Henrichs v. Chugach Alaska Corp.
250 P.3d 531
Alaska2011Background
- CAC board split in 2004 pẹlu Henrichs challenging chair Buretta; Henrichs served as chair for ~6 months before reinstatement of Buretta; CAC sued Henrichs for misconduct spanning creating mini-board decisions, bylaw noncompliance, and misuse of corporate resources; late-2004 proxy campaign included a contested late-bird letter soliciting proxies; jury found Henrichs liable for conversion, misrepresentation, general fiduciary breach, and specific fiduciary breach (false/misleading proxy letter) and awarded $34,500 for the latter; superior court issued a five-year bar on Henrichs serving on CAC’s board based on seven Martinez factors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Safe harbor instruction error? | Henrichs relied on AS 10.06.450(b). | Court should have repeated reliance-on-counsel in all instructions. | No reversible error; evidence did not show counsel approval or reliance. |
| Business judgment vs. gross negligence? | Business judgment rule requires gross negligence for liability. | Ordinary negligence suffices under rule. | Rule does not require gross negligence; ordinary negligence not dispositive; conduct here falls outside protected scope. |
| Equitable defenses instruction? | Equitable defenses should be instructed. | Equitable defenses unnecessary given legal claims and advisory jury. | No error; court has discretion to refuse advisory-equity instructions. |
| Five-year board ban proper? | Ban warranted by egregious conduct; supported by jury verdict. | Ban relies on erroneous verdict or misapplied standards. | Not error; seven Martinez factors and AS 10.06.463 support a five-year ban. |
Key Cases Cited
- Alaska Plastics, Inc. v. Coppock, 621 P.2d 270 (Alaska 1980) (establishes business judgment rule and heightened care standard)
- Betz v. Chena Hot Springs Group, 657 P.2d 831 (Alaska 1982) (retreat of partnership with deference to management decisions)
- Shields v. Cape Fox Corp., 42 P.3d 1083 (Alaska 2002) (clarifies relation between common-law business judgment rule and statute)
- Martinez v. Cape Fox Corp., 113 P.3d 1226 (Alaska 2005) (seven-factor test for barring directors from service)
- City of Kodiak v. Samaniego, 83 P.3d 1077 (Alaska 2004) (jury instructions and prejudice standards; advisory jury concepts)
- Dugan v. Atlanta Casualty Cos., 113 P.3d 652 (Alaska 2005) (standard of review and prejudicial error framework)