McCann v. McCann
152 Idaho 809
Idaho2012Background
- Ron McCann and Bill McCann, Jr. dispute management of McCann Ranch & Livestock Co., a closely-held family corporation.
- William McCann, Sr. transferred shares to a trust for Gertrude McCann with Meisner as trustee; upon Sr.’s death, Bill gained control of the company.
- Ron alleged breach of fiduciary duties and sought equitable relief or dissolution under I.C. § 30-1-1430(2)(b); district court granted summary judgment for respondents.
- Ron’s earlier derivative claims were at issue, with McCann I affirming derivative nature of those claims; the current case readdresses individual versus derivative theories.
- Allegations include squeeze-out tactics, lack of dividends, employment denial, and transactions benefiting Gertrude at Ron’s expense; expert testimony discusses payments to Gertrude totaling roughly $600k post-2001.
- Discovery disputes limited pre-2001 evidence; final judgment granted dissolution-related relief and shifted costs; Ron appeals and respondents cross-appeal for attorney fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Count I is an individual claim or a derivative action | Ron argues Count I is individual and not governed by the written-demand rule. | Respondents contend Count I is derivative because quantum of injury is to the corporation. | Count I is an individual claim not subject to § 30-1-742; derivative labeling reversed. |
| Whether dissolution is appropriate under I.C. § 30-1-1430(2)(b) | Ron asserts irreparable harm to the corporation from alleged siphoning and related transactions. | Respondents argue no irreparable injury to the corporation proven and harm is personal/ speculative. | Irreparable injury to the corporation was shown; reversal and remand on Count II. |
| Whether pre-2001 discovery was improperly excluded | Ron contends pre-2001 facts are relevant to understanding transactions post-2001. | Respondents argue discovery should be limited to events after 2001 per McCann I. | District court abused discretion; pre-2001 discovery vacated. |
| Whether attorney fees were properly denied | Ron prevailed on important issues; fees should be considered. | Respondents seek fees under I.C. § 30-1-746 and § 12-121; court previously denied. | District court’s denial affirmed; novel issues justified discretion and no fee on appeal. |
Key Cases Cited
- McCann v. McCann, 138 Idaho 228 (2002) (derivative vs. individual action; McCann I affirmed derivative nature)
- Steelman v. Mallory, 110 Idaho 510 (1986) (fiduciary duties; close corporation; business judgment rule; minority duties)
- Jenkins v. Jenkins, 138 Idaho 424 (2003) (fiduciary duties in closely held corporations; minority interests)
- Crosby v. Beam, 548 N.E.2d 217 (Ohio 1989) (direct vs derivative actions; special duty to shareholder)
- Landstrom v. Shaver, 561 N.W.2d 1 (S.D. 1997) (oppression of minority shareholders; close-corporation context)