Case Summaries

Contracts

[09/03] F.B.T. Prods., LLC v. Aftermath Records
In a dispute concerning the percentage of royalties due to plaintiffs under their contracts with defendant in connection with the recordings of the rapper Eminem, judgment in favor of defendant is reversed and an attorney's fees award in its favor is vacated where: 1) a "Masters Licensed" provision unambiguously applies to permanent downloads and mastertones; and 2) thus, the district court should have granted summary judgment to plaintiffs.

[09/03] SmallBizPros, Inc. v. MacDonald
In an appeal arising from the entry of a contempt order against defendant enforcing a settlement agreement with plaintiff, the contempt order is vacated and remanded where, although the parties and the district court likely intended for the district court to retain ancillary jurisdiction to enforce the terms of the settlement agreement, a stipulation effectively dismissed the case when it was filed, and thus, the district court lacked jurisdiction to enforce the terms of the settlement agreement.

[09/02] Travelers Prop. Cas. Ins. Co. of Am. v. Nat'l. Union Ins. Co.
In an action by one insurer against another seeking $10 million in subrogation proceeds, summary judgment for defendants is affirmed in part where plaintiff waived certain rights by refusing repeated invitations to participate in subrogation discussions. However, the judgment is reversed in part where, as the excess insurer, plaintiff was entitled to a priority interest in the subrogation proceeds representing insured losses.

[09/02] Atlantic Nat'l Trust LLC v. Mt. Hawley Ins. Co.
In an action seeking insurance proceeds arising from a fire, defendants' appeal from the grant of plaintiff's motion to remand is dismissed where the court lacked appellate jurisdiction to review a federal district court order remanding a case to state court based on a ground colorably characterized as a "defect" for purposes of 28 U.S.C. section 1447(c).

[09/02] Bodum USA, Inc. v. La Cafetiere, Inc.
In a suit for common law trade dress of a French-press coffee maker known as the Chambord, district court's judgment in favor of the defendant is affirmed as, Article 4 of the parties' contract is clear and precise as it allows defendant to sell the coffee maker design anywhere except France - provided that it does not use the Chambord or Melior names and does not use plaintiff's supply channels for four years.

[09/01] US ex rel. SNAPP v. Ford Motor Co.
District court's denial of plaintiff's motion to file a second amended complaint concluding that the proposed amended complaint, which included a list of contracts that the government allegedly entered into as a result of fraudulent representations on the part of Ford, did not allege with sufficient particularity the existence of a "claim" as defined by the False Claims Act (FCA), is affirmed as, because no holding of Bledsoe II affected the circuit's law on the questions at issue before the district court, the district court did not abuse its discretion in holding that its original rationale for not permitting plaintiff to file its second amended complaint pursuant to Rule 59(e) still obtained and that permitting such a filing was not otherwise "required in order to prevent an injustice."

[09/01] Hinerfeld-Ward, Inc. v. Lipian
In a general contractor's suit against homeowners for breach of oral contract, quantum meruit, wrongful withholding of progress payments, and related cause of action, the judgment of the trial court is affirmed as, the oral contract was enforceable and the contractor is entitled to attorney fees for the homeowners' delay in making progress payments.

[09/01] Smith v. Selma Cmty. Hosp.
In plaintiff's successful suit against a hospital to have his hospital privileges reinstated, trial court's denial of his motion for attorney fees is reversed and remanded where: 1) when the conditions contained in section 809.9 are shown, the prevailing party is entitled to attorney fees; 2) the statutory phrase "frivolous, unreasonable, without foundation, or in bad faith," set forth separate grounds for an award of attorney fees; 3) the terms "frivolous," "unreasonable" and "without foundation" are objective standards that might overlap; 4) the term "bad faith" is a subjective standard concerned with a defendant's motives for defending or litigating a lawsuit; and 5) because a defendant's subjective state of mind is usually proven by circumstantial evidence, a defendant's prelitigaton conduct and postlitigation conduct are relevant evidence from which inferences can be drawn regarding its motives in defending or litigating a lawsuit.

[08/31] Hayes Lemmerz Int'l, Inc. v. ACE Am. Ins. Co.
In an employer's suit against its insurer for refusing to tender defense in an underlying suit under its workers' compensation and employer liability policy, judgment of the district court in favor of the insurer is affirmed as, because defendant was, by virtue of Indiana law, a joint employer, insurer was contractually obligated to reimburse the reasonable expense of defendant's getting itself dismissed from the tort suit. However, because the defendant is not claiming that insurer refused to pay that amount, but rather, it is complaining that the insurer breached its duty to defend by failing to advise defendant that it's law firm was not defending the suit properly, the insurer had no duty to provide its insured's lawyers with legal advice.

