Fraudulent Inducement

News & Analysis as of

Clear Contractual Terms Prevail Over Equitable Principles in Bankruptcy Cases (Again)

Bankruptcy courts in the U.S. are widely viewed as favorable fora for debtors, trustees and creditors’ committees to pursue creative and difficult causes of actions against deep-pockets lenders and others in an attempt to...more

FRANCHISEE 101: Franchisee Keeps Case in Home Court Despite Forum Selection Clause

Rob & Bud's Pizza ("R&B") is a Papa Murphy's franchisee and owns and operates multiple Papa Murphy's Take 'n' Bake Pizza restaurants in Arkansas, Missouri and Kansas. In April 2014, R&B and other Papa Murphy's franchisees...more

Delaware Superior Court Explains Fraudulent Inducement Claims

ITW Global Investments Inc. v. American International Partners Capital Fund IV, L.P., C.A. No. 14C-10-236 JRJ (June 24, 2015) This decision explains several important aspects of Delaware law. First, a claim for fraud...more

Kentucky Supreme Court Reinforces Importance of Properly Incorporated Arbitration Provisions to Larger Agreements

The Kentucky Supreme Court recently held that an arbitration provision signed by a class of students upon their application and acceptance to a for-profit college was unenforceable because the enrollment agreement did not...more

Is That Covered - Misrepresentations In Sale of Life Insurance

A Pennsylvania appellate court on Tuesday affirmed a $300,000 judgment against Riversource Life Insurance Co. in a suit accusing the insurer and its agent of making fraudulent misrepresentations in the sale of a couple's...more

Fortis Advisors LLC v. Dialog Semiconductor PLC, C.A. No. 9522-CB (Del. Ch. Jan. 30, 2015) (Bouchard, C.)

In this memorandum opinion, the Court of Chancery granted a motion to dismiss certain claims relating to a dispute over earn-out payments owed to the former equity holders of iWatt, Inc. (“iWatt”) following the sale of iWatt...more

Texas Supreme Court Relaxes Its Grip on the Discovery Rule

The Texas Supreme Court – that elephants’ graveyard of claims and causes of action – has sided with a lessor-plaintiff who relied on the discovery rule to defeat a limitations defense. For the many with low expectations when...more

Southern District of Ohio Strikes Policyholders Class From Suit Against State Automobile Mutual Insurance Company

In Schumacher v. State Auto. Mut. Ins. Co., No. 13-cv-00232, 2015 U.S. Dist. LEXIS 11857 (S.D. Ohio Feb. 2, 2015), the Southern District of Ohio struck class allegations from a putative class action alleging breach of the...more

Ambac Sues Countrywide For Alleged Fraud in Connection with $1.7 Billion in RMBS

On December 27, Ambac Assurance Corporation filed a complaint against several Countrywide entities and Bank of America Corporation in New York state court, seeking to recover at least $600 million in damages in connection...more

In Battle Of Apparel Companies, Court Compels Arbitration

In early September, a New York district court granted defendants United States Polo Association, Inc. (“USPA”) and Arvind Ltd.’s (“Arvind”) motion to compel arbitration. It further dismissed Ralph Lauren Corporation and its...more

Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLLP, C.A. No. 7906 (Del. Ch. Nov. 26, 2014) (Glasscock, V.C.)

In this memorandum opinion, the Court of Chancery largely denied but granted in part defendants’ motion to dismiss claims relating to a 2011 merger in which plaintiffs Great Hill Equity Partners IV, LP and related entities...more

MBIA Allowed to Pursue Fraudulent Inducement Claim Against J.P. Morgan

On September 19, Justice Alan D. Scheinkman of the New York Supreme Court for Westchester County granted in part MBIA’s motion for leave to amend its complaint against J.P. Morgan in an action related to a Bear Stearns RMBS...more

Sixth Circuit says ERISA does not preempt state law claim for fraudulent inducement.

The Sixth Circuit recently held that ERISA did not preempt a plan participant’s claim for state law fraudulent inducement. McCarthy v. Ameritech Pub., Inc., No. 12-4510, 2014 WL 3930572 (6th Cir. 2014). Defendant-API’s...more

IP Solicitation Scams on the Rise

In recent months, an increasing number of companies have reported receiving official-looking intellectual property notices and solicitations. These fraudulent solicitations may take the form of invoices, renewal notices, or...more

Aurora Resolves Mortgage Modification Class-Action Lawsuit for $5.3 Million

A former goliath of the non-prime lending market, Aurora Loan Services, LLC (“ALS”), recently resolved a class-action lawsuit alleging that it fraudulently induced distressed California borrowers to enter into purported...more

New Texas Supreme Court Case Helps/Hurts At-Will Status

On April 25, 2014, the Texas Supreme Court issued a decision in the Sawyer, et al. v. Du Pont case. The case involved questions from the Fifth Circuit Court of Appeals regarding the scope of the at-will doctrine in Texas....more

Real Property, Financial Services & Title Insurance Case Law Updates

I. FLORIDA STATE CASES - Quiet Title: deed reservation of right-of-way in favor of State, which applied only to tracts of land of 10 acres or more, did not attach to title of landowner of less than 10 acres and,...more

Florida’s False Claims Act – Did You Know It Changed Last Year?

In June 2013, Florida’s legislature significantly amended Florida’s False Claims Act, Fla. Stat. §§ 68.081-68.092 (“FFCA”), effective July 1, 2013. Although these amendments have not received much publicity or commentary,...more

The State and Impact of Florida’s Economic Loss Rule

In March of this year, the Florida Supreme Court departed from established precedent and limited the application of the economic loss rule to product liability cases. The court explained that this was necessary given the...more

Business Litigation Reporter

We are pleased to introduce the inaugural issue of Goodwin Procter’s Business Litigation Reporter. This unique publication provides timely summaries of key cases and other developments within dedicated Business Litigation...more

In Delaware, Privilege Goes to the Buyer -- Court Finds Buyer Controls Attorney-Client Privilege over Seller’s Pre-Closing...

The Delaware court of chancery held recently that control over a target company’s attorney-client privileged communications, including communications between the target company’s counsel and its pre-merger stockholders,...more

Eighth Circuit Adopts Novel False Claims Act Fraud-in-the-Inducement Theory Long Espoused by Government

On October 15, 2013, a divided three-judge panel of the United States Court of Appeals for the Eighth Circuit rendered a federal False Claims Act ("FCA") judgment against Bayer Healthcare Pharmaceuticals ("Bayer"), based on a...more

Change In Parol Evidence Precedent Could Spell Greater Litigation Expense for Businesses

The California Supreme Court’s recent clarification of the fraud exception to the Parol Evidence Rule weakened the effect of contract integration clauses, and may mean lengthier, and more costly, litigation for businesses. ...more

New York Appellate Court Dismisses Syncora’s $320M RMBS Suit Against J.P. Morgan

On August 13, the First Department of the Appellate Division of the Supreme Court of New York reversed a trial court decision denying Syncora Guarantee Inc.’s motion for summary judgment in an action against J.P. Morgan...more

Deutsche Bank Sued for Fraud in Connection with US$535 Million in RMBS

In a lawsuit filed in New York State Court on August 5, Royal Park Investments SA/NV (RPI) alleged that several Deutsche Bank affiliates fraudulently induced it to invest in more than US$535 million worth of RMBS in...more

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