DiMaggio v. Rosario
950 N.E.2d 1272
Ind. Ct. App.2011Background
- DiMaggio and Rosario are shareholders of Galleria Realty Corporation, an Indiana closely held real estate development company.
- LLE is an Indiana LLC formed in 2003 to pursue Porter County real estate development, with Rosario, Nebel, and Haak as members.
- In 2008, DiMaggio alleged Rosario and LLE members usurped a corporate opportunity from Galleria, causing damages to DiMaggio.
- Appellees moved to dismiss for failure to state a claim; the trial court dismissed without prejudice.
- Indiana recognizes fiduciary duties among close corporations; the potential liability of non-fiduciaries for usurping a corporate opportunity remains unsettled.
- The Indiana Court of Appeals affirmatively declined to recognize a third-party non-fiduciary usurpation claim at this time, and upheld dismissal for failure to state a claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Indiana recognizes a third-party non-fiduciary usurpation claim | DiMaggio contends Indiana should recognize such a claim. | Appellees argue Indiana does not recognize non-fiduciary usurpation liability. | Indiana does not recognize the claim at this time; dismissal affirmed. |
Key Cases Cited
- McLinden v. Coco, 765 N.E.2d 606 (Ind.Ct.App.2002) (fiduciary duty among close shareholders; duty to deal fairly)
- Dreyer & Reinbold, Inc. v. AutoXchange.com, Inc., 771 N.E.2d 764 (Ind.Ct.App.2002) (discusses usurpation context; not a holding on third-party liability)
- Hartung v. Architects/Hartung/Odle/Burke, Inc., 301 N.E.2d 240 (Ind. Ct. App. 1973) (fiduciary duty and avoidance of self-dealing)
- Melrose v. Capitol City Motor Lodge, Inc., 705 N.E.2d 985 (Ind. 1998) (close corporation fiduciary duties among shareholders)
- Barth v. Barth, 659 N.E.2d 559 (Ind. 1995) (fiduciary duties in closely held corporations)