Articles Posted in Business Law

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Leonetti's filed suit against Crew for negligence, breach of contract, breach of fiduciary duty, and trade libel. Leonetti's alleged that an email sent by the president of Crew caused Sam's Club to decline to purchase Leonetti's stromboli products. The district court granted summary judgment for Crew on each count except the breach of contract count, which was later dismissed with prejudice. The Eighth Circuit reversed the district court's grant of summary judgment, holding that there was a genuine issue of material fact as to the causation of the project termination. In this case, the district court failed to consider Leonetti's evidence offered to rebut an email explaining that Sam's Club was terminating the project for product quality concerns. View "Leonetti's Frozen Foods,Inc. v. Crew, Inc." on Justia Law

Posted in: Business Law, Contracts

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The Eighth Circuit affirmed the district court's grant of summary judgment to the City and ImOn in an action brought by Mediacom, seeking declarations that certain resolutions were void and that the City could not permit a potential cable provider to construct a "cable system" without acquiring a cable franchise. Mediacom also alleged contract violations, tortious interference, civil conspiracy, and Equal Protection violations, all depending on whether ImOn could lawfully build a fiber-optic network without a franchise. The court held that ImOn's fiber-optic network was not a "cable system," because ImOn has not provided or proposed to provide cable services. Therefore, the agreements at issue authorizing ImOn's construction of a fiber-optic network were not a de facto cable franchise. In regard to Mediacom's equal protection claim, the court also held that the district court properly concluded that ImOn and Mediacom were not similarly situated because only Mediacom was a cable provider in the City, and the district court did not abuse its discretion in denying Mediacom's motion for discovery. View "MCC Iowa v. Iowa City" on Justia Law

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Qwinstar and Pro Logistics entered into an agreement wherein Qwinstar would purchase Pro Logistics and employ its owner for a term of five years. Qwinstar fired the owner a few months after the sale and filed suit alleging that it did not receive the inventory it bargained for in the sale. The owner counterclaimed, alleging breach of the employment contract by not paying him for the full five-year term. The Eighth Circuit held that Qwinstar was unable to prove that the owner breached the contract and thus affirmed the district court's grant of summary judgment to the owner and Pro Logistics. The court held that summary judgment was inappropriate on the owner's counterclaim because the contract provisions were ambiguous and reasonably susceptible to more than one interpretation. Therefore, interpretation becomes a question of fact precluding summary judgment. View "Qwinstar Corp. v. Anthony" on Justia Law

Posted in: Business Law, Contracts

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After ten individuals resigned from West Plains to join a start-up freight brokerage operation founded by the former owner of West Plains, West Plains filed suit. The jury found defendants liable for tortious interference with business relationships and breach of the duty of loyalty. The Eighth Circuit affirmed, holding that, based on the nature and intent of their actions, a jury could reasonably find the employee defendants committed unjust acts of interference; the evidence was sufficient to show defendants' actions caused a loss of profits to West Plains, and that the loss continued after the expiration of the temporary injunction; there was sufficient evidence for a reasonable jury to find the employee defendants breached their duty of loyalty; given the extent to which each employee defendant was involved in the planning of the start up and the time in which they were so committed, there was adequate support for each forfeiture award; and there was abundant evidence showing defendants entered into an agreement tortiously to interfere with West Plains' business or to breach their duty of loyalty. Finally, the court affirmed the district court's denial of defendants' motion for a new trial or altered or amended judgment. View "West Plains, LLC v. Retzlaff Grain Co. Inc." on Justia Law

Posted in: Business Law

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3M filed an insurance claim to recover losses incurred on a number of investments due to fraud perpetrated by its own investment advisors. The Eighth Circuit affirmed the district court's grant of summary judgment to the Insurers, holding that the ownership requirement of Endorsement 8 applies to the Employee Dishonesty provision. Therefore, 3M does not own the stolen earnings and cannot seek coverage for the earnings under the Policy. Until the earnings were distributed to the partners, the stolen earnings were property of WG Trading, not 3M. The court explained that it is fundamental that property acquired with partnership funds is partnership property, and individual partners do not own partnership assets until the winding up of the partnership. Finally, the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., does not alter general commercial property rights, but merely defines the nature and scope of the fiduciary duties owed to plan participants. View "3M v. National Union Fire Insurance" on Justia Law

