Justia Commercial Law Opinion Summaries

The dispute arose from an agreement between Columbia Plaza Associates (CPA) and Northeastern University regarding the development of a parcel of land in Boston. The contract stipulated that the developer for each phase of the project would be Northeastern or an affiliated entity, which could include CPA. The contract also specified that the developer of the garage parcel would be a joint venture between Northeastern and CPA.CPA claimed that Northeastern violated the agreement when it sought to develop a subparcel unilaterally and repudiated CPA's rights to that subparcel. CPA also argued that Northeastern's communication with a governmental agency amounted to a deceptive business practice.The court held that the agreement did not grant CPA development rights in any of the subparcels except for the garage parcel. The court also found no proof of an enforceable promise by Northeastern to build a hotel with CPA on the disputed subparcel. The court thus ruled in favor of Northeastern on all counts, including CPA's claims for breach of contract, breach of the implied covenant of good faith and fair dealing, intentional interference with advantageous economic relations, unjust enrichment, commercial fraud, unfair or deceptive business practices, and requests for declaratory and injunctive relief.The court further held that Northeastern was entitled to attorney's fees under the anti-SLAPP statute because it successfully dismissed CPA's claim of commercial fraud, which was based solely on Northeastern's petitioning activity. The court did not find CPA's claim to be a SLAPP suit. View "Columbia Plaza Associates v. Northeastern University" on Justia Law

In a dispute between SmartSky Networks, LLC and DAG Wireless, Ltd., DAG Wireless USA, LLC, Laslo Gross, Susan Gross, Wireless Systems Solutions, LLC, and David D. Gross over alleged breach of contract, trade secret misappropriation, and deceptive trade practices, the United States Court of Appeals for the Fourth Circuit ruled that the district court did not have the jurisdiction to enforce an arbitration award. Initially, the case was stayed by the district court pending arbitration. The arbitration tribunal found in favor of SmartSky and issued an award, which SmartSky sought to enforce in district court. The defendants-appellants argued that, based on the Supreme Court decision in Badgerow v. Walters, the district court lacked subject matter jurisdiction to enforce the arbitration award. The Fourth Circuit agreed, noting that a court must have a basis for subject matter jurisdiction independent from the Federal Arbitration Act (FAA) and apparent on the face of the application to enforce or vacate an arbitration award. The court concluded that the district court did not have an independent basis of subject matter jurisdiction to confirm the arbitration award. As such, the court reversed and remanded the case to the district court for further proceedings. View "Smartsky Networks, LLC v. DAG Wireless, LTD." on Justia Law

The Supreme Court of North Carolina was required to decide whether a trial court can refuse to hear oral testimony during a summary judgment hearing on the mistaken belief that the North Carolina Rules of Civil Procedure prohibit the receipt of such testimony. The plaintiff, a corporation, had sued the defendants for breach of a commercial lease, and the defendants counterclaimed for fraud. During the summary judgment hearing, the trial court declined a request by the defendants to introduce live testimony, asserting that it was not permitted during a summary judgment hearing. The defendants appealed, and the Court of Appeals vacated the trial court's summary judgment order and remanded the case, leading to this appeal.The Supreme Court of North Carolina held that a trial court errs if it fails to exercise its discretion under the misapprehension that it has no such discretion, referring to Rule 43(e) of the North Carolina Rules of Civil Procedure that allows for the introduction of live oral testimony during a summary judgment hearing at the discretion of the trial court. The court found that the trial court was mistaken in its belief that it could not allow oral testimony, and this error warranted vacatur and remand for reconsideration. The Supreme Court thereby modified and affirmed the decision of the Court of Appeals to vacate the trial court's summary judgment order and remand the case. View "D.V. Shah Corp. v. VroomBrands, LLC" on Justia Law

