Christopher K. Kesling, et al. v. Andrew Kesling, et al. - 7/18/17

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Tuesday  July 18, 2017 
11:00 AM  EST

Christopher Kesling, DDS, MS, Adam Kesling, and Emily Kesling, individually and on behalf of TP Orthodontics, Inc. (collectively “the Sibling Shareholders”), appeal the trial court’s entry of summary judgment in favor of intervenor TP Orthodontics, Inc. (“TPO”), and defendants Andrew C. Kesling, individually and as Trustee of the Andrew C. Kesling Trust Dated March 28, 2001 and the Andrew C. Kesling Trust Dated March 28, 2001 (collectively “Andrew”).  

This case involves a lawsuit initiated by three sibling minority shareholders of TPO, a closely-held corporation, against their brother Andrew, the majority shareholder and president of TPO, based upon, among other things, his alleged breach of fiduciary duties and mismanagement of TPO.  After a disinterested special litigation committee determined that it was not in TPO’s best interests to pursue most of the Sibling Shareholders’ claims, but that it was in TPO’s best interests to pursue four of the claims, TPO filed a motion to dismiss or, in the alternative, for summary judgment. 

TPO requested dismissal of the claims rejected by the committee and further argued that the Sibling Shareholders should not be allowed to proceed directly/individually against Andrew to redress the remaining claims, but that those claims had to be brought by derivative action.  The trial court granted TPO’s motion for summary judgment. 

Specifically, the trial court dismissed the rejected claims, and although acknowledging that it had the discretion under Indiana law to permit the Sibling Shareholders to proceed directly against Andrew on the remaining derivative claims based upon the closely-held corporation exception to the general rule prohibiting direct actions by shareholders, the court determined that the exception did not apply and that the Sibling Shareholders would not be allowed to proceed directly against Andrew.  The court further determined that TPO, as a board, retained the right to pursue the derivative claims on behalf of TPO. 

On appeal, the Sibling Shareholders assert that the trial court abused its discretion in not permitting them to proceed directly against Andrew to redress derivative injuries to TPO, and they also assert that the trial court erred in determining that TPO’s board of directors is the proper party to prosecute any derivative action on TPO’s behalf.

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  1. He TIL team,please zap this comment too since it was merely marking a scammer and not reflecting on the story. Thanks, happy Monday, keep up the fine work.

  2. You just need my social security number sent to your Gmail account to process then loan, right? Beware scammers indeed.

  3. The appellate court just said doctors can be sued for reporting child abuse. The most dangerous form of child abuse with the highest mortality rate of any form of child abuse (between 6% and 9% according to the below listed studies). Now doctors will be far less likely to report this form of dangerous child abuse in Indiana. If you want to know what this is, google the names Lacey Spears, Julie Conley (and look at what happened when uninformed judges returned that child against medical advice), Hope Ybarra, and Dixie Blanchard. Here is some really good reporting on what this allegation was: Here are the two research papers: 25% of sibling are dead in that second study. 25%!!! Unbelievable ruling. Chilling. Wrong.

  4. Mr. Levin says that the BMV engaged in misconduct--that the BMV (or, rather, someone in the BMV) knew Indiana motorists were being overcharged fees but did nothing to correct the situation. Such misconduct, whether engaged in by one individual or by a group, is called theft (defined as knowingly or intentionally exerting unauthorized control over the property of another person with the intent to deprive the other person of the property's value or use). Theft is a crime in Indiana (as it still is in most of the civilized world). One wonders, then, why there have been no criminal prosecutions of BMV officials for this theft? Government misconduct doesn't occur in a vacuum. An individual who works for or oversees a government agency is responsible for the misconduct. In this instance, somebody (or somebodies) with the BMV, at some time, knew Indiana motorists were being overcharged. What's more, this person (or these people), even after having the error of their ways pointed out to them, did nothing to fix the problem. Instead, the overcharges continued. Thus, the taxpayers of Indiana are also on the hook for the millions of dollars in attorneys fees (for both sides; the BMV didn't see fit to avail itself of the services of a lawyer employed by the state government) that had to be spent in order to finally convince the BMV that stealing money from Indiana motorists was a bad thing. Given that the BMV official(s) responsible for this crime continued their misconduct, covered it up, and never did anything until the agency reached an agreeable settlement, it seems the statute of limitations for prosecuting these folks has not yet run. I hope our Attorney General is paying attention to this fiasco and is seriously considering prosecution. Indiana, the state that works . . . for thieves.

  5. I'm glad that attorney Carl Hayes, who represented the BMV in this case, is able to say that his client "is pleased to have resolved the issue". Everyone makes mistakes, even bureaucratic behemoths like Indiana's BMV. So to some extent we need to be forgiving of such mistakes. But when those mistakes are going to cost Indiana taxpayers millions of dollars to rectify (because neither plaintiff's counsel nor Mr. Hayes gave freely of their services, and the BMV, being a state-funded agency, relies on taxpayer dollars to pay these attorneys their fees), the agency doesn't have a right to feel "pleased to have resolved the issue". One is left wondering why the BMV feels so pleased with this resolution? The magnitude of the agency's overcharges might suggest to some that, perhaps, these errors were more than mere oversight. Could this be why the agency is so "pleased" with this resolution? Will Indiana motorists ever be assured that the culture of incompetence (if not worse) that the BMV seems to have fostered is no longer the status quo? Or will even more "overcharges" and lawsuits result? It's fairly obvious who is really "pleased to have resolved the issue", and it's not Indiana's taxpayers who are on the hook for the legal fees generated in these cases.