Speetjens v. Malaco Inc., et al.
| Docket Number: | 2004-CA-01098-SCT | |
| Oral Argument: | 03-08-2006 | |
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| Supreme Court: | Opinion Link Opinion Date: 05-18-2006 Opinion Author: COBB, P.J. Holding: AFFIRMED |
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| Additional Case Information: |
Topic: Joint venture - Shareholder derivative claim - Section 79-4-7.42 - Written demand - Futility exception Judge(s) Concurring: SMITH, C.J., WALLER, P.J., CARLSON AND DICKINSON, JJ. Non Participating Judge(s): RANDOLPH, J. Dissenting Author : DIAZ AND GRAVES, JJ. EASLEY, J. DISSENTS WITH SEPARATE WRITTEN OPINION Procedural History: Dismissal Nature of the Case: CIVIL - OTHER |
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| Trial Court: |
Date of Trial Judgment: 05-05-2004 Appealed from: MADISON COUNTY CHANCERY COURT Judge: Jason H. Floyd, Jr. Disposition: Finding that Speetjens was statutorily barred from suing derivatively, pursuant to Miss. Code Ann. section 79-4-7.42 (Rev. 2001) and all other claims were without merit, the trial court entered judgment dismissing the case. Case Number: 97-255 |
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| Party Name: | Attorney Name: | |||
| Appellant: | JOSEPH K. SPEETJENS, DR. FASER TRIPLETT, et al. |
AMANDA POVALL TAILYOUR, GRADY F. TOLLISON, JR., T. ROE FRAZER, EDWARD J. PETERS |
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| Appellee: | MALACO INC., et al. | GLENN GATES TAYLOR, DONALD JAMES BLACKWOOD, JR., CHRISTY MICHELLE SPARKS, ALEX A. ALSTON, JR., TERRY R. LEVY |
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| Topic: | Joint venture - Shareholder derivative claim - Section 79-4-7.42 - Written demand - Futility exception |
| Summary of the Facts: | Joseph K. Speetjens, et al. filed suit against Malaco, Inc., et al. The case was bifurcated and after hearing the first portion, involving a joint venture, final judgment was entered by the court. Thereafter, Dr. Triplett and others filed two separate actions asserting the same claims as the first suit. Therefore, these cases were consolidated with the initial Malaco case. Defendants in the actions were Thomas J. Couch, Sr., Stewart Madison, Gerald Stephenson (the directors and officers of Malaco, Inc.); Northside partners, a partnership; Couch & Madison, a partnership; Couch, Grubman & Madison, a partnership; Burdette Russ; Tann Brown & Russ; Robert A. Malouf; Robert A. Malouf Law Firm; Alan J. Grubman; Select-O-Hits, Inc.; and Malaco, Inc. Profit Sharing Plan and Trust. Prior to trial, each filed motions for summary judgment. Select-O-Hits and the Pension Plan were dismissed at the beginning of the trial, while the remaining motions were taken under advisement. At the conclusion of the plaintiffs’ case, the court also dismissed the Burdette Russ, Tann Brown and Russ, Robert A. Malouf, Robert A. Malouf Law Firm, and Alan J. Grubman. Therefore, the only remaining actions pending were the derivative claims asserted against Couch, Madison, and Stephenson, and the partnerships NSP, C&M, and CGM. Finding that Speetjens was statutorily barred from suing derivatively, pursuant to section 79-4-7.42, and all other claims were without merit, the trial court entered judgment dismissing the case. Speetjens appeals. |
| Summary of Opinion Analysis: | Speetjens argues that the court erred by failing to recognize a futility exception to the written demand requirement. This is an issue of first impression. Section 79-4-7.42 provides that no shareholder may commence a derivative proceeding until a written demand has been made upon the corporation to take suitable action. No written demand as required by section 79-4-7.42 was ever made to Malaco to take suitable action. Speetjens argues that this derivative action should be allowed to proceed anyway because the demand would have been futile since the directors of Malaco are in absolute control of the corporation and they unlawfully breached their fiduciary duties, usurped corporate opportunities and awarded themselves excessive salaries and extravagant bonuses. Determination of whether section 79-4-7.42 would be better if it contained an exception for futility, or even how other state courts have interpreted their comparable, but not identical, corporate law statutes is not required of us in the present case. The fact is, Mississippi’s written demand statute does not contain an exception for futility, and unless and until the Legislature decides to include one, it does not exist. |
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