Articles Posted in Business Law

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Alan Miller, acting “individually and in the right of” and for the benefit of SAM Miller, Inc. (SMI), filed a second amended complaint against Miller’s Lobster Company, Inc. (MLC), Steve Miller, and Mark Miller (collectively, the Millers) seeking injunctive relief and damages arising out of the lease of wharf property by SMI to MLC. The court granted the Millers’ and SMI’s motions for summary judgment, concluding that Alan Miller’s claims were barred on limitations grounds. The Supreme Judicial Court affirmed, holding that Alan’s action was barred by the applicable statute of limitations and that Alan did not meet his burden to demonstrate a genuine issue of material fact as to whether the limitations period was nevertheless tolled or otherwise inapplicable. View "Miller v. Miller" on Justia Law

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This dispute arose out of the franchise relationship between Ford Motor Company and Darling’s, an automobile dealer. In Ford I, the Maine Motor Vehicle Franchise Board entered an award of damages against Ford, concluding that Ford violated the Business Practices Between Motor Vehicle Manufacturers, Distributors, and Dealers Act (Dealers Act) by failing to provide Darling’s with proper notice of a franchise modification. The Business and Consumer Docket (BCD) affirmed the Board’s damages award. The Supreme Court affirmed most aspects of the judgment but held that the Board lacked jurisdiction to award damages for violations of the Dealers Act. On remand, after a jury trial, the BCD awarded Darling’s damages of $154,695 based on Ford’s violation of the statutory notice provision. The Supreme Court affirmed the judgment in part and vacated it part, holding (1) the court did not err by reducing Darling’s damages by the amounts it received under an incentive program; but (2) the court erred as a matter of law by limiting Darling’s recovery to a 270-day period. Remanded to the BCD for a new trial on the issue of damages. On remand, Ford is entitled to an offset of any damages awarded to Darling’s based on payments that Darling’s received pursuant to the incentive program. View "Ford Motor Co. v. Darling's" on Justia Law

Posted in: Business Law

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The shareholders of Sheepscot Island Company approved a plan to convert a for-profit corporation into a nonprofit corporation. Some dissenting shareholders (Plaintiffs) filed a complaint seeking declaratory and injunctive relief. In the complaint, Plaintiffs alleged that the nonprofit conversion plan should be invalidated because it failed to reclassify all shares of the corporation equally. The trial court dismissed the complaint with prejudice for failure to state a claim. Plaintiffs appealed, arguing that the trial court incorrectly applied the law governing corporations and nonprofit corporations. The Supreme Judicial Court affirmed, holding that no law prohibits a business corporation’s nonprofit conversion plan from reclassifying the corporation’s shares into membership classes with disparate rights. View "Andrews v. Sheepscot Island Co." on Justia Law

Posted in: Business Law

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James Stanley, Barbara Stanley and Northeast Marine Services, Inc. (collectively, “Stanley”) were parties to a binding arbitration with Michael Liberty and five corporations under his control (“the Liberty corporate entities”) regarding contractual and fiduciary disputes arising from Stanley’s tenure as an officer and director of the Liberty corporate entities. Many of Stanley’s claims were rejected, but the three main issues relevant to this appeal were decided in favor of Stanley. The business and consumer docket affirmed the arbitration award in full. The Supreme Court affirmed, holding (1) in challenging the arbitrator’s findings that Stanley had not engaged in a breach of fiduciary duty regarding transactions involving the Liberty corporate corporate entities, Liberty and the Liberty corporate entities asked the court to review fact-findings by the arbitrator, and such findings were not reviewable; (2) Liberty and the Liberty corporate entities did not demonstrate that the arbitrator exceeded his broad authority in interpreting the retirement contract that generated this litigation; and (3) the arbitrator did not exceed his authority by deciding to pierce the corporate veil and make Liberty personally liable for obligations of his closely-controlled corporations. View "Stanley v. Liberty" on Justia Law

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Northern Maine Transport, LLC (NMT), a Maine limited liability company with only two members, including Paul Beaudry, was administratively dissolved in 2009. In 2012, Beaudry filed this action, individually and purportedly on behalf of NMT, against Alan Harding and Hardings Law Offices for professional negligence and breach of fiduciary duty in 2010 when Harding represented NMT and possibly Beaudry in facilitating a settlement with a third party. The superior court granted Harding’s motion for summary judgment, concluding (1) Beaudry lacked the legal capacity to bring suit on behalf of the administratively dissolved LLC or derivatively, and (2) Beaudry had no individual claim because he suffered no personal harm. The Supreme Court affirmed, holding that Maine law did not permit Beaudry to proceed on behalf of the administratively dissolved LLC under these circumstances, either through a derivative action or individually. View "Beaudry v. Harding" on Justia Law