In this case between Norfolk Southern Railway Company and Zayo Group, LLC, the United States Court of Appeals for the Fourth Circuit affirmed the district court's judgment on the pleadings. The dispute arose from a lease agreement between the parties, in which Zayo leased a utility duct from Norfolk Southern. When the time came to renew the lease, the parties could not agree on the renewal rent and referred the dispute to three appraisers, as specified in the lease. The appraisers decided the rent by a two-to-one vote, but Zayo refused to pay the rent, arguing that the decision was not unanimous. Norfolk Southern sued for breach of the lease, and the district court entered judgment for Norfolk Southern, ordering Zayo to pay the rental amount determined by the appraisers. Zayo appealed, contending that the appraisers could determine the rent only by unanimous vote. The Fourth Circuit held that the lease's language was unambiguous and did not impose a unanimity requirement on the appraisers. Therefore, it found that Zayo breached the lease by refusing to pay the full amount determined by the appraisers. The court affirmed the district court's judgment, requiring Zayo to pay the rental amount determined by the appraisers. View "Norfolk Southern Railway Company v. Zayo Group, LLC" on Justia Law

Russell is an orthopedic trauma surgeon who invented numerous products such as bone substitutes and surgical devices. He, along with other inventors were shareholders in CelgenTek, a medical device firm. According to the Inventors, Russell’s creations were game-changers in the field of orthopedics. In 2015, the Inventors entered into an agreement with Zimmer as the exclusive distributor of certain CelgenTek products. CelgenTek was experiencing dire financial problems. Zimmer acquired a 10% ownership of CelgenTek for $2 million and purchased the remaining 90% in 2016. The Inventors retained the right to a small percent of the net yield on the products it developed (earnout products). Zimmer agreed that it would use “Commercially Reasonable Efforts,” as defined in the Agreement, to sell the earnout products. From the date the agreement through 2019, Zimmer paid the Inventors approximately $130,000 in earnout payments. The Inventors sued, alleging that Zimmer failed to use Commercially Reasonable Efforts.The Seventh Circuit affirmed that the Inventors failed to state a claim. Many of Zimmer's 21 complained-of actions and inactions reflect how the Inventors hoped Zimmer would have marketed and sold the earnout products or what the Inventors would have done had they not put Zimmer in charge of sales. Others allege broken promises that Zimmer purportedly made before the signing of the agreement that are not actionable due to the agreement’s integration clause. View "Russell v. Zimmer, Inc." on Justia Law

Sunny sold seasonal merchandise to Walgreens, with Envision as an intermediary. From 2007-2012 Sunny shipped goods directly to Walgreens but routed documents through Envision. Every year Sunny sent documents calling for it to be named the beneficiary of letters of credit to cover the price. Envision passed these to Walgreens, which arranged for the letters of credit. In 2013 Sunny sent the usual documents but Envision substituted its own name for Sunny’s as the beneficiary of the letters of credit. Walgreens sent the letters of credit to Envision, which drew more than $3 million.A jury found that Envision breached its contract with Sunny by not paying it the money drawn on the letters of credit and that Envision had committed fraud. The Seventh Circuit affirmed, rejecting Envision’s argument that it cannot be liable for fraud because it was not Sunny’s agent or fiduciary and therefore did not have any duty to alert Sunny that it had changed the instructions about who would control the letters of credit. The cooperative business relations between Sunny and Envision from 2007-2012 created a “special relationship” that required Envision to notify Sunny about any deviation in their dealings. View "Sunny Handicraft (H.K.) Ltd. v. Envision This!, LLC" on Justia Law

The landlord is a four-member LLC with a single asset--a building in downtown Napa. The tenant, Stone Brewing, a large beer brewing and retail corporation, operates a brewpub in the building. Stone Brewing did not pay rent for several months during the pandemic. The landlord sued for unlawful detainer. Stone argued it was excused from paying rent because COVID-19 regulations and business interruptions triggered a force majeure provision in its lease.The trial court granted the landlord summary judgment, finding that the force majeure provision only excused performance if the claiming party was unable to meet its obligations due to factors outside its control; the tenant admitted during discovery it had the financial resources to pay rent during the period of the COVID-19 regulations but simply refused to do so. The court of appeal affirmed. The force majeure provision does not apply where the tenant had the ability to meet its contractual obligations but chooses not to perform due to financial constraints. The plain meaning of the force majeure provision does not support an interpretation that ties a party’s obligation to pay rent to its profitability or revenue stream instead of a delay or interruption caused by the force majeure event itself. View "West Pueblo Partners, LLC v. Stone Brewing Co., LLC" on Justia Law

