time the complaint was filed, declining to overrule or limit Kimball. The Court also declined to address whether the judgment should be designated as without prejudice, leaving preclusion consequences to future proceedings. View "The Bank of New York Mellon v. Quinn" on Justia Law

Several plaintiffs, including an individual, an investment fund, and a limited partnership, engaged in trading derivatives tied to the Sterling London Interbank Offered Rate (Sterling LIBOR). They alleged that a group of major banks conspired to manipulate Sterling LIBOR for their own trading advantage. The plaintiffs claimed that the banks coordinated false submissions to the rate-setting process, sometimes inflating and sometimes deflating the benchmark, which in turn affected the value of Sterling LIBOR-based derivatives. The plaintiffs asserted that this manipulation was orchestrated through internal and external communications among banks and with the help of inter-dealer brokers.The United States District Court for the Southern District of New York reviewed the case and dismissed the plaintiffs’ claims under the Sherman Act and the Commodity Exchange Act (CEA). The district court found that two plaintiffs lacked antitrust standing because they were not “efficient enforcers” and had not transacted directly with the defendants, resulting in only indirect and remote damages. The court also determined that the third plaintiff, a limited partnership, lacked the capacity to sue and had not properly assigned its claims to a substitute entity. Additionally, the court found that one plaintiff failed to adequately plead specific intent for the CEA claims.On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court’s dismissal, but on a narrower ground. The Second Circuit held that none of the plaintiffs plausibly alleged actual injury under either the Sherman Act or the CEA. The court explained that because the alleged manipulation was multidirectional—sometimes raising and sometimes lowering Sterling LIBOR—the plaintiffs did not show that they suffered net harm as a result of the defendants’ conduct. Without specific allegations of transactions where they were harmed by the manipulation, the plaintiffs’ claims could not proceed. The judgment of dismissal was affirmed, and the cross-appeal was dismissed as moot. View "Sonterra Cap. Master Fund, Ltd. v. UBS AG" on Justia Law

Three individuals, including the appellant, formed a limited liability company (LLC) to design and sell firearms products, later adding two more members to a second LLC. The first LLC did not have a formal operating agreement, while the second adopted one in early 2019, setting a low company valuation. The appellant’s behavior became erratic and disruptive, leading to accusations against a key business partner and other members, which damaged business relationships and led to the loss of significant contracts. The remaining members of both LLCs unanimously voted to dissociate the appellant, citing his conduct as making it unlawful to continue business with him. The appellant disputed the validity of the operating agreement in the second LLC and challenged the valuation of his interests in both companies, also alleging wrongful dissociation, defamation, and conversion of property.The Eleventh Judicial District Court, Flathead County, granted summary judgment to the defendants on all claims. The court found the appellant was properly dissociated from the first LLC under Montana’s Limited Liability Company Act due to the unanimous vote and the unlawfulness of continuing business with him. It also held that the second LLC’s operating agreement was valid and permitted dissociation by unanimous vote. The court valued the appellant’s interests according to the operating agreement for the second LLC and based on company assets for the first LLC. The court denied the appellant’s motion to extend expert disclosure deadlines and partially denied his motion to compel discovery. It also granted summary judgment to the defendants on the conversion claim, finding no evidence of unauthorized control over the appellant’s property.The Supreme Court of the State of Montana affirmed the lower court’s rulings on dissociation and valuation regarding the second LLC, as well as the summary judgment on the conversion claim. However, it reversed the valuation of the appellant’s interest in the first LLC, holding that the district court erred by failing to consider the company’s “going concern” value as required by statute. The case was remanded for further proceedings on that issue. View "Herbert v. Shield Arms" on Justia Law

Golden View Ready-Mix, LLC (Golden View) supplied concrete to Grangaard Construction, Inc. (Grangaard) for a bridge project. Golden View alleged that Grangaard failed to pay for the concrete, breached the implied obligation of good faith and fair dealing, and committed fraud. A jury found in favor of Golden View on the breach of contract and good faith claims, awarding damages and punitive damages, but found no liability for fraud. Grangaard appealed the punitive damages award and the decision to submit the fraud issue to the jury.The Circuit Court of the First Judicial Circuit, McCook County, South Dakota, presided over the case. Grangaard moved for partial summary judgment on the fraud claim, arguing there was no independent tort duty outside the contract. The court denied this motion, allowing the fraud claim to proceed. During the trial, the court permitted the jury to consider punitive damages based on the breach of the implied obligation of good faith, despite Grangaard's objections.The Supreme Court of the State of South Dakota reviewed the case. The court determined that punitive damages are only recoverable for breaches of obligations not arising from a contract, as per SDCL 21-3-2. The court found that the implied obligation of good faith arises from the contract itself and does not constitute an independent tort that could support punitive damages. Consequently, the court vacated the punitive damages award. However, the court affirmed the lower court's judgment in all other respects, concluding that the error regarding punitive damages did not affect the jury's decision on the breach of contract and good faith claims. View "Goldenview Ready-Mix, LLC v. Grangaard Construction, Inc." on Justia Law

