Opinion ID: 2628309
Heading Depth: 3
Heading Rank: 2

Heading: Requiring a Return of the IMAI Stock Would Overcompensate Ockey

Text: ¶ 49 The district court's refusal to order the return of Ockey's IMAI stock is also supported on an independent basis. Requiring that Lehmer deliver IMAI stock to Ockey would be inequitable because it would overcompensate Ockey by awarding him almost fourteen percent of IMAI's stock, which is worth millions today but was of negligible worth at the time of the alleged conversion and breach of fiduciary duty. ¶ 50 When Lehmer took control of the IMAI stock after the developers defaulted, the stock had minimal value. IMAI's only asset was the State Lease, an asset requiring an immediate $6,000 payment in order to retain it. At that point, development of the ranch was not assured, and maintaining the State Lease was an integral part of the envisioned development. Even Ockey believed that the IMAI stock had only nominal value in 1993. The speculative investment in IMAI made by other family members enabled the family to keep the State Lease, which ultimately caused IMAI's value to skyrocket. Granting Ockey's request would allow Ockey to enjoy the benefits of his family members' speculative investment, while avoiding the risks that they all undertook in 1993. ¶ 51 This dynamic, where returning the allegedly converted stock would overcompensate the plaintiff, is the same dynamic that motivated our adoption of the New York rule. Under the New York rule, Ockey's damages would be the highest intermediate value between the time of Lehmer's alleged conversion and breach of fiduciary duty and a reasonable time after Ockey learned about the alleged conversion and breach. Because the district court concluded that Ockey learned about the conversion as early as 1993, his remedy for Lehmer's breach under the New York rule would be minimal because the value of the stock in 1993 was minimal. Had the district court granted Ockey's requested remedy, it would have allowed him to circumvent the New York rule, thereby reaping an unjustified windfall. Such a result would be inequitable because it would effectively allow Ockey to ride the stock market at the defendant[s'] risk and expense. [49] Accordingly, the district court appropriately refused to fashion an equitable remedy for Ockey that would allow him to receive a windfall at the expense of his family members.