Justia Commercial Law Opinion Summaries

A business entity sued an investment fund manager for fraud in Massachusetts state court. Defendant removed to federal court, which dismissed based on the statute of limitations. On appeal, the Sixth Circuit noted that the allegations were insufficient to establish diversity jurisdiction and instructed plaintiff to identify the citizenship of all of its members. Plaintiff did not comply, but simply asserted that none of its members shared defendant's Rhode Island citizenship. The court stated that it could not proceed to judgment with the information it had and ordered plaintiff to provide the necessary information, under seal. View "D.B. Zwirn Special Opportunities Fund, L.P. v. Mehrotra" on Justia Law

First National Keystone Bank retained an independent accounting firm to audit its records at a time that members of the bank's management were fraudulently concealing the bank's financial condition. The accounting firm issued a clean audit concerning the bank. It was later discovered that the bank had overstated its assets by over $500 million. Upon investigation, the FDIC concluded that the law firm that represented the bank had engaged in legal malpractice. The FDIC settled its claims against the law firm. The accounting firm was later found liable to the FDIC in federal district court for a negligent bank audit. The accounting firm subsequently sued the law firm, alleging fraud, negligent misrepresentation, and tortious interference with the accounting firm's contract to perform the audit. The circuit court granted summary judgment in favor of the law firm. The Supreme Court affirmed, holding that the claims of the accounting firm against the law firm were, in reality, contribution claims rather than direct or independent claims and were, therefore, barred by the settlement agreement between the law firm and the FDIC. View "Grant Thornton, LLP v. Kutak Rock, LLP" on Justia Law

Deutsche Bank, the holder of a note and mortgage on the Pelletiers' home, filed a complaint for foreclosure against the Pelletiers. The Pelletiers filed a motion to dismiss and asserted affirmative defenses through which they sought rescission as a remedy. The district court entered summary judgment for the Pelletiers, ruling that, because the bank offered no evidence to oppose the facts offered by the Pelletiers in support of rescission, and because the evidence offered by the Pelletiers established that they had timely notified the bank of their rescission right, they were entitled to judgment on their demand for rescission as a matter of law. The Supreme Court affirmed the judgment of the district court but remanded for further proceedings to determine how the rescission should be effectuated. View "Deutsche Bank Nat'l Trust Co. v. Pelletier" on Justia Law

Appellant bank sued Appellees, a corporation and its members, after loans granted to Appellees went into default and Appellees transferred certain property into a trust. After a jury rendered its verdicts, the circuit court (1) granted foreclosure against the property securing the debts, (2) dismissed Appellant's claim to avoid the transfer of one of the properties in the trust and ruled that the deed of another property in the trust was void, and (3) denied Appellant's various post-trial motions. The Supreme Court reversed and remanded on direct appeal and affirmed on cross-appeal, holding (1) the circuit court erred in submitting Appellant's foreclosure and fraudulent-transfer claims to the jury because they were equitable in nature; and (2) the circuit court properly granted Appellant's motion for a directed verdict on Appellee's abuse-of-process claim. Remanded. View "Nat'l Bank of Ark. v. River Crossing Partners, LLC" on Justia Law

In 2005, plaintiffs, residents of Puerto Rico, contracted with defendants, Florida corporations, to purchase condominiums to be built in Florida, and submitted earnest money. Because of the financial crisis, the units were not completed and defendant terminated the agreements. Plaintiffs sued for return of the earnest money. The district court dismissed, finding the defendants did not have minimum contacts with Puerto Rico necessary to establish jurisdiction. The First Circuit vacated and remanded, noting that there certain contacts that could establish jurisdiction that were not adequately addressed at trial.View "Carreras v. PMG Collins LLC" on Justia Law

This case stemmed from the mortgage plaintiff carried on her New York house. In 2001, WaMu acquired the note and mortgage and then assigned it to Fannie Mae. Thereafter, plaintiff's home went into foreclosure, WaMu failed, and the FDIC became its receiver. In 2009, plaintiff brought this action against the FDIC, alleging that WaMu "owned and/or serviced the mortgage," and that it engaged in wrongful conduct in the foreclosure's aftermath. The district court sua sponte dismissed the complaint under Rule 12(b)(1) on the ground that plaintiff lacked standing. Plaintiff appealed and the FDIC argued that the court lacked jurisdiction to hear the appeal because plaintiff's notice of appeal was untimely. The court held that the district court's order ran afoul of Rule 4(a)(5)(C), which limited any extensions to thirty days, meaning that the last permissible day would have been the day before plaintiff filed her notice. The court agreed with plaintiff that the Rule 4(a)(5)(C) time limit was a claim-processing rule, not a jurisdictional bar, and that the FDIC forfeited its timeliness objection. The court reversed the decision of the district court and remanded for further proceedings. View "Youkelsone v. FDIC" on Justia Law

