Justia Commercial Law Opinion Summaries

Plaintiff-school opened a bank account for its operating fund with Defendant-bank. One of Plaintiff’s employees later opened a bank account with Defendant that Plaintiff had not authorized and deposited into that account several hundred checks originating from, or intended to be deposited into, Plaintiff’s bank account with Defendant. Over the course of approximately four years, the employee deposited $832,776 into this bank account and withdrew funds just short of that amount. Defendant refused Plaintiff’s demand to return the funds that the employee had funneled through this account to himself. Thereafter, Plaintiff commenced this action, alleging breach of contract, violations of the Uniform Commercial Code (UCC), negligence, and common law conversion. The trial court rendered judgment in favor of Plaintiff on each of the counts and awarded $832,776 in total compensatory damages. The Supreme Court affirmed in all respects with the exception of the damages award, holding that some of Plaintiff’s claims under the UCC were time barred and that the trial court did not otherwise err in its judgment. Remanded with direction to reduce the award by $5,156 and to proportionately reduce prejudgment interest, . View "Saint Bernard Sch. of Montville, Inc. v. Bank of Am. " on Justia Law

Coastal filed suit against Chase Bank, asserting claims of conversion and negligence under the Texas Uniform Commercial Code (UCC) and money had and received under the common law. At issue on interlocutory appeal was whether section 3.405 of the UCC can serve as an affirmative defense to a common law "money and received" claim and whether settlement credits in Texas reduce the nonsettling defendant's liability rather than the plaintiff's total loss. The court concluded that the money had and received claim as applied in this situation must simply incorporate the affirmative defense provided by section 3.405. Therefore, the district court did not err in its determination that section 3.405 could so be applied. Further, the district court was correct in holding that the settlement credit should be applied to reduce the nonsettling defendant's liability, not the plaintiff's total loss. On remand, however, the district court must give Coastal an opportunity to demonstrate that allocation of the settlement amount is appropriate. Accordingly, the court affirmed and remanded for further proceedings. View "Coastal Agricultural Supply v. JP Morgan Chase Bank, N.A." on Justia Law

SB1 Waukesha County, LLC and Decade Properties, Inc. were two judgment creditors of defendant Jack Collier. SB1 purchased from Associated Bank, N.A. a portion of a default judgment against Collier. Subsequently, Decade obtained a judgment against Collier personally. Each party claimed that they were entitled to collect on Collier’s personal property. The Supreme Court held (1) because SB1 was the first judgment creditor with a docketed money judgment to levy specific, non-exempt personal property of Collier, SB1 had priority over Decade in regard to specific personal property that SB1 identified and levied; but (2) there was no blanket lien in favor of SB1 or Decade that prevented other creditors from pursuing collection from Collier’s personal property. View "Associated Bank N.A. v. Collier" on Justia Law

Defendants, Heartland Wisconsin Corp. and Town Bank, were creditors of a Milwaukee real estate investor and landlord (Debtor). The issue in this case was which defendant had priority over proceeds of the Debtor’s legal malpractice claim that was held in escrow pending resolution of their dispute. Heartland claimed that the Debtor validly assigned the proceeds of his legal malpractice claim, which gave Heartland a security interest in those proceeds that was superior to Town Bank’s interest. Town Bank claimed that it obtained a superior interest in the proceeds by levy and that proceeds from legal malpractice claims are not assignable. The Supreme Court concluded (1) the debtor lawfully assigned the potential proceeds from his legal malpractice claim as collateral for a debt to Heartland; and (2) Heartland perfected a security interest in the proceeds before Town Bank obtained a superior interest in the proceeds, and therefore, Heartland was entitled to the proceeds. View "Attorney's Title Guar. Fund, Inc. v. Town Bank" on Justia Law

Bill Head, doing business as Bill Head Enterprises (Head), hired Petroleum Solutions, Inc. to manufacture and install an underground fuel system at the truck stop Head owned and operated. After a major diesel-fuel leak occurred, Respondents sued Petroleum Solutions for its damages. The trial rendered judgment in favor of Head and in favor of third-party defendant Titeflex, Inc., the alleged manufacturer of a component part incorporated into the fuel system, on Titeflex’s counterclaim against Petroleum Solutions for statutory indemnity. The court of appeals affirmed. The Supreme Court (1) reversed the judgment as to Head, holding that the trial court abused its discretion in imposing the sanctions of charging the jury with a spoliation instruction and striking Petroleum Solutions’ statute-of-limitations defense, and the trial court’s abuse of discretion was harmful; and (2) affirmed the judgment as to Titeflex’s indemnity claim, holding that Titeflex was entitled to statutory indemnity from Petroleum Solutions. Remanded for further proceedings between Respondents and Petroleum Solutions. View "Petroleum Solutions, Inc. v. Head" on Justia Law