During the COVID-19 pandemic, K7 Design Group, Inc. (K7) offered to sell hand sanitizer to Walmart, Inc., doing business as Sam’s Club (Sam’s Club). K7 and Sam’s Club discussed and agreed upon the product, price, quantity, and delivery terms for various hand sanitizer products through email communications. K7 delivered over 1,000,000 units of hand sanitizer to Sam’s Club, which paid approximately $17.5 million. However, Sam’s Club did not collect or pay for the remaining hand sanitizer, leading to storage issues for K7.The United States District Court for the Western District of Arkansas held a jury trial, where the jury found in favor of K7 on its breach of contract claim and awarded $7,157,426.14 in damages. Sam’s Club’s motions for judgment as a matter of law and for a new trial were denied by the district court.The United States Court of Appeals for the Eighth Circuit reviewed the case. Sam’s Club argued that K7 failed to present sufficient evidence of an obligation to pay for the products, the jury’s verdict was against the weight of the evidence, and the district court abused its discretion in instructing the jury. The Eighth Circuit affirmed the district court’s decision, holding that the communications between K7 and Sam’s Club constituted binding orders under Arkansas’s Uniform Commercial Code (UCC). The court found that the evidence supported the jury’s verdict and that the district court did not abuse its discretion in its jury instructions or in denying Sam’s Club’s motions. The court also affirmed the district court’s award of prejudgment interest and attorney fees and costs. View "K7 Design Group, Inc. v. Walmart, Inc." on Justia Law

Anderson & Koch Ford, Inc., a Ford dealership in North Branch, Minnesota, operates under a Ford Sales and Service Agreement. In late 2022, Ford announced plans to establish a new dealership in Forest Lake, Minnesota, and to reassign half of Anderson & Koch’s designated sales area to the new dealership. Anderson & Koch filed a lawsuit in state court, alleging violations of the Minnesota Motor Vehicle Sale and Distribution Act (MVSDA), specifically sections 80E.13(k) and (p). Ford removed the case to federal court and moved to dismiss the claims.The United States District Court for the District of Minnesota partially granted Ford’s motion to dismiss, ruling that Anderson & Koch failed to state a claim under sections 80E.13(k) and (p) regarding the establishment of the new dealership. However, the court allowed Anderson & Koch to challenge the proposed change to its designated sales area under the same sections. Anderson & Koch then appealed the dismissal of its claims related to the new dealership.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo and affirmed the district court’s decision. The appellate court agreed that Anderson & Koch could not challenge the establishment of the new dealership under sections 80E.13(k) or (p) of the MVSDA. The court held that the establishment of a new dealership did not modify the existing franchise agreement, as required by section 80E.13(k), nor did it arbitrarily change the dealer’s area of sales effectiveness under section 80E.13(p). The court also noted that Anderson & Koch had dismissed its claims regarding the change to its sales area, leaving only the challenge to the new dealership on appeal. View "Anderson & Koch Ford, Inc. v. Ford Motor Company" on Justia Law

Sysco Machinery Corporation, a Taiwanese company, accused DCS USA Corporation, a North Carolina company, of business torts related to their manufacturer-distributor relationship. Sysco alleged that after some of its employees left to form a competitor, Cymtek Solutions, Inc., DCS sold machines made by Cymtek using Sysco's confidential information. Sysco claimed these diverted contracts were worth millions of dollars.Sysco first filed suit in Taiwan, where it claims to have won a preliminary injunction against Cymtek. Sysco then filed a suit in the Eastern District of North Carolina, which it voluntarily dismissed, followed by a suit in the District of Massachusetts, which was dismissed. Finally, Sysco returned to the Eastern District of North Carolina, where it brought claims for trade secret misappropriation, copyright infringement, unfair and deceptive trade practices, and tortious interference with prospective economic advantage. The district court dismissed all claims under Rule 12(b)(6) for failure to state a claim and denied Sysco's post-judgment leave to amend its complaint.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court affirmed the district court's dismissal of Sysco's trade secret misappropriation claim, finding that Sysco did not plausibly allege the existence of a valid trade secret or that DCS misappropriated it. The court also affirmed the dismissal of Sysco's other claims, noting that Sysco did not sufficiently develop its arguments for copyright infringement, unfair and deceptive trade practices, and tortious interference with prospective economic advantage. Finally, the court upheld the district court's denial of Sysco's motion to alter or amend the judgment and for leave to amend the complaint, citing Sysco's repeated failure to state a claim and the potential prejudice to DCS. View "Sysco Machinery Corp. v. DCS USA Corp." on Justia Law