More...

Corporation & Enterprise Law

[09/03] Superior Seafoods, Inc. v. Tyson Foods, Inc.
District court's denial of plaintiff's Rule 60(d)(3) motion to vacate an underlying consent judgment involving a series of trademark-related actions stemming from plaintiff's sale of a seafood-products business to defendant is affirmed as, given the facts, and given the equitable requirement that the party seeking relief be free from negligence and fault, the district court clearly did not abuse its discretion in finding equitable relief inappropriate in this case.

[08/30] Metavante Corp. v. Emigrant Savings Bank
In plaintiff's suit for breach of contract against defendant-bank for nonpayment of fees under the parties' Technology Outsourcing Agreement, judgment of the district court is affirmed where: 1) an expert's testimony was both relevant and reliable; 2) district court correctly determined that plaintiff did not breach the Agreement's performance warranty and its duty of good faith; 3) district court did not err in concluding that any reliance by defendant on the alleged misrepresentations of plaintiff was not reasonable; 3) district court committed no reversible error in determining that defendant's fraud claims were without merit; 4) district court determined correctly that defendant's success on the in-house issue does not render it a "prevailing party" within the meaning of the contract; and 5) the district court acted within the bounds of its discretion in determining that no additional guarantee of reasonableness was required.

[08/30] Flood v. ClearOne Communications, Inc.
In defendant's appeal from a preliminary injunction requiring defendant-corporation to advance attorney fees and costs to its former CEO, who was then facing a criminal trial, the order is vacated where the district court misread the parties' contract as a matter of law, disregarding express conditions to advancement specified in their agreement.

[08/30] HCM Healthcare, Inc. v. California Ins. Guarantee Ass'n
In a residential nursing facility's suit against California Insurance Guarantee Association (CIGA) for breach of contract and for violating the Insurance Code for refusing to provide plaintiffs with defense counsel and indemnification for underlying lawsuits for elder abuse, judgment in favor of defendant is affirmed where: 1) as a creature of statute, and not of contract, in some instances CIGA may not be responsible for an insured loss to the same extent as the insolvent insurer might be under the terms of its insurance contract; and 2) Pennsylvania's liquidation order imposed a June 30, 2005 deadline for filing against an insurer and because plaintiff did not meet the deadline, CIGA may not honor their claims.

[08/27] Paloian v. Lasalle Bank, N.A.
In a debtor-hospital's trustee's action to recover, as fraudulent conveyances, some loan payments made during the last years before hospital entered bankruptcy, judgment of the district court is vacated and remanded where: 1) LaSalle Bank is an "initial transferee" as an entity that receives funds for use in paying down a loan, or passing money to investors in a pool, is an "initial transferee" even though the recipient is obliged by contract to apply the funds according to a formula; 2) because the hospital was solvent in August 1997, the ensuing months' debt service cannot be recaptured as a fraudulent conveyance; and 3) on remand, the bankruptcy court is instructed to determine whether the transfer of the accounts receivable to MMA Funding was a true sale, such that MMA Funding served as the bankruptcy-proofing intermediary that the lenders desired.

[08/27] Russell v. Comm'r of Internal Rev.
In taxpayers' appeal from the tax court’s decision that several loans did not constitute "indebtedness of the S corporation to the shareholder" such that taxpayers could claim losses incurred by the Missouri River Royalty Corporation (MMRC), the order is affirmed where the court's review of the record revealed no error in the tax court's rulings.

[08/25] Waldner v. Carr
In a breach of contract action arising from failed negotiations for the acquisition and management of a financially struggling trucking company, summary judgment for defendants is affirmed where: 1) the alleged contract was merely an agreement to agree in the future and did not constitute a valid contract because the necessary Stock Purchase Agreement was never signed by the parties; and 2) because the memorandum explicitly stated that it was not the final contract, plaintiff could not have justifiably relied on its contents.

[08/24] Quinn v. Anvil Corp.
In a derivative action seeking damages from Anvil Corporation, its board of directors, and others for breach of fiduciary duty, breach of contract, and negligence, dismissal of the action for lack of standing is affirmed where, lacking shares, plaintiff lost standing to assert claims derivatively on behalf of the corporation under Federal Rule of Civil Procedure 23.1's continuous ownership requirement.

