Opinion ID: 1262975
Heading Depth: 1
Heading Rank: 3

Heading: The Present State and Concurrent Brazilian Litigation

Text: Panama commenced this action against Cities in 1981 on two theories of liability  breach of contract [7] and breach of fiduciary duty [8]  in the District Court, Tulsa County. The trial court in 1982 denied Cities' motion to dismiss on grounds of forum non conveniens. [9] Cities then unsuccessfully sought on the same grounds a writ of prohibition in the Oklahoma Supreme Court. [10] In 1983, while the Oklahoma action was still pending, Cities, along with Copebras and three wholly-owned Cities subsidiary companies, filed a declaratory judgment action in Brazil against Panama and its Brazilian subsidiary. [11] The Brazilian trial court held itself competent over Panama's objections that (a) the place of performance of the 1965 letter was to be Oklahoma and (b) an action was pending in an Oklahoma court concerning the same letter. [12] The Brazilian court rendered judgment for the plaintiffs in 1984, holding that the letter was unenforceable. [13] The appellate court affirmed this decision. [14] Cities then moved for partial summary adjudication in the Tulsa trial court on the breach of contract theory, asserting that the Brazilian judgment should be recognized and enforced and that the res judicata doctrine bars relitigation of Panama's breach of contract theory, which had been fully and fairly litigated in the Brazilian court. On January 18, 1988 the district court sustained Cities' motion on the basis of comity. The following July it gave summary judgment to Cities on both of Panama's theories of liability. The decision on the status-based prong of the dispute was rested on several grounds (1) Brazilian law applies to this issue; (2) neither Brazilian Corporation Law [Code] nor any other Brazilian law creates a fiduciary obligation of majority to minority shareholders; (3) any recovery for abuse of majority shareholder power must be sought under Article 246 and in accordance with Articles 116 and 117 of the Brazilian Corporation Law; [15] and (4) an action pursuant to these provisions is derivative, thus a shareholder has no individual cause of action under Brazil's Corporation Law for damages suffered by it as a shareholder.