News

Case Summaries

Securities Law

[08/26] Bank of Am., N.A. v. UMB Fin. Servs., Inc.
In an appeal from a series of orders in which the district court declined to compel plaintiff to submit to arbitration and declined to stay litigation pending the outcome of such arbitration, the orders are affirmed where: 1) plaintiff never signed an agreement containing an arbitration clause, and the document plaintiff did sign, the employment agreement, did not incorporate the arbitration clause of the FINRA contracts by reference or otherwise; and 2) the court need not reach the question of waiver since the district court properly determined there was no existing right to arbitration in this case.

[08/20] Lustgraaf v. Behrens
In an action for damages arising out of a Ponzi scheme perpetrated by a registered representative of one defendant and general agent of another, the dismissal of the complaint is affirmed in part where the complaint did not allege the additional facts necessary to demonstrate that defendant actually exercised control over its subsidiary's general operations rather than merely possessing the ability to do so. However, the order is reversed in part where plaintiffs met their burden of alleging falsity under the Private Securities Litigation Reform Act.

[08/20] Schleicher v. Wendt
In a securities-fraud suit against some managers of a large, publicly traded financial-services holding company, district court's conclusion that investors can use the fraud-on-the-market doctrine as a replacement for person-specific proof of reliance and causation in granting the class certification is affirmed as, the district court assured itself that the market for the company's stock was thick enough to transmit defendants' statements to investors by way of the price, and as such, the district court did not commit a legal error, or abuse of discretion, in deciding that the fraud-on-the-market doctrine should not be conscripted to serve some other function.

[08/18] In re: Mercury Interactive Corp. Sec. Litig.
In a securities class action, the district court's order awarding attorneys' fees of twenty-five percent of the $117.5 million settlement fund to class counsel is vacated where the district court erred under Federal Rule of Civil Procedure 23(h) in setting the schedule for objecting to counsel's fee request.

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Dispute Resolution & Arbitration

[08/31] Cent. States Southeast & Southwest Areas Pension Fund v. O'Neil Bros. Transfer & Storage Co.
In a multi-employer pension fund administrator's suit against an employer seeking interim payment of withdrawal liability under the Employee Retirement Income Security Act, district court's grant of summary judgment for administrator is affirmed as defendant's default is governed by the provisions of 29 U.S.C. section 1399(c)(5)(B), and under that section, as interpreted reasonably by the Pension Benefit Guaranty Corporation (PBGC), the entire amount of the withdrawal payment is immediately payable upon default and that obligation is not deferred because of the pendency of arbitration.

[08/31] Cotchett, Pitre & McCarthy v. Universal Paragon Corp.
In defendant's suit against a law firm, claiming that an arbitrator's award of $7,554,149.13 in attorney fees and expenses for the law firm, related to its representation of defendant in an underlying complex environmental litigation, is unconscionable and violates public policy, superior court's affirmance of the award is affirmed as, assuming that defendant's claim of unconscionability is subject to judicial review as a predicate for determining whether the arbitration award violates public policy, the claim is rejected on the merits as neither the fee agreement nor the award actually issued by the arbitrator is unconscionable under rule 4-200 of the Rules of Professional Conduct.

[08/30] Next Step Med. Co., Inc. v. Johnson & Johnson Int'l

[08/30] Critzer v. Enos
In plaintiffs' suit against a homeowners association (HOA), and a property owner and its successor in interest, involving a dispute concerning a window installed in defendant-property owner's upstairs bathroom, trial court's order enforcing the parties' settlement is reversed where: 1) the order enforcing the settlement finally determined the rights of the parties, and therefore, the order is amended to include an appealable judgment; and 2) because there was neither an oral settlement all parties personally agreed upon, nor a written settlement signed by all of the parties, the court lacked authority under the summary procedure of section 664.6 to enforce any settlement.

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Banking Law

[08/31] Force Framing, Inc. v. Chinatrust Bank
In plaintiff's suit against defendant-lender for a bonded stop notice, trial court's grant of defendant's motion for summary judgment because plaintiff served the statutorily required 20-day preliminary notice on another lender, and not defendant, is reversed where: 1) the trial court erred when it granted summary judgment because there is a triable issue of fact regarding the reasonableness of plaintiff's belief that another lender was the lender for the project; 2) defendant's argument that plaintiff could not have held a good faith belief that the other lender was the actual lender because plaintiff did not check the county records for the deed of trust that the lender recorded in 2005 is rejected; and 3) the court is not persuaded that, as a matter of law, pursuant to Kodiak, plaintiff had constructive notice that defendant was the actual lender and could not have held a good faith belief that the other lender was the actual lender.

[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] Lechoslaw v. Bank of America
In plaintiff's suit against a bank for damages, claiming that a four-and-a-half month delay in receiving his $31,787.34 disrupted the construction of a motel and restaurant in Poland and caused him severe emotional distress, judgment of the district court is affirmed where: 1) plaintiff has failed to meet his burden of proving that the Bank in Poland met the requirements for the exercise of personal jurisdiction, and trial court did not abuse its discretion in finding that the Bank did not waive its defense of lack of personal jurisdiction; 2) there was no abuse of discretion on the facts in the court's exclusion of the statement as offered against Bank of America (BoA); 3) there was no evidence that BoA violated chapter 93A in any of its dealings with plaintiff, and the district court properly entered judgment in its favor; and 4) it was not an abuse of discretion for the courts not to reopen discovery according to the Hague Convention.

[08/27] Jefferson State Bank v. Lenk
In an estate administrator's suit against a bank to recover money as a result of unauthorized transactions, approximately two years before she was appointed as the administrator, judgment of the court of appeals' is reversed and judgment is rendered in favor of the bank as the statute of repose in section 4.406 of the Business and Commerce Code bars the administrator's claims because she failed to notify the bank of any unauthorized transactions within sixty days of being appointed estate administrator.

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