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Stuparich v. Harbor Furniture Mfg., Inc.
California Court of Appeal
83 Cal.App.4th 1268 (2000)
Ann Stuparich and Candi Tuttleton (plaintiffs) were sisters who each owned 19.05 percent of the voting and one-third of the non-voting shares in Harbor Furniture Manufacturing, Inc. (Harbor Furniture). Their brother, Malcolm, owned 51.56 percent of the voting shares. The plaintiffs became generally frustrated with the management of the corporation, including the failure to observe corporate formalities. The corporation had two operations, a mobile home park and its original furniture manufacturing operation. The furniture manufacturing operation had become unsuccessful, incurring losses, while the mobile home park was very profitable. The plaintiffs proposed formally separating the operations to insulate the profits of the mobile home park. Malcolm refused to discuss the proposal and later refused the plaintiffs’ request to buy them out. At that point, the plaintiffs became so frustrated that they stopped attending annual meetings. Throughout this time period, the plaintiffs continued to receive monthly dividends from the corporation. Nonetheless, they brought suit, seeking involuntary dissolution of the corporation. Harbor Furniture moved for summary judgment and the motion was granted. The plaintiffs appealed.
Rule of Law
Holding and Reasoning (Epstein, J.)
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