Court Opinion

ID: 8913757
Source: CourtListenerOpinion
Date Created: 2022-11-27 04:07:30.453356+00
Date Added: 2024-06-11T17:08:46.752833
License: Public Domain

BOOCHEVER, Circuit Judge,
concurring:
I concur separately for the purpose of expressing my views that upon remand the trial court may wish to reconsider its grant of summary judgment to M-K in light of the nature of the fiduciary duty owed to Elk Power Enterprise. Judge Taylor, in his findings, held that M-K was to exercise its business judgment “for the interest of the respective parties to the agreement.” Under Idaho law, the scope of the duty owed depends upon the nature of the relationship. Compare Mallory v. Watt, 100 Idaho 119, 594 P.2d 629, 632 (1979) (real estate broker) with Beal v. Mars Larsen Ranch Corp., 99 Idaho 662, 586 P.2d 1378, 1383 (1978) (attorney). The Idaho Supreme Court has recognized that the fiduciary duty must be divided into two parts: (1) a duty of care and (2) a duty of loyalty. See, e. g., Melgara v. Moscow Idaho Seed Co., 73 Idaho 265, 251 P.2d 546, 549-50 (1952). While Judge Taylor found that there was no joint venture, the relationship here has the characteristics of either a corporation or partnership. In the corporate context, the Idaho Supreme Court has recognized that the duty of loyalty is an “undivided” one. See id. The same standard is applicable to partnerships.1
Here since Archer had no right to participate in management decisions, the relationship is more akin to that of a limited partnership. Yet unlike most limited partnerships, Archer was required to make contributions to the expenses of the operation. It would thus appear that the duty of loyalty owed is at least that owed by a general partner to a limited partner or that of a board of directors to the shareholders of a corporation.
With this in mind the trial court may wish to reconsider the question of triable issues of fact as to whether: (1) the deci*967sion to make the sale to Elko complied with the fiduciary duties or was based solely on M-K’s financial problems without consideration of Archer’s interest; (2) threats were made to Archer indicating that M-K sought to harm him by wiping out his interest in breach of the duty of loyalty; and (3) the evidence of sources of long-term contracts for sale of the coal other than Japan indicates that M-K, in making the sale to Elko, failed in its duty to exercise business judgment “for the interest of the respective parties to the agreement.”

. See generally Homestake Mining Co. v. Mid-Continent Exploration Co., 282 F.2d 787, 799 (10th Cir. 1960); Tolmie v. San Diego Fruit & Produce Co., 57 Idaho 631, 68 P.2d 61, 69 (1937). Bassan v. Inv. Exch. Corp., 83 Wash.2d 922, 524 P.2d 233, 238 (1974); Crane & Brom-berg, Law of Partnership § 68, at 389 (1963); Note, Fiduciary Duties of Partners, 48 Iowa L.Rev. 902, 908 (1963).