Justia Wisconsin Supreme Court Opinion SummariesArticles Posted in Business Law
Veritas Steel, LLC v. Lunda Construction Co.
The Supreme Court affirmed the decision of the court of appeals affirming the circuit court's grant of summary judgment to Veritas Steel, LLC on Lunda Construction Company's successor liability claim, holding that neither the de facto merger nor the mere continuation exceptions to the rule against successor liability applied in this case to impose successor liability on Veritas, and Lunda forfeited its argument that the fraudulent transaction exception applied. Lunda alleged that Veritas and third-party defendants took unfair advantage of DPM Bridge LLC's loan defaults with the intent to gain ownership of PDM's steel fabrication business. The circuit court granted summary judgment to Veritas on the successor liability claim. The court of appeals affirmed. The Supreme Court affirmed, holding (1) because Lunda did not establish a genuine issue of material fact as to identity of ownership between Veritas and PDM, it could not satisfy the de facto merger or mere continuation exceptions to the rule against successor liability; and (2) by not raising the fraudulent transaction exception before the court of appeals, Lunda forfeited its claim for successor liability based on that exception. View "Veritas Steel, LLC v. Lunda Construction Co." on Justia Law
Marx v. Morris
In this case brought by two members of an LLC against another member after the LLC sold valuable assets to a company owned by the defendant, the Supreme Court affirmed the decision of the circuit court denying the defendant's motion for summary judgment on the plaintiffs' claim that the defendant willfully failed to deal fairly with them while having a material conflict of interest, holding that there were genuine issues of material fact as to whether the defendant violated Wis. Stat. 183.0402(1). Daniel Marx and Michael Murray brought this action against Richard Morris, alleging that Morris violated the Wisconsin Limited Liability Company Law, Wis. Stat. ch. 183 and alleging a number of common-law claims involving improper self-dealing. Marx and Murray brought their claims in their individual LLC and personal capacities. The circuit court denied Morris's motion for summary judgment. The Supreme Court affirmed and remanded for further proceedings, holding (1) the members of an LLC have standing to assert individual claims against other members and managers of the LLC based on harm to the members or harm to the LLC; and (2) there were genuine issues of material fact as to whether Morris violated section 183.0402(1) by dealing unfairly with Marx and Murray, and potentially with regard to the common law claims. View "Marx v. Morris" on Justia Law
Koss Corp. v. Park Bank
The Supreme Court affirmed the court of appeals’ decision affirming the circuit court’s dismissal of Koss Corporation’s claim that Park Bank acted in bad faith in processing transactions initiated by Sujata Sachdeva and affirmed the dismissal of Park Bank’s third-party claims, holding that Park Bank was not liable to Koss Corporation. The circuit court granted summary judgment in favor of Park Bank on Koss Corporation’ Uniform Fiduciaries Act (UFA) claim. The court of appeals affirmed. The Supreme Court affirmed, holding (1) Wis. Stat. 112.01(1)(c) describes the term “good faith” as honest bank acts, even when negligently done, and “bad faith” pursuant to section 112.01(9), an intentional tort, may be shown by acts evidencing bank dishonesty; and (2) Koss Corporation failed to offer evidence of bank dishonesty on the part of Park Bank, and therefore, Park Bank was not liable for the intentional tort of bad faith. View "Koss Corp. v. Park Bank" on Justia Law
Winebow, Inc. v. Capitol-Husting Co., Inc.
A wine grantor-dealer relationship is not included within the definition of a dealership in Wis. Stat. 135.02(3)(b). The United States Court of Appeals for the Seventh Circuit certified to the Supreme Court the question answered above in order to determine whether Winebow, Inc.’s attempt to end its business relationship with two wine distributors was governed by the unilateral termination limitations of the Wisconsin Fair Dealership Law (WFDL), Wis. Stat. 135.03. Winebow argued that its unilateral termination of its relationship with the distributors was permissible because the parties’ business relationship was not an “intoxicating liquor” dealership entitled to the protections of the WFDL. The Supreme Court held that the operative definition of “intoxicating liquor” for purposes of Wis. Stat. ch. 135 explicitly excludes wine, and therefore, a wine grantor-dealer relationship is not included within the definition of a dealership in section 135.02(3)(b). View "Winebow, Inc. v. Capitol-Husting Co., Inc." on Justia Law
Sands v. Menard, Jr.
Debra Sands appealed the grant of summary judgment in favor of Menard, Inc. Sands and John Menard, Jr., were involved in a romantic relationship from late 1997 to April 2006. Sands alleged that from 1998 until 2006 she cohabitated with Menard and they engaged in a "joint enterprise" to work together and grow Menard's businesses for their mutual benefit. Menard and his affiliated entities argued that by failing to comply with Supreme Court Rule 20:1.8(a), which regulated business transactions between lawyers and their clients, Sands was precluded from seeking an ownership interest in any of Menard's various business ventures. As to the claim she characterized as a “Watts” unjust enrichment claim, the Wisconsin Supreme Court concluded Sands failed to allege facts which, if true, would support her legal conclusion that she and Menard had a joint enterprise that included accumulation of assets in which both she and Menard expected to share equally. Furthermore, the Court held SCR 20:1.8(a) could guide courts in determining required standards of care generally; however, it could not be used as an absolute defense to a civil claim involving an attorney. Finally, the Court concluded the court of appeals properly granted summary judgment to Sands on Menard, Inc.'s counterclaim for breach of fiduciary duty, and to the Trustees on their motion for summary judgment dismissing Sands' claim. View "Sands v. Menard, Jr." on Justia Law
North Highland Inc. v. Jefferson Machine & Tool Inc.
