May 24, 2013 4th Circuit published opinions

VRCompliance LLC v HomeAway, Inc.

HomeAway sued VRCompliance in Texas state court alleging VRCompliance used software to scrape information from its site to assist Colorado ski towns to collect hotel taxes form homeowners. VRCompliance sued in federal district court in Virginia seeking declaratory judgment that its actions were lawful. The federal district court stayed the federal action. The panel affirmed. It held that even under the higher Colorado River standard, the stay was proper as VRCompliance had refused to transfer the case to federal court in Texas and thus engaged in forum shopping. It only has itself to blame, therefore, for not having a federal forum to litigate the case.

Painter’s Mill Grille, LLC v Brown

Grille and its owners sued Brown, its landlord, alleging racial discrimination in the lease relationship. The district court dismissed the complaint finding it failed to state a claim. The panel affirmed. It first held that the owners of Grille were barred from bringing suit as all alleged harm was done to Grille as a business entity and personal claims were barred under united states supreme Court precedent. It affirmed the dismissal of the federal claims as the complaint failed to provide any facts which demonstrated plausibly that Brown or anyone else interfered with operation of Grille or its proposed sale let alone did so for racially discriminatory reasons. The dismissal of the conspiracy counts were affirmed as the alleged coconspirators were a corporation and its agents and the law does not recognize intracorporate conspiracy as a viable cause of action. The dismissal of the remaining state law claims was affirmed as the complaint provided no facts in support of its allegations of racial animus.

Johnson v American Life Insurance Company

Johnson’s husband died while driving drunk. She filed a claim for accidental death and dismemberment insurance which American denied on the basis that drunk driving is not an “accident” under the policy. Johnson field suit seeking review of the rejection. The district court affirmed the denial. The panel reversed. Construing the policy de novo, it held that because “accident” could mean an unintentional or unplanned incident or the consequences of intentional conduct that are expected or reasonably foreseeable and because American did not define the term in the policy, the contract must be construed against American and in favor of coverage. Even if state law applied, because drunk driving results in death approximately 1 in 9000 incidents, Johnson’s husband would not have been on notice that his death was substantially certain or reasonably likely. Thus, the outcome would be the same and there was no need to determine if the North Carolina statute was preempted.

Grayson Consulting, Incorporated v Wachovia Securities LLC (In re Derivium Capital, LLC)

Grayson, assignee of the trustee in the underlying Derivium bankruptcy brought an adversary proceeding against Wachovia alleging tort and fraudulent conveyance claims. The bankruptcy court dismissed the tort claims and grantee summary judgment to Wachovia on the transfer claims. The district court affirmed. The panel affirmed. It held that the transfers could not be avoided in bankruptcy as the initial transfer of the stock in question was to Derivium and not from Derivium to a creditor, Wachovia did not exercise dominion over all the assets claimed and their fees were reasonable and customary given the industry standard to give fee discounts to high volume customers. The panel also affirmed the dismissal of the state law tort claims holding that Derivium acted as a sole actor and participated in any tortuous conduct. As Grayson steps into Derivium’s shoes, its tort claims are barred under the in pari delicto doctrine.

White v White

The White’s divorced in Switzerland. Custody of their son was given to Ms. White. She removed him to the United States. Mr. White sued in a United States district court alleging wrongful removal under the Hague Convention. The district court denied his petition. After oral argument before the panel, a Swiss appeals court reversed an earlier determination that Ms. White had not violated any right of Mr. White in leaving the country and awarded custody to Mr. White. The panel affirmed. It held that, consistent with Swiss law, Mr. White and no rights which were violated by Ms. White removing their son to the United States. Further, because Ms. White came to the United States to obtain medical treatment for their son, she did not abuse her custody rights. The panel also held that the rights at the time of the removal of the child determine whether a removal is a wrongful removal claims. Joining Canada, England and Scotland, the panel held that later purported custody orders are not relevant to the removal analysis.

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