Quimbee logo
DMCA.com Protection Status

Western Property Holdings, LLC v. Aequitas Capital Management, Inc.

392 P.3d 770 (2017)

Case BriefRelatedOptions
From our private database of 35,600+ case briefs...

Western Property Holdings, LLC v. Aequitas Capital Management, Inc.

Oregon Court of Appeals

392 P.3d 770 (2017)

Facts

Computer company Catcher Holding, Inc. (Catcher) was to be merged with wireless-technology company Vivato Networks, Inc. (Vivato). Aequitas Capital Management (Aequitas) (defendant) was an investment-management company, and one of its affiliates, Aequitas Investment Management (AIM), was part of a group that had loaned $4.8 million to Catcher, of which AIM contributed $500,000. Vivato was to merge into Catcher, and Catcher would then sell preferred stock to obtain $8 million. Aequitas agreed to loan Vivato $1 million as part of this process. Vivato’s main assets—patents—were transferred to a new company, Vivato Holdings, Inc. Aequitas received a security interest in the patents, but Vivato also agreed to grant Catcher an exclusive license and option to purchase the patents. Some of Vivato’s shareholders formed Western Property Holdings, LLC (Western) (plaintiff) to help with financing. Western entered into a loan participation agreement with Aequitas under which Western would contribute up to 30 percent of the funds loaned to Vivato, and Aequitas agreed to return a proportionate share of all repayments from Vivato back to Western, as well as grant Western a proportionate share of any proceeds from the sale of collateral after default. The loan-participation agreement gave Aequitas full and complete authority to enforce the loan documents, including commencing and managing foreclosures. From November 2007 to February 2008, Aequitas loaned Vivato $987,750, with Western paying $287,750. Vivato defaulted on the loan, and the stock offering was not successful. By December 2007, Vivato Holdings was negotiating a sale of the patents to another company, Intellectual Ventures (IV), for $1.8 million. That sale did not go through, in part because AIM expressed concern to the group that had loaned funds to Catcher about whether the title to the patents could be cleared without impairing Catcher’s rights. After much haggling, Aequitas ultimately filed a foreclosure action on the patents, obtaining clear title to them in 2009 at a sheriff’s sale. Aequitas ultimately sold the patents to XR Communications for $800,000. Western then filed this suit against Aequitas, arguing breach of contract, breach of the implied duty of good faith and fair dealing, breach of duties under a special relationship, and negligence. After the suit was filed, Aequitas paid Western $220,481.60, its share of the sale from XR Communications plus interest. Aequitas filed a motion for summary judgment, arguing that it had not breached the agreement or the duty of good faith and fair dealing, that there was no special relationship between the parties, and that the negligence claim was barred by the economic-loss rule. Western argued that Aequitas should be liable for blocking the sale of the patents to IV.

Rule of Law

Issue

Holding and Reasoning (Sercombe, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 620,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 620,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 35,600 briefs, keyed to 984 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 620,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 35,600 briefs - keyed to 984 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership