Justia Maryland Court of Appeals Opinion SummariesArticles Posted in Business Law
Bontempo v. Lare
Petitioner, a former employee and a minority shareholder in Quotient Inc., filed this action alleging that he had been oppressed by Clark Lare, whose shares together with those owned by his wife, Jodi Lare, were the majority interest in Quotient. The trial court found that Clark oppressed Petitioner by firing him for refusing to sell his shares. The court ordered an accounting and awarded Petitioner damages, unpaid corporate distributions, and attorneys’ fees. The court, however, declined to dissolve Quotient, to require Quotient to reinstate Petitioner as an employee, or to award other employment-related relief. The court also found that Petitioner failed to meet his burden of proving that Clark’s actions were fraudulent and accordingly declined to award punitive damages. The Court of Appeals affirmed, holding that the trial court did not abuse its discretion in deciding on appropriate relief. View "Bontempo v. Lare" on Justia Law
Posted in: Business Law
Schlossberg v. Bell Builders Remodeling, Inc.
The United States Bankruptcy Court for the District of Maryland submitted to the Supreme Court a certified question of law. The Court reformulated the question to be this: “Under Maryland law, where there is no allegation of common law fraud, may a court disregard the corporate entity and establish personal liability to enforce a paramount equity?” The Supreme Court answered the question in the affirmative, holding that the corporate veil may be disregarded when necessary and personal liability established to prevent fraud or to enforce a paramount equity. View "Schlossberg v. Bell Builders Remodeling, Inc." on Justia Law
Posted in: Business Law
NIHC, Inc. v. Comptroller of the Treasury
Nordstrom, Inc. created several subsidiary corporations, including NIHC, Inc., which engaged in a series of transactions, with each other and with Nordstrom, involving the licensing rights to Nordstrom’s trademarks. The rights to use Nordstrom’s trademarks eventually ended up back with Nordstrom. In the process, Nordstrom’s Maryland taxable income was significantly reduced, and Nordstrom realized a significant gain. The Comptroller of the Treasury issued tax assessments against the subsidiaries’ income, determining that the transactions were an effort to shift income from Nordstrom, where a portion of the income would be taxable by Maryland, to the subsidiaries, where the income would escape Maryland taxation, as the subsidiaries had arguably no nexus to Maryland. The tax court affirmed the assessments against the two subsidiaries, concluding that the activities of the subsidiaries must be considered the activities of Nordstrom, which had a nexus with Maryland, and therefore, the subsidiaries’ income was taxable by Maryland. The circuit court and court of special appeals affirmed. The Court of Appeals affirmed, holding that NIHC did not carry its burden of showing that the Comptroller’s assessment was wrong. View "NIHC, Inc. v. Comptroller of the Treasury" on Justia Law
Posted in: Business Law, Tax Law
Spivery-Jones v. Trans Healthcare, Inc.
In 2009, Trans Healthcare, Inc. (THI) filed a petition requesting that an individual and his firm be appointed as receiver over THI and forty-three related entities. THI’s petition was granted. Approximately eighteen months after the appointment, the receiver requested that a substitute receiver be appointed. The motion was granted. Almost six months later, Francina Spivery-Jones, a creditor, filed a motion to vacate the receivership, challenging the subject matter jurisdiction of the circuit court. The circuit court denied the motion. Spivery-Jones appealed. The court of special appeals dismissed the appeal, concluding that the order denying the motion to vacate the receivership was not a final judgment, nor was it appealable under Md. Code Ann. Cts. & Jud. Proc. 12-303 or under the collateral order doctrine. The Court of Appeals affirmed, holding that Spivery-Jones had no right of appeal pursuant to section 12-303(3)(iv) or the collateral order doctrine. View "Spivery-Jones v. Trans Healthcare, Inc." on Justia Law
Posted in: Business Law, Civil Procedure
CR-RSC Tower I, LLC v. RSC Tower I, LLC
The owners of two properties leased them to developer-tenants for the purpose of building an apartment building on each. As construction was beginning, the landlords breached the leases by refusing to provide estoppel certificates and contesting the tenants' building permits. The landlords' breach prevented the tenants from obtaining financing, which ended the development project. The tenants sued for lost profits. Before trial, the circuit court ruled against the landlords on several motions, holding in part (1) the landlords could not introduce evidence of the 2008 crash in the real estate market to show that the tenants would not have made profits, and (2) the tenants could introduce evidence of the landlords' reasons for breaching, including communications with their former counsel. The jury awarded the tenants over $36 million in damages, holding the landlords jointly and severally liable. The court of special appeals held the landlords could not be held jointly and severally liable but otherwise affirmed. The Court of Appeals affirmed, holding (1) the trial court did nor err in excluding all evidence of post-breach market data in measuring damages; and (2) the landlord waived the attorney-client privilege as to communications relevant to the subject matter of the claim of bad faith. View "CR-RSC Tower I, LLC v. RSC Tower I, LLC" on Justia Law
Posted in: Business Law, Construction Law, Contracts, Maryland Court of Appeals
Gomez v. Jackson Hewitt, Inc.
