Articles Posted in Business Law

by
The administrator of the Utah Motor Vehicle Enforcement Division denied Tesla Motors UT, Inc., a wholly owned subsidiary of a motor vehicle manufacturer, an application for a license to sell new motor vehicles, determining that the application implicated both the Motor Vehicle Business Regulation Act (Licensing Act) and the New Automobile Franchise Act (Franchise Act). The Tax Commission affirmed. The Supreme Court affirmed, holding that the Licensing Act and Franchise Act together prohibit a wholly owned subsidiary of a motor vehicle manufacturer from obtaining a license to sell the manufacturer’s new motor vehicles in stores in Utah, and the statutory scheme is constitutional. View "Tesla Motors UT, Inc. v. Utah Tax Commission" on Justia Law

by
In 2014, Don McBroom, grandson of Rufus Call Willey, founder of R.C. Willey, filed a petition with the Second District Court to review his motion under Utah R. Civ. P. 60(b) seeking to set aside two Second District Court orders relating to McBroom’s interests in the business. The orders were entered in 1973 and 1975, respectively. The district court denied McBroom’s Rule 60(b) motion. The Supreme Court affirmed, holding that the district court did not err in denying McBroom’s Rule 60(b) motion because (1) McBroom did not appropriately file for relief under paragraph (6), and, instead, his claims fall under paragraphs (3) and (4); (2) McBroom’s claims under paragraph (b)(3) are untimely; and (3) McBroom’s claims under paragraph (b)(4) fail on their merits. View "In re Estate of Rufus C. Willey" on Justia Law

by
Attorney Donald Gilbert represented the Utah Down Syndrome Association and several of its founders in litigation between the Association and the Utah Down Syndrome Foundation, Inc. Gilbert filed this petition for extraordinary relief challenging (1) a 2008 district court judgment ordering Gilbert to disgorge $30,000 taken from Foundation bank accounts to pay his attorney fees, (2) an injunction that originally barred Gilbert’s clients from paying him with Foundation funds, (3) an order denying Gilbert’s motion to vacate the 2008 judgment, and (4) an order denying Gilbert’s motion for relief from the 2008 judgment. The Supreme Court denied Gilbert’s petition for extraordinary relief, holding (1) Gilbert unreasonably delayed seeking extraordinary relief from the injunction, the disgorgement order, and the denial of his motion to vacate; and (2) Gilbert failed to pursue the plain, speedy, and adequate remedy of direct appeal from the denial of his motion for relief from judgment. View "Gilbert v. Third Dist. Court Judges" on Justia Law

by
Plaintiff ClearOne is a Utah corporation and Defendant Revolabs is a competitor incorporated in Delaware with its principal place of business in Massachusetts. The underlying dispute arose when Revolabs recruited and hired Timothy Mackie while he was still employed by ClearOne. ClearOne brought this suit in Utah district court, alleging intentional interference with a contractual relationship, predatory hiring, and aiding and abetting a breach of fiduciary duty. Revolabs filed a motion to dismiss for lack of personal jurisdiction. The trial court granted the motion. The Supreme Court affirmed, holding (1) ClearOne failed to allege that Revolabs had sufficient minimum contacts to subject it to specific personal jurisdiction in Utah; and (2) the trial court did not abuse its discretion in denying discovery to determine whether Revolabs was subject to general personal jurisdiction in Utah. View "ClearOne, Inc. v. Revolabs, Inc." on Justia Law

by
Employees and others founded Nuriche, LLC, a now-defunct limited liability company formed in Nevada and registered to do business in Utah. After being terminated, Employees filed this complaint alleging that Nuriche and members of its board of managers (Managers) breached their agreement to pay Employees a certain amount of compensation in annual salaries and benefits and violated the Utah Payment of Wages Act (UPWA) by failing to pay past-due wages following Employees’ termination. The district court granted Managers’ motion for summary judgment, ruling that the UPWA does not extend wage liability to individual managers. The Supreme Court affirmed, holding (1) the question of Managers’ liability for unpaid wages is governed by Utah law; and (2) Managers could not be held personally liable for the unpaid wages claimed by Employees under the UPWA because Managers did not personally employ Employees but instead were acting as agents of Nuriche. View "Heaps v. Nuriche, LLC" on Justia Law

