Articles Posted in Business Law

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The charging order at issue here was issued over limited partnerships’ and limited liability company’s objections that ancillary provisions included in the charging order, which required them to refrain from certain kinds of transactions and provide extensive financial information to the judgment creditor, were not authorized under the controlling statutes. On appeal, the Court of Appeals held that some, but not all, of the ancillary provisions were authorized. The Oregon Supreme Court held a trial court has either general or specific statutory authority to include, in a charging order, ancillary provisions that it finds necessary to allow a judgment creditor access to a debtor-partner’s distributional interest in a company, as long as those provisions do not unduly interfere with the company’s management. Furthermore, the Court held that in this case, the record did not establish that that standard was met and, therefore, that the trial court erred in imposing the challenged ancillary provisions. The Court reversed the Court of Appeals and vacated the circuit court order, and remanded to the circuit court for further proceedings. View "Law v. Zemp" on Justia Law

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This case presented for the Oregon Supreme Court's review the question of when, if ever, the filing of a third-party complaint constitutes the “filing of a proceeding under subsection (1)” of ORS 60.952(6), such that the shareholder of a closely-held corporation who filed the proceeding could be bought out by the corporation or another shareholder. The corporation here, Graydog Internet, Inc., had only two shareholders: Douglas Westervelt, the company’s president and majority shareholder, and David Giller, an employee and minority shareholder. Graydog initiated the underlying case, at Westervelt’s direction, when it filed a declaratory judgment action against Giller raising an issue regarding his employment. As part of his response, Giller filed a third-party complaint against Westervelt. Graydog then filed an election to purchase Giller’s shares under ORS 60.952(6). Giller objected, arguing that filing a third-party complaint did not constitute the “filing of a proceeding” as that term is used in ORS 60.952(6) and that the claims in the third-party complaint were not “under [ORS 60.952(1)].” For those reasons, Giller asserted, Graydog could not elect to purchase his shares. The Oregon Supreme Court agreed that ORS 60.952(6) did not apply to Giller’s third-party complaint, and therefore reversed the decision of the Court of Appeals which held to the contrary. View "Graydog Internet, Inc. v. Giller" on Justia Law

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Plaintiff sustained injuries while working for Union Pacific Railroad Company “as a spiker machine operator near Minidoka, Idaho.” Union Pacific’s decision to reduce “the spiker machine’s customary three-[person] crew to a two-[person] crew” placed greater physical demands on plaintiff, causing or contributing to the injuries he suffered. As a result of Union Pacific’s alleged negligent maintenance of the spiker machine and its decision to reduce the number of persons operating that machine, plaintiff suffered economic and noneconomic damages totaling approximately $615,000. The question this case presented was whether the Due Process Clause of the Fourteenth Amendment permitted Oregon to exercise general jurisdiction over an interstate railroad for claims unrelated to the railroad’s activities in Oregon. The trial court ruled that it could exercise general jurisdiction over the railroad and denied the railroad’s motion to dismiss plaintiff’s negligence action for lack of personal jurisdiction. After the railroad petitioned for a writ of mandamus, the Supreme Court issued an alternative writ to the trial court, which adhered to its initial ruling. After review, the Supreme Court held that due process did not permit Oregon courts to exercise general jurisdiction over the railroad. View "Barrett v. Union Pacific Railroad Co." on Justia Law

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Plaintiff was working for BNSF Railway Company in Pasco, Washington, where she was repairing a locomotive engine. While she was reaching up to remove an engine part, the “portable stair supplied by [BNSF] rolled or kicked out from under [p]laintiff,” causing her to sustain substantial injuries. The question that this case presented was whether, by appointing a registered agent in Oregon, defendant (a foreign corporation) impliedly consented to have Oregon courts adjudicate any and all claims against it regardless of whether those claims have any connection to defendant’s activities in the state. Defendant moved to dismiss this action because the trial court lacked general jurisdiction over it. When the court denied the motion, defendant petitioned for an alternative writ of mandamus. The Oregon Supreme Court issued the writ, and held as a matter of state law, that the legislature did not intend that appointing a registered agent pursuant to ORS 60.731(1) would constitute consent to the jurisdiction of the Oregon courts. View "Figueroa v. BNSF Railway Co." on Justia Law

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In June 2002, defendant Ron Miller entered into an open account agreement with plaintiff Union Lumber Company for the purchase of building supply materials. In July 2010, plaintiff filed an action for breach of contract and unjust enrichment against Ron Miller and his spouse Linda Miller, seeking $17,865 as the unpaid balance on the account. The complaint alleged that defendants' son, Ean Miller, had purchased building materials from plaintiff, charging those materials to the Miller account with his father's authority. The complaint further alleged that the materials that Ean purchased were delivered to properties that defendants owned and were used to improve those properties and that, for several years, defendants had paid the charges that Ean had made on the account. The question this case presented for the Supreme Court's review was whether the trial court erred in denying defendants' motion under ORCP 71 B(1) to set aside a general judgment entered against them on grounds of excusable neglect and mistake. The Court of Appeals reversed the trial court's ruling, concluding that the judgment was entered as a result of mistakes made by plaintiff and a court-appointed arbitrator with respect to the service of case-related documents on defendants. Because the Supreme Court concluded that defendants were not entitled to relief from the judgment on the grounds asserted, it reversed the Court of Appeals and affirmed the trial court's order denying defendants' motion to set aside the judgment. View "Union Lumber Co. v. Miller" on Justia Law