Burzlaff bought a “Stallion” motorized tricycle from Thoroughbred Motorsports in 2009 for $35,000. When Burzlaff reported the first problems to Thoroughbred, the company instructed him to take his vehicle to a Ford dealer for warranty repairs. Burzlaff did so repeatedly. After the vehicle had been out of service for repairs for 71 days during the first year, Burzlaff demanded, under the Wisconsin Lemon Law, that Thoroughbred replace the vehicle or refund his purchase price. Thoroughbred refused. Further efforts to repair the vehicle at the Thoroughbred factory in Texas failed to correct the defects. Burzlaff sued Thoroughbred under the federal Magnuson-Moss Warranty Act, 15 U.S.C. 2301, and the Wisconsin Lemon Law, Wis. Stat. 218.0171. The district court awarded double damages plus costs and attorney fees for a total judgment of $95,000 under the more generous provisions of the state law. The Seventh Circuit affirmed, rejecting challenges to the jury instructions on the Lemon Law claim, the sufficiency of the evidence on that claim, and the submission of the Magnuson-Moss claim to the jury. View "Burzlaff v. Thoroughbred Motorsports Inc." on Justia Law

Dependable imports packing, janitorial, floral, office supplies, and some glass items. In 2010, Dependable imported, from China, items invoiced as “Generic Bud Vases” valued at $0.30 or less and larger “Generic Trumpet Vases,” valued at no more than $3.00. Dependable sells the vases to flower-packing houses that fill them with flowers for shipment to supermarkets or similar retailers, where the vase and flower combinations are sold as a single unit. Dependable classified the vases under the Harmonized Tariff Schedule 7018.90.50. At liquidation, U.S. Customs and Border Protection applied Heading 7013, which provides for “Glassware of a kind used for . . . indoor decoration.” Dependable protested but after a deemed denial and paying assessed duties, argued to the Court of International Trade that both vases should be classified under Heading 7010, which includes “containers, of glass, of a kind used for the conveyance or packing of goods ... Carboys, bottles, flasks, jars, pots, vials, ampules and other containers, of glass ... for the conveyance or packing of goods; preserving jars of glass; stoppers, lids and other closures, of glass." The court stated that “a reasonable jury could only conclude that the vases here are commercially fungible with other inexpensive clear glass vases whose principal use is decorative, rather than with glass packing containers” and granted summary judgment in favor of the government. The Federal Circuit affirmed. View "Dependable Packaging Solutions, Inc. v. United States" on Justia Law

Between October 2007 and August 2008, R.T. foods made 24 entries of “Tempura Vegetables” and “Vegetable Bird’s Nests” (frozen tempura-battered vegetable mixtures) from Thailand, 10 through the port of Boston and 14 through the port of Long Beach. United States Customs and Border Protection classified the 10 Boston entries and three of the Long Beach entries under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 2004.90.85, which carries a duty rate of 11.2%. The remaining 11 entries into Long Beach were liquidated under R.T.’s proposed subheading, HTSUS 2106.90.99, which carries a duty-free preference for products from Thailand. HTSUS 2004.90.85 covers “Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, frozen, other than products of heading 2006: Other vegetables and mixtures of vegetables: Other: Other, including mixtures.” HTSUS 2106.90.99 provides for “Food preparations not elsewhere specified or included: Other: Other: Other: Frozen.” R.T. timely filed and Customs denied protests. The Court of International Trade held it only had jurisdiction over three of the entries, then entered summary judgment in favor of the government. The Federal Circuit affirmed.View "R.T. Foods, Inc. v. United States" on Justia Law

In 2009, Chemsol made six entries of citric acid, purportedly from the Dominican Republic, and in 2009-2010, MCI made 13 entries of citric acid, purportedly from India; both claimed duty-free status for the entries and did not deposit any duties. U.S. Immigration and Customs Enforcement and Customs and Border Protection initiated an investigation to determine whether Chinese citric acid was being transshipped through other countries to evade antidumping and countervailing duties applicable to citric acid imported from China. Customs extended the deadline for liquidation of the entries under 19 U.S.C. 1504(b) and notified Chemsol and MCI of the extensions. In response, the companies sought a declaration that the extensions were unlawful and that the entries were deemed liquidated. They asserted that the Court of International Trade had jurisdiction under 28 U.S.C. 1581(i). The government argued that they were first required to challenge the extensions before Customs by post-liquidation protest, after which they could seek judicial review of any protest denial under 19 U.S.C. 1515, the Tariff Act’s “review of protests” provision. The court agreed, stating that “since the commencement of this action, ICE has completed its investigation and, but for .. suit, Customs could complete its administrative process and liquidate … remaining entries.” The Federal Circuit affirmed dismissal. View "Chemsol, LLC v. United States" on Justia Law

Jack Irwin owed a warehouse that Shade rented to store personal property. West Gate Bank held notes payable from Shade that were secured by Shade’s personal property. Shade later defaulted on the notes. Irwin and West Gate subsequently agreed to move Shade’s personal property pursuant to an “Abandonment” document. When Shade filed for bankruptcy, the bankruptcy court approved distribution of the proceeds in Shade’s personal property to West Gate, concluding that the Abandonment document was not an assignment or release of West Gate’s perfected security interest. Thereafter, Irwin filed this action against West Bank in district court alleging that West Gate breached its obligations under the Abandonment document by failing to pay the proceeds to Irwin. The district curt entered judgment in favor of West Gate. The Supreme Court affirmed, holding (1) the district court’s determination regarding the preclusive effect of the bankruptcy court’s ruling with respect to an assignment or release of West Gate’s security interest in Shade’s property was not relevant to this appeal; and (2) the district court did not err in concluding that the Abandonment document was not an enforceable contract or a warranty. View "Irwin v. West Gate Bank" on Justia Law