Opinion ID: 200293
Heading Depth: 3
Heading Rank: 1

Heading: Gunning

Text: 14 The only evidence cited by Hershey to create a fiduciary relationship with Gunning, apart from any duty that Gunning might have owed Hershey as a shareholder, is: (1) both Gunning and Hershey knew that Gunning had experience conducting mergers and acquisitions, while Hershey had none; (2) Gunning had a direct pecuniary interest in the transaction at issue; and (3) on numerous occasions, Gunning offered or Hershey requested advice. In essence, Hershey paints himself as a naive shareholder who relied on Gunning to consider Hershey's best interests above his duties to the corporation he headed. Hershey claims that Gunning, as trusted advisor, should have known that Hershey was dependant on his valued advice, and owed Hershey the duties of a fiduciary. 15 This argument fails for several reasons. First, Hershey's education in economics and law gave him the appearance of a sophisticated investor able to consider the terms of the merger of his company. Hershey also had his own experienced attorney reviewing the transaction and providing advice. Gunning therefore could have reasonably believed that Hershey was able to evaluate the options on his own. Hershey had to know that Gunning's central fiduciary duty ran to the company and not to Hershey personally; indeed, Hershey had himself negotiated a compensation package for Gunning that made clear that Gunning was encouraged to arrange for a sale of CAF. 16 Finally, even if Gunning offered advice, the evidence refutes Hershey's claim that he blindly relied upon Gunning's expertise. While Hershey stated that he recruited Gunning because of his respect for [Gunning's] personal integrity and honesty, the evidence shows that these initial feelings of fondness quickly faded. Hershey was openly critical of Gunning from 1993 to 1996, questioning his business decisions and calling him a brick wall of resistance. Hershey was much less charitable behind Gunning's back, accusing him of drinking heavily, having poor judgment, and creating problems and then scurrying to kind of protect his ego and position and reputation. In addition, Hershey's records include a Dave Gunning Evaluation in which he wrote Dave's relationship to me has been disturbing, and a memo entitled Some of the Questionable Decisions Dave Has Made in which he outlined five points of concern. Hershey sometimes refused to follow Gunning's advice, including his advice not to pursue the sale of CAF. Hershey sought out DLJ to pursue a sale of CAF, suggesting that he did not believe Gunning was capable of the task. These facts, even when viewed in the light most favorable to Hershey, cannot support the assertion that Hershey reposed some special trust in Gunning. Hershey cannot now claim that he and Gunning had a close, confidential relationship sufficient to establish a fiduciary relationship when the record reflects, at best, a troubled relationship characterized by mistrust.