Articles Posted in Business Law

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In 2007, plaintiffs-appellants, Taracorp and Tara and Kelly Barlean, (collectively Taracorp) obtained a default judgment against defendants-appellees, Jeff Dailey and AJ's Bargain World in Colorado. Three days later, Taracorp sought to collect on the judgment by filing a lien on the real estate of the judgment debtors in Pottawatomie County, Oklahoma. Taracorp abandoned the Pottawatomie case, but re-filed the Colorado judgment in Marshall County, Oklahoma, nearly nine years later in 2016. The judgment debtors sought to quash the Colorado judgment because Oklahoma's five year limitation for enforcing judgments had lapsed. The trial court agreed, and quashed the Colorado judgment. Taracorp appealed, and the Court of Civil Appeals vacated the trial court's ruling and remanded for further proceedings. The Oklahoma Supreme Court granted certiorari to address whether the Colorado judgment, enforceable in Colorado for twenty years after the judgment, was also enforceable in Oklahoma by re-filing it a second time in Oklahoma, after Oklahoma's five year limitation period for enforcing judgments lapsed. The Supreme Court held that when a judgment creditor seeks to enforce a Colorado judgment a second time in Oklahoma, after Oklahoma's limitation period has lapsed on the original judgment, the underlying original Colorado judgment enforceable for twenty years may be enforced in Oklahoma. View "Taracorp v. Dailey" on Justia Law

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Insight Equity, a private-equity firm headquartered in Southlake, Texas, purchased Berry Family Nurseries, a nationwide wholesale nursery company headquartered in Tahlequah, Oklahoma, for $160 million. The Purchase Agreement entered into by the parties contained a Texas choice-of-law provision. The Agreement also contained a five-year non-compete provision, prohibiting the owners of Berry Family Nurseries, Bob Berry and Burl Berry, from owning a competing wholesale nursery company for five years. Park Hill Nursery, a nursery also located in Tahlequah, and owned by the Berrys, was not included in the Agreement, but the Agreement allowed the Berrys to continue to own and operate Park Hill Nursery so long as it did not compete with the newly formed BFN Operations. The parties performed under the terms of the Agreement for approximately three years until the Berrys, through Park Hill Nursery, began selling to several of BFN's largest customers. The Berrys sought a declaration that the restrictive covenants were unenforceable and void under Oklahoma law. BFN filed a counterclaim, seeking injunctive relief and monetary damages for the Berrys' breach of the covenants. Upon review, the Oklahoma Supreme Court concluded the Texas choice-of-law provision was valid, and the non-compete was enforceable under Texas law. The Berrys breached the non-compete, and Park Hill Nursery tortiously interfered with the parties' Agreement. BFN was entitled to injunctive relief through December 7, 2015, and was also entitled to monetary damages. The trial court's determination that BFN was entitled to attorney's fees was not a final judgment, and appeal of that issue was deemed premature. View "Berry & Berry Acquisitions v. BFN Properties" on Justia Law

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Insight Equity, a private-equity firm headquartered in Southlake, Texas, purchased Berry Family Nurseries, a nationwide wholesale nursery company headquartered in Tahlequah, Oklahoma, for $160 million. The Purchase Agreement entered into by the parties contained a Texas choice-of-law provision. The Agreement also contained a five-year non-compete provision, prohibiting the owners of Berry Family Nurseries, Bob Berry and Burl Berry, from owning a competing wholesale nursery company for five years. Park Hill Nursery, a nursery also located in Tahlequah, and owned by the Berrys, was not included in the Agreement, but the Agreement allowed the Berrys to continue to own and operate Park Hill Nursery so long as it did not compete with the newly formed BFN Operations. The parties performed under the terms of the Agreement for approximately three years until the Berrys, through Park Hill Nursery, began selling to several of BFN's largest customers. The Berrys sought a declaration that the restrictive covenants were unenforceable and void under Oklahoma law. BFN filed a counterclaim, seeking injunctive relief and monetary damages for the Berrys' breach of the covenants. Upon review, the Oklahoma Supreme Court concluded the Texas choice-of-law provision was valid, and the non-compete was enforceable under Texas law. The Berrys breached the non-compete, and Park Hill Nursery tortiously interfered with the parties' Agreement. BFN was entitled to injunctive relief through December 7, 2015, and was also entitled to monetary damages. The trial court's determination that BFN was entitled to attorney's fees was not a final judgment, and appeal of that issue was deemed premature. View "Berry & Berry Acquisitions v. BFN Properties" on Justia Law