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The court affirmed the grant of a permanent injunction enjoining BC Cleaners from using Martinizing's trademarks, concluding that Martinizing failed to prove willful infringement by BC Cleaners. Because Martinizing failed to prove that it was entitled to monetary remedies against BC Cleaners, the individual defendants were likewise not liable for damages, an accounting for profits, and attorneys' fees. The court also concluded that the district court did not abuse its discretion in not granting injunctive relief against the individual defendants, because BC Cleaners had agreed to stop using the trademarks. Therefore, the court reversed as to these issues; affirmed the denial of a default judgment against Defendants Lundell and Carver; and remanded with directions to enter amended judgments. View "Martinizing International v. BC Cleaners" on Justia Law

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Plaintiff filed a shareholder derivative action on behalf of Medtronic, Inc., against current and former directors and officers of Medtronic, and against Medtronic as a nominal defendant. Plaintiff's complaint alleged various bad acts and false and misleading statements stemming from Medtronic's alleged improper promotion to physicians of the "off-label" use of its "Infuse" product. The district court dismissed the action based on a report by a special litigation committee (SLC). The court concluded that defendants' motion to terminate the litigation based on the SLC report could not be construed as a motion under Rule 12(b)(6) nor one arising under Rule 56; the court agreed with the district court and the Eleventh Circuit that the closest fit for a motion to terminate in the Federal Rules was Rule 23.1(c); the proper standard of review was for an abuse of the district court's discretion; the district court did not err in deferring to the SLC under Minnesota's business judgment rule (BJR) where the SLC possessed a disinterested independence, and the SLC's investigative methodologies and procedures were adequate, appropriate, and pursued in good faith; and the district court did not abuse its discretion by denying plaintiff's motion for discovery. Accordingly, the court affirmed the judgment. View "Kokocinski v. Collins, Jr." on Justia Law

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Plaintiffs, 92 investors in a Ponzi scheme called the British Lending Program (BLP), filed suit against PNC, alleging, among other things, (1) violations of Missouri's Uniform Fiduciaries Law (UFL); (2) aiding and abetting the breach of fiduciary duties; (3) conspiracy to breach fiduciary duties; and (4) conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(d). Specifically, plaintiffs alleged that PNC's predecessor, Allegiant, conspired with and aided Martin Sigillito in his scheme to defraud investors when it served as custodian for the self-directed IRAs of those who chose to invest in the BLP at its inception. The court granted summary judgment to PNC, concluding that even if the court overlooked plaintiffs' failure to cite any legal authorities in support of their RICO and common-law claims, those claims fail on the merits. In this case, the evidence is insufficient to establish a reasonable fact dispute as to whether Allegiant, PNC's predecessor, objectively manifested an agreement to participate in criminal activity with Sigillito, had a meeting of the minds with Sigillito, or substantially assisted or encouraged Sigillito's conduct. The court also rejected plaintiffs' UFL claim, concluding that no evidence exists that Allegiant processed any transaction with actual knowledge that Sigillito was breaching his fiduciary duties, and the evidence fails to show that Allegiant acted in bad faith. Accordingly, the court affirmed the judgment. View "Aguilar v. PNC Bank, N.A." on Justia Law

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The district court found third-party plaintiff Qwest failed to prove its claims for intentional interference with a business relationship, unfair competition, and unjust enrichment against third-party defendant FC. The court agreed with the district court that FC did not act with an improper purpose when it contracted with Sancom, a local exchange carrier (LEC), because FC was simply attempting to take advantage of the uncertain regulatory scheme at the time; FC had a legitimate argument that it could be considered an “end user,” and thus Sancom could bill Qwest under its tariff for calls delivered to FC’s call bridges; and thus the district court did not err in finding for FC on Qwest's claim for intentional interference with a business relationship. The court predicted that the South Dakota Supreme Court would not recognize a tort of unfair competition under these circumstances, and found that the district court properly rejected this new tort. The court concluded, however, that the district court incorrectly found FC’s conduct was “neither illegal nor inequitable” because it was simply taking advantage of a loophole until the loophole closed, and the district court improperly considered Sancom’s settlement payments to Qwest when it found FC was not unjustly enriched. Therefore, the court reversed and remanded for reconsideration of whether FC was unjustly enriched. View "Qwest v. Free Conferencing Corp." on Justia Law

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Plaintiff filed suit against his brother, an accountant, and a banker, alleging that they siphoned money from the brother's farming business. Plaintiff filed suit against all three, as well as the accountant and banker's employer, for violating the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961-68. The court affirmed the district court's dismissal of the complaint because plaintiff failed to plead the existence of an enterprise whose affairs were supposedly conducted in such an illicit manner. View "Nelson v. Nelson" on Justia Law

Posted in: Business Law