MILLER v. ROBERTSON, 22157-8-II

• Decision Date: 12 February 1999
• Docket Number: No. 22157-8-II,No. 23087-9-II,22157-8-II,23087-9-II
• Court: Washington Court of Appeals
• Parties: BRUCE MILLER, APPELLANT, v. GORDON ROBERTSON AND JANE DOE ROBERTSON, HUSBAND AND WIFE, AND THEIR MARITAL COMMUNITY, AND B & B SERVICES, INC., A WASHINGTON CORPORATION, RESPONDENTS AND CROSS APPELLANTS.

[1]
[2]	BRUCE MILLER, APPELLANT,; v.; GORDON ROBERTSON AND JANE DOE ROBERTSON, HUSBAND AND WIFE, AND THEIR MARITAL COMMUNITY, AND B & B SERVICES, INC., A WASHINGTON CORPORATION, RESPONDENTS AND CROSS APPELLANTS.