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Petitioners were a group of miners who operated small suction dredges in Oregon waterways. They challenged the lawfulness of an order of the Department of Environmental Quality (DEQ) adopting a general five-year permit that regulated that type of mining. By the time the challenge reached the Court of Appeals, however, the permit had expired. The agency then moved to dismiss petitioners’ challenge on mootness grounds. The Court of Appeals agreed and dismissed. Petitioners sought review of the dismissal arguing that their case was not moot, or in the alternative, their challenge nevertheless was justiciable under ORS 14.175 because it is the sort of action that is capable of repetition and likely to evade judicial review. The Oregon Supreme Court concluded that the petitioners’ challenge to the now-expired permit was moot. But the Court agreed with petitioners that it was justiciable under ORS 14.175. The Court therefore reversed the decision of the Court of Appeals and remanded for further proceedings. View "Eastern Oregon Mining Association v. Dept. of Env. Quality" on Justia Law

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This appeal arose from a legal malpractice and negligent misrepresentation case where the trial court judgment granted a directed a verdict in favor of defendant Jack Platten. In an earlier lawsuit, defendant had represented plaintiffs the Harknesses against Kantor, a loan officer, and her successive employers, Sunset Mortgage (Sunset) and Directors Mortgage, Inc. (Directors), as the result of a fraudulent investment and loan scheme directed at plaintiffs by Kantor. That case did not settle to plaintiffs’ satisfaction, and plaintiffs sought to recover their remaining loss from defendant. In this case, the trial court granted defendant’s motion for a directed verdict based on the conclusion that plaintiffs’ liability theories of apparent authority and respondeat superior asserted against Sunset and Directors were not supported by sufficient evidence in the record and could not have led to a result more favorable than the settlement. Plaintiffs appealed the trial court ruling, and the Court of Appeals affirmed. Viewing the evidence in the light most favorable to plaintiffs, the Oregon Supreme Court concluded that the Court of Appeals interpreted the prevailing caselaw incorrectly, and that a reasonable factfinder could have inferred from the evidence presented that defendants authorized the investment scheme. The court reversed the directed verdict and remanded the case for further proceedings. View "Harkness v. Platten" on Justia Law

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The City of Eugene sued to collect from Comcast of Oregon II, Inc. (Comcast) a license fee that the city, acting under a municipal ordinance, imposes on companies providing “telecommunications services” over the city’s rights of way. Comcast did not dispute that it used the city’s rights of way to operate a cable system. However it objected to the city’s collection effort and argued that the license fee was either a tax barred by the Internet Tax Freedom Act (ITFA), or a franchise fee barred by the Cable Communications and Policy Act of 1984 (Cable Act). The city read those federal laws more narrowly and disputed Comcast’s interpretation. The trial court rejected Comcast’s arguments and granted summary judgment in favor of the city. The Court of Appeals affirmed. Finding no reversible error, the Supreme Court affirmed. View "City of Eugene v. Comcast of Oregon II, Inc." on Justia Law

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TriQuint Semiconductor, Inc., and its directors were defendants in two consolidated shareholder derivative suits filed in Washington State. TriQuint moved to dismiss those suits on the ground that its corporate bylaws establish Delaware as the exclusive forum for shareholder derivative suits. The trial court denied TriQuint’s motion to dismiss, and the Supreme Court allowed TriQuint’s petition for an alternative writ of mandamus. After review, the Supreme Court concluded that, as a matter of Delaware law, TriQuint’s bylaw was a valid forum-selection clause and bound its shareholders. The Court also concluded that, as a matter of Oregon law, the bylaw was enforceable. The Court issued a peremptory writ of mandamus directing the trial court to grant TriQuint’s motion to dismiss. View "Roberts v. TriQuint Semiconductor, Inc." on Justia Law

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Defendants were in the business of processing and selling industrial wood products and maintained a large inventory at numerous distribution centers throughout the United States. In 2002, defendants and plaintiffs entered into an asset purchase agreement (PA), which provided for the merger of the two companies, changes in personnel, and until plaintiffs' purchase of an inventory unit, plaintiffs, for a fee, would provide defendants with "all management and administrative services associated with purchasing, processing, and maintaining [defendants'] inventory." In 2003, plaintiffs' books were audited by a certified public accountant, Schmidt. Schmidt found unusual entries in the books and many entries that did not appear to be related to normal inventory activity. After Schmidt completed his work on defendants' books, the bookkeeper who was employed by plaintiffs but was providing inventory-related services to defendants, was discovered to have embezzled at least $360,000 from defendants' accounts. Three legal actions (including this case) ensued. The issue on review in this case was whether the trial court erred in denying defendants' motion for a new trial under ORCP 64 (B)(4),2 based on the asserted ground of newly discovered evidence. The trial court determined that defendants' proffered evidence did not satisfy the legal standard for granting a new trial under that rule. The Court of Appeals reversed, concluding that defendants' post-trial proffer qualified as newly discovered evidence, that the evidence was material for defendants, and that defendants exercised reasonable diligence in attempting to produce the evidence at trial. Because the Supreme Court concluded that, irrespective of whether the proffered evidence was newly discovered and material for defendants, defendants failed to exercise reasonable diligence to produce the evidence at trial. Ultimately, the Court concluded the trial court did not err in denying defendants' motion for a new trial. View "Greenwood Products v. Greenwood Forest Products" on Justia Law