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Meyer v. Brubaker1/29/2002
As modified February 25, 2002. There is no change in the judgment. Petition for rehearing denied.
STEVEN MEYER, PLAINTIFF AND RESPONDENT,
v.
GARY BRUBAKER ET AL., DEFENDANTS AND APPELLANTS.
Appeal from a judgment of the Superior Court of Orange County, Peter S. Smith, Temporary Judge. (Pursuant to Cal. Const., art. VI, ยง 21.) Affirmed in part and reversed in part. (Super. Ct. No. 755867)
Law Offices of Jeffrey S. Benice and Jeffrey S. Benice for Defendants and Appellants Gary Brubaker, Carolyn I. Brubaker, Jon M. Brubaker, and Sally K. Brubaker. Law Offices of Keith Scheuer and Keith Scheuer for Plaintiff and Respondent.
The opinion of the court was delivered by: Moore, J.
NOT TO BE PUBLISHED
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
OPINION
Gary and Jon Brubaker, the controlling shareholders in a closely held corporation owning two "fast food" chicken franchises, appeal a judgment for compensatory and punitive damages in favor of the third shareholder, Steven Meyer. The Brubakers assert four claims. First, they contend the trial court erred in allowing Meyer to bring a direct action for oppressive conduct by the majority shareholders, instead of a derivative suit on behalf of the corporation. Second, they insist the damage awards were improper as a matter of law, or at least were not supported by substantial evidence. Third, they attack the trial court's order dissolving their corporation involuntarily, and fourth, they recite a bias claim against the trial court. We reverse a portion of the trial court's compensatory damages award, and remand for recalculation of the award amounts, but otherwise affirm the judgment.
I. FACTS
Gary Brubaker and Steven Meyer formed Bye P.D. Corporation in 1986, soon after they left employment with the Los Angeles Police Department. They formed Bye P.D. to own and operate two El Pollo Loco chicken franchises, one in Costa Mesa and one in Tustin. Gary's brother, Jon Brubaker, joined them in the venture; he controls a 25 percent interest in Bye P.D., Gary Brubaker controls 50 percent, and Meyer is a 25 percent shareholder.
In 1991, Gary Brubaker opened a third El Pollo Loco restaurant within two miles of Bye P.D.'s El Pollo Loco in Costa Mesa. He apparently owned that restaurant with a third party through a corporation called The Cluck Brothers. Jon Brubaker eventually bought out the third party.
Relations ultimately deteriorated between Meyer and the Brubakers, and Meyer sued. He sought an accounting to determine the value of his interest in Bye P.D., as well as dissolution of Bye P.D. and compensatory and punitive damages against the Brubakers. Following a bench trial, the court's assessment was that, " f this wasn't a case of a minority shareholder being treated unequally, I've never seen it; it's a classic case of it." The court ordered the involuntary dissolution of Bye P.D. It also awarded Meyer $176,529 in compensatory damages and $95,000 in punitive damages against Gary Brubaker and $47,500 in punitive damages against Jon Brubaker. The Brubakers now appeal.
II. DISCUSSION
We deal first with a preliminary matter. Meyer asserts the Brubakers' appeal should be dismissed as a penalty for their asserted contempt of the trial cour
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