Court Opinion

ID: 9524079
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:49:53.050684+00
Date Added: 2024-06-11T13:08:49.372239
License: Public Domain

ROBB, Judge,
dissenting.
I respectfully dissent. The Restriction paragraph reads:
So long as this Agreement shall remain in force and effect no Stockholder shall transfer or in any way encumber his shares of stock in the Corporation to any person, firm or corporation except by Will or gift without the consent of all other Shareholders and of the Corporation, other than as hereinafter provided.
The majority states that the only reading which gives meaning to the "except by Will or gift" phrase is to read that all testamentary and gift transfers are excepted from the restrictions which follow. I do not agree. The majority's interpretation of the paragraph seems to give no significance to the phrase "other than as hereinafter provided." The majority reads the following sections to apply only in the event of the sale of a shareholder's shares, in the event of a shareholder dying intestate, or in the event that a shareholder fails to dispose of his shares in his will. But the Agreement does not make a distinction between a testamentary gift and a shareholder dying intestate.
The trial court considered the interpretation put forth by the majority and rejected it, instead reading the paragraph to signify that the only way in which a shareholder may transfer his shares of stock to any person or in any way encumber his shares without the consent of all other shareholders is by will or gift and subject to the restrictions which follow.
Following the trial court's interpretation, Section I below the Restriction paragraph sets forth the parameters for the sale of stock to a third party. Section II then sets forth the parameters for the transfer of stock upon the death of a shareholder. These two sections are alike in that they grant to Penz similar rights in the event a shareholder attempts to transfer stock. Both paragraphs grant Penz the right to preclude a transfer the shareholder desires to make by standing in the shoes of the would-be buyer or devisee, provided Penz makes payment of an amount fixed by the terms of the Agreement. Under Section I, Penz may elect not to accept the shareholder's offer that Penz purchase the shareholder's stock and *1014allow the shareholder's sale to a third person to go forward. Similarly, under Seetion II, Penz may elect not to demand the sale of the decedent's stock to Penz and instead allow the testamentary disposition set forth in. the shareholder's will to go forward.
The trial court's interpretation of the Agreement is in keeping with the philosophy of FBI. Farms that restrictions in closely held corporations are permissible provided they do not violate any policy. The majority's interpretation would allow shareholders to create wills or to make inter vivos gifts to dispose of their stock as they wished. However, the Agreement represents the desire of the members of a close-knit family corporation to determine to whom shares are sold, transferred, or devised. By following the majority's interpretation, a shareholder could evade the restrictions of the Agreement by transferring stock through testamentary transfer or inter vivos gift. I do not believe that such an interpretation fits with a reading of the entire Agreement or with our supreme court's decision in F.B.L. Farms.
I agree with the majority that the first substantive paragraph of the Agreement could have been written more clearly so that we could easily ascertain the intentions of the parties. However, we are attempting to interpret the Agreement as it sits in front of us. Even though the Agreement could have been written differently, I still believe that the majority's reading does not take into consideration the phrase "other than as hereinafter provided." <
Thus, I would affirm the trial court's interpretation of the Agreement. Although the majority does not reach the issue, I would also affirm the trial court's determination that the Estate and Trust were obligated by the Agreement to honor the demand by Penz to sell to Penz the 860 shares of stock owned by Gregory Penzen-ik at the time of his death for the total book value of the shares.
Additionally, I do not agree with the majority's determination that this court's holding in Pengenik I did not signify that Penz could maintain a claim against the Trust under the terms of the Agreement. In Pengenik I, this court stated:
Because Penz filed its petition outside the statutory time limit for bringing claims, it was untimely, and the trial court erred in trying the matter. Our decision today, however, does not foreclose Peng's claim completely. Unlike the general claim statute, under which an untimely claim is forever barred, the consequence of a failure to file a timely claim under IC 29-1-14-21 is that the claimant must proceed against the distributes, rather than the estate. Thus, Penz's failure to comply with IC 29-1-14-21 does not bar its efforts to enforce the Agreement, but rather, requires it to seek recourse against the distributees.
Penzenik I, 749 N.E.2d at 64-65 (citation omitted). When an opinion forecloses one option for litigation, but leaves another option open, the parties understandably rely on that language to mean that subsequent litigation may be brought. The majority's opinion encourages people to disregard directives in opinions, thus spurring on litigation. The majority seems to suggest that the language in Pengenik I was mere dicta. I believe that the language was directive and should not be contradicted by today's opinion.
I do not assert that the language in Pengenil I entitles Penz to an instant judgment based on res judicata because I recognize that the issues presented today were not resolved in Pengenik I. However, I feel that anything we write in an opinion-whether dicta or holding-should have some meaning. The majority holds *1015today that the language was dicta and Penz should not have relied upon it, thereby saying that the language in Pengenik I was meaningless. I cannot join in stating that the language was meaningless.
Therefore, I would affirm the decision of the trial court.