The Supreme Court affirmed the grant of summary judgment in favor of Frederick Wells, holding that North Highland, Inc. failed present sufficient evidence to support either its claim of conspiracy to breach a fiduciary duty or its claim of misappropriation of a trade secret. North Highland alleged that Wells conspired to breach a fiduciary duty that a former North Highland employee owed to the company and that Wells misappropriated a trade secret. The court of appeals affirmed the circuit court order, concluding that North Highland failed to set forth facts establishing that there was a conspiracy or that a trade secret was misappropriated. The Supreme Court affirmed, holding that the record was insufficient to support a conspiracy claim or a misappropriation of a trade secret claim. View "North Highland Inc. v. Jefferson Machine & Tool Inc." on Justia Law
Benson v. City of Madison
The Supreme Court reversed the decision of the court of appeals, which affirmed the circuit court’s judgment dismissing a lawsuit filed by Petitioners, four golf professionals, against the City of Madison (the City pursuant to the Wisconsin Fair Dealership Law (the WFDL). Petitioners filed a lawsuit against the City after the City informed them that it would not be renewing operating agreements with Petitioners to oversee clubhouse operations at certain golf courses. Petitioners alleged that the City failed to comply with the WFDL in ending the City’s relationship with them and seeking damages. The circuit court granted summary judgment to the City, concluding that the relationships between Petitioners and the City did not constitute “dealerships” protected by the WFDL. The court of appeals affirmed. The Supreme Court reversed, holding (1) the WFDL applies to the City; (2) the relationships between Petitioners and the City are “dealerships” under the WFDL; and (3) Petitioners’ lawsuit is not time-barred, and the City is not immune from the lawsuit. View "Benson v. City of Madison" on Justia Law
Data Key Partners v. Permira Advisers, LLC
After Defendant-directors decided to sell their interest in Renaissance Learning, Inc. to Permira Advisers, LLC, Plaintiffs brought this lawsuit, contending that Defendants breached their fiduciary duty to the minority shareholders by selling Renaissance because Defendants “put their personal interest in monetizing their holdings in the Company…ahead of…the Company’s minority shareholders.” The circuit court dismissed the complaint for failure to state a claim, concluding that the business judgment rule protected the directors’ actions and that Defendants violated no legal duty when they chose to sell Renaissance to Permira. The court of appeals reversed in part, concluding that the business judgment rule should not be used to dismiss a complaint. The Supreme Court reversed, holding (1) the business judgment rule, which is a substantive law, unequivocally sets forth the terms on which directors may be held liable for their decisions, and as such, a party challenging the decision of a director must plead facts sufficient to plausibly show that he or she is entitled to relief; and (2) Plaintiffs’ complaint did not plead facts sufficient to plausibly show that Defendants’ actions came within the terms of potential liability or that the directors received an improper material benefit at the expense of the minority shareholders. View "Data Key Partners v. Permira Advisers, LLC" on Justia Law
Beidel v. Sideline Software, Inc.
Plaintiff was a minority shareholder in Defendant, a company that served the fantasy football league market. Plaintiff sought specific performance of the stock repurchase agreement that he and the majority shareholder had signed. At issue was whether Defendant should pay only the appraised value for Plaintiff's shares or whether Defendant should pay the stipulated share price, which was approximately six times more, where Defendant delayed terminating Plaintiff's employment until the stipulated price expired. The circuit court granted summary judgment for Defendant. The court of appeals reversed, concluding that this case required balancing of the equities that were due to a specific performance claim and consideration of the potential application of the covenant of good faith and fair dealing. The Supreme Court affirmed and remanded for the circuit court's determination of "where the bulk of the equities lie, including an evaluation of what the parties intended when they agreed to the stock repurchase agreement, and whether it should grant specific performance" as Plaintiff requested.View "Beidel v. Sideline Software, Inc." on Justia Law
Paul Davis Restoration of Se. Wis., Inc. v. Paul Davis Restoration of Ne. Wis.
This case arose from territory-related disputes between two franchisees, Paul Davis Restoration of S.E. Wisconsin, Inc. (Southeast) and Paul Davis Restoration of Northeast Wisconsin (Northeast). The results of an arbitration process included an award for Southeast against Northeast, which is the name under which EA Green Bay, LLC (Green Bay) did business. Green Bay opposed the subsequent garnishment action on the grounds that the judgment, entered against Northeast only, was unenforceable. The circuit court held that any valid judgment against Northeast was also enforceable against Green Bay. The court of appeals reversed. The Supreme Court reversed, holding (1) if the name under which a person or corporation does business is simply another way to refer to a single legal entity and constitutes no entity distinct from the person or corporation who does business, then a judgment against the "doing business as" or "d/b/a" name is enforceable against the legal entity from which it is indistinct; and (2) therefore, the judgment against Green Bay's d/b/a designation, Northeast, was enforceable against Green Bay.View "Paul Davis Restoration of Se. Wis., Inc. v. Paul Davis Restoration of Ne. Wis." on Justia Law