Justia Commercial Law Opinion Summaries

Petitioner William Daane defaulted on a loan secured by a mortgage on his residence. CR Title Services, the trustee of the deed of trust, filed a notice of default to initiate the foreclosure process. Daane opted to participate in the Foreclosure Mediation Program (Program). The district court later found that CitiMortgage, the beneficiary of the deed of trust, had participated in the mediation in bad faith. After the foreclosure process was reinitiated, Daane again elected for mediation in the Program. Daane subsequently brought a petition for a writ of prohibition, seeking to preclude the Program from proceeding with further mediations or issuing a letter of certification. The Supreme Court denied the writ, holding that a writ of prohibition was unwarranted to preclude the Program from conducting further proceedings with respect to Daane's residence because he had an adequate remedy in the ordinary course of law.

Appellant Angela O'Connell was involved in a theft scheme whereby Appellant's husband would steal property from a local business and sell the stolen goods for cash. Appellant pled guilty to accountability for theft pursuant to a plea agreement. Upon sentencing, Appellant was prohibited from entering bars and casinos and consuming alcohol, and was ordered to pay restitution to the business she stole from in the amount of $159,606. The Supreme Court reversed in part and affirmed in part, holding (1) because the district court's determination of lost profits in this matter was based upon speculation and not supported by substantial evidence, the district court erred by ordering payment of lost profits, in addition to the replacement value of the stolen property, as part of Appellant's restitution obligation, and (2) the district court did not abuse its discretion by prohibiting Appellant from entering bars as a condition of her sentence because the restriction furthered Appellant's rehabilitation. Remanded for recalculation of restitution based upon the replacement value of the stolen property.

The jury found that Amazon's 1-click purchasing system infringes plaintiff's 710 patent, entitled "Object-Based On-Line Transaction Infrastructure," which covers an online purchasing system, but that all of the claims of the patent were invalid, and that Amazon did not infringe any of the other patents at issue. The judge granted a plaintiff's post-verdict motion and ruled that the 710 patent claims were not invalid. The Federal Circuit reversed the post-verdict ruling and held that each asserted claim of the 710 Patent is invalid as anticipated and the asserted claims of the other patents remain valid and not infringed.

In a loan-and-supply contract, plaintiff agreed to provide defendant with a $150,000 loan that would be gradually forgiven over five years as defendant purchased specified quantities of motor-oil products from plaintiff. The typewritten contract included a handwritten note stating that the "Agreement will terminate after 225,000 gallons and 225,000 filters of Exxon/Mobil is purchased or 60 months, whichever comes first." Defendant stopped buying products from plaintiff after only two years, having purchased only 55,296 gallons and 61,551 filters. The district court entered summary judgment for plaintiff. The Seventh Circuit affirmed, rejecting an argument that the handwritten provision relieved plaintiff of any liability after 60 months (after July 1, 2008) regardless of the amount of product it purchased.

A limited liability company (MIC) was formed for the purpose of building and operating a hotel. The original members of MIC were a revocable trust (the Trust), trustee Michael Siska, and Thomas, Jane, and Jason Dowdy. Later, Thomas and Jane Dowdy transferred, without the Trust's involvement, MIC's assets to Milestone Development, the Dowdy's family company. The Trust filed an amended complaint derivatively on behalf of MIC against Defendants, Milestone and the Dowdys. In its amended complaint, the Trust claimed that the transfer of assets to Milestone was not in the best interests of MIC or its members and alleging, inter alia, breach of fiduciary duty, breach of contract, unlawful distribution, and conversion, and seeking to recover damages. The Trust, however, did not join MIC as a party to the derivative action. The circuit court dismissed the Trust's amended complaint, holding that the Trust lacked standing to maintain the derivative action on behalf of MIC because the Trust could not fairly represent the interests of the Defendant shareholders. The Supreme Court reversed, holding that it would not entertain the appeal on the merits because MIC was a necessary party to the proceeding and had not been joined. Remanded.

