Hoyt Properties, Inc. v. Production Resource Group, L.L.C. case brief summary
736 N.W.2d 313 (Minn. 2007)
SYNOPSIS:
Appellants, a lessee and its successor, sought review of a court of appeals (Minnesota), which reversed the trial court's decision partially dismissing on summary judgment a lawsuit brought by respondents, a lessor and its successor. Respondents sought to rescind settlement agreement and to pierce the corporate veil to hold the lessee liable for its successor's breach of a lease based on fraudulent misrepresentation.
OVERVIEW: When the lessee's successor defaulted on the lease, the lessor agreed to release the lessee and its other affiliates from liability allegedly because the lessee's attorney stated that the corporate veil could not be pierced and that the lessee and its successor were separate entities. The lessor learned of a third party lawsuit in which the corporate veil of the lessee was being pierced and claimed fraudulent misrepresentation. The trial court concluded that the alleged misrepresentation was a legal opinion; the court of appeals reversed on grounds that the alleged misrepresentation both implied and directly asserted facts.
HOLDING:
On appeal, the court found that the statement that there was no way to pierce the corporate veil was not an expression of pure legal opinion but rather a statement implying that facts existed that supported a legal opinion.
ANALYSIS:
The second alleged representation, that the lessee and its successor were separate was also actionable as a direct factual assertion that the corporate veil could not be pierced. There were genuine issues of material fact about whether the representations were actionable and whether the lessor's reliance on the statements were reasonable.
OUTCOME: The court affirmed the judgment and remanded the case to the district court for further proceedings.
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736 N.W.2d 313 (Minn. 2007)
SYNOPSIS:
Appellants, a lessee and its successor, sought review of a court of appeals (Minnesota), which reversed the trial court's decision partially dismissing on summary judgment a lawsuit brought by respondents, a lessor and its successor. Respondents sought to rescind settlement agreement and to pierce the corporate veil to hold the lessee liable for its successor's breach of a lease based on fraudulent misrepresentation.
OVERVIEW: When the lessee's successor defaulted on the lease, the lessor agreed to release the lessee and its other affiliates from liability allegedly because the lessee's attorney stated that the corporate veil could not be pierced and that the lessee and its successor were separate entities. The lessor learned of a third party lawsuit in which the corporate veil of the lessee was being pierced and claimed fraudulent misrepresentation. The trial court concluded that the alleged misrepresentation was a legal opinion; the court of appeals reversed on grounds that the alleged misrepresentation both implied and directly asserted facts.
HOLDING:
On appeal, the court found that the statement that there was no way to pierce the corporate veil was not an expression of pure legal opinion but rather a statement implying that facts existed that supported a legal opinion.
ANALYSIS:
The second alleged representation, that the lessee and its successor were separate was also actionable as a direct factual assertion that the corporate veil could not be pierced. There were genuine issues of material fact about whether the representations were actionable and whether the lessor's reliance on the statements were reasonable.
OUTCOME: The court affirmed the judgment and remanded the case to the district court for further proceedings.
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Interested in learning how to get the top grades in your law school classes? Want to learn how to study smarter than your competition? Interested in transferring to a high ranked school?
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