Opinion ID: 1216412
Heading Depth: 1
Heading Rank: 7

Heading: competition with corporation by former director

Text: Birl Lynch and R.C. Lynch contend that Patterson, by forming an oil-field consulting business in competition with LCS, breached his fiduciary duties as a former director of the corporation. Absent an agreement to the contrary, however, a director or officer who terminates his position with the corporation has a right to open his own business and to compete for former clients. Master Records, Inc. v. Backman, 133 Ariz. 494, 652 P.2d 1017 (1982); Parsons Mobile Products, Inc. v. Remmert, 216 Kan. 256, 531 P.2d 428 (1975). The Supreme Court of Arkansas, in Raines v. Toney, 228 Ark. 1170, 313 S.W.2d 802, 809 (1958), considered the business activities available to a former director and officer:    It is, however, a common occurrence for corporate fiduciaries to resign and form a competing enterprise. Unless restricted by contract, this may be done with complete immunity because freedom of employment and encouragement of competition generally dictate that such persons can leave their corporation at any time and go into a competing business. They cannot while still corporate fiduciaries set up a competitive enterprise. Witmer v. Arkansas Dailies, Inc., 202 Ark. 470, 151 S.W.2d 971, or resign and take with them the key personnel of their corporations for the purposes of operating their own competitive enterprise. Duane Jones Company, Inc. v. Burke, 306 N.Y. 172, 117 N.E.2d 237. But they can, while still employed, notify their corporation's customers of their intention to resign and subsequently go into business for themselves, and accept business from them when offered to them. Aetna Building Maintenance Co. v. West, 39 Cal.2d 198, 246 P.2d 11. But they can use in their own enterprise the experience and knowledge they gained while working for their corporation. Witmer v. Arkansas Dailies, Inc., supra. They can solicit the customers of their former corporation for business unless the customer list is itself confidential. Continental Car-Na-Var Corporation v. Moseley, 24 Cal.2d 104, 148 P.2d 9. Clearly, Patterson breached no duty to LCS shareholders by accepting consulting jobs offered by the corporation's clients after he had established his business. Birl Lynch and R.C. Lynch contend, however, that Patterson took for his own benefit the Sunmark Exploration job which had been generated for LCS with corporate funds while Patterson served as a director and officer of the corporation. The trial court made no express findings of fact in dismissing this counterclaim against Patterson. However, we have said in the past that a general finding and judgment for the successful party carries with it every finding of fact which can reasonably and fairly be drawn from the evidence. Burk v. Burzynski, Wyo., 672 P.2d 419, 425 (1983). Since the evidence is in conflict on this point, we will abide by our appellate duty to accept the evidence of the successful party as true and to leave out of consideration entirely the conflicting evidence of the unsuccessful party. Martin v. Wing, Wyo., 667 P.2d 1159, 1163 (1983). We will sustain the findings of the trial court unless they are clearly erroneous or contrary to the great weight of the evidence. Salt River Enterprises, Inc. v. Heiner, Wyo., 663 P.2d 518, 522 (1983). Patterson testified that Sunmark Exploration had a special job in the coastal forest which called for his expertise. He said that Sunmark Exploration officials knew him, knew his work, and wanted him on the job particularly. He further testified that without him the corporation would not have received this work. Patterson breached no duty of loyalty by resigning from LCS and subsequently performing this work directed to him personally rather than to the corporation. Raines v. Toney, supra. The trial court's dismissal of the claim against Patterson finds support in the law and the facts, and we will not overturn it on appeal. Burk v. Burzynski, supra.