Tuesday, February 26, 2013

Northeast Harbor Golf Club, Inc. v. Harris case brief

Northeast Harbor Golf Club, Inc. v. Harris case brief summary
1999 ME 38

SYNOPSIS: Appellant president sought review of an order of the Superior Court, Hancock County (Maine), that found she usurped a corporate opportunity when she purchased and developed property.

OVERVIEW: Appellant president of a golf course purchased property surrounding the course. Appellant learned of one opportunity to purchase property in her capacity as president. She purchased a second piece of property that she learned of independent of her position. Appellant disclosed both of these purchases to appellee's board of directors. When appellant began to develop the property, appellees took no action, but created a separate organization to oppose development. The lower court found appellant usurped a corporate opportunity. The appeals court reversed.

HOLDING:
Appellant usurped a corporate opportunity because she did not comply with the strict requirements of full disclosure before taking advantage of the opportunity.

ANALYSIS:
Even though she informed appellee after her decision, she usurped a corporate opportunity because the corporation was entitled to determine what was in its best interest. The court reversed because a six-year statute of limitations applied, and appellee's claims were partially barred because the period began to run when the property was purchased. The court found the doctrine of laches prevented appellee from bringing suit because an unreasonable length of time elapsed.

OUTCOME: The court reversed the order of the lower court that found appellant usurped a corporate opportunity because the statute of limitations barred the claim. The limitations period began to run when appellant purchased the property and appellee filed suit after that time period elapsed. The court found doctrine of laches also prevented appellee's suit because so much time elapsed appellant would have been prejudiced by the suit.
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