Glanzer v. St. Joseph’s Indian School

[Editor’s Note: The casebook Comparative Corporate Law (Larry Backer ed., 1st ed. 2002) erroneously gives the title of this case as “Greer v. St. Joseph’s Indian School.” The correct title is “Glanzer v. St. Joseph’s Indian School.”] Greer and Alan Glanzer (plaintiffs) operated a fishing-tackle business before forming a limited partnership called Glanzer Tackle Company with Dehon Industries, Inc. (Dehon) (defendant) in June 1984. Dehon, which was a wholly owned subsidiary of the St. Joseph’s Indian School (St. Joseph) (defendant) was Glanzer Tackle’s general partner. As part of the transaction, Dehon was to make certain payments to the Glanzers, and Glanzer Tackle was to employ Alan for three years. In approximately July 1985, Glanzer Tackle fired Alan and filed for bankruptcy. The Glanzers then sued Dehon and St. Joseph, asserting contract, negligence, fraud, and breach-of-fiduciary-duty claims. The Glanzers alleged that St. Joseph was liable because Dehon was an instrumentality and agent of St. Joseph. In opposition to St. Joseph’s summary-judgment motion, the Glanzers presented evidence that (1) St. Joseph and Dehon shared common executives; (2) Glanzer Tackle’s manager was employed by St. Joseph; (3) St. Joseph incorporated and capitalized Dehon; (4) the sole purpose for creating Glanzer Tackle was to provide income, jobs, and business opportunities for Native Americans; (5) Alan’s 1984 IRS Form W-2 listed St. Joseph as his employer; (6) Alan was paid with checks drawn on St. Joseph’s bank account; and (7) St. Joseph provided medical insurance for the Glanzers. Additionally, the Glanzers presented evidence that Dehon mismanaged Glanzer Tackle by wasting money, antagonizing customers, providing unwise discounts, hiring inadequate staff, incurring too much debt, and not paying creditors. The trial court granted summary judgment to St. Joseph, and a jury awarded $120,001 in damages against Dehon. The Glanzers appealed the grant of summary judgment to St. Joseph.