Schultz v. Scandrett

The parties in this case were two families of shareholders owning stock in Cosmos of the Black Hills, Inc. Plaintiffs, the minority shareholders, brought an action against Defendants, the majority shareholders, alleging breach of fiduciary loyalty, breach of fiduciary care, minority shareholder oppression, and request for accounting. The fiduciary duty claims were tried to the jury, and the oppression and accounting claims were tried to the circuit court. The jury rendered a verdict in favor of Defendants on the fiduciary duty claims, and the circuit court issued a judgment in favor of Defendants on the remaining claims. Plaintiffs appealed, challenging the jury instructions. The Supreme Court affirmed, holding (1) the circuit court incorrectly instructed the jury that “South Dakota law does not allow a shareholder to use the fiduciary duty concept to rewrite an original deal he or she made with the corporation,” but the error did not prejudice Plaintiffs; (2) the jury instructions, when viewed as a whole, adequately instructed the jury of Defendants’ fiduciary duty of care and loyalty; and (3) the circuit court did not err in rejecting certain proposed jury instructions by Plaintiffs where the instructions merely amplified other instructions and no authority was cited in support of the instructions. View "Schultz v. Scandrett" on Justia Law