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Court won't recognize non-fiduciary liability

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Indiana doesn’t allow people to sue when they’ve had corporate opportunities taken away by business partners who’ve gone off and formed new partnerships with others, and the state Court of Appeals declined to decide whether non-fiduciaries can be held liable for usurping corporate opportunity.

A three-judge appellate panel made that decision in Victor J. DiMaggio III v. Elias Rosario, et al., No. 64-A03-1009-PL-500, a case out of Porter Superior Court involving a Lake County business relationship that went bad.

Victor DiMaggio and Elias Rosario were shareholders in Galleria Reality Corporation in Lake County starting in 1997, and they remained in that real estate business through 2003 when Rosario and two others began Liberty Lake Estates  in Porter County. In March 2008, DiMaggio filed a complaint against Rosario and the other LLE shareholders claiming they’d usurped a corporate opportunity from the original business Galleria and caused damage to DiMaggio.

The suit claimed Rosario owed a fiduciary duty to DiMaggio, his fellow shareholder in Galleria, and that the initial business should have had the chance to develop real estate in Porter County prior to Rosario forming the LLE with the others and servicing that untapped market.

Porter Superior Judge William Alexa granted the requests from Rosario and the appellees to dismiss DiMaggio’s complaint on the grounds it failed to state a claim for which relief could be granted. DiMaggio appealed, asking the Court of Appeals to determine that a shareholder’s fiduciary duty requires he be held liable if he usurps a corporate opportunity in a non-fiduciary manner.

DiMaggio contended that notion is supported, at least by inference, from the decision in Dreyer & Reinbold v. AutoXchange.com, 771 N.E. 2d 764 (Ind. Ct. App. 2002), where the court addressed a partially related topic on corporate opportunity.

But the appellate court disagreed with that caselaw interpretation, saying Dreyer didn’t stand for the proposition that Indiana recognizes a claim that non-fiduciaries can be held liable for usurping corporate opportunity. Specifically, DiMaggio wanted the court to require that in order for a non-fiduciary to be held jointly and severely liable with a fiduciary of a corporation, that person must act knowingly when he or she joins with or aids someone in breaching that existing fiduciary relationship.

“Without deciding at this time whether Indiana should adopt DiMaggio’s proposed cause of action, we conclude that, even if we were to recognize the cause of action existed in Indiana, DiMaggio’s complaint did not state a claim upon which relief can be granted against the Appellees,” Judge James Kirsch wrote, referring to the lack of intentional behavior or knowledge that might be required.

The broader question remains for another day, and the lower court ruling is affirmed.
 

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  1. Living in South Bend, I travel to Michigan a lot. Virtually every gas station sells cold beer there. Many sell the hard stuff too. Doesn't seem to be a big deal there.

  2. Mr. Ricker, how foolish of you to think that by complying with the law you would be ok. Don't you know that Indiana is a state that welcomes monopolies, and that Indiana's legislature is the one entity in this state that believes monopolistic practices (such as those engaged in by Indiana Association of Beverage Retailers) make Indiana a "business-friendly" state? How can you not see this????

  3. Actually, and most strikingly, the ruling failed to address the central issue to the whole case: Namely, Black Knight/LPS, who was NEVER a party to the State court litigation, and who is under a 2013 consent judgment in Indiana (where it has stipulated to the forgery of loan documents, the ones specifically at issue in my case)never disclosed itself in State court or remediated the forged loan documents as was REQUIRED of them by the CJ. In essence, what the court is willfully ignoring, is that it is setting a precedent that the supplier of a defective product, one whom is under a consent judgment stipulating to such, and under obligation to remediate said defective product, can: 1.) Ignore the CJ 2.) Allow counsel to commit fraud on the state court 3.) Then try to hide behind Rooker Feldman doctrine as a bar to being held culpable in federal court. The problem here is the court is in direct conflict with its own ruling(s) in Johnson v. Pushpin Holdings & Iqbal- 780 F.3d 728, at 730 “What Johnson adds - what the defendants in this suit have failed to appreciate—is that federal courts retain jurisdiction to award damages for fraud that imposes extrajudicial injury. The Supreme Court drew that very line in Exxon Mobil ... Iqbal alleges that the defendants conducted a racketeering enterprise that predates the state court’s judgments ...but Exxon Mobil shows that the Rooker Feldman doctrine asks what injury the plaintiff asks the federal court to redress, not whether the injury is “intertwined” with something else …Because Iqbal seeks damages for activity that (he alleges) predates the state litigation and caused injury independently of it, the Rooker-Feldman doctrine does not block this suit. It must be reinstated.” So, as I already noted to others, I now have the chance to bring my case to SCOTUS; the ruling by Wood & Posner is flawed on numerous levels,BUT most troubling is the fact that the authors KNOW it's a flawed ruling and choose to ignore the flaws for one simple reason: The courts have decided to agree with former AG Eric Holder that national banks "Are too big to fail" and must win at any cost-even that of due process, case precedent, & the truth....Let's see if SCOTUS wants a bite at the apple.

  4. I am in NJ & just found out that there is a judgment against me in an action by Driver's Solutions LLC in IN. I was never served with any Court pleadings, etc. and the only thing that I can find out is that they were using an old Staten Island NY address for me. I have been in NJ for over 20 years and cannot get any response from Drivers Solutions in IN. They have a different lawyer now. I need to get this vacated or stopped - it is now almost double & at 18%. Any help would be appreciated. Thank you.

  5. I am in NJ & just found out that there is a judgment against me in an action by Driver's Solutions LLC in IN. I was never served with any Court pleadings, etc. and the only thing that I can find out is that they were using an old Staten Island NY address for me. I have been in NJ for over 20 years and cannot get any response from Drivers Solutions in IN. They have a different lawyer now. I need to get this vacated or stopped - it is now almost double & at 18%. Any help would be appreciated. Thank you.

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