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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. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  2. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

  3. Hello everyone I'm Gina and I'm here for the exact same thing you are. I have the wonderful joy of waking up every morning to my heart being pulled out and sheer terror of what DCS is going to Throw at me and my family today.Let me start from the !bebeginning.My daughter lost all rights to her 3beautiful children due to Severe mental issues she no longer lives in our state and has cut all ties.DCS led her to belive that once she done signed over her right the babies would be with their family. We have faught screamed begged and anything else we could possibly due I hired a lawyer five grand down the drain.You know all I want is my babies home.I've done everything they have even asked me to do.Now their saying I can't see my grandchildren cause I'M on a prescription for paipain.I have a very rare blood disease it causes cellulitis a form of blood poisoning to stay dormant in my tissues and nervous system it also causes a ,blood clotting disorder.even with the two blood thinners I'm on I still Continue to develop them them also.DCS knows about my illness and still they refuse to let me see my grandchildren. I Love and miss them so much Please can anyone help Us my grandchildren and I they should be worrying about what toy there going to play with but instead there worrying about if there ever coming home again.THANK YOU DCS FOR ALL YOU'VE DONE. ( And if anyone at all has any ideals or knows who can help. Please contact (765)960~5096.only serious callers

  4. He must be a Rethuglican, for if from the other side of the aisle such acts would be merely personal and thus not something that attaches to his professional life. AND ... gotta love this ... oh, and on top of talking dirty on the phone, he also, as an aside, guess we should mention, might be important, not sure, but .... "In addition to these allegations, Keaton was accused of failing to file an appeal after he collected advance payment from a client seeking to challenge a ruling that the client repay benefits because of unreported income." rimshot

  5. I am not a fan of some of the 8.4 discipline we have seen for private conduct-- but this was so egregious and abusive and had so many points of bad conduct relates to the law and the lawyer's status as a lawyer that it is clearly a proper and just disbarment. A truly despicable account of bad acts showing unfit character to practice law. I applaud the outcome.

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