Opdyke v. Kent Liquor Mart, Inc.

Milton Opdyke (plaintiff), George Smith (defendant), and Glenn Richter (defendant) ventured into the liquor business together. Opdyke and Smith retained an attorney named Herman Brown (defendant) to incorporate the business as Kent Liquor Mart, Inc. (the corporation) (defendant) and assist with obtaining a liquor license. Opdyke, Smith, and Richter each received 100 of the 300 shares of capital stock issued for the corporation. Additionally, the corporation borrowed money to open a liquor store, and Opdyke, Smith, and Richter guaranteed the note. Thereafter, Richter considered getting out of the corporation because the liquor store struggled. After discussions, Opdyke gave Richter a check for $415 and wrote “[f]or equity in the corporation” on the check. Opdyke thought he had purchased a controlling stake in the corporation, but Richter canceled the check and later contended that Opdyke had not arranged to relieve Richter of the note obligations, as purportedly agreed upon. Although Brown informed Opdyke, Richter, and Smith that he represented only the corporation and suggested that they retain their own attorneys, Brown moderated a meeting at his office between the shareholders. At the meeting, Opdyke agreed to relieve Richter of the note obligations for the shares. However, the following day, Opdyke told Richter that the deal was off. Brown subsequently purchased the shares himself. When Brown told Opdyke about the purchase, Opdyke did not get angry, but he also did not consent to the transaction. Opdyke then sued Brown and alleged that Brown, as a lawyer, owed Opdyke a fiduciary duty and breached that duty by purchasing Richter’s stock. Opdyke argued that Brown acquired an interest adverse to his client by purchasing the stock and, even if the attorney-client relationship had ended, Brown used confidential information to make a purchase adverse to his former client. Brown maintained that he represented only the corporation and was therefore free to buy the shares. The lower court ruled for Brown and dismissed the claim. Opdyke appealed.