Thursday, February 21, 2013

Merola v. Exergen Corp. case brief

Merola v. Exergen Corp. case brief summary 

38 Mass. App. Ct. 46

SYNOPSIS: Defendants, corporation and president, sought review of a judgment from the Superior Court of Middlesex County (Massachusetts), which was rendered against defendants on plaintiff minority stockholder's complaint of wrongful termination.

-The trial court had rendered a judgment against defendants, corporation and president, on plaintiff minority stockholder's complaint that defendant president had wrongfully terminated him.
-The trial court issued findings of fact and conclusions of law that found defendant president owed a fiduciary duty to plaintiff, and by terminating plaintiff's employment without any legitimate purpose he failed to perform his fiduciary obligations to plaintiff.
-On appeal, the court did not find any merit in defendants' arguments that challenged the trial court's findings.

-There was enough evidence to support the inference that defendant president's motivation for the discharge was to harm plaintiff and not to benefit the corporation.
-Also, there was a reasonable expectation that plaintiff would have received a return in his investments with continued employment and with opportunities to become a major shareholder.
-The court affirmed the trial court's judgment, but modified it to run only against defendant president. -There was no direct cause of action against defendant corporation based on defendant president's breach of his fiduciary duty to plaintiff.

HOLDING: The court modified the trial court's judgment to run only against defendant president and not defendant corporation. Defendant president had breached his fiduciary duty to plaintiff employee, but this did not provide a direct cause of action against defendant corporation.

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