[08/24] Worldmark, The Club v. Wyndham Resort Dev. Corp.
Trial court's denial of a nonprofit mutual benefit corporation's petition to set aside a member's section 8330 demand on the ground that it had satisfied its statutory obligations in proposing an alternative is affirmed and modified where: 1) the information the member seeks, including email addresses, shall be made available to him in electronic form at his option and no further written demand is necessary; 2) if any member's address is not in electronic form, the corporation shall provide a written copy of such address to the member; 3) the member or his appointed representative must acknowledge in writing his agreement not to use or allow use of the membership information for commercial or other purposes not reasonably related to the affairs of the corporation.

More...

Trademark

More...

Tax Law

[09/02] Bale Chevrolet Co. v. US
In a petition for review of intentional disregard penalties issued against petitioner for failing to file required Forms 8300 information returns with the IRS, the petition is denied where the government's positions were substantially justified.

[09/01] Hongsermeier v. Comm'r of Internal Rev.
The tax court's determination of petitioners' federal income tax deficiencies and liability for underpayment of interest is affirmed where: 1) the tax court's determination of the percentage deduction in the taxpayers' deficiencies, plus other benefits, accorded with the court's mandate in Dixon and was not an abuse of discretion; 2) the IRS Commissioner's position did not constitute fraud on the court or bad faith; and 3) the Tax Court did not abuse its discretion in relying on the materials available to determine a settlement fraction.

[08/30] US v. Blanchard
Conviction of defendant for failure to account for and pay over-withholding and FICA taxes and making and causing the making of a false claim for a tax refund is affirmed where: 1) offenses under section 7202 are covered by section 6531(4)'s six-year limitations period; 2) district court did not err in admitting evidence regarding discretionary expenditures; 3) while a defendant's inability to pay taxes when due bears on the willfulness of his act, it is not an element of the offense under 26 U.S.C. section 7202; 4) district court did not err in refusing to give defendant's proposed jury instructions; 5) sufficient evidence supported defendant's convictions under section 287; and 6) district court's restitution order is vacated and remanded.

[08/30] US v. Kloehn
Defendant's conviction and sentence for four counts of causing tax evasion are reversed where the district court abused its discretion and prejudiced defendant's ability to present his defense when it refused to continue the trial for two days to allow him to see his dying son.

[08/27] US v. Pfaff
In a tax evasion prosecution, the fine imposed on one defendant is vacated where the district court plainly erred in imposing a fine, pursuant to 18 U.S.C. section 3571(d), based on the court's finding that defendant caused a certain pecuniary loss, when that fine exceeded the maximum fine that would have been permitted absent the finding.

[08/27] Russell v. Comm'r of Internal Rev.
In taxpayers' appeal from the tax court’s decision that several loans did not constitute "indebtedness of the S corporation to the shareholder" such that taxpayers could claim losses incurred by the Missouri River Royalty Corporation (MMRC), the order is affirmed where the court's review of the record revealed no error in the tax court's rulings.

[08/25] Giacometti v. Aulla, LLC
In employees' suit for professional negligence against an accounting firm, claiming that the firm negligently or fraudulently over-reported income on their W-2 forms by including tip money taken by the restaurant managers as income to the employees, trial court's order sustaining the demurrer to the employees' second amended complaint against the firm for professional negligence without leave to amend is affirmed where: 1) there are no allegations in the charging complaint that the accountants knew that the restaurant's representation of employees' income was wrong at the time they prepared these documents, and there are no allegations that the accountants were hired to calculate, or in fact did calculate, employees' income for purposes of year-end reporting; and 2) the accountants did not owe the employees a duty of care under the negligence theory alleged in the second amended complaint.

[08/19] US v. Kottwitz
Defendants' convictions for tax fraud-related charges are affirmed in part where the circumstantial evidence was sufficient for the jury to have concluded beyond a reasonable doubt that defendants entered into the charged conspiracy. However, the convictions are vacated in part where: 1) the district court erred in refusing to give defendants' requested special instruction to the jury on their good faith reliance on their accountant's advice; and 2) the evidence was insufficient for a properly instructed jury to convict on the charge of aiding and assisting in the filing of a materially false corporate tax return.

[08/17] City of N.Y. v. Permanent Mission of India to the U.N.
In an action by New York City against certain foreign missions for unpaid property taxes, a denial of defendants' motion to dismiss is reversed where the Notice issued by the Department of State was a lawful exercise of the Department's authority under the Foreign Missions Act, and the Notice operated in this case to render appellants exempt from the property taxes imposed by the City, and so nullified the City's existing tax liens against appellants.

More...

Trade Secrets

More...