Allen earned a Ph.D. in physics from Yale University in 1965 and embarked on a successful career in the aerospace industry. He retired in 2004 and granted a financial power of attorney to his daughter, Key, when he and his wife experienced declining health and he could no longer manage their finances. For several years Key used the power of attorney to make withdrawals from Allen’s investment accounts held by affiliated investment firms (Brown). Five years later Allen revoked the power of attorney and sued Brown, raising contract and fiduciary-duty claims under Maryland law. He alleged that Key’s withdrawals (or some of them) were not to his benefit and that the investment companies should not have honored them.The Seventh Circuit affirmed the dismissal of the suit. The Maryland Court of Appeals has clarified that a plaintiff may plead a claim for breach of fiduciary duty even when another cause of action (like breach of contract) is available to redress the conduct. . Still, the power of attorney shields Brown from liability for breach of fiduciary duty just as it does for breach of contract. Brown had no fiduciary obligation to refuse to carry out transactions authorized by the power of attorney. View "Allen v. Brown Advisory, LLC" on Justia Law

The issue this case presented for the Pennsylvania Supreme Court's review centered on whether Appellant’s legal malpractice claims against Appellees, her former attorneys, were barred under the Court’s decision in Muhammad v. Strassburger, McKenna, Messer, Shilobod & Gutnick, 587 A.2d 1346 (Pa. 1991), which held that a plaintiff could not sue his attorney on the basis of the adequacy of a settlement to which the plaintiff agreed, unless the plaintiff alleged the settlement was the result of fraud. Appellant, Dr. Ahlam Kahlil, owned a unit in the Pier 3 Condominiums in Philadelphia; the unit was insured by State Farm Fire and Casualty Company (“State Farm”). The Pier 3 Condominium Association (“Pier 3”) was insured under a master policy issued by Travelers Property Casualty Company of America (“Travelers”). In May 2007, Appellant sustained water damage to her unit as a result of a leak in the unit directly above hers, which was owned by Jason and Anne Marie Diegidio. Due to the water damage, Appellant moved out of her unit and stopped paying her condominium fees. Appellant filed suit against State Farm and Travelers, alleging breach of contract and bad faith, and against the Diegidios, alleging negligence. A year later, Pier 3 filed a separate lawsuit against Appellant for her unpaid condominium fees and charges. In affirming in part and reversing in part the trial court, the Supreme Court found that by finding Appellant’s claims were barred under Muhammad, the lower courts ignored other averments in Appellant’s complaint which did not allege fraud, but, rather, alleged legal malpractice by Appellees in allowing Appellant to enter into a settlement agreement in the Water Damage Case that subsequently precluded her from raising her desired claims in the Fees Case, while repeatedly advising Appellant that the settlement agreement would not preclude those claims. "[A]s our review of Appellant’s complaint demonstrates that she was not merely challenging the amount of her settlement in the Water Damage Case, but rather alleged that Appellees provided incorrect legal advice regarding the scope and effect the Travelers Release, we hold that Muhammad’s bar on lawsuits based on the adequacy of a settlement is not implicated in this case." View "Khalil v. Williams" on Justia Law

Plaintiffs appealed the district court’s grant of summary judgment in favor of Safeco Insurance Company of Illinois (“Safeco”). The case involved a dispute over the applicability of an “other structure” exclusion in a homeowner’s policy when the building sustaining damage was “used in whole or in part for business.”   At issue is a loss caused by the failure of an in-floor radiant heat system in a pole barn that was occasionally used for business purposes. The Eighth Circuit affirmed the district court’s summary judgment ruling in favor of Defendants. The court concluded that the business use exclusion for other structures precludes coverage for the loss, there is no evidence of bad faith on the part of Safeco, and Safeco had no duty to advise Plaintiffs about coverage.   The court explained that Plaintiffs’ arguments seeking to engraft an additional requirement on the business use exclusion—that the structure be used for “actual business activity”— or that the limited coverage for business property located on the premises somehow changes or modifies the plain language of the business use exclusion are unavailing. Because the policy language is unambiguous and the exclusion is neither obscure nor unexpected, the reasonable expectations doctrine is inapplicable. Thus, Safeco did not breach the contract when it denied coverage.Further, the court held that there is no other evidence of bad faith in the investigation of this claim. Finally, there is no evidence in the record to support a claim that Plaintiff either relied on the agent to provide appropriate coverage or needed protection from any specific threat. View "Joseph Wobig v. Safeco Ins Co of Illinois" on Justia Law