Two brothers, Roland and Robert, ran an automotive business together under Guieb Inc. Their relationship deteriorated when Robert made decisions that Roland disagreed with, including using their company for his own benefit and allegedly stealing the trade name and most profitable shop for his personal companies. Roland sued Robert, alleging unfair and deceptive trade practices, unfair methods of competition, and deceptive trade practices under Hawaii Revised Statutes (HRS) §§ 480-2 and 481A-3. He also sought punitive damages for fraud, misrepresentation, nondisclosure, and breach of fiduciary duty.The Circuit Court of the First Circuit granted Robert’s motion for partial summary judgment (MPSJ) and dismissed Roland’s claims under count 12, finding no genuine issue of material fact. The court also granted Robert’s motion for judgment as a matter of law (JMOL) on punitive damages, preventing the jury from considering them. Additionally, the court ruled that brotherhood did not establish a fiduciary duty, granting Robert’s MPSJ on that issue as well.The Intermediate Court of Appeals (ICA) reversed the circuit court on three issues. It held that Roland’s unfair and deceptive trade practices claim should have gone to the jury, as there was evidence that Robert represented Guieb Inc. and Guieb Group as the same entity. The ICA also held that the jury should have considered punitive damages, given the evidence of Robert’s actions that could justify such damages. Lastly, the ICA found that brotherhood created a kinship fiduciary duty, which should have been considered by the jury.The Supreme Court of Hawaii agreed with the ICA that the jury should have considered Roland’s claims under count 12 and punitive damages. However, it disagreed that kinship created a fiduciary duty, affirming the circuit court’s MPSJ on that issue. The case was remanded for further proceedings consistent with the opinion. View "Guieb v. Guieb" on Justia Law

The case involves Ma Shun Bell, who filed a lawsuit against the law firm Friedman, Framme & Thrush (FFT), formerly known as Weinstock, Friedman & Friedman, alleging unfair trade practices and abuse of process. Bell claimed that FFT, representing First Investors Servicing Corporation (FISC), pursued a deficiency debt from her despite knowing it was not lawfully recoverable due to procedural defects in the vehicle repossession process.In the Superior Court of the District of Columbia, Bell's second amended complaint was dismissed. The court ruled that the complaint failed to allege the elements of a Uniform Commercial Code (UCC) violation, that FFT was immune from suit under the Consumer Protection Procedures Act (CPPA) and the D.C. Automobile Financing and Repossession Act (AFRA) due to its role as litigation attorneys, and that the complaint did not articulate how FFT’s conduct violated the Debt Collection Law (DCL). Additionally, the court found that Bell’s claims were barred by res judicata based on a Small Claims Court judgment in favor of FISC, with which FFT was found to be in privity.The District of Columbia Court of Appeals reviewed the case. The court concluded that Bell’s DCL cause of action could proceed, but her other causes of action were properly dismissed. The court held that the Superior Court erred in finding privity between FFT and FISC solely based on their attorney-client relationship and a contingency-fee arrangement. The court determined that the DCL claims were not barred by res judicata or collateral estoppel and that Bell had sufficiently alleged that FFT misrepresented the amount of the debt and charged excessive fees. The court affirmed the dismissal of the UCC, CPPA, and abuse of process claims but reversed the dismissal of the DCL claim, remanding the case for further proceedings. View "Bell v. Weinstock, Friedman & Friedman, PA" on Justia Law

Plaintiffs alleged that an automobile manufacturer designed, manufactured, and sold defective vehicles, specifically Dodge "muscle" cars with defective rear differentials. They filed a complaint asserting state and federal causes of action based on fraud and breach of warranty. The District Court dismissed the fraud counts and some warranty counts, allowing plaintiffs to amend their complaint. After amending, the District Court dismissed the fraud counts again and some warranty counts, but allowed two warranty counts to proceed.The United States District Court for the District of Delaware initially dismissed the complaint without prejudice, allowing plaintiffs to amend it. After the plaintiffs amended their complaint, the District Court dismissed the fraud counts and some warranty counts with prejudice, but allowed two warranty counts to proceed. The plaintiffs then moved to certify the dismissal of their fraud counts for appeal under 28 U.S.C. § 1292(b) or for final judgment under Rule 54(b). The District Court denied the request for certification under § 1292(b) but granted the request for final judgment under Rule 54(b) for the fraud counts.The United States Court of Appeals for the Third Circuit reviewed the case and determined that the District Court's Rule 54(b) judgment was not final. The Court of Appeals held that the fraud and warranty counts constituted a single claim for purposes of Rule 54(b) because they were alternative theories of recovery based on the same factual situation. As a result, the judgment did not dispose of all the rights or liabilities of one or more of the parties. Consequently, the Court of Appeals dismissed the appeal for lack of jurisdiction and instructed the District Court to vacate its order directing the entry of a partial final judgment. View "Diaz v. FCA US LLC" on Justia Law