In 2014, EMS entered into a payment processing agreement with Procom, a business owned by Gaal that sold historical tours. The Agreement was executed by Gaal, who signed a personal-guaranty provision. It contained terms relating to “chargebacks,” which occurred when a Procom customer’s transaction was declined or canceled after EMS had credited Procom’s account for the purchase; EMS repaid the money to the Procom customer, then charged Procom for that money plus a fee. In 2019, EMS and Procom executed a second agreement, which contained an explicit integration clause; the guaranty provision was not signed by Gaal but by another Procom employee. During the COVID-19 pandemic, many customers canceled purchases with Procom, resulting in $10 million in chargebacks. Procom is involved in Chapter 7 bankruptcy proceedings. EMS filed a creditor’s proof of claim and sued Gaal. The district court dismissed for failure to state a claim, finding that the 2019 Agreement superseded the 2014 agreement “in all material respects,” including replacing Gaal’s guaranty.The Sixth Circuit affirmed in part, upholding the district court’s consideration of the bankruptcy filing for purposes of determining when chargebacks occurred and its finding that the 2019 Agreement replaced the 2014 Agreement rather than merely supplementing it. The court reversed in part, holding that any chargeback related to transactions occurring before the execution of the 2019 Agreement arose under the 2014 Agreement. View "Electronic Merchant Systems LLC v. Gaal" on Justia Law

In 2006, Price approached Marcone about using e-commerce in the appliance parts industry. Price and Marcone entered into a non-disclosure agreement while evaluating the concept, but no partnership resulted. Price then created PartScription. Both companies sell appliance replacement parts online. In 2017, Price restarted talks with Marcone. In 2018, Marcone’s CEO proposed that PartScription and Marcone form a “50-50” partnership. Price accepted, and they shook hands on the idea. Price drafted a term sheet for the contemplated partnership. The first line sheet states “PartScription and Marcone (PSM) have agreed to form a partnership/joint venture to serve the independent hardware industry.” Negotiations continued. During a conference call, Marcone representatives purportedly “stated that they approved of the terms,” and offered one change regarding a joint bank account. Days later Price sent a follow-up email saying that his notes indicated “Marcone ha[d] approved the terms outlined in the draft PSM term sheet” and asking whether they needed to memorialize the agreement. No further memorialization took place. Marcone's representatives became unresponsive.In 2021, PartScription filed suit. The Seventh Circuit affirmed the dismissal of the suit. PartScription’s complaint fails to plausibly allege a valid contract; any amendment would be futile. The only documentation speaks of general goals— not obligations—and fails to identify definite and certain binding terms. View "KAP Holdings, LLC v. Mar-Cone Appliance Parts Co." on Justia Law

TURSS provided background and credit screening services to property management professionals and landlords through its online platforms and undertook to build an online platform to sell customizable electronic lease forms. TURSS sent Helix a letter of intent that the platform would be completed in 2009. The companies entered into a five-year marketing agreement that required TURSS to provide the platform and Helix to provide the product. TURSS would receive 35% of the revenue generated from sales and Helix would receive 65%. The agreement was not exclusive. Helix provided electronic forms and supporting materials to TURSS but the platform was still not completed in 2015.Helix sued TURSS for“willful and intentional” breach of contract, fraud, negligent misrepresentation, and promissory estoppel. The court ultimately granted TURSS summary judgment. The appellate court and Illinois Supreme Court reversed, finding that Helix failed to present proof of its damages with reasonable certainty. Helix did not present evidence of revenues of a similar product or a similar business in a similar market. Where a plaintiff seeks lost profits for a new company, "without a track record of profit, attempting to sell a new and untested product to a new market,” the specter of impermissible speculation arises. View "Ivey v. Transunion Rental Screening Solutions Inc." on Justia Law