Court Opinion

ID: 9574831
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:08:46.523699+00
Date Added: 2024-06-11T12:45:32.153270
License: Public Domain

O’Connell, RJ.
(dissenting). The majority opinion adroitly distinguishes this case from Production Finishing Corp v Shields, 158 Mich App 479; 405 NW2d 171 (1987). I cannot join in that exercise. The facts of *537Production Finishing axe nearly identical to those of the present case. In Production Finishing, this Court summarized the situation as follows:
Reasonable minds could not honestly disagree in this case. The facts indicate that plaintiff is entitled to a judgment as a matter of law. Shields breached his fiduciary duties to the corporation by diverting a corporate business opportunity for his own personal gain. Shields did so when he pursued the Ford polishing business and purchased the Ford equipment while president of Production Finishing without full disclosure to the corporation. [Id. at 485.]
This Court reversed the denial of the corporation’s motion for judgment notwithstanding the verdict and remanded for further proceedings regarding damages for the defendant’s breach of fiduciary duty and usurpation of corporate opportunity. Because the facts of Production Finishing are nearly identical to the facts in this case, I would do the same here.
Defendant Terry Fewless was regional vice president for automotive sales for plaintiff Central Cartage Co., which was affiliated with plaintiffs CenTra, Inc., Central Transport, Inc., and C.C. Southern, Inc. Fewless also acted as consultant for plaintiff P.A.M. Transport, Inc. Fewless was a trusted corporate officer. While working for plaintiffs, Fewless started another company in his wife’s name and began diverting plaintiffs’ potential business to his wife’s company.1 More specifically, Fewless was funneling corporate busi*538ness opportunities to his wife’s company without full disclosure to his employers.2 When confronted with rumors that he had started a new company and was diverting coiporate opportunities to his wife’s company, Fewless offered to resign, but was instead abruptly terminated. Shortly thereafter, Fewless entered into written contracts with plaintiffs’ customers to perform essentially the same work that he had done for them during the course of his employment with plaintiffs.
This complex case3 went to trial on June 10, 1996. After fifteen days of trial, the parties rested their respective cases. The trial court then directed a verdict for plaintiffs in the amount of $55,000. That figure represented revenues received by Fewless’ wife’s company during the time that Fewless worked for plaintiffs. The trial court’s decision regarding the motion for a directed verdict limited plaintiffs’ damages to the period Fewless was employed by plaintiffs. In my opinion, the trial court committed error requiring reversal in limiting plaintiffs’ damages to the period that Fewless was their employee.4
Plaintiffs’ damages for Fewless’ breach of fiduciary duty and usurpation of corporate opportunity are not properly limited to the profits Fewless earned from *539plaintiffs’ customers while Fewless remained in plaintiffs’ employ.
“A corporate officer or director is under a fiduciary obligation not to divert a corporate business opportunity for his own personal gain. The rule is that if there is presented to a corporate officer or director a business opportunity which the corporation is financially able to undertake which is, from its nature, in the line of the corporation’s business and is of practical advantage to it, and which is one in which the corporation has an interest or a reasonable expectancy, and if, by embracing the opportunity, the self interest of the officer or director will be brought into conflict with that of this corporation, the law will not permit him to seize the opportunity for himself. If he does, the corporation may claim the benefit of the transaction.” [Production Finishing, supra at 485-486, quoting 18B Am Jur 2d, Corporations, § 1770, pp 623-624, and citing 19 CJS, Corporations, § 785, p 161; anno: Fairness to corporation where “corporate opportunity” is allegedly usurped by officer or director, 17 ALR4th 479.]
In the present case, the trial court in essence determined that Fewless diverted a corporate business opportunity from his employers for his own personal gain. Although the trial court correctly ruled that Fewless had acted adversely to the interest of his employers, the court erred in limiting the calculation of damages to cover only the time when Fewless was employed by plaintiffs. The impropriety of Fewless’ amassing of profits from his appropriation of plaintiffs’ rightful business opportunities did not cease with the employment relationship. Any commissions earned from Fewless’ wrongful diversion rightfully belonged to plaintiffs.
“If an agent acquires any pecuniary advantage to himself from third parties by means of his fiduciary *540character, he is accountable to his employer for the profit made.” Production Finishing, supra at 487. This rule applies to transactions “consummated after the fiduciary relationship is ended, if they began during the existence of the relationship or were founded on information or knowledge acquired during the relationship.” 18B Am Jur 2d, Corporations, § 1774, p 627. As our Supreme Court has stated, “ ‘Except with the full knowledge and consent of his principal, an agent. . . cannot. . . take advantage of the knowledge acquired of his principal's business to make profit for himself at his principal’s expense.’ ” Stephenson v Golden (On Rehearing), 279 Mich 710, 736; 276 NW 849 (1937), quoting Mechem’s Outlines of Agency (1901 ed), § 148.
Once the trial court determined that Fewless acquired a pecuniary advantage for himself from plaintiffs’ customers through a breach of fiduciary duty, the trial court should have awarded damages based on a determination of the total amount of profits acquired as a result of the breach.
I would affirm the trial court’s decision to grant plaintiffs a directed verdict in this case, and remand to the trial court for further proceedings consistent with this opinion. Fewless is accountable to his former employers for all profits flowing from his breach of fiduciary duty and usurpation of corporate opportunity.

 Reasonable minds cannot dispute that Fewless’ wife, Susan, had no experience in the trucking industry and that the profits she earned were the result of Fewless’ diversion of a corporate opportunity. Susan Fewless, doing business as SKAN Consulting, was simply the vehicle Fewless used to receive the profits from his personal cultivation of his employers’ potential business opportunities.

 While employed with Central Cartage, Fewless incorporated his own business, applied for his own broker’s license, and entered into a lease for office space. For obvious reasons he did not disclose any of this information to plaintiffs, including Central Cartage.

 Although the original complaint contained numerous counts of alleged misconduct and the lower court file is extensive, in this opinion I address only the central error that occurred below.

 That error was then compounded by the trial court’s failure to inform the jury that the court had granted a partial directed verdict for plaintiffs.