Justia Consumer Law Opinion SummariesArticles Posted in Delaware Court of Chancery
In re Altaba, Inc.
The Court of Chancery adopted Verizon Communications Inc.'s proposal for the amount of security required for its indemnification claim relating to national consumer-oriented class actions, holding that Altaba, Inc. (the Company) shall reserve $400 million as security earmarked for that claim, inclusive of the $58.75 million that the Company had paid to fund its share of the settlement.The Company, formerly known as Yahoo! Inc., publicly disclosed massive data breaches only after selling its operating business to Verizon Communications Inc. The Company's customers filed a series of national customer class actions. The parties to the class actions subsequently reached a global settlement, which the federal district court approved. The Company then dissolved. Verizon possessed a contingent contractual claim to indemnification from the Company for fifty percent of the liabilities associated with the class actions, and the Company proposed an amount of security that Verizon rejected. This proceeding followed, with the Company claiming that no security was required for Verizon's indemnification claim. The Court of Chancery held that the Company failed to carry its burden of proving that its proposed amount and form of security would be sufficient to satisfy Verizon's claim for indemnification if it matured and adopted Verizon's proposal for an amount. View "In re Altaba, Inc." on Justia Law
Posted in: Communications Law, Consumer Law, Delaware Court of Chancery
The Sequoia Presidential Yacht Group LLC v. FE Partners LLC
This lawsuit involved a loan agreement between Lender and Borrowers. The agreement gave Lender an option to purchase the collateral for the loan - the famous ex-Presidential Yacht Sequoia. A valuation of the Sequoia for purposes of securing the loan was established via fraud on the part of Borrowers. The claims and counterclaims arising out of the loan agreement were eventually resolved by a settlement entered as a court order. The only issue remaining for the Court of Chancery was to oversee the computation of the amount due Borrowers from Lender should Lender elect to acquire the Sequoia. Lender agreed to a minimum option price of zero dollars. The Court of Chancery found the option price to be zero dollars. View "The Sequoia Presidential Yacht Group LLC v. FE Partners LLC" on Justia Law
Posted in: Commercial Law, Consumer Law, Contracts, Delaware Court of Chancery
James v. National Financial, LLC
The court issued a post-trial opinion holding that the loan agreement between plaintiff and National was unconscionable and that National violated the federal Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq. At issue is the court's award of attorneys' fees and costs to plaintiff. The court concluded that, because plaintiff prevailed on her TILA claims, and because plaintiff's other claims arose out of the same common core of facts as her TILA claims, the fee award extends to all of plaintiff's attorneys' fees and costs. The court also concluded that the bad faith with which National and its counsel acted throughout the litigation provides an independent basis for awarding plaintiff her attorneys' fees. Finally, the court rejected National's various procedural arguments. Therefore, plaintiff is entitled to the full amount sought and, given the seriousness of the misconduct in which National and its counsel engaged, they are jointly and severally liable for the fee award. View "James v. National Financial, LLC" on Justia Law
Posted in: Consumer Law, Delaware Court of Chancery, Legal Ethics
James v. National Financial, LLC
National Financial, LLC, a consumer finance company, loaned $200 to Gloria James. In substance, the loan was a one-year, non-amortizing, unsecured cash advance. The total repayments added up to $1,820, totaling a cost of credit of $1,620. The annual percentage rate (APR) of for the loan was 838.45 percent. After James defaulted, she filed this lawsuit. The Court of Chancery held that the loan was invalid and (1) rescinded the loan on the grounds that it was unconscionable, and (2) awarded statutory damages and attorneys fees and costs on the basis that National violated the Truth in Lending Act. View "James v. National Financial, LLC" on Justia Law
Posted in: Consumer Law, Delaware Court of Chancery
Smith v. Donald L. Mattia, Inc.
Plaintiffs, David and Barbara Smith, asserted various claims arising out of the construction of their home against Defendants, Donald L. Mattia, Inc. (DLM), Donald Mattia, and Barbara Joseph (Barbara). The Chancery Court (1) granted Defendants' motion for summary judgment on (i) Plaintiffs' breach of contract claim and (ii) Plaintiffs' civil conspiracy claim; (2) denied Defendant's motion for summary judgment on (i) Plaintiffs' claim for misappropriation of Plaintiffs' backfill and money paid to DLM that was not applied to their project and (ii) Plaintiffs' claim that Defendants fraudulently induced Plaintiffs to purchase excess lumber and misappropriated $8,836 in connection with the purchase of excess lumber; (2) granted Plaintiffs' motion for summary judgment, as Defendants did not articulate a viable cause of action in their counterclaim; and (3) denied Barbara's motion for Chan. Ct. R. 11 sanctions where there was no evidence that Plaintiffs' attorney did not have a good faith belief in the legitimacy of the claims asserted against Barbara. View "Smith v. Donald L. Mattia, Inc." on Justia Law