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The United States Court of Appeals for the Tenth Circuit certified a question of Oklahoma law to the Oklahoma Supreme Court. Plaintiff-Appellant Perry Odom was an employee of Penske Logistics, LLC. Penske Logistics, LLC was a wholly owned subsidiary of Defendant-Appellee Penske Truck Leasing Co. (PTLC). After a trailer owned by PTLC fell on Odom and injured him, he filed a claim against his employer, Penske Logistics, LLC, pursuant to the Administrative Workers' Compensation Act (AWCA). However, plaintiff and his wife Carolyn (collectively, the Odoms) also filed a lawsuit against PTLC in federal district court, alleging PTLC's tortious negligence caused Perry Odom's injury. The federal appellate court asked whether under Oklahoma’s dual-capacity doctrine, an employer who was generally immune from tort liability could become liable to its employee as a third-party tortfeasor, if it occupies, in addition to its capacity as an employer, a second capacity that confers obligations independent of those imposed on it as an employer. The Court asked what was the effect of Oklahoma's Administrative Workers' Compensation Act (AWCA) on the dual-capacity doctrine, and whether the AWCA abrogated the dual-capacity doctrine as to an employer's stockholder. The Oklahoma Court found the AWCA abrogated the dual-capacity doctrine with regards to employers. Title 85A O.S. Supp. 2013 § 5(A) did not bar an employee from bringing a cause of action in tort against a stockholder of their employer for independent tortious acts when the stockholder is not acting in the role of employer. View "Odom v. Penske Truck Leasing Co." on Justia Law

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Taxpayer held stock in two Oklahoma S-corporations. He sold substantially all of the corporate assets of both companies to a third party. Following the sale, taxpayer received his proportionate share of the proceeds, and reported that sum as a net capital gain on his federal tax return. Taxpayer later sought a deduction equivalent to the net capital gain on an amended Oklahoma return. The Oklahoma Tax Commission disallowed the deduction to the extent the proceeds were derived from intangible personal property (namely goodwill). After review of the matter, the Oklahoma Supreme Court reversed, finding the taxpayer sold an indirect ownership interest in an Oklahoma company, and therefore, qualified for the deduction. View "In the Matter of the Income Tax Protest of Hare" on Justia Law

Posted in: Business Law, Tax Law

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The trial court granted the request of a wholesaler of veterinary prescription drugs to set aside a final order of the Oklahoma Board of Veterinary Medical Examiners (“Vet Board”) wherein the Board ordered the wholesaler to produce certain requested documents and fined it $25,000 for failure to do so. The Supreme Court found nothing in the Vet Act made wholesale distributors of veterinary prescription drugs, who are licensed and regulated by the Pharmacy Board through the Pharmacy Act, subject to the Vet Act and its investigative power. As such, the Vet Board was without statutory authority to investigate or sanction wholesalers who fell under the regulation of the Pharmacy Board, let alone fine a wholesaler $25,000 for failure to produce records that the Vet Board could have inspected in the regular course of the wholesaler's business. View "Farmacy, LLC v. Kirkpatrick" on Justia Law

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Defendant Century Surety Company (Century) issued a Commercial Lines Policy to Plaintiff Siloam Springs Hotel, L.L.C. (Siloam). This policy included general liability insurance coverage of Siloam's hotel in Siloam Springs, Arkansas, for the policy period from November 13, 2012, through November 13, 2013. The insuring agreement of the general liability coverage form provided that Century would pay sums the insured was legally obligated to pay as damages because of bodily injury to which the insurance applies and that Century would have the right and duty to defend the insured against any suit seeking such damages. On January 17, 2013, several guests inside of the hotel allegedly suffered bodily injury due to carbon monoxide poisoning. The carbon monoxide allegedly escaped into the air due to leakage from the hotel's indoor swimming pool heater. Siloam sought coverage under its policy from Century, which Century denied based on an Indoor Air Exclusion at issue. The United States District Court for the Western District of Oklahoma certified a single question of Oklahoma law to the Oklahoma Supreme Court under the Revised Uniform Certification of Questions of Law Act, 20 O.S. 2011 sections 1601-1611: “Does the public policy of the State of Oklahoma prohibit enforcement of the Indoor Air Exclusion, which provides that the insurance afforded by the policy does not apply to ‘Bodily injury', 'property damage', or 'personal and advertising injury' arising out of, caused by, or alleging to be contributed to in any way by any toxic, hazardous, noxious, irritating pathogenic or allergen qualities or characteristics of indoor air regardless of cause?” The Oklahoma Supreme Court answered the question in the negative. View "Siloam Springs Hotel, LLC v. Century Surety Co." on Justia Law

