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Francis v. Stinson

760 A.2d 209 (2000)

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Francis v. Stinson

Maine Supreme Judicial Court

760 A.2d 209 (2000)

Facts

Calvin Stinson Sr. established the Stinson Canning Company, and over several years, he gave his six children the company’s stock. By the late 1970s, each of his children’s families owned about one-sixth of the company. At that time, Calvin Sr.’s two sons, Calvin Stinson Jr. (defendant) and Charles Stinson (defendant), operated the business. The company received several purchase offers, and Charles estimated the company could be sold for $18 million. In 1979 Charles called his sister Lou Ann Francis (plaintiff) and advised her that she and her family should sell their stock. Charles told Lou Ann the company was doing poorly financially, and if she died the estate taxes on her stock would be devastating. Charles, on behalf of the company, and Lou Ann and her family agreed to $700,000, with Charles promising a fair share distribution—if other stock sold for more later, the company would pay the difference to Lou Ann’s family. The written stock-purchase agreement disclosed the company had received purchase offers, and financial statements that indicated good performance were attached to the agreement. The agreement expressly provided that the company had no obligation for fair share distribution, stating that Lou Ann and her family would not receive additional money if stock sold for higher amounts later. Lou Ann and her family did not review the contract before signing it. In 1981 another sister, Eva Wight (plaintiff), was in financial trouble and inquired about selling her stock. Eva heard from someone, though she could not remember whom, that the company was not doing well and about estate-tax issues, but she was suspicious that her brothers were trying to grab her stock. Charles, on behalf of the company, initially offered Eva $700,000. After negotiations, Eva accepted an offer of $1.9 million. In 1990, with substantially the same assets as in 1980, the company was sold to Camp Hills, Inc. (defendant) for $24 million. A certified public accountant determined that when their stock was sold, the Francis family stock was worth $2,254,591 and the Wight family stock was worth between $2,500,000 and $3,333,000. The Francis and Wight families sued Charles, Calvin Jr., and Camp Hills (collectively, the Stinsons) for fraud and intentional or reckless misrepresentations, among other claims. The trial court granted summary judgment for the Stinsons. The Francis and Wight families appealed.

Rule of Law

Issue

Holding and Reasoning (Clifford, J.)

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