Plaintiffs, James D. Azzar and Extrusions Division, Inc., appeal as of right a July 30, 1990, Kent Circuit Court opinion and order granting the defendants summary disposition pursuant to MCR 2.116(C)(8). We affirm.
This appeal arises from the plaintiffs’ action against the defendants, Primebank and its board of directors, for breach of fiduciary duty. Azzar owned one hundred percent of the common stock of Extrusions Division, Inc. Primebank was a federally chartered savings bank. Azzar and Extrusions Division, Inc., collectively owned 9.98 percent of Primebank’s common stock.
On November 16, 1989, Primebank and First of America bank agreed to merge. First of America was to acquire all of Primebank’s issued and outstanding common stock. The merger agreement contained a "lock-up warrant” entitling First of America to purchase unissued shares of Prime-bank stock at twenty dollars a share upon the occurrence of certain events.
On December 4, 1989, the plaintiffs requested permission to examine Primebank’s books, records, list of stockholders, and other documents. Defendants denied access to the documents because the plaintiffs’ request was overly broad and not relevant to their stated purpose in requesting the documents.
On April 23, 1990, the plaintiffs filed their complaint, alleging that the defendants breached the fiduciary duty they owed the plaintiffs and the other stockholders of Primebank. Plaintiffs also alleged that the defendants wrongfully refused to
The circuit court determined that the defendants’ actions in petitioning the fhlbb constituted an attempt to influence governmental action and were thus immune from liability. The court held that the First Amendment of the United States Constitution barred litigation arising from injuries incurred as a consequence of First Amendment petitioning activities because the prospect of litigation would chill the exercise of the right to petition. The court determined that even if the defendants’ petitioning of the fhlbb was a sham because it was based on false information, their efforts were immune from liability because successful petitioning was presumed to be genuine.
The court also denied the plaintiffs’ request for an injunction requiring the defendants to provide all the shareholder information they requested. The court determined that equitable considerations weighed against the plaintiffs because their document demand substantially overreached the legal requirement and they did not have clean hands. The court held that the plaintiffs had effectively injured themselves by ignoring the defendants’ attempt to mitigate damages and resolve any differences between the parties. The court also determined that the plaintiffs did not really want the documents, but wanted more money, and used the document issue to perpetuate the lawsuit.
On appeal, plaintiffs first argue that the circuit court erred in holding that the First Amendment
A motion for summary disposition under MCR 2.116(C)(8) tests the legal sufficiency of a claim by the pleadings alone.
Hutchinson v Allegan Co Bd of Road Comm’rs (On Remand),
The right to petition, as guaranteed by the First Amendment of the United States Constitution,
1
protects the right of the people to inform their representatives in government of their desires with respect to the passage or enforcement of laws, regardless of their intent in doing so.
Eastern Railroad Presidents Conference v Noerr Motor Freight, Inc,
It is inevitable, whenever an attempt is made to influence legislation by a campaign of publicity, that an incidental effect of that campaign may be the infliction of some direct injury upon the interests of the party against whom the campaign is directed.
Accordingly, unless the petitioning is a sham,
Plaintiffs next argue that the circuit court erred in holding that the First Amendment protected the defendants from tort liability for intentionally misrepresenting facts to the fhlbb. Although we accept as true the factual allegation that the defendants intentionally misrepresented facts to the fhlbb,
Parkhurst Homes, Inc, supra,
we disagree with the plaintiffs. Allegations in a complaint of knowing falsehoods are generally protected from liability under the First Amendment
Nevertheless, knowingly and maliciously made allegations in petitions to government are not protected under the First Amendment from liability for defamation.
McDonald v Smith,
Next, plaintiffs argue that the circuit court erred in finding that the defendants had successfully petitioned the fhlbb because they had not been successful on the merits of their administrative challenge. Plaintiffs maintain that any success the circuit court perceived is legally insufficient to warrant any presumption that the defendants engaged in protected petitioning. Plaintiffs also argue that the defendants’ petitioning efforts are not entitled to protection under the First Amendment because they were a sham. Citing
Trepel v Pontiac Osteopathic Hosp,
From the face of the plaintiffs’ complaint, we find that the defendants’ petitioning efforts were successful. Plaintiffs alleged that the defendants sent information to the fhlbb, which is charged with determining whether the plaintiffs had provided sufficient information to rebut the presumption of control. Plaintiffs admitted in their complaint that the fhlbb adopted the defendants’ contention that the plaintiffs had not submitted adequate information to rebut the presumption of control. The fhlbb informed the plaintiffs that their filing was materially insufficient. Thus, the circuit court did not err in determining that the defendants were successful in their petitioning efforts.
Plaintiffs’ reliance upon
Trepel, supra,
is misplaced. This Court in
Trepel
noted that the counterdefendants’ petition was a sham because it was sent to an agency that lacked the authority to review it. In the present case, the fhlbb was the
Finally, the plaintiffs claim that the circuit court erred in denying their request for an injunction prohibiting the defendants from refusing to furnish the information requested by the plaintiffs. Plaintiffs argue that they were entitled to all the information they requested from the defendants. They further contend that the circuit court erroneously granted the defendants summary disposition against their request despite the existence of genuine issues of material fact. We disagree.
Injunctive relief is an extraordinary remedy that issues only when justice requires, there is no adequate remedy at law, and there is real and imminent danger of irreparable injury.
Holly Twp v Dep’t of Natural Resources (On Rehearing),
Any stockholder with not less than five percent of the total outstanding voting shares of a federal stock association has the right to examine the association’s "books and records of account, minutes and record of stockholders” upon written demand stating a proper purpose. 12 CFR 552.11(b) (2). A shareholder is only entitled to inspect documents that are relevant to a proper purpose.
Fie
In their demand for the documents, the plaintiffs’ stated purpose was to determine the value of the shares held by them, to communicate with other shareholders, and to ascertain the existence of possible mismanagement at Primebank in connection with the recent acquisition discussions with First of America. Plaintiffs then requested permission to examine the books of account of Primebank; documents relating to stock issuances since January 1987; minutes of meetings of the stockholders and directors; any agreements and correspondence between Primebank and First of America or any of its representatives; documents concerning the compensation of officers and directors of Primebank; Primebank’s tax returns for the last three fiscal years; all current material contracts of Primebank; current stock option plans; any and all agreements with investment bankers; any financial projections prepared by Primebank’s management; and current stockholder agreements. We find that most of these documents are irrelevant to the plaintiffs’ purpose in requesting them. Fleisher Development Corp, supra. In addition, an adequate remedy at law existed for the plaintiffs’ claim, as evidenced by their request for monetary damages for the defendants’ failure to provide the documents. Holly Twp, supra. Further, the circuit court noted that the defendants had offered to meet with the plaintiffs and provide them all the documents to which they were entitled, but the plaintiffs failed to respond. Accordingly, the circuit court did not abuse its discretion in denying the plaintiffs’ request for an injunction.
Finally, we conclude that the circuit court did
Affirmed.
Notes
US Const, Am I, provides: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of people peaceably to assemble, and to petition the Government for a redress of grievances.”