Loren Wagner v. Russell Wagner Wanooka Farms, 371 P.3d 807

Wanooka Farms, a closely held family farming corporation, owned a lentil mill, ~1,038 acres, and other real property; 1,000 shares were allocated among family members (Majority vs. Minority shareholders).
Parties negotiated a tax-free split (26 U.S.C. § 355) and obtained two agricultural appraisals (2007 and 2012). An attorney (Cadagan) produced a spreadsheet valuing the company at $3,344,157 ($3,344/share) based on the June 28, 2012 appraisal and accountant data.
On July 12, 2012, the Majority voted to cease the 355 split, close the mill, and liquidate mill assets; Minority later sued seeking dissolution on August 22, 2013.
The Majority elected to buy out the Minority under Idaho Code § 30-29-1434; parties stipulated that the court would determine fair value of the Minority shares.
Bench trial focused on fair value: Minority’s expert valued shares at $3,399; Majority’s expert valued voting shares ~$1,540 and non-voting ~$1,490 (applying minority/marketability discounts). District court fixed fair value at $3,344/share as of July 11, 2012, rejected discounts, and the Majority appealed.

Issue	Wagner (Minority) Argument	Russell/Stuart et al. (Majority) Argument	Held
Whether district court’s $3,344/share valuation is supported by substantial evidence	Cadagan spreadsheet and Reinstein’s appraisal support $3,344–$3,399 value	Majority contends Cadagan spreadsheet was flawed and Hyde’s discounted appraisal was more accurate	Affirmed: substantial and competent evidence supported $3,344 (court credited Cadagan and Reinstein over Hyde)
Proper valuation date under I.C. § 30-29-1434(4)	Value should reflect condition before Majority’s decision to close mill (July 11, 2012)	Statute presumes date before petition (Aug 21, 2012); Majority urges August date showing post-closure losses	Affirmed: court did not abuse discretion in selecting July 11, 2012 as valuation date
Whether minority (DLOC) and marketability (DLOM) discounts must be applied as matter of law	Discounts are discretionary; court may consider but need not apply them	Discounts must be applied to reflect lack of control and marketability	Held: Discounts are not mandatory; they are factors a court may consider and here court permissibly declined to apply them
Award of appellate attorney fees	Minority requested fees under I.C. § 12-121; Majority not prevailing	Majority sought fees under I.C. § 12-120(3)	Awarded fees to Minority under § 12-121 (appeal was frivolous on key issues); Majority not entitled to § 12-120(3) fees

Camp v. E. Fork Ditch Co., 137 Idaho 850 (explaining appellate standard for factual findings)
Miller v. Callear, 140 Idaho 213 (defining substantial and competent evidence standard)
Link v. L.S.I., Inc., 793 N.W.2d 44 (S.D. 2010) (MBCA comment gives courts discretion in "fair value" determinations)
Matter of Seagroatt Floral Co., Inc., 78 N.Y.2d 439 (N.Y. 1991) (courts may consider liquidity risk but need not mandate discounts)
McCauley v. Tom McCauley & Son, Inc., 724 P.2d 232 (N.M. 1986) (upholding trial court discretion to apply discount to non-controlling shares)