Plaintiff Fox Rest Associates (Fox Rest) was formed to purchase Fox Rest Apartments. Defendants in this case were George Little, Fox Rest's legal counsel through his law firm, George B. Little and Associates (GBL&A), George Little's wife, and GBL&A. This action took place after Mr. Little sold the Apartments without knowledge of Fox Rest and transferred a portion of the proceeds from the sale in an account he held with Mrs. Little. Unable to satisfy a previous judgment finding Mr. Little and GLB&A liable to Fox Rest for, inter alia, malpractice and double billing, Fox Rest filed this action against Defendants, seeking to void various transactions by Mr. Little as fraudulent conveyances and voluntary conveyances. The court granted Defendants' motion to strike, finding that Fox Rest did not present sufficient evidence in its case in chief to establish a prima facie case for its claims. The Supreme Court affirmed in part and reversed in part, holding that, except for a portion of the claims relating to the sale of certain equipment, the circuit court erred in striking Fox Rest's fraudulent conveyance and voluntary conveyance claims. Remanded.

Janelle Gabay defaulted on a promissory note secured by a mortgage of her real property. HSBC Bank USA, the holder of the mortgage, filed a complaint for foreclosure and sale against Gabay. The district court granted HSBC's motion for summary judgment. The Supreme Court vacated the judgment of the district court, holding that entry of judgment as a matter of law was precluded where (1) HSBC's statement of material facts failed to properly present proof of ownership of the mortgage note; (2) HSBC's statement of material facts did not contain an adequate description of the mortgaged premises including a street address; (3) a genuine issue of material fact existed as to the order of priority and amounts due to other parties-in-interest; and (4) the amount of costs due as part of the amount due on the mortgage was not included in the summary judgment record as required. Remanded.

David Pyper hired attorney Justin Bond to represent him in a probate matter. Bond's law firm subsequently sued Pyper to obtain payment of the attorney fees. The district court entered a judgment in favor of the law firm for $10,577. To satisfy the judgment, Bond filed a lien against a house owned by Pyper that was worth approximately $125,000. Bond was the only bidder at the sheriff's sale auctioning Pyper's home and purchased Pyper's home for $329. Pyper later communicated his desire to redeem his property to Dale Dorius, another attorney at the firm, but was unable to speak to Bond after several attempts. After the redemption period expired, the deed to Pyper's home was transferred to Bond. Pyper subsequently filed a petition seeking to set aside the sheriff's sale of his property. The district court set aside the sheriff's sale. The court of appeals affirmed. The Supreme Court affirmed, holding the court of appeals did not err in (1) concluding that gross inadequacy of price together with slight circumstances of unfairness may justify setting aside a sheriff's sale and (2) affirming the district court's conclusion that Bond and Dorius's conduct created, at least, slight circumstances of unfairness.

Loan borrowers entered into a residential mortgage loan. After a dispute about whether the borrowers paid the proper amount of property taxes, the mortgage holder filed a foreclosure action, alleging that the borrowers failed to pay monthly mortgage payments and fees. The borrowers asserted numerous legal defenses and claims against the mortgage holder and loan servicer. The borrowers asked for a jury trial on these defenses and claims, but the trial court denied the request, reasoning that foreclosure was an "essentially equitable" cause of action. The court of appeals reversed, concluding that the essential features of this case were not equitable. The Supreme Court affirmed the trial court's denial of the borrowers' request for a jury trial, holding that the borrowers' claims and defenses shall be tried in equity because the core legal questions presented by the borrowers' defenses and claims were significantly intertwined with the subject matter of the foreclosure action.

Defendants, online booking companies, acquire inventories of hotel rooms at negotiated rates (wholesale rate) and rent the rooms to consumers at higher retail rates; they charge consumers a separate amount for hotel taxes. Defendants pay the taxes to the hotels, which in turn remit it to the state taxing authority. Plaintiff brought a claim on behalf of a putative class of New Jersey municipalities, alleging that basing the tax on the wholesale rate, rather than the retail rate, is a form of tax evasion. The district court granted defendants' motion to dismiss for lack of subject matter jurisdiction on grounds of prudential standing ground, reasoning that the municipality was attempting to assert a legal right that was reserved to the Director of the Division of Taxation (aided by the Attorney General) to enforce municipal hotel occupancy taxes by determining the amount of tax due and then collecting the related revenue. The Third Circuit affirmed, reasoning that municipalities have authority to impose a local hotel tax under N.J. Stat. 40:48F, but enforcement is reserved to state officials.