811 N.W.2d 856
Wis. Ct. App.2012Background
- Beidel appeals denial of his motion for reconsideration of a dismissal order on his first count seeking specific performance of a stock repurchase agreement.
- Sideline Software and Beidel entered into a stock repurchase agreement providing a buyback of a terminated shareholder’s stock if termination was without cause.
- Beidel contends he was constructively discharged without cause within 24 months of the last stipulated price, triggering the buyout at $1,600 per share.
- The last agreed stock price stipulation occurred March 6, 2007; no new valuation was agreed for 24 months.
- Beidel purportedly exercised his option on January 20, 2009; the date of closing would be within 90 days after exercise.
- The circuit court granted partial summary judgment dismissing the specific-performance claim; this court remands for a balancing-of-equities analysis on whether specific performance is appropriate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether constructive discharge can trigger the stock repurchase and specific performance. | Beidel asserts constructive discharge began before expiration of the $1,600 price. | Sideline contends no actual resignation or constructive termination occurred under §6. | Remanded for equity-based determination. |
| Whether Beidel's January 20, 2009 exercise of the put option was timely and proper under the 90-day closing rule. | Beidel argues exercise was timely and effective before the 1,600 valuation expired. | Sideline argues timing and termination requirements were not satisfied. | Remand to determine timing and implementation on the record. |
| Whether the circuit court should grant specific performance given equities and good-faith requirements. | Beidel seeks specific performance to compel Sideline to buy at $1,600. | Sideline argues relief is inappropriate where termination criteria and valuations are disputed. | Court remands for consideration of equities and potential evidentiary hearing. |
Key Cases Cited
- Strozinsky v. School Dist. of Brown Deer, 2000 WI 97 (Wis. 2000) (constructive-discharge framework; voluntary resignation inquiry)
- Scribner v. WorldCom, Inc., 249 F.3d 902 (9th Cir. 2001) (withdrawal of benefits and termination to facilitate sale may breach duty of good faith)
- Green Spring Farms v. Kersten, 136 Wis. 2d 304, 401 N.W.2d 816 (Wis. 1987) (summary-judgment standards and equitable review)
- Venisek v. Draski, 35 Wis. 2d 38, 150 N.W.2d 347 (Wis. 1967) (equitable considerations in specific performance)
- Phillips v. U.S. Bank, N.A., 2010 WI App 35, 324 Wis.2d 151, 781 N.W.2d 540 (Wis. Ct. App. 2010) (employer must consider fairness in terminating to avoid obligations)
- Leen v. Butter Co., 177 Wis. 2d 150, 501 N.W.2d 847 (Wis. Ct. App. 1993) (secondarily addresses agency and commissions after termination)