439 S.W.3d 853
Mo. Ct. App.2014Background
- Robinson appeals a circuit-court summary judgment in favor of Langenbach, Longbrook, and Perma-Jack Company.
- Three directors — Robinson, Langenbach, and Longbrook — have served since 1988.
- A voting trust (1985) requires trustees to vote shares, with two trustees (Robinson and Langenbach) and Longbrook not a trustee.
- Two-thirds of the directors (Langenbach and Longbrook) removed Robinson as president and treasurer at a special meeting.
- Robinson argues the removal was invalid under the voting trust; defendants argue the by-laws authorize removal by the board.
- Court remands for trial on oppression, fiduciary duties, and business-judgment issues; majority authority to remove is affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to remove Robinson despite voting trust | Robinson claims trustees’ consent was required | Two-thirds of directors could act under by-laws | Majority had authority; voting trust not binding on directors |
| Fiduciary duty of Langenbach as voting-trust trustee | Langenbach breached fiduciary duty as trustee | No actionable breach by trustee shown | No breach established; affirmed on this basis |
| Shareholder oppression and breach of fiduciary duties as directors/controlling shareholders | Oppressive conduct warranting dissolution/relief | Actions were within governance and control | Issues require credibility-based trial; reverse and remand for trial on oppression and fiduciary duties; business-judgment analysis to be reconsidered |
| Application of the business-judgment rule | Rule does not protect potentially oppressive or breached actions | Rule shields good-faith, rational business decisions | Remanded for trial; not resolved at summary judgment |
Key Cases Cited
- Fix v. Farm Master Co., Inc., 538 S.W.2d 351 (Mo. App. St.L.D. 1976) (fiduciary duties; corporate control principles)
- Cardi nal Partners, LLC v. Desco Investment Co., L.L.C., 301 S.W.3d 104 (Mo. App. E.D. 2010) (summary judgment; burden and inferences in business disputes)
- Systema e, Inc. v. St. Louis Co unty, 432 S.W.3d 783 (Mo. App. E.D. 2014) (contract interpretation; corporate governance)
- Struckhoff v. Echo Ridge Farm, Inc., 833 S.W.2d 463 (Mo. App. E.D. 1992) (oppression standard in shareholder disputes)
- Waters v. G&B Feeds, Inc., 306 S.W.3d 138 (Mo. App. S.D. 2010) (fiduciary duty; closely held corporation)
- Sutherland v. Sutherland, 348 S.W.3d 84 (Mo. App. W.D. 2011) (business-judgment rule; standards and application)