Plaintiff Crystal Point Condominium Association, Inc. obtained default judgments against two entities for construction defect claims. Kinsale Insurance Company was alleged to have insured those entities, under the Direct Action Statute, N.J.S.A. 17:28-2. The relevant policies both contained an arbitration agreement providing in part that “[a]ll disputes over coverage or any rights afforded under this Policy . . . shall be submitted to binding Arbitration.” Crystal Point filed a declaratory judgment action against Kinsale, alleging that it was entitled to recover the amounts owed by the entities under the insurance policies issued by Kinsale. Kinsale asserted that Crystal Point’s claims were subject to binding arbitration in accordance with the insurance policies. Kinsale argued that the Direct Action Statute did not apply because Crystal Point had not demonstrated that neither entity was insolvent or bankrupt. In the alternative, Kinsale contended that even if the statute were to apply, it would not preclude enforcement of the arbitration provisions in the policies. The trial court granted Kinsale’s motion to compel arbitration, viewing the Direct Action Statute to be inapplicable because there was no evidence in the record that either insured was insolvent or bankrupt. An appellate court reversed the trial court’s judgment, finding the evidence that the writs of execution were unsatisfied met the Direct Action Statute’s requirement that the claimant present proof of the insured’s insolvency or bankruptcy and determining that the Direct Action Statute authorized Crystal Point’s claims against Kinsale. The appellate court concluded the arbitration clause in Kinsale’s insurance policies did not warrant the arbitration of Crystal Point’s claims, so it reinstated the complaint and remanded for further proceedings. The New Jersey Supreme Court determined Crystal Point could assert direct claims against Kinsale pursuant to the Direct Action Statute in the setting of this case. Based on the plain language of N.J.S.A. 17:28-2, however, Crystal Point’s claims against Kinsale were derivative claims, and were thus subject to the terms of the insurance policies at issue, including the provision in each policy mandating binding arbitration of disputes between Kinsale and its insureds. Crystal Point’s claims against Kinsale were therefore subject to arbitration. View "Crystal Point Condominium Association, Inc. v. Kinsale Insurance Company " on Justia Law

M & L Financial, Inc. (M&L) took 45 vivid yellow diamonds worth $4 million to Sotheby’s for auction on consignment. M&L told Sotheby’s it was the exclusive owner of the diamonds, but Sotheby’s later released them to a stranger without telling M&L. The diamonds vanished. M&L sued Sotheby’s, which escaped on demurrer.   The Second Appellate District reversed the breach of contract ruling and affirmed the tort ruling, and remanded. The court explained that there was no agreement yet that Sotheby’s definitely would auction the diamonds for M&L, but a potential auction was the point of Sotheby’s involvement. Sotheby’s breached this agreement by giving the diamonds to a stranger without M&L’s permission. This breach cost M&L the value of the lost diamonds.   The court further wrote that as for M&L’s negligence claim, however, the trial court’s ruling was right. The court explained that the economic loss rule governs. “In general, there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage.” (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922 (Sheen).) By deferring to the contract between parties, the economic loss rule prevents the law of contract and the law of tort from dissolving one into the other. M&L offers no good reason for departing from the fundamental economic loss rule, which bars its tort claim. View "M & L Financial v. Sotheby's" on Justia Law

