I don’t draft arbitration provisions in agreements, but if I did I would not draft one like the one in Taggart v. Physicians Pharmacy Alliance, Inc. Not because it turned out to be unenforceable, but because it was found to be enforceable. What?
Judge McGuire granted a Motion to Compel Arbitration in that case
There are all sorts of questions when court proceedings run alongside an arbitration dispute. Who decides issues that cut across both? Judge? Arbitrator?
Assume that you represented the Claimant in an arbitration In which the opposing party (the Respondent) made a number of counterclaims on which it was awarded a substantial amount. You’re still smarting
I don’t think that it was worth it for TSG to appeal Judge Murphy’s Order denying its Motion for a Preliminary Injunction on a covenant not to compete. That’s true even though an injunction (though not on the covenant) was ultimately granted by Judge Bledsoe in an unpublished Order on December 14th.
From Business Court
The Business Court’s Opinion last week in Coleman v. Coleman, 2015 NCBC 110, provides useful guidance on how to properly plead a Meiselman claim, and proper procedure to follow before making a derivative claim.
Plaintiff in the Coleman case made both a Meiselman claim and a derivative claim. As you will guess from
There’s a lot to wonder about receiverships. Like, how is the Receiver’s compensation calculated? And does it make a difference to compensation if a corporate shareholder says the receivership was unnecessary, and that it was obtained for improper purposes?
Judge Bledsoe answered those questions this week in Ekren v. K&E Real Estate Investments, LLC
It’s pretty hard to succeed at getting a Business Court Judge to reconsider a prior ruling and reverse himself. But the Plaintiff in RREF BB Acquisitions, LLC v. MAS Properties, LLC, 2015 NCBC 105, accomplished exactly that last week.
I wrote about this case when the earlier ruling in the case was made
You don’t have many options when you think that the arbitrator who you agreed to hear your case has delivered a plainly wrong arbitration award. In fact, you probably have none at all.
The Defendants in the NC Business Court’s recent decision in Trilogy Capital Partners,, LLC v. Killian, 2015 NCBC 103 were left
The Business Court turned out its one hundredth published (numbered) opinion of 2015 at the end of last week. It came in the form of a tax case, in Home Depot U.S.A., Inc. v. North Carolina Dept. of Revenue, 2015 NCBC 100.
How much of a milestone ruling is this? It marks the first time that the Business Court has delivered one hundred opinions in a year. That’s way more than the opinions issued by the Court in its early years (like in 1996, the Court’s second year: 2 opinions, 1997: 5 opinions, 1998: 4 opinions). Its most productive year before this year was 2014: 73 opinions.
You might be wondering how those 100 opinions compare to the production of the Delaware Court of Chancery. That Court has already rendered more than twice the number of opinions of the Business Court, 237. Well, there are five Judges (Chancellors) on that Court and only three active Judges on the Business Court.
And don”t forget that the Court of Chancery is way older (founded in 1792) than the Business Court (founded in 1995).
The Case Was About A Sales Tax Refund Based On The "Bad Debt Deduction"
Home Depot was seeking a refund of some of the sales tax which it had paid to the Department of Revenue (DOR). It said that it was entitled to a bad debt deduction against its gross sales, the amount on which sales tax is calculated. The requested bad debt deduction for 2004-07 was nearly $2 million. Op. ¶7.
The applicable statute says that a retailer can deduct from its gross sales "[a]ccounts of purchasers, representing taxable sales, on which the tax imposed by this Article has been paid, that are found to be worthless and actually charged off for income tax purposes." N.C. Gen. Stat. §105-164.13(15).
Private Label Credit Cards
The bad debts which Home Depot was seeking to deduct were unpaid amounts on Home Depot’s Private Label Credit Cards (PLLCs)(credit cards branded with Home Depot’s colors and logo, usable only at Home Depot).
If a Home Depot customer does not pay his or her PLLC bill, doesn’t Home Depot suffer a bad debt which it should be allowed to deduct from its gross sales?
You would think the answer should be "yes," but first you need to get into the business of PLLCs. Home Depot doesn’t actually extend the credit which its customers enjoy on their cards. Home Depot, like many other companies that issue PLLCs, farms out the administration of its PLLC program to third party lenders. In Home Depot’s case, the lenders were General Electric Capital Financial, Inc., and Monogram Credit Card Bank of Georgia, Op. ¶20(5).
The third party banks owned the PLLC accounts. The banks settled up with Home Depot at the end of each day, paying Home Depot the amount charged by the customer less a service fee. Op. ¶20(16-17). The bank, not Home Depot, bore the risk of non-payment.
This case represents one of a number of cases where Home Depot has sought a state sales tax refund based on a bad debt deduction. Home Depot has apparently not won a single one of these cases. The states where Home Depot has made the same arguments as in North Carolina and lost include: Alabama (Magee v.. Home Depot U.S.A., Inc., 230 So.3d 781 (Ala. App. 2011); Arizona (Home Depot U.S.A., Inc. v. Arizona Dept. of Revenue); Indiana (Home Depot U.S.A., Inc. v. Indiana Dept. of State Revenue, 891 N.E.2d 187 (Ind. Tax 2008); New Jersey (Home Depot, U.S.A., Inc. v. Director, Division of Taxation); New York (In re Home Depot USA, Inc. v. Tax Appeals Tribunal);Ohio (Home Depot U.S.A., Inc. v. Levin, 905 N.E.2d 630 (Ohio 2009); Oklahoma (In re Sales Tax Claim for Refund of Home Depot, 198 P.3d 902 (Okla. App. 2008); and Washington (Home Depot, U.S.A., Inc. v. State Dept. of Revenue);
Home Depot can now add North Carolina to its list of losses. This was an appeal to the Business Court, from a final Agency Decision of the DOR, which had affirmed a grant of summary judgment against Home Depot by an Administrative Law Judge. Home Depot didn’t get traction in the Business Court with any of its arguments.
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I wrote yesterday about the arbitration aspects of Gaylor, Inc. v. Vizor, LLC, 2015 NCBC 98.
But there is a significant aspect of Business Court procedure addressed in that case which deserved its own post.
It concerns the authority of a non-Business Court Judge (i.e. a regular Superior Court Judge) to make a
You may have pondered over the question whether a Judge or an Arbitrator decides if a particular dispute is subject to an agreement to arbitrate.
If you have wondered who makes that sort of decision, it’s actually not an open question. The U.S. Supreme Court held twenty years ago that:
[u]nless the parties clearly