Opinion ID: 1431780
Heading Depth: 1
Heading Rank: 1

Heading: FOR CLARIFICATION, THE DISMISSAL OF DOUBLE L's COUNTERCLAIM IS SPECIFICALLY AFFIRMED.

Text: The notice of appeal and statement of issues of Double L clearly presented as one of the issues to be resolved in this case the dismissal by the trial court of the counterclaim of Double L alleging the breach by Dale and Norma of fiduciary duties to Double L and their contractual agreements with the corporation. In its initial brief on appeal, Double L asserted that Dale's conduct presented genuine issues as to whether he breached his fiduciary duty to the corporation and shareholders and whether that made available the defense of equitable estoppel and justified Double L's Counterclaim. We cannot discern in the decision of the Court of Appeals where this issue was considered specifically. We note that in discussing the issue of estoppel the Court of Appeals stated: The corporation has cited no authority to support the proposition that a director has a fiduciary duty to vote his minority stock for the benefit of the corporation and of the other shareholders, rather than for himself. Id. at 263, 755 P.2d at 1301. We also note that the Court of Appeals affirmed the summary judgment of the trial court without any reservation or exception. Id. We construe the decision of the Court of Appeals implicitly to include a rejection of the legal theory of Double L's counterclaim. For clarification, we specifically affirm the trial court's dismissal of the counterclaim based on the reasoning of the Court of Appeals in that portion of its opinion dealing with Double L's argument that Dale engaged in conduct equitably barring him and his wife from invoking any statutory rights as dissenters. Id. at 263-65, 755 P.2d at 1301-03. Double L cites as authority in support of the theory of its counterclaim the decision of this Court in Hanny v. Sunnyside Ditch Co., 82 Idaho 271, 353 P.2d 406 (1960). We note that the statement of the duty of directors in Hanny was drawn from I.C. § 30-142 (1948). This statute was repealed in 1979 when the Idaho Business Corporation Act was adopted. 1979 Idaho Sess. Laws, ch. 105. I.C. § 30-1-35 became effective on July 1, 1979. The pertinent part of this statute provides: A director shall perform his duties as a director, including his duties as a member of any committee of the board upon which he may serve, in good faith, in a manner he reasonably believes to be in the best interests of the corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. This is the standard of fiduciary duty by which Dale's conduct in this case must be measured. In its memorandum decision dismissing Double L's counterclaim, the trial court stated: In this case, there is no evidence that Dale Waters acted in any manner other than in good faith when he voted in favor of the transaction at the special director's meeting. It is apparent, however, from the statements contained in his deposition that he did not favor the transaction and, at least a few weeks prior to the stockholders meeting, had determined to dissent from the very transaction he supported as a director. ... . [Double L] states that because Dale Waters participated in the negotiations for the sale of Double L, he cannot now use his inside position to obtain a windfall profit at the expense of the other shareholders. There is no evidence [Dale] ever attempted to do so. There is no suggestion, for example, that Dale Waters acted in any manner but in the best interests of the corporation when he agreed at the director's meeting to vote for the transaction. Furthermore, it appears that any windfall visiting upon [Dale and Norma] must necessarily arise from [Double L's] failure to comply with the procedures outlined in Idaho Code Sec. 30-1-81. With this clarification and in light of I.C. § 30-1-35, we concur with the trial court's analysis of this issue and affirm the dismissal of the counterclaim.