Justia Business Law Opinion Summaries

The majority shareholder of a family farm corporation served as a director and officer of the corporation. A minority shareholder of the corporation (Plaintiff) sued the corporation and the majority shareholder (collectively, Defendants), alleging that illegal, oppressive, and fraudulent acts by the majority shareholder resulted in waste of the corporation's assets and constituted a breach of fiduciary duty. At the close of Plaintiff's evidence at trial, Defendants moved for a directed verdict. The district court granted the motion and dismissed the action, concluding that Plaintiff had presented no evidence that Defendants had acted fraudulently, illegally, or oppressively. The Supreme Court reversed, holding that the district court erred in dismissing Plaintiff's oppression claim because the court did not apply the correct legal standard in the adjudication of the oppression claim. Remanded. View "Baur v. Baur Farms, Inc." on Justia Law

The board of directors of a nonprofit condominium association approved necessary but nonemergency repairs to the association's parking garage without a full vote by its members. The repairs were completed at an amount eight times greater than the theshold in the bylaw, which required preapproval of a supermajority of owners to authorize certain expenditures exceeding $25,000. Several condominium owners sued for a judicial declaration that the board's violation of the bylaw's preapproval requirement excused their obligation to pay. The association counterclaimed against the owners to collect their share of the completed repairs and for attorney fees. The district court ruled in favor of the owners. The Supreme Court reversed, (1) holding that the business judgment rule applies to the governance decisions of this board when it acts within its authority; and (2) because the bylaw at issue was ambiguous, the Court deferred to the board's authority under the governing declaration to decide questions of interpretation or application of the bylaws. Remanded.

A bank attempted to prove an accounting negligence claim by using an expert witness to testify regarding the accountant's audit of a lumber company. The district court refused to allow the expert to testify as to generally accepted CPA auditing standards, whether the accountant breached those standards, and causation. The district court left open the question of whether the expert could testify as to the accountant's work papers. At trial, the bank made an offer of proof as to the work papers but did not move to introduce them, and so the court never ruled on their admissibility. The jury returned a verdict finding the accountant did not negligently perform the audit. The court of appeals reversed the district court and remanded for a new trial. The Supreme Court vacated the decision of the court of appeals and affirmed the judgment of the district court, holding (1) the bank failed to preserve error on the work-paper issue, and (2) the expert was not qualified to testify on the ultimate issue of whether the accountant violated generally accepted accounting standards because the expert lacked the knowledge, skill, experience, training, or education to provide an adequate basis for this testimony.

An executor brought a cause of action against a bank for failing to obtain approval for investments it made on behalf of the deceased when the deceased was under conservatorship and the bank acted as conservator. The district court dismissed the executor's claim. The court of appeals affirmed. The Supreme Court affirmed, holding (1) the conservator's failure to seek prior approval of the investment of the ward's property under Iowa Code 633.647 did not, in and of itself, make the conservator personally liable for losses caused by the investment; (2) to find the conservator personally liable for losses caused by an investment, the executor must prove a breach of fiduciary duty under Iowa Code 633.633A; and (3) in this case, the executor failed to prove a breach of fiduciary duty.

Gerald Kirke and Wild Rose Entertainment (collectively, defendants), entered into an agreement with John Pavone and Signature Management Group (collectively, plaintiffs), stating the ownership and management relationship between the parties upon the opening of casino projects within the state. Wild Rose later terminated the agreement, and plaintiffs sued defendants for breach of contract and other claims. The district court sustained defendants' motion for a directed verdict on most of plaintiffs' claims but allowed the breach of contract claims. After a jury trial, the district court found Wild Rose breached the agreement and awarded plaintiffs ten million dollars in damages. Defendants filed a motion for a new trial, which the district court denied. The court of appeals reversed the judgment and remanded the case for judgment in favor of defendants. On review, the Supreme Court vacated the decision of the appellate court and affirmed the judgment of the district court, holding, inter alia, that the district court did not err in (1) overruling defendants' motion for a directed verdict on plaintiffs' breach of contract claims; (2) allowing the jury to award damages for a period of as much as thirty years; and (3) denying defendants' motion for a new trial.