In 2003, Zubin Mehta and Gregory Shalov formed Finger Lakes Capital Partners as an investment vehicle to own several operating companies. Mehta and Shalov contacted Lyrical Partners L.P. to participate in their venture. The parties signed a term sheet covering their overall relationship, as well as topics relating to two specific investments. On the advice of counsel, Finger Lakes held each of its portfolio companies as separate limited liability companies with separate operating agreements. Over the course of a decade, the companies did not perform as expected. Finger Lakes asked Lyrical for additional capital. The parties agreed to allow Lyrical to “clawback” its investment money as added protection for its continued investment in the enterprise. Only one investment performed well and generated a substantial return when it was sold. The others failed or incurred substantial losses. The parties disagreed about how the proceeds from the one profitable investment should have been distributed under the network of agreements governing their business relationship. The Court of Chancery held that the proceeds should have been distributed first in accordance with the operating agreement governing the investment in the profitable portfolio company; the term sheet and clawback agreement would then be applied to reallocate the distribution under their terms. Finger Lakes argued on appeal that the profitable investment entity’s operating agreement superseded the overarching term sheet and clawback agreement; even if the clawback agreement was not superseded, the Court of Chancery applied it incorrectly; Lyrical could not recover its unpaid management fees through a setoff or recoupment; and, the Court of Chancery improperly limited Finger Lakes’ indemnification to expenses incurred until Finger Lakes was awarded a partial judgment on the pleadings, instead of awarding indemnification for all expenses related to these proceedings. With one exception, the Supreme Court affirmed the Court of Chancery’s judgment with respect to that court's interpretation of the operating agreements. The Supreme Court found, however, that the Court of Chancery erred when it held that Lyrical could use setoff or recoupment to recover time-barred management fees. Further, Lyrical could not assert its time-barred claims by way of recoupment because the defensive claims did not arise from the same transaction as Finger Lakes’ claims. View "Finger Lakes Capital Partners, LLC v. Honeoye Lake Acquisition, LLC" on Justia Law

Robert Perry was issued a Citibank MasterCard account in 1998. The terms and conditions of the Citibank Card Agreement governing Perry’s account included an arbitration agreement. In 2010, Citibank filed a debt collection action against Perry seek to recover the balance owed on Perry’s account. In 2015, Perry filed an answer to Citibank’s complaint and a class counterclaim alleging that Citibank had violated the West Virginia Consumer Credit and Protection Act. Thereafter, Citibank filed a motion asking the court to compel arbitration of the parties’ claims. The circuit court concluded that Citibank had implicitly waived its right to arbitration by filing suit in circuit court and waiting nearly five years before seeking to invoke its contractual right to arbitrate. Citibank appealed. The Supreme Court reversed, holding that Citibank did not waive its right to compel arbitration in this matter. Remanded. View "Citibank, N.A. v. Perry" on Justia Law

Braxton Lumber Company filed suit against Lloyd’s Inc. seeking payment on a promissory note. Braxton Lumber did not file suit within six years of the due date on the promissory note owed to it. The circuit court dismissed the lawsuit, concluding, in part, that the statute of limitations expired on Braxton Lumber’s claims. Braxton Lumber appealed, arguing that its suit was not time-barred because tolling provisions in two West Virginia statutes extended the time in which it could have filed suit. The Supreme Court affirmed, holding that neither of the tolling provisions relied upon by Braxton Lumber tolled the six-year statute of limitations on its lawsuit. View "Braxton Lumber Co. v. Lloyd's Inc." on Justia Law

Insured Kourtni Martin suffered serious injuries from an automobile collision in Oklahoma City with Nicholas Gray. At the time of the collision, Insured had UM coverage with Goodville Mutual Casualty Company. The policy was purchased by her parents while they lived in Kansas. She was, however, a listed/rated driver in the policy. Before the collision, Martin's parents notified the Kansas agent that she was moving to Oklahoma to live with her grandmother and that her vehicle would be garaged in Oklahoma. After the collision, the claim was reported to the agent in Kansas who then transmitted the claim to Insurer which was located principally in Pennsylvania. The claim was adjusted out of Pennsylvania. Martin was unable to locate Gray. Her attempts to serve Gray, or his insurer, in Oklahoma and Texas failed. Martin filed this lawsuit against Gray alleging negligence (later adding breach of contract and bad faith against her Insurer). After service by publication, Gray answered asserting a general denial. Martin sought compensation from the Insurer pursuant to her UM policy and negotiations began between Insured and Insurer regarding medical bills and projected future medical bills substantially in excess of $100,000. Insurer offered $27,000 for medical expenses under the "Kansas No Fault Benefits" and $10,000 in UM coverage. The trial court, after reviewing the policy at issue here, applied Kansas law to this case and dismissed Martin's bad faith claim against the Insurer (with prejudice). After review, however, the Oklahoma Supreme Court concluded the trial court erred in applying Kansas law, finding that the actions by Insurer related to the bad-faith claim appear to have occurred primarily in Oklahoma and Pennsylvania: (1) any injury from the alleged bad faith occurred in Oklahoma where Insured is located; (2) the alleged conduct causing injury from bad faith occurred in Oklahoma or Pennsylvania, where the claim was handled; (3) the domicile of Insurer and Insured are Pennsylvania and Oklahoma, respectively, and (4) the place where the relationship between the parties occurred had yet to be determined. However, because the trial court did not apply the "most significant relationship test," there was no evaluation of these factors according to their relative importance. Despite the parties' voluntary settlement of this case, the Supreme Court nevertheless remanded this case for the trial court to make findings with respect to the "most significant relationship test," and then to dismiss. View "Martin v. Gray" on Justia Law

