The trial court granted summary disposition to defendants with regard to plaintiffs claims, which included a shareholder derivative claim and a breach of employment contract claim. Subsequently, the trial court granted defendant Capitol Bancoip, Ltd. (Capitol), sanctions against both plaintiff and his counsel, and granted defendants Joseph Reid and Lee Hendrickson sanctions against plaintiff. Plaintiff appeals as of right, and we affirm in part, reverse in part, and remand for further proceedings.
Plaintiff first argues that the trial court should not have granted summary disposition of his claims against defendant Access BIDCO, Inc. (Access). We disagree. The trial court properly held that plaintiff, a member of Access’ board of directors, was estopped from challenging transactions that he approved at meetings of the board of directors. A shareholder who acquiesces or participates in a corporate transaction may not later challenge the validity of the transaction in court.
Burch v Norton Hotel Co,
We do not agree that plaintiff should be excused for failing to object to or vote against the proposals by which the transactions were effected. Plaintiff claims that he acquiesced in Reid’s proposals under threat of termination of plaintiff’s employment. In other words, his employment would have been terminated if he had openly opposed those proposals at the board meetings. He argues that because he only acquiesced under threat of losing his job, he should not now be precluded from bringing his claims. While we agree that a plaintiff may maintain an action if he demonstrates that complaining to the directors or requesting them to act differently would have been futile,
id.
at 314-315, plaintiff here did not demonstrate that it would have been useless to challenge the actions at issue. Moreover, the directors of a corporation owe fiduciary duties to stockholders and are bound to act in good faith for the benefit of the cor
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poration.
Production Finishing Corp v Shields,
Next, we acknowledge that one of the transactions that plaintiff challenges, the use of Access money to finance defendant Access Venture Fund, L.P., apparently transpired after plaintiff’s employment with Access ceased. Thus, our prior ruling with regard to plaintiff’s claims against Access does not extend to this particular transaction. Nevertheless, we also conclude that summary disposition was appropriate with regard to this transaction. Plaintiff claims that the Access Venture Fund transaction violated the Michigan BIDCO Act, MCL 487.1101
et seq.-,
MSA 23.1189(101)
et seq.,
which provides that “[a] licensee shall not provide, directly or indirectly, financing assistance to an associate of the licensee.” MCL 487.1809; MSA 23.1189(809). In
Claire-Ann Co v Christenson & Christenson, Inc,
We also note that plaintiff argues that because discovery was not complete, the trial court’s grant of summary disposition was premature and improper. This argument was not raised and decided by the trial court and, therefore, we will not review it.
Adam v Sylvan Glynn Golf Course,
Plaintiff next argues that the trial court should not have granted summary disposition in favor of Capitol. We disagree. Because plaintiff was estopped from vindicating the corporate interests of Access through a suit against Access itself, he was likewise estopped from vindicating the corporate interests of Access through an action against Capitol. The claims
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asserted against Capitol involve the same allegations and facts as some of the claims alleged against Access, which claims plaintiff was unable to maintain. The purpose of estoppel in the context of a derivative shareholder suit is to prevent a shareholder from challenging transactions in which the shareholder participated. See
Burch, supra
at 314. Because we have held that plaintiff was not entitled to relief against Access, we hold that plaintiff is also barred from challenging those same transactions through his claims against Capitol. Plaintiff may not pursue claims based on conduct and transactions that he approved. In addition, we note that plaintiff could not have been attempting to sue Capitol as a shareholder because there was no evidence that he held shares in Capitol. Finally, we also note that plaintiff argues on appeal that he should have been allowed to amend his complaint with regard to Capitol. Plaintiff did not raise this issue in his questions presented and review is therefore inappropriate.
Weiss v Hodge (After Remand),
Plaintiff next argues that the trial court erred in granting summary disposition of his breach of employment contract claim. We agree. There was a question of fact with regard to whether plaintiff’s employment had been terminated or he had resigned, and, if his employment had been terminated, whether that termination was in violation of his employment contract.
Plaintiff’s employment contract stated that “[t]he Employee’s employment. .. may be terminated at any time by the board of directors of Access, with or without cause . . . .” The term “cause” is exclusively *310 defined in the contract. Plaintiff testified dining his deposition that Reid “made it clear that he didn’t want me working at the BIDCO any longer and I agreed with that.” He also stated, “I agreed that if [Reid] doesn’t want me there, it’s not working out, yeah, it’s a good idea to part ways.” In a subsequent affidavit, plaintiff claimed:
2. That to date, [plaintiff] has not resigned from Access BIDCO, nor has [plaintiff] been terminated in accordance with the terms of his employment agreement.
18. That following his repeated dissent and complaint, Joseph Reid told [plaintiff] that he was “50% of the way to firing you . . . .” [Plaintiff] indicated that he would not change his course of dissent and criticism. Reid directed that he negotiate with Attorney Lasky and enter into a separation agreement. Such agreement was never achieved. Two days later, Hendrickson asked for [plaintiff’s] keys to the Access office and told him that he did not have to come in again. Hendrickson caused him to be locked out of his telephone system, including voice mail. About one week later, [plaintiff] asked for and was granted permission to remove personal items from his desk while being watched by Hendrickson.