Starz Entertainment LLC (Starz) entered into two licensing agreements with MGM Domestic Television Distribution LLC (MGM). Starz sued MGM in May 2020, asserting 340 claims of direct copyright infringement, 340 claims of contributory copyright infringement, 340 claims of vicarious copyright infringement, one claim of breach of contract, and one claim of breach of the covenant of good faith and fair dealing. MGM moved for dismissal under Federal Rule of Civil Procedure 12(b)(6), arguing that many of Starz’s copyright infringement claims are barred by the Supreme Court’s decision in Petrella.   The district court concluded that Petrella left unaffected the discovery rule—that under the Copyright Act there exists “a three-year damages bar [under Section 507(b)] except when the plaintiff reasonably was not aware of the infringements at the time they occurred.” The Ninth Circuit affirmed the district court’s denial.   The court wrote that generally, a copyright claim accrues when the infringement occurs. The court held that Petrella did not do away with the discovery rule, under which a claim alternatively accrues when the copyright holder knows or reasonably should know that an infringement occurred. The court held that the discovery rule allows copyright holders to recover damages for all infringing acts that occurred before they knew or reasonably should have known of the infringing incidents, and the three-year limitations period runs from the date the claim accrued. The court held that the district court correctly applied the discovery rule, thus Plaintiff was not barred from seeking damages for all acts of infringement. View "STARZ ENTERTAINMENT, LLC V. MGM DOMESTIC TELEVISION DISTR." on Justia Law

Google sent an email to users, such as Plaintiff, who had contributed photos to Google maps but had not yet joined the company’s Local Guides Program, inviting them to join the program. Plaintiff joined the Local Guides program and claimed his terabyte of free Google Drive storage. Google advised him the benefit was for two years, and Plaintiff contended that when he read the initial email, he assumed Google was offering a lifetime benefit. In ruling on Google’s summary judgment motion, the district court considered three documents – the photo impact email, the enrollment page, and the Program Rules - and concluded that they did not constitute a unilateral contract offer for one terabyte of free Google Drive storage for life.   The Ninth Circuit affirmed the district court’s summary judgment. The court explained that advertisements are not typically understood as offers, but that rule includes an exception for offers of a reward. The operative question under California law is “whether the advertiser, in clear and positive terms, promised to render performance in exchange for something requested by the advertiser, and whether the recipient of the advertisement reasonably might have concluded that by acting in accordance with the request a contract would be formed.”   The court reasoned that the Google documents at issue neither informed users how they might conclude the bargain, nor invited the performance of a specific act, leaving nothing for negotiation. The court held that the district court properly granted summary judgment to Google on Plaintiff’s conversion and breach of contract claims. View "ANDREW ROLEY V. GOOGLE LLC" on Justia Law

This was the second time plaintiff-appellant Petrolink, Inc. returned to the Court of Appeal in its suit against Lantel Enterprises. Petrolink filed an action against defendant Lantel Enterprises (Lantel), seeking specific performance of a lease agreement that gave Petrolink the option to purchase a commercial property owned by Lantel at fair market value; Lantel cross-complained against Petrolink, contending that Petrolink was refusing to purchase the property for its fair market value. The parties disagreed as to the valuation of the property and were effectively seeking a judicial determination as to the fair market value of the property so that they could complete the transaction. After years of litigation in the trial court, an appeal, a partial reversal of the judgment, remand, and further litigation, the trial court ultimately concluded that the fair market value of the property was $889,854. The court then calculated a net purchase price of $948,404 by subtracting from the fair market value a credit to Petrolink for the rents that it had paid from the date the purchase should have been completed, and adding a credit to Lantel for the loss of use of the sale proceeds. In its amended judgment, the court ordered the parties to complete the transaction; Petrolink was to deposit $948,404 in escrow and Lantel was to deliver title to the property “by grant deed free and clear of all encumbrances.” Petrolink appealed the amended judgment, arguing that it was entitled to certain additional financial reductions and offsets to the purchase price. The Court of Appeal rejected Petrolink’s contentions and affirmed the amended judgment in Petrolink II. Eleven days after Petrolink II was issued, and four days after Petrolink deposited the purchase funds in escrow, the State of California Department of Transportation (Caltrans) filed an eminent domain action pertaining to the property. The filing of the Caltrans action prevented Lantel from being able to convey unencumbered title, as required by the amended judgment. Petrolink then refused to close escrow. Lantel moved to compel performance under the trial court's order, despite the encumbrance on title resulting from the Caltrans eminent domain action. The Court of Appeal concluded the trial court did not abuse its discretion in ordering Petrolink to accept title encumbered by the Caltrans eminent domain action. "[T]he trial court weighed the equities and concluded that it would be more equitable for Petrolink to bear any burden of the encumbrance created by the filing of the Caltrans action." View "Petrolink, Inc. v. Lantel Enterprises" on Justia Law