The company imported plasma flat panel televisions, made or assembled in Mexico, between 2003, and 2005 that were liquidated as dutiable under subheading 8528.12.72 of the Harmonized Tariff Schedule at a rate of five percent. The company claimed that the televisions should be treated as duty-free under the North American Free Trade Agreement. After filing protests with United States Customs and Border Protection, the company filed in the Court of International Trade, arguing that its protest was denied or deemed denied under 19 U.S.C. 1515(a) because Customs had taken more than two years to act on its protest, or under 28 U.S.C. 1581(i). The Court dismissed for lack of jurisdiction, interpreting 1515(a) to impose neither automatic allowance nor automatic denial of a protest, and concluding that jurisdiction was therefore not proper under 1581(a) or (i). The Court noted that, to establish jurisdiction, the company could file for accelerated disposition under 19 U.S.C. 1515(b) and wait for a maximum of 30 days. The Federal Circuit affirmed, View "Hitachi Home Electronics (America), Inc. v. United States" on Justia Law

After Dorothy Leighton failed to pay taxes on her property and the Town of Blue Hill recorded a tax collector's lien certificate on the property, the Town filed a complaint against Leighton for forcible entry and detainer (FED), seeking possession of the property and costs. The district court entered judgment in Leighton's favor. The superior court vacated the district court's judgment and remanded with instructions to issue a writ of possession in favor of the Town. On appeal, Leighton contended that the Town was required, as a matter of law, to prove that it held current title to the property in the FED action. The Supreme Court affirmed, holding that because the Town produced evidence that it held title superior to Leighton by virtue of the statutorily-foreclosed tax lien mortgage on the property, the Town presented sufficient evidence that it was entitled to possession of the property. View "Town of Blue Hill v. Leighton" on Justia Law

In 1999 plaintiff pled guilty to making false statements while working on a project funded by the Federal Highway Administration (18 U.S.C. 2, 1014, and 1020). The agreement prohibited plaintiff from participating in any FHWA-funded project for a year. Plaintiff challenged Puerto Rico agencies' subsequent actions. The parties negotiated settlements; plaintiff entered into an agreement allowing it to bid on FHWA projects. Puerto Rico then enacted Law 458, which prohibits award of government contracts to any party convicted of a crime constituting fraud, embezzlement, or misappropriation of public funds and requires rescission of any contract with a party convicted of a specified offense. The statute states that it does not apply retroactively. One agency cancelled plaintiff's successful bids, another withdrew its consent to the settlement. The district court rejected claims of violation of the federal Contracts Clause and breaches of contract under Puerto Rico law. The First Circuit affirmed with respect to the constitutional claim. Any breach of the settlement agreements did not violate the Contracts Clause, even if committed in an attempt to unlawfully enforce Law 458 retroactively; defendants have not impaired plaintiff's ability to obtain a remedy for a demonstrated breach. Given the stage of the litigation, the district court should have retained the breach of contract claims. View "Redondo Constr. Corp. v. Izquierdo" on Justia Law

Plaintiff, a supplier of outdoor power equipment, gave defendant, a disttributer of such equipment, as well as of irrigation equipment, a distributor agreement with a multi-state territory. After about four years, plaintiff provided notice of termination and shifted sales to another distributor. Defendant was in significant debt, its lenders had refused to loan it any more money. Defendant is now out of business. During the contract period, defendant also distributed products for other companies. Plaintiff claimed that defendant owed for products purchased. The district court ruled in favor of plaintiff on the breach of contract claim and rejected defendant's claims of wrongful termination and that the new distributor improperly induced plaintiff to terminate. The Seventh Circuit affirmed. Rejecting a Connecticut Franchise Act claim, the court noted that defendant failed to show that more than 50 percent of its business resulted from its relationship with plaintiff. The district court properly awarded interest and rejected claims of unjust enrichment and tortious interference. View "Echo, Inc. v. Timberland Machines & Irrigation, Inc." on Justia Law