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While operating a large auger, James Neece, an employee of the plaintiff-appellee C&H Power Line Construction Company, ruptured an underground high pressure natural gas line belonging to the defendants-appellants Enterprise Products Operating, LLC. The blast killed Neece and damaged and destroyed equipment belonging to the plaintiff, which claimed that the accident was caused by the negligence, negligence per se, and gross negligence of the defendants for failure to mark the pipeline after they had been notified of the intention to dig in the area of their pipeline. Plaintiff claimed loss of its business as a result of the accident. The jury returned a verdict for the plaintiff for $26 million and punitive damages of $1 million. Defendants raised issues regarding jury instructions, denial by the trial court of their motion for directed verdict, exclusion of evidence offered by the appellants, inclusion of inadmissible evidence, acceptance of a less than unanimous verdict, and awarding improper interest on the judgment, as grounds for appeal. Finding no reversible error, the Supreme Court affirmed the trial court's judgment. View "C&H Power Line Construction Co. v. Enterprise Products Operating, LLC" on Justia Law

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This legal battle began in 2006 when American Biomedical Group, Inc. (ABGI) and ABG Cattletraq, LLC (Cattletraq) filed a petition in the district court against Techtrol, Inc. and William Ardrey (Defendants); Defendants then filed a counterclaim. ABGI and Cattletraq dismissed their claims and causes of action against Defendants (without prejudice), leaving Defendants' counterclaim pending. Two years later, Defendants filed a petition in the same court against ABGI, Cattletraq, and James Burgess, their sole shareholder and CEO (Plaintiffs). In 2009, Plaintiffs filed another petition alleging that Defendants "wrongfully exercised dominion and control over plaintiffs' personal and intellectual property" and "willfully, deliberately and maliciously converted plaintiffs' personal and intellectual property" for their own benefit. Plaintiffs sought damages based on Defendants' unjust enrichment from the conversion. The district court consolidated the three cases. When the cases were consolidated, Defendants' counterclaim, Defendants' petition alleging abuse of process, and Plaintiffs' petition alleging causes of action for conversion and unjust enrichment remained pending before the district court. In 2014, Defendants moved for summary judgment on Plaintiffs' claim for conversion, asserting that Oklahoma did not recognize a tort for conversion of intangible property, and for unjust enrichment, asserting Plaintiffs' claim was precluded because they had an adequate remedy at law for breach of contract. The question this appeal presented for the Supreme Court's review was whether Defendants supported their motion for summary judgment with undisputed, material facts sufficient to warrant the district court granting partial summary adjudication in their favor. After that review, the Court answered in the negative. "Defendants failed to show that they were entitled to summary judgment. Throughout their arguments before the district court and this Court, Defendants rely on allegations which they have failed to allege as undisputed in their motion for summary judgment, which have no supporting evidentiary materials, and which Plaintiffs contest or which Plaintiffs have not admitted." View "American Biomedical Group, Inc. v. Techtrol, Inc." on Justia Law

Posted in: Business Law, Contracts

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At issue before the Oklahoma Supreme Court in this case was a challenge to the legal sufficiency of Initiative Petition No. 409. Respondents-proponents Retail Liquor Association of Oklahoma and Bryan Kerr filed Initiative Petition No. 409 with the Oklahoma Secretary of State, seeking to amend the Oklahoma Constitution by repealing Article 28 and adopting Article 28A. Article 28A as proposed, would have allowed wine to be sold in grocery stores. Also under the proposed article, retail package stores could sell any and all items that were sold in convenience stores and grocery stores. Small brewers could sell their products at a brewery or festival or trade show and could sell alcoholic beverages by the drink at a restaurant co-located on the premises of the brewery. Petitioners-opponents Oklahoma Grocers Association and Ron Edgmon filed an Application to Assume Original Jurisdiction with the Supreme Court to protest: (1) the constitutionality of the petition; and (2) the statutory sufficiency of the gist of the petition. Upon review, the Supreme Court held that the gist of the petition did not fairly describe the proposed constitutional amendment and was invalid. View "In re Initiative Petition No. 409, State Question No. 785" on Justia Law