Commercial Litigation: the Year in Review
| Publication year | 2021 |
| Pages | 135 |
83 CBJ 135. COMMERCIAL LITIGATION: THE YEAR IN REVIEW
Volume 83, No. 2, Pg. 135
JUNE 2009
Between the spring of 2008 and the spring of 2009, there was a plethora of interesting decisions at all levels of our state court system. There is hesitation to say that any clear trends are being established, but it is observed that, as a general proposition, jurists at every level, and particularly superior court judges, are seizing the opportunity to write elaborate and highly analytical decisions, especially on the subjects of foreclosure and breach of contract.
One of the more notable decisions at the Supreme Court level is Bernhard -thomas Building Systems, LLC v. Dunican,(fn1) which features an interesting intersection between the law of prejudgment remedies and the cause of action for vexatious litigation. In this case, the plaintiff applied for a prejudgment remedy and, after losing the hearing on the application, decided not to pursue the lawsuit.
The respondent then filed his own action against both the applicant and the applicant's attorney for vexatious litigation. The court granted the defendant's motion to strike the complaint, finding that one of the necessary elements of a vexatious litigation claim, namely the termination of a prior civil action in the plaintiff's favor, was lacking. The court ruled that an application for a PJR, absent anything more, does not constitute a "civil action," especially where, as here, the unsuccessful applicant thereafter declined to institute the lawsuit. Thus, there could be no claim for vexatious litigation.
This case also serves as a reminder that the mere filing of an application for a PJR does not satisfy the requirement for instituting a lawsuit for purposes of filing an action before the statute of limitations has run.
The statute of limitations is also considered in another noteworthy case, JSA Financial Corp. v. Quality Kitchen Corp. of Delaware.(fn2) There, the holder of a note brought a lawsuit against the guarantor of the underlying obligation. The note was a term instrument with a maturity date of July I8, I990 and was, naturally, subject to the six-year statute of limitations for written contracts.
The holder did not commence suit until July 2, 2002 which, at first blush, appears to be nearly six years after the statute had run. Nevertheless, the reaffirmation of a debt can revive the limitations period. In this case, the maker had made a payment on November I9, I996, about five months after the statute had run. This had the practical effect of extending the limitations period six years from that date-November 2002.
Thus, the action was deemed to have been timely filed. Although the guarantor was not the party who had tendered the payment that extended the statute, the guaranty expressly stated that the holder could modify the terms of repayment with the maker, without the consent or knowledge of the guarantor.
The case of Kendall v. Amster(fn3) raises hopes for many creditors who have heretofore been frustrated by companies that run up debts, go out of business, and then reopen in a slightly reconstituted form under a different name. In Kendall, the appellate court upheld the trial court's granting of the plaintiff's PJR application, which sought to attach the property of an entity other than the party which was actually indebted to the applicant.
The court found that the plaintiff had established the successor liability of the defendant for the debts of its predecessor. Both were engaged in the highly specialized business of restoring vintage automobiles; and both utilized the same production processes in virtually identical work environments; and both used the same employees as technicians and supervisors. Thus, the successor was liable under the theory of continuity of enterprise.
In the civil procedure arena, Argent Mortgage Co., LLC v. Huertas(fn4) is of interest. The Supreme Court upheld the trial court's denial of a motion to open a judgment of strict foreclosure filed by the property owner who claimed that the plaintiff had not properly served him by leaving the suit papers at his residence during his period of incarceration. The Supreme Court agreed with the trial court that service was sufficient, notwithstanding the defendant's status as a "guest of the State" at the time since he was planning to return to his residence following his release, and his...
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