Harris Management and JJR Associates filed a complaint against Paul Coulombe and two LLCs under his control (collectively, Defendants), alleging seven causes of action arising from allegations that Coulombe had misrepresented his commitment to hire Harris Management to manage a golf course, which Coulombe was preparing to purchase, in an effort to obtain nearby property from JJR Associates at a discount and to prevent Harris from purchasing the golf club. During discovery, the court entered an order providing that Coulombe must permit Harris to discover the communications among Coulombe, his counsel, and a third party, concluding that those communications were either not subject to the attorney-client privilege or were discoverable because the crime-fraud exception to the attorney-client privilege applied. The Supreme Judicial Court affirmed the judgment except with respect to one communication that the Court concluded the trial court must consider further on remand, holding that, with the exception of those pages, the court did not abuse its discretion in ordering the release of specific communications between Coulombe and his attorneys. View "Harris Management, Inc. v. Coulombe" on Justia Law

Defendant Veterans Parkway Developers, LLC (“VPD”) appealed a Superior Court order granting injunctive relief and requiring an accounting in this suit by RMW Development Fund, II, LLC (“RMW”) stemming from VPD’s management of Veterans Parkway Apartments, LLC (the “Company”). The order at issue granted RMW an interlocutory injunction: (1) enjoining VPD from using funds in its possession or control to construct a second entrance to an apartment complex in Columbus (the “Property”), constructed and managed by the Company; (2) prohibiting VPD from using funds for any purpose other than the normal day-to-day expenses of the Property; and (3) requiring VPD to submit a monthly report of its expenses to the superior court, with copies to counsel for the parties. RMW filed suit against VPD alleging VPD’s breach of contract by its entering into an unauthorized management agreement and thereby paying an unauthorized management fee, and a claim for “promissory estoppel,” stemming from VPD’s alleged failure to use some of the Company’s funds for partial repayment of a development loan; RMW asked for VPD’s removal as manager of the Company and for the costs of litigation. Prior to the filing on the complaint, the Company had purchased a 60-foot strip of land for the purpose of creating a second entrance to the Property. At a hearing on the injunction, RMW argued that it could not undo any construction of the second entrance to the Property. VPD countered that RMW was, in reality, concerned about money being spent on the construction of the second entrance instead of being used to repay the loans made by RMW, and that any appropriate redress was monetary damages. Ultimately the injunction was granted and VPD appealed. The Supreme Court found after review of this matter that the trial court's injunction was not supported by the record, and that court abused its discretion in granting the injunction. The Supreme Court reversed the trial court and remanded this matter for further proceedings. View "Veterans Parkway Developers, LLC v. RMW Development Fund II, LLC" on Justia Law

