Darr v. Marine Electronics Solutions, Inc.
96 So. 3d 527
La. Ct. App.2012Background
- Darr and Donna Penney, former spouses and co-owners of MES and MESI, owned 46% and 45% respectively; corporations incorporated in Florida with Harahan, Louisiana offices.
- MSA (Aug 24, 2003) stated the parties would jointly own and operate the two businesses and keep salaries equal.
- June 21, 2004 board changes terminated Darr and assigned VP roles, leading to his removal as director; both corporations dissolved in 2006.
- Dec 28, 2004 Darr filed a damages petition alleging violations of the MSA, failure to provide corporate records, unpaid salary, accounting problems, wrongful removal, and other misconduct.
- Feb 18, 2005 hearing ordered production of documents; federal court later granted summary judgment on federal and most state claims; remaining state claims were remanded to state court.
- Aug 16, 2010 defendants moved for summary judgment; March 31, 2011 trial court granted summary judgment for defendants on breach of fiduciary duty, records review, and breach of the MSA; Darr appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants complied with document-production orders | Darr argues documents were not provided as ordered | Penney affidavit shows discs with all records were supplied | No factual issue; summary judgment supported. |
| Whether MSA is a shareholders' agreement | MSA constitutes shareholders’ agreement and employment terms | MSA signed individually, not as shareholders; not binding on corporations; even if considered, no breach shown | MSA not a shareholders’ agreement; no breach proven. |
| Whether Penney and Mazyck breached fiduciary duties by wasting assets or misvaluing the company | Defendants wasted assets and provided misleading valuations | No competent evidence of waste or misvaluation; documents and affidavits show otherwise | No material factual dispute; summary judgment proper. |
| Whether a derivative action was properly maintained | Derivative action on corporate waste | Not a proper derivative action; plaintiff pursued direct claims; failed procedural prerequisites | Derivative action not proper; summary judgment affirmed. |
Key Cases Cited
- Jewelers International Showcase, Inc. v. Mandell, 529 So.2d 1211 (Fla. 3d DCA 1988) (documents needed to value stock include tax returns, ledgers, and financial statements)
- Schultz v. Guoth, 57 So.3d 1002 (La. 2011) (summary judgment burden on movant; competent evidence required)
- Lanman Lithotech, Inc. v. Gurwitz, 478 So.2d 425 (Fla. 5th DCA 1985) (derivative action procedural requirements; prior demand)