by
Utah Resources International, Inc. (URI) conducted a share consolidation transaction, and two minority shareholders dissented. URI petitioned the district court to determine the fair value of the shares. After the district court made its determination, URI filed an amended motion under Utah R. Civ. P. 62 to stay execution pending its appeal. The district court denied the amended motion. URI then filed an application for a stay with the Supreme Court under Utah R. App. P. 8, and while that application was pending, filed a separate appeal arguing that the district court improvidently denied its request to abate interest as a term of the stay under rules 62 and 60(b) of the Utah Rules of Civil Procedure. The Supreme Court denied URI’s request under rule 8. The Court then held that the district court did not err in refusing to rule on the abatement of interest issue, as district courts do not have authority to abate interest under rule 62, and URI never requested relief with the district court under rule 60(b). View "Utah Res. Int’l, Inc. v. Mark Techs. Corp." on Justia Law

Posted in: Business Law

by
Utah law provides that shareholders may dissent from certain corporate transactions and that the corporation must pay the dissenting shareholders “fair value” for their shares. Two minority shareholders of Utah Resources International, Inc. (URI) dissented from URI’s consummation of a share-consolidation transaction, but URI and the dissenters disagreed on the fair value of the dissenters’ shares. URI petitioned the district court to determine the fair value of the shares. The district court concluded that the fair value of the dissenters’ shares was more than two times the amount proposed by URI. The Supreme Court vacated the district court’s ruling, holding that the district court erred in disallowing four deductions from URI’s assets in determining the fair value of the dissenters’ shares in URI. Remanded. View "Utah Res. Int’l, Inc. v. Mark Techs. Corp." on Justia Law

Posted in: Business Law

by
James Garside acquired shares in South Despain Ditch Company in contravention of corporate restrictions on transferability of South Despain shares. After the sale, South Despain refused to issue certificates in Garside’s name and recognize him as a shareholder, claiming that the sale violated the transfer restrictions and was therefore was void. Garside filed suit, challenging the enforceability of the restrictions and asserting that their enforcement put South Despain in breach of its obligations in contract, fiduciary duty and the Utah Nonprofit Corporation Act. The district court granted summary judgment in favor of South Despain. Garside died during litigation, and Paul Southam proceeded on appeal. The Supreme Court affirmed, holding that the restrictions on the transfer of South Despain shares were enforceable, and thus, Southam acquired no viable rights as a shareholder. Absent a shareholder interest in the corporation, Southam lacked standing to pursue any of his claims. View "Southam v. S. Despain Ditch Co." on Justia Law

by
Plaintiffs, property owners in a development, filed a derivative suit against Defendants, the directors of the non-profit homeowners association that provided road maintenance and other services to the development, alleging that the directors favored their own properties in their allocation of road construction and maintenance funds. Instead of defending the suit on the merits, Plaintiffs appointed an independent committee to evaluate whether maintenance of the derivative suit was in the best interest of the nonprofit corporation pursuant to Utah Code 16-6a-612(4). Based on the committee's report, the district court dismissed the suit. The Supreme Court reversed, holding that the district court erred in concluding that the members of the committee, all of whom owned property allegedly receiving preferential treatment, were "independent" under section 612(4). Remanded to allow the district court to assess whether the directors were independent, applying the definition of independence clarified by the Court in this opinion.View "Hi-Country Prop. Rights Group v. Emmer" on Justia Law

by
In 2010, Plaintiff was negotiating the sale of three limited liability companies of which he was the sole shareholder. The companies were S Corporations. Plaintiff retained an Accounting Firm to advise him on his tax liability from the contemplated sale. Altaview Concrete, one of the companies, was named as the client. Jeffrey Bickel, a partner at the Accounting Firm, advised Plaintiff that he could restructure the deal to reduce his tax liability to $663,000. The buyer agreed to the restructuring proposals, and the sale closed. Later Bickel and the Accounting Firm (collectively, Defendants) discovered they had greatly underestimated Plaintiff's tax liability. Plaintiff filed a professional negligence claim in district court. The district court granted Defendants' motion for summary judgment, finding that Plaintiff's claim failed to satisfy the writing requirement of Utah Code 58-26-602, which provides that accountants are not liable to third parties unless the accountant identified in writing to the client that the professional services were intended to be relief upon by the third party. The Supreme Court reversed, holding that Defendants were liable to Plaintiff as a third party under section 602 because Defendants identified in writing that the professional services were intended to be relied upon by Plaintiff.View "Reynolds v. Bickel" on Justia Law