19. That [plaintiff] made repeated inquiry as to his status at Access and Onset because he knew of his ongoing responsibilities as a shareholder and director. At no time was [plaintiff] informed that he had been terminated nor had he resigned.
20. That all payments received by [plaintiff] after being asked to leave the premises of Access BIDCO were salary since he has not resigned or entered into a severance agreement with the Defendant, Access BIDCO, nor had he been terminated by action of the Board of Directors as required by his Employment Agreement.
*311 Hendrickson testified that he never saw a resignation from plaintiff and that plaintiff had indicated that he was not sure if he had resigned.
Defendants produced a letter sent by Access’ attorney, also a member of Access’ board, to plaintiff, that purported to clarify the board’s position regarding plaintiff’s “separation” from employment. In the letter, plaintiff was offered six months of salary as severance pay and the issues of health insurance, vacation pay, and plaintiff’s Access stock were discussed. In addition, the letter requested that plaintiff draft a letter of resignation. Defendants also produced the affidavit of Hendrickson, which indicated that plaintiff “has been paid his accumulated vacation time and has been paid the equivalent of six month’s salary, which payments have been made by check and have been negotiated by” plaintiff.
After reviewing the record, the trial court determined that on the basis of plaintiff’s deposition testimony and “undisputed corporate documents” in the record, there was no genuine issue of material fact that plaintiff was an at-will employee, that plaintiff and Reid mutually negotiated a resignation by plaintiff with severance pay, and that plaintiff received six months of pay and his accumulated vacation pay. Our review de novo of the record leads to the opposite conclusion. Plaintiff averred that he never entered into a severance agreement. Moreover, plaintiff averred that he never resigned and that he was never informed that the board had terminated his employment. His deposition testimony that he and Reid had agreed that they should part ways does not indicate whether a resignation was negotiated or expected, or whether Reid planned on terminating or did terminate *312 plaintiffs employment. Defendants did not produce unequivocal evidence that plaintiff resigned or approved the proposed severance agreement.
Summary disposition may be granted under MCR 2.116(C)(10) when, except for the amount of damages, there is no genuine issue concerning any material fact and the moving party is entitled to judgment as a matter of law.
Stehlik v Johnson (On Rehearing),
A court reviewing such a motion must consider the pleadings, affidavits, depositions, admissions, and any other evidence in favor of the opposing party and grant the benefit of any reasonable doubt to the opposing party. [Id.]
Viewing the facts in the light most favorable to plaintiff, we find that there was a genuine issue of material fact regarding plaintiffs breach of contract claim, specifically whether he had resigned and accepted a severance package or whether his employment had been terminated pursuant to the terms of his contract.
In making our ruling, we note that we also disagree with the trial court that plaintiffs affidavit contradicted his deposition testimony. As previously indicated, while plaintiff acknowledged during his deposition that he and Reid agreed that they were going to end up parting ways, plaintiff never stated unequivocally that he had resigned or that he had reached a severance agreement. Plaintiffs affidavit was more specific than his deposition testimony. 2 While it clarified and expanded that testimony, it does not directly contradict it.
*313 Plaintiff also contends that because a genuine issue existed with regard to his contract claim, the trial court’s ruling with regard to plaintiff’s Access stock was improper. We agree. Access’ right to repurchase stock from plaintiff was conditioned on the vesting provisions in his employment contract and, apparently, on how the separation occurred. Because of our holding with regard to plaintiff’s claim for breach of his employment contract, we are unable to resolve the issue with regard to the vesting of plaintiff’s stock. This issue will need to be resolved on remand after a determination is made regarding whether and when plaintiff resigned or his employment was terminated.
Plaintiff also argues that the trial court failed to order defendants to convey to plaintiff shares he owned in defendant Onset BIDCO, Inc. Defendants concede that plaintiff is entitled to the Onset BIDCO shares. The trial court ruled that “the Onset issue has been adequately addressed by the concession.” We agree. Plaintiff is entitled to the shares.
Finally, plaintiff argues that the trial court erred in awarding sanctions. We agree. The trial court determined that plaintiff’s complaint was frivolous. While we agree that plaintiff was not entitled to relief pertaining to his allegations against Capitol, we do not find that the complaint, including the allegations against Capitol and defendants Reid and Hendrickson, rose to the level of frivolity that requires an award of sanctions; there was no showing or finding that the complaint was made to harass, embarrass, or injure any of the defendants or that plaintiff had no reasonable basis to believe that the facts supporting his claim were false, or that his position was devoid of argua
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ble legal merit.
Cvengros v Farm Bureau Ins,
Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
Notes
In rendering our opinion that plaintiff was not able to maintain his action, we express no opinion regarding the validity, legality, or propriety of the actions about which plaintiff complains.
We note that our review of the deposition testimony is limited to the few select pages of testimony utilized by the parties in the trial court. The entire deposition transcripts were not filed in the trial court.