Articles Posted in Business Law

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A subsidiary company brought an action seeking a declaratory judgment against its parent companies, challenging three management agreements by which the parent companies controlled, managed, and participated in the affairs of the subsidiary. The subsidiary argued that two clauses in the agreements were unconscionable because one stated that the parent companies could never be liable to the subsidiary company and the other required the subsidiary to indemnify the parent companies for all legal and liability costs. The circuit court declared that the two clauses at issue were unconscionable and unenforceable. The Supreme Court affirmed, holding that the circuit court did not err in ruling that the two challenged clauses were unconscionable because the clauses were oppressive and unfair. View "Blackrock Capital Investment Corp. v. Fish" on Justia Law

Posted in: Business Law, Contracts

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Plaintiffs worked in coal mining operations under Consolidated Coal Company, a wholly-owned subsidiary of CONSOL Energy, Inc. In 2013, CONSOL sold Consolidated Coal Company to Murray Energy Corporation. Prior to the sale, Plaintiffs’ terms of employment included CONSOL’s Equity Incentive Plan that provided for the award of CONSOL common stock to Plaintiffs in Restricted Stock Units (RSUs). The award of RSUs was subject to a vesting schedule. Pursuant to an Award Agreement, the vesting of RSUs would accelerate upon the occurrence of certain events. The acceleration event in controversy was the phrase “change in control.” At the time of the sale, Plaintiffs had been awarded RSUs. Plaintiffs argued that they were entitled to accelerated vesting of the unvested portion of the RSUs pursuant to the Award Agreement because a “change in control” occurred when CONSOL sold Consolidated Coal Company. CONSOL failed to accelerate the RSUs and asserted that Plaintiffs’ unvested RSUs were forfeited. The circuit court granted summary judgment for Plaintiffs. The Supreme Court affirmed, holding (1) the phrase “change in control” under the Award Agreement necessarily included CONSOL’s subsidiary, Consolidated Coal Company; and (2) the sale of Consolidated Coal Company to Murray Energy Corporation triggered the accelerated vesting of Plaintiffs’ RSUs. View "Consol Energy, Inc. v. Hummel" on Justia Law

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Plaintiffs sued Sugar Rock, seeking a dissolution of partnerships, alleging them to be mining partnerships and attempted to obtain class action status. The circuit court granted plaintiffs partial summary judgment, finding that the partnerships should be dissolved, and appointed a special receiver and a distribution company to achieve that result. The Supreme Court of Appeals reversed, finding genuine issues of material fact and questions of law regarding the type of partnerships involved in the case, the parties who are the partners thereof, whether the partnerships’ property includes leases, and whether the procedural requirements for a decree of dissolution have been satisfied. View "Sugar Rock, Inc. v. Washburn" on Justia Law

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After a bench trial, the circuit court concluded that Bernard Bossio had proven that the parties in this case intended to enter into and were bound by the terms of a 1990 stock purchase agreement requiring the Estate of Luigi Bossio to sell to Bossio Enterprises the corporate shares owned by Luigi Bossio at the time of his death in 2007. The Supreme Court affirmed, holding that the circuit court did not commit clear error in concluding that Bernard Bossio proved, with clear and convincing evidence, the terms of the 1990 stock purchase agreement. View "Estate of Luigi Bossio v. Bossio" on Justia Law

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The underlying case involved oil and gas wells owned and operated by four separate partnerships. The partnerships owned mineral interests in the form of leases to extract oil and gas from real estate. The partners themselves, however, owned no part of the mineral interests. Plaintiff alleged that he owned an interest in the partnerships. A federal district court determined that Plaintiff’s assertion of an interest in the four “mining partnerships” failed because he could not produce a written instrument in conformance with the Statute of Frauds showing his ownership interest in the partnerships. Plaintiff appealed. Because of the vagaries of West Virginia law on this issue, the U.S. Court of Appeals certified a question of law to the Supreme Court. The Court answered that (1) the Statute of Frauds requires the partners of a “mining partnership” to show their membership through a deed, will, or other written instrument establishing they are co-owners of the mineral interest being mined; but (2) because the real property of a general partnership belongs to the partnership entity and not to the individual partners, no written instrument is required to establish a partnership interest in a general partnership. View "Valentine v. Sugar Rock, Inc." on Justia Law

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After disagreements over Ripley Associates, LLC’s operation arose, the Domenick Marrara, Jr. Trust, which owned a twenty-five percent interest in Ripley, decided to dissociate from Ripley. The Trust and its Trustees filed this proceeding to enforce Ripley’s purchase of the Trust’s distributional interest. After an evidentiary hearing, the circuit court determined the fair market value of the Trust’s distributional interest in Ripley. The court subsequently ordered that Ripley should pay interest on this amount from the date the court determined the value of the Trust’s distributional interest at the hearing. The Trustees appealed, arguing that they were entitled to receive interest on the Trust’s distributional interest from the date of its dissociation from Ripley. The Supreme Court reversed, holding that the payment of interest upon a dissociated member’s distributional interest in an at-will limited liability company is calculated from the date of dissociation.View "Marrara v. Ripley Assocs., LLC" on Justia Law

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After an altercation that took place at Bubba's Bar and Grill (Bubba's), Petitioner filed a complaint against Bubba's, asserting three negligence claims. Petitioner subsequently learned that Bubba's was a fictitious name used for business purposes by The Tavern, LLC and that James Paugh and Lawson Mangum were the only members of The Tavern. Petitioner sought leave to amend his complaint to utilize the proper company name, add Paugh and Mangum as defendants, and assert a veil piercing count against Paugh and Mangum. The Tavern argued in response that the sole purpose for adding Paugh and Mangum as defendants was to pierce the veil of their West Virginia limited liability company, which The Tavern claimed was against West Virginia law. Instead of ruling on Petitioner's motion, the circuit court certified a question to the Supreme Court regarding West Virginia's version of the Uniform Limited Liability Company Act (the Act). The Court answered the certified question in the negative, holding that the Act permits the equitable remedy of piercing the veil to be asserted against a West Virginia limited liability company. View "Kubican v. The Tavern, LLC" on Justia Law

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The City of Fairmont owned and operated Fairmont General Hospital (FGH) until 1985. In 1984, the City Council adopted section 4.06 of the Fairmont City Charter, which provided that the board of directors of the hospital would be appointed by the Council. FGH then became a private, not-for-profit corporation. In 2010, FGH amended its bylaws to provide for appointment of its board members by the board itself, rather than the Council. FGH also amended its articles of incorporation to comport with the amended bylaws. After the Council challenged FGH's authority to make appointments to the hospital board, FGH filed an action seeking a declaration that section 4.06 of the city charter was no longer applicable to the hospital. The City and Council counterclaimed, seeking a declaration that FGH's amended bylaws were void. The circuit court granted summary judgment for the hospital. The Supreme Court affirmed, holding that neither the City nor the Council had standing to challenge, either as ultra vires or as a violation of the city charter, the actions of the hospital's board in amending its bylaws, appointing new members to the board, and amending the articles of incorporation. View "The City of Fairmont v. Fairmont Gen. Hosp., Inc." on Justia Law

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Plaintiffs filed a medical malpractice action against a hospital, several doctors, and others. Two of the doctors were employed by a corporate entity and treated patients exclusively at the hospital in accordance with a contractual relationship between the hospital and the entity. The third doctor provided surgical services at the hospital in accordance with a contract he executed with a corporation that contracted with hospital to provide a "surgicalist" program, an arrangement that provided the hospital with surgeons. Plaintiffs sought to hold the hospital vicariously liable for the alleged negligence of the doctors on the theory that the doctors were employees or actual agents of the hospital, or that the doctors and corporate defendants were engaged in a joint venture with the hospital. The circuit court granted summary judgment in favor of the hospital, holding (1) the doctors were not actual agents or employees of the hospital at the time of the alleged negligence, and (2) there was no joint venture. The Supreme Court affirmed, holding that the circuit court did not err in its judgment. View "Cunningham v. Herbert J. Thomas Mem'l Hosp." on Justia Law

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This case was before the Supreme Court for a second time. Here the case was before the Court on a petition for writ of prohibition brought by Massachusetts Mutual Life Insurance Company (MassMutual) seeking to prohibit the circuit court from enforcing its order requiring Roger Crandall, the president, CEO and chairman of Mass Mutual, to submit to deposition. The underlying lawsuits were part of a series of 412i retirement plan cases against multiple defendants, including MassMutual. Respondents alleged fraud and tax fraud in their complaints regarding annuities and pension plans that allegedly subjected Respondents to tax and compliance penalties and other collateral liabilities. In MassMutual I, the Court issued a writ of prohibition prohibiting the circuit court from enforcing its orders that directed Crandall submit to deposition. In the instant appeal, MassMutual argued that the circuit court failed to comply with the Supreme Court's decision in MassMutual I in ordering its president to submit to deposition. The Supreme Court granted the requested writ, holding that the circuit court and Respondents failed to follow the directive of the Court in MassMutual I, and therefore, the court was prohibited from enforcing its order requiring Crandall to submit to deposition. View "State ex rel. Mass. Mut. Life Ins. v. Circuit Court" on Justia Law