Plaintiff entered into a reverse mortgage agreement with Reverse Mortgage Solutions, Inc. (“RMS”). In violation of the Truth in Lending Act (“TILA”), RMS failed to disclose certain information at closing. Section 1635(b) of TILA imposes certain obligations on a creditor, like RMS, after it receives a notice of rescission, but RMS did not comply with those obligations either. Plaintiff sued RMS for, among other things, rescission and failing to honor her rescission rights under TILA.   A jury returned a verdict for RMS, finding that RMS did not fail to honor Plaintiff’s attempt to rescind the loan. However, the district court issued judgment as a matter of law for Plaintiff holding that RMS violated Section 1635(b)’s requirements. It also held that Plaintiff was not required to tender or return, the loan proceeds to RMS.   The Fourth Circuit vacated the district court’s judgment as a matter of law and remanded. The court explained that the district court erred in granting judgment as a matter of law to Plaintiff on the Rescission Count. In response to RMS’s failure to voluntarily unwind the loan or otherwise respond to that notice as required by Section 1635(b), Plaintiff had a right to sue RMS to obtain rescission relief under TILA. But neither Section 1635(b) nor any other provision of TILA provides that the failure of a lender to voluntarily unwind a loan or respond to a notice of intent to rescind allows a borrower to avoid tendering the loan proceeds as part of rescission. View "Teresa Lavis v. Reverse Mortgage Solutions Inc" on Justia Law

The owners of Hotel Erwin and Larry’s (a restaurant adjacent to the hotel) in Venice Beach—Marina Pacific Hotel & Suites, LLC; Venice Windward, LLC; Larry’s Venice, L.P.; and Erwin H. Sokol, as trustee of the Frances Sokol Trust (collectively insureds)—sued Fireman’s Fund Insurance Company alleging the COVID-19 virus was present on and had physically transformed, portions of the insured properties—“direct physical loss or damage” within the meaning of Fireman’s Fund’s first party commercial property insurance policy—but Fireman’s Fund refused to pay policy benefits for covered losses incurred as a result. The trial court sustained Fireman’s Fund’s demurrer to the insureds’ first amended complaint without leave to amend and dismissed the lawsuit, ruling the COVID-19 virus cannot cause direct physical loss or damage to property for purposes of insurance coverage.   The Second Appellate District reversed the trial court’s judgment sustaining Defendant’s demurrer to the insureds’ first amended complaint without leave to amend and dismissed the lawsuit, ruling the COVID-19 virus cannot cause direct physical loss or damage to property for purposes of insurance coverage. The court held it was an error at the nascent phase of the case. The court explained that because the insureds adequately alleged losses covered by Fireman’s Fund’s policy, they are entitled to an opportunity to present their case, at trial or in opposition to a motion for summary judgment. The judgment of dismissal based on the trial court’s disbelief of those allegations, whether ultimately reasonable or not, must be reversed. View "Marina Pacific Hotel and Suites, LLC v. Fireman's Fund Ins. Co." on Justia Law