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This was the second appeal of a matter involving six subdivision lot owners and their attempt to form a road association. In the first appeal, the Supreme Court held that the lot owners were authorized by statute to begin the process of forming the road association. On remand, the superior court issued an order requiring the parties to submit a proposed judgment. The resulting proposal asked the court to clarify what the word "majority" as used in 23 Me. Rev. Stat. Ann. 3101(5) meant. The court answered that the word "majority" as used in section 3101(5) required only a majority vote of those owners physically present at the meeting and those present by proxy and did not require a majority of all lot owners whether present or not. The Supreme Court affirmed, holding that the superior court did not err in declaring that "a majority vote" as used in section 3101(5) meant a majority vote of lot owners actually present or represented by proxy at a properly called road association meeting. View "Goudreau v. Pine Springs Rd. & Water, LLC" on Justia Law

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Plaintiff, an owner of a condominium unit, filed a complaint, individually and derivatively on behalf of the condominium association (Association), against the Association and four members of its board of directors (Board), claiming that Defendants had refused effectively to enforce the condominium's smoking ban. The business and consumer docket dismissed the counts of the complaint related to the smoking ban for failure to state a claim. The Supreme Court affirmed, holding that the court did not err in (1) finding that Plaintiff did not have a right to bring a shareholder derivative action under either the Maine Condominium Act or the Maine Nonprofit Corporation Act; (2) dismissing Plaintiff's individual claims related to the smoking ban; and (3) denying Plaintiff's motion to file a second amended complaint following the partial dismissal of his amended complaint. View "America v. Sunspray Condo. Ass'n" on Justia Law

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The issue before the Supreme Court in this case was whether a resort violated the requirement to pay its employees the minimum wage when it paid wait staff a portion of the standard "service charge" that it added to its banquet customers' bills and treated that portion as a "tip" that satisfied the minimum wage law by qualifying the resort for a tip credit. Allison Hayden-Tidd appealed the superior court's grant of summary judgment to The Cliff House & Motels, Inc. and the denial of her cross-motion for summary judgment. On appeal, Hayden-Tidd contended that the court erred when it rejected her argument that the wage laws required Cliff House to treat its entire banquet staff service charge as a "tip" to be paid to the banquet servers for purposes of the tip credit statute. The Supreme Court agreed that Cliff House's compensation arrangement with its banquet servers did not violate the tip credit statute, and therefore was not a violation of the minimum wage law. View "Hayden-Tidd v. Cliff House & Motels, Inc." on Justia Law

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Former Bushmaster shareholders Thomas Barr Jr. and Claude Warren appealed a judgment entered in the Business and Consumer Docket in which the court granted summary judgment to all defendants on Barr and Warren’s complaint seeking rescission and other remedies based on claims of breach of fiduciary duty, fraud, unjust enrichment, and infliction of emotional distress. The court concluded that the terms of the stock purchase agreement and general release executed in settlement of Barr and Warren’s prior claims must be enforced in the circumstances of this case. The issue before the Supreme Court in this appeal was the enforceability of the contracts executed in settlement of litigation. The Court found that the minority shareholders (Barr and Warren) explicitly disclaimed reliance on the corporation and its officers and directors in determining the value of the stock that they were selling pursuant to the settlement agreement, but they sought to avoid enforcement of that disclaimer-of-reliance clause. The Court concluded that the allegations purporting to demonstrate fraud did not, in the absence of reliance, vitiate the terms of the contract of release executed between these parties, who had access to counsel, understood Bushmaster’s business, and negotiated clear terms at arm’s length in settlement of the earlier contentious lawsuit. Accordingly, the Supreme Court enforced the general release with regard to the remaining claims, and affirmed the judgment disposing of Barr and Warren’s claims. View "Barr Jr. v. Dyke et al." on Justia Law

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Victor Bravo Aviation, LLC purchased an aircraft in Connecticut in 2004 that was flown to Victor Bravo in Connecticut. Victor Bravo did not register the aircraft in Maine but used it regularly in Maine during the first twelve months of ownership. In 2007, the State Tax Assessor assessed Victor Bravo a use tax on its aircraft plus interest, penalties and costs. Victor Bravo appealed. The Business and Consumer Docket entered summary judgment for the Assessor affirming the assessment of the tax and interest, and judgment for Victor Bravo waiving and abating the non-payment penalty. The Supreme Court affirmed except vacated and remanded the issue of interest waiver or abatement. On remand, the court declined to waive or abate the interest as of the date of the reconsideration decision. Victor Bravo appealed. The Supreme Court affirmed, holding that the court properly considered Victor Bravo's arguments for failure to pay the use tax and deemed them unsatisfactory to warrant a waiver or abatement of interest under the statutory scheme. View "Victor Bravo Aviation, LLC v. State Tax Assessor" on Justia Law