Minority shareholder oppression; Business Corporation Act (BCA); MCL 450.1489; Statute of limitations; Estes v Idea Eng’g & Fabrications, Inc; Res judicata; Breach of fiduciary duty; Spoliation; Equitable remedy; Stock purchase at fair value; Madugula v Taub; Franks v Franks’ Attorney fees; American Rule

The court held that the trial court properly applied the six-year statute of limitations and granted plaintiff equitable relief on his minority shareholder oppression claim, but did not err by directing a verdict on his breach-of-fiduciary-duty claim or denying attorney fees. Plaintiff remained a shareholder of defendant-corporation (J & J) after prior litigation established that the parties’ redemption agreement had not been followed. The court first held that res judicata did not bar plaintiff’s BCA claims because they “arose after this Court issued the Turner II decision,” and no prior court had addressed “the merits of plaintiff’s contentions regarding defendants’ violation of the BCA.” The court next held that plaintiff sufficiently pled and supported shareholder oppression because he alleged and produced evidence that defendants refused to recognize his shareholder status, denied access to corporate records, failed to redeem his shares, and manipulated or hid J & J’s finances. It also upheld the directed verdict on breach of fiduciary duty because, even assuming a breach, the lack of financial records created a “six-year evidentiary gap,” leaving no non-speculative basis for damages. As to the shareholder-oppression remedy, noting there was no binding precedent as to the amended statute, the court held that the six-year residual limitations period applied to equitable relief under MCL 450.1489(1)(a)-(e), while the shorter limitations period in MCL 450.1489(1)(f) applied only to damages. Relying on Madugula, the court explained that a forced stock buyout is equitable because it requires the court “to compel a party to purchase shares.” The court further held that the valuation remedy was within the trial court’s discretion because defendants’ “‘massive and entirely successful campaign of spoliation’” made valuation nearly impossible, and the trial court reasonably used the only uncontroverted evidence of stock value: plaintiff’s $25,000 cash purchase price, plus 7% simple interest. Finally, the court held that attorney fees were not warranted under the American Rule because defendants’ conduct, while “less than ideal,” did not fall within the limited fraudulent-or-unlawful-conduct exception. Affirmed.