At issue in this appeal was whether the Maryland Credit Services Businesses Act (CSBA) applies to a tax preparer who receives payment from a lending bank for facilitating a consumer's obtention of a refund anticipation loan (RAL) where the tax preparer receives no direct payment from the consumer for this service. In this case, the circuit court dismissed Consumer's CSBA claim for failure to state a claim, concluding that the General Assembly enacted the CSBA to regulate credit repair agencies and not RAL facilitators. The court of special appeals affirmed. The Supreme Court affirmed, holding (1) the plain language of the CSBA most logically is understood as reflecting the legislative intent that the "payment of money or other valuable consideration" in return for credit services flow directly from the consumer to the credit service business; and (2) therefore, under the CSBA, Tax Preparer in this case was not a "credit services business" nor a "consumer"; and (3) accordingly, the CSBA did not apply in this case. View "Gomez v. Jackson Hewitt, Inc." on Justia Law
Posted in: Banking, Business Law, Consumer Law, Maryland Court of Appeals, Tax Law
Boland v. Boland Trane Assocs.
These two consolidated appeals involved two lawsuits, a derivative claim and a direct shareholder action, both arising from a series of stock transactions in two family corporations owned primarily by eight siblings. After the death of one of the sisters, the corporations attempted to repurchase her stock pursuant to the terms of a stock purchase agreement. The sister's estate refused. The corporations filed a declaratory judgment action, seeking enforcement of the agreement. Meanwhile, two siblings, aggrieved by an earlier stock transaction, filed a derivative action, alleging self-dealing and breach of fiduciary duty. The circuit court (1) granted summary judgment in favor of the corporations on the derivative action after deferring to the judgment of a special litigation committee (SLC); and (2) granted summary judgment to the corporation in the declaratory judgment proceeding. The Supreme Court (1) reversed the circuit court's judgment in the derivative action, holding that the court made an inadequate inquiry into the SLC's independence and the reasonableness of its procedures; and (2) reversed in part the circuit court's grant of summary judgment in the declaratory judgment action, holding that the circuit court erroneously applied res judicata to the issue. View "Boland v. Boland Trane Assocs." on Justia Law
Posted in: Business Law, Contracts, Maryland Court of Appeals
Pautsch v. Real Estate Comm’n
The Maryland Real Estate Commission revoked the real estate licenses of Joel Pautsch pursuant to Md. Code Ann. Bus. Occ. & Prof. 17-322(b)(24)(i) based on Pautsch's convictions for child abuse. The circuit court affirmed after finding there was competent, material and substantial evidence to support the Commission's decision. The court of special appeals affirmed. The Court of Appeals affirmed, holding (1) there was substantial evidence upon which the Commission relief to support its finding that there was a nexus between Pautsch's convictions and his professional activities; and (2) the sanction was neither arbitrary nor capricious because Pautsch's crimes undermined his trustworthiness in dealing with the public during the course of providing real estate brokerage services and negatively impacted his character and reputation. View "Pautsch v. Real Estate Comm'n" on Justia Law