Procedural Posture: employer defense law firms
Defendant majority shareholders appealed an order from the Superior Court of Los Angeles County (California), which confirmed an appraisal of shares pursuant to Corp. Code, § 2000, subd. (c), and deferred the date of the buyout of plaintiff minority shareholder until after the resolution of a related derivative action.
Overview
Alleging breach of fiduciary duties, a minority shareholder sought dissolution of the corporation and other relief. The majority shareholders invoked their statutory right to purchase the minority shareholder's interest. The trial court obtained an appraisal of the fair value of the shares. The appraisers clearly stated in their valuation report and responses to interrogatories that they did not attempt to value the minority shareholder's derivative claims and did not take those claims into account in determining the fair value of his shares. Rather, the appraisers recommended that the purchase of the shares be conditioned on the corporation's assignment of the derivative claims to the minority shareholder. The court stated that pending litigation was relevant to a fair value determination under § 2000, subd. (c). Because the appraisers did not account for the derivative action, their report failed to appraise the value of a potential asset of the corporation and was therefore incomplete. Deferring valuation was inconsistent with § 2000, subd. (f), and an assignment of the claims was not feasible in light of the continuous ownership requirement of Corp. Code, § 800, subd. (b).
Outcome
The court reversed and remanded to the trial court with directions to obtain an appraisal taking into account the effect of the pending litigation on the fair value of the corporation or, in the alternative, to allow the parties to litigate that issue before the trial court.
Procedural Posture
Appellant objectors to a proposed class action settlement in litigation stemming from a chemical release at a refinery sued respondent class counsel. The San Francisco County Superior Court (California) sustained class counsel's demurrer to the objectors' fraud-related causes of action and entered summary judgment in favor of class counsel on the objectors' legal malpractice and breach of fiduciary causes of action. The objectors appealed.
Overview
The objectors argued that a class settlement and notices related thereto were inadequate and that class counsel breached its duty to the objectors by certifying the non-opt-out punitive damages class, negotiating and recommending the settlement and refusing to support their objections. In sustaining class counsel's demurrers, the trial court ruled that knowledge of all relevant events and notices by objectors' retained firm was imputed to the objectors. The objectors contended the imputed knowledge doctrine did not apply because class counsel and retained counsel were "defalcating" agents. However, the instant court noted that the objectors erroneously assumed that class counsel associated with the retained firm. Class counsel was court-appointed. The instant court rejected the objectors' contention that until the class was certified, class counsel was not class counsel and instead owed responsibilities to the objectors as individuals. After certification, class counsel's duties ran to the class as a whole and did not depend on individualized representation of individual class members. The objectors could not recover any damages against class counsel, including punitive damages.
Outcome
The instant court affirmed the order sustaining class counsel's demurrer to the objectors' fraud causes of action. The summary judgment in favor of class counsel on the objectors' legal malpractice and breach of fiduciary causes of action was also affirmed.