This case arose out of the purchase of a used 2007 BMW vehicle by plaintiff-appellant Michael Tun from defendant-respondent Plus West LA Corporation, dba CA Beemers (CA Beemers). Defendant-appellant Wells Fargo Dealer Services, Inc., an incorporated division of Wells Fargo Bank, N.A. (collectively Wells Fargo), subsequently accepted assignment of Tun's retail installment sales contract (RISC) under an agreement with CA Beemers and/or defendant and respondent West LA Corporation, dba California Beemers (California Beemers) (sometimes collectively dealer). Tun listed 11 causes of action in a third amended complaint, all based primarily on his contention that dealer knowingly and intentionally failed to disclose that the vehicle had suffered "frame/unibody damage" from a prior collision, which damage Tun further alleged "existed at the time it was sold" to him and which "substantially decreased the value of the vehicle." Tun alleged he first learned the vehicle had been in a prior collision when he took it to a mechanic near his home, after he experienced problems while driving the vehicle. After a multi-day trial, the jury returned a verdict in favor of the dealer, finding dealer had not committed fraud, breached its contract with Tun or otherwise engaged in conduct that violated the Consumers Legal Remedies Act. The jury also found that Wells Fargo was not derivatively liable as holder of the RISC. Following the verdicts, the trial court granted Tun's new trial motion only as to Wells Fargo, despite the fact Wells Fargo was only liable to the extent, if at all, dealer was liable. In granting the motion, the trial court determined it had erred in ruling pretrial that Tun could not comment to the jury regarding Wells Fargo's tender under section 2983.4—a statute awarding a party prevailing under the Automobile Sales Financing Act (hereafter ASFA) reasonable attorney fees and costs—of the amount Tun had paid under the RISC ($15,700). Wells Fargo appealed, arguing that the court had correctly ruled in limine that Tun could not comment on Wells Fargo's tender under section 2983.4 because that tender could not be treated as a judicial admission of liability; that the tender was irrelevant to the issues decided by the jury, which focused on the conduct of dealer in connection with the sale of the vehicle; that, even assuming error, Tun could not establish prejudice; and that the new trial order was improper because there were no issues left to try, inasmuch as Wells Fargo's liability, if any, was derivative of dealer's, and dealer was exonerated. After review, the Court of Appeals concluded the trial court erred in granting Tun a new trial against Wells Fargo because the Court concluded the court's pretrial ruling precluding comment on the Wells Fargo tender was not legal error. The Court rejected Tun's cross-appeal. View "Tun v. Wells Fargo Dealer Services" on Justia Law

Petitioner Arnold Calderon was injured in a vehicle accident with an uninsured motorist. At the time, petitioner was insured with respondent American Family Mutual Insurance. American Family paid the policy limit to petitioner's medical providers; it denied payment with respect to his uninsured/underinsured (UM/UIM), disputing the amount of petitioner's damages. A jury returned an award in petitioner's favor. The trial court offset the amount of the jury award by the amount already paid to the medical providers. Petitioner argued on appeal of that offset, that the "MedPay" coverage was separate from the UM/UIM coverage, and that the MedPay amount should not have been deducted. The Supreme Court reversed, finding that the amount of UM/UIM coverage, as listed in petitioner's policy, in this case should not have been reduced by the MedPay amount. View "Calderon v. American Family Mutual Insurance Company" on Justia Law

Vernon Smith appeals the district court’s award of attorney fees to Treasure Valley Seed Company, LLC and its owner Don Tolmie (collectively TVSC). This case arose out of a contract for the sale of lima beans between Victoria H. Smith and TVSC. In 2013, Victoria’s son, Vernon, filed a complaint against TVSC alleging claims for breach of the lima beans contract. As plaintiff, the complaint named “VICTORIA H. SMITH, by and through her attorney in fact, Vernon K. Smith, by and through his Durable and Irrevocable Power of Attorney.” In 2014, TVSC learned Victoria had died on September 11, 2013—roughly three months before the complaint was filed. TVSC then moved to dismiss the complaint, contending there was no real party in interest. Vernon responded and argued he was the real party in interest because of his durable and irrevocable power of attorney. The district court concluded Vernon’s power of attorney had terminated at Victoria’s death. Further, the district court reasoned that because no personal representative had been appointed through probate, there was no real party in interest. Accordingly, the district court granted TVSC’s motion to dismiss. Vernon appealed. The Supreme Court found, after review of this matter: (1) there was indeed a real party in interest; and (2) the district court erred by assessing attorney fees jointly and severally against Victoria and Vernon. The matter was remanded for further proceedings. View "Smith v. Treasure Valley Seed Co." on Justia Law

Appellants DOT Compliance Service (“DOT Compliance”), Jeff Minert, David Minert, and Ryan Bunnell appealed a jury verdict finding that DOT Compliance and Bunnell tortiously interfered with Respondent Drug Testing Compliance Group, LLC’s (“DTC Group’s”) customer contracts and that Jeff and David Minert violated the covenant of good faith and fair dealing by disparaging DTC Group in violation of a settlement agreement entered into by the parties. DTC Group brought this suit alleging that DOT Compliance, through its owners and employees was calling DTC Group’s customers, asking them to cancel their service, and making disparaging comments about DTC Group. after careful consideration of the trial court record, the Supreme Court found that the trial court erred: (1) in denying Appellants' motion for a directed verdict on the tortious interference with contract claim; and (2) in denying Appellants' motion for JNOV on the breach of implied good faith and fair dealing claim against Jeff and David Minert. The trial court judgment was reversed and the matter remanded for further proceedings. View "Drug Testing Compliance Grp v. DOT Compliance Service" on Justia Law