Articles Posted in Business Law

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Plaintiff filed a complaint against Defendants alleging breach of fiduciary duty resulting from oppressive conduct, breach of fiduciary duty resulting from self-dealing, fraud in the inducement, and negligent misrepresentation. During trial, Plaintiff produced 155 pages of documents that had not been produced to Defendants during discovery. Defendants argued that they were denied a fair trial because the information contained in the documents would have permitted them to properly cross-examine Plaintiff. The district court dismissed the case with prejudice pursuant to Sup. Ct. R. Civ. P. 37(b) as a sanction for the mid-trial production of documents. The court subsequently denied Plaintiff’s motion to vacate the order of dismissal under Sup. Ct. R. Civ. P. 60(b). The Supreme Court affirmed, holding (1) the trial justice did not err in dismissing Plaintiff’s claim with prejudice pursuant to Rule 37; and (2) the trial justice did not abuse his discretion in denying Rule 60(b) relief. View "Joachim v. Straight Line Prods., LLC" on Justia Law

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This case stemmed from a number of disputes that arose after the defendant corporation, Nuzzo Campion Stone Enterprises, Inc. (NCS), was purchased by its present owner. Plaintiff James Nuzzo alleged that he was owed $133,816 in unpaid commissions on orders that had been placed prior to his termination but not actually paid for by customers of NCS until after his termination. NCS filed a counterclaim for breach of contract, alleging that Plaintiff failed to indemnify NCS for certain amounts covered by the terms of an Asset Purchase Agreement signed by the parties. The trial justice concluded that Plaintiff was not entitled to the disputed commissions and that NCS was due nearly $17,000 for both “work in progress” and warranty work pursuant to the Agreement. The Supreme Court affirmed, holding (1) the trial justice did not err in determining that Plaintiff was not entitled to commissions for orders that had been placed, but not actually paid for, prior to Plaintiff’s termination; and (2) the trial justice did not make “fundamental mistakes regarding the contract and damages” relating to the counterclaim. View "Nuzzo v. Nuzzo Campion Stone Enters., Inc." on Justia Law

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Plaintiffs were a certified class of approximately 14,000 policyholders of Beacon Mutual Insurance Company, a state-chartered workers’ compensation insurance provider. Plaintiffs filed suit against Beacon, alleging that they were denied money that should have been equitably distributed to all policyholders as dividends, among other claims. The superior court dismissed the complaint and entered judgment in favor of Beacon, concluding that Plaintiffs’ claims were derivative in nature and that Plaintiffs failed file suit in accordance with R.I. Gen. Laws 7-1.2-711(c) and Rule 23.1 of the Superior Court Rules of Civil Procedure. Plaintiffs appealed, arguing that their claims met the requirements of a direct, and not a derivative, action and were therefore not subject to the procedural requirements of section 7-1.2-711(c) and Rule 23.1. The Supreme Court affirmed, holding that Plaintiffs’ claims were derivative in nature, and therefore, Plaintiffs were required to comply with the procedural requirements set forth in section 7-1.2-711(c) and Rule 23.1 before they commenced suit. Because Plaintiffs failed to comply with these requirements, the district court’s dismissal of the suit was proper. View "Heritage Healthcare Servs., Inc. v. Beacon Mut. Ins. Co." on Justia Law

Posted in: Business Law

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In 1997, Defendants formed a Vermont corporation called Green Mountain Park, Inc. to reconstruct, revive, and operate a defunct horseracing facility in the Town of Pownal, Vermont. Plaintiff agreed to invest $350,000 in the enterprise. Plaintiff subsequently became a member of the board of directors along with Defendants. A few years later, the project was abandoned due to issues surrounding Green Mountain’s ability to obtain a racetrack license. Defendants filed a complaint against Plaintiff in 2002, and Plaintiff counterclaimed for breach of fiduciary duty, fraud, and breach of contract. Defendants’ complaint was subsequently dismissed, and the case proceeded to trial on Plaintiff’s counterclaims. After a bench trial, the superior court entered judgment for Defendants on all counts. The Supreme Court affirmed, holding that the trial justice did not err in his factual findings and conclusions of law.View "Wilby v. Savoie" on Justia Law

Posted in: Business Law, Contracts

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Lawrence LaBonte, the owner of New England Development RI, LLC (N.E. Development), filed a petition seeking the reorganization and/or the dissolution of N.E. Development. American Steel Coatings, LLC (American Steel) filed a motion to approve secured claim attempting to recover the funds it alleged were owed pursuant to a loan agreement between the parties. The LLC’s permanent receiver and LaBonte objected to American’s motion, asserting that the loan agreement was void because the amount of interest to be charged violated the state’s usury laws. The superior court sustained the objections and voided as usurious the loan agreement. The Supreme Court affirmed, holding that the loan agreement in this case was usurious and, therefore, void. View "LaBonte v. New England Dev. R.I., LLC" on Justia Law

Posted in: Business Law, Contracts

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This litigation stemmed from a dispute over monies allegedly owed to a now-defunct corporation for work performed as part of a construction project that took place in 1990. Plaintiff corporation instituted suit about twenty-two years ago. Seventeen years later, the superior court dismissed the action, finding that Plaintiff could neither maintain the action in its own name nor substitute another entity as Plaintiff. The Supreme Court affirmed, holding that, as a defunct corporation, Plaintiff could no longer maintain this action in its own name, and because the receiver was discharged when Plaintiff was dissolved, the receiver could not maintain the action on its behalf. View "Piccoli & Sons, Inc. v. E & C Constr. Co., Inc." on Justia Law

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After Defendant failed to repay a loan Plaintiff made to him in the amount of $8,500, Plaintiff filed a complaint against Defendant alleging breach of contract and breach of an implied-in-fact contract. Plaintiff later amended his complaint to include a claim for failure to repay based on book account. After a jury, the trial justice ordered Defendant to pay damages to Plaintiff in the amount of $8,500. Defendant appealed, contending that the trial justice erred in finding that Plaintiff was a credible witness and in failing to find that the transaction was void because Plaintiff had allegedly advanced the money to Defendant with the knowledge that it would be used for gambling. The Supreme Court affirmed, holding that the Court had no choice but to uphold the lower court's findings because the Court was not provided with a transcript of the trial below and therefore was unable to properly engage in a review of the trial justice's factual findings. View "Vogel v. Catala" on Justia Law

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Dean Pepper, the owner and sole shareholder of D.F. Pepper Construction (DFP) was driving one of his trucks home in the early winter morning. An icy road caused the truck to slide into Pepper's house and crash through the foundation and west wall. The house was later condemned and demolished as a result of the damage. The house was insured by Nationwide Casualty Insurance Company. Nationwide paid the loss. As subrogee of Pepper, Nationwide then sued DFP, the registered owner of the truck, alleging vicarious liability for the negligence of its employee, Pepper. The superior court issued judgment in favor of Nationwide, finding that Pepper had been negligent and that the antisubrogation rule did not apply in this case. The Supreme Court affirmed, holding that the trial court did not err in its judgment. View "Nationwide Prop. & Cas. Ins. Co. v. D.F. Pepper Constr., Inc." on Justia Law

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Plaintiff was a Massachusetts corporation when it entered into a contract with Defendants. The contract was to be performed entirely in Rhode Island. Defendants subsequently commenced a civil action against Plaintiff. At the time, Plaintiff had a certificate of authority from the secretary of state, but after Plaintiff filed this action, the corporation's certificate of authority was revoked. The superior court granted summary judgment in favor of Defendants, determining that Plaintiff did not have a certificate of authority to transact business in Rhode Island, and therefore, it lacked the capacity to sue in the state. The Supreme Court reversed, holding that a certificate was not required in this instance, but Plaintiff must obtain a certificate before proceeding to final judgment. View "Custom Metals Sys., Ltd. v. Tocci Building Corp." on Justia Law

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Plaintiff filed a civil action against Sportsman's Inn, Inc., a hotel and lounge, and DLM, Inc., the corporation that leased the premises to the hotel, alleging that he was shot as a result of the failure of Defendants to provide adequate security at the business. Several months later, Plaintiff learned that the property where the hotel was located was for sale, and moved for a preliminary injunction. The trial justice granted Plaintiff's motion to enjoin the sale of the property, concluding that Plaintiff had established a likelihood of success that the corporate formalities should be disregarded and that Sportsman's Inn had breached its duty of reasonable care to him. Defendants appealed, contending that the trial justice erred in finding Plaintiff had demonstrated there was a reasonable likelihood of success on the merits of the negligence claim and that the corporate veil should be pierced. The Supreme Court vacated the superior court's order granting a preliminary injunction, holding that Plaintiff did not establish a reasonable likelihood of success on the merits of his underlying negligence claim and that a "piercing of the corporate veil" analysis was unnecessary at this stage of the litigation. View "Vasquez v. Sportsman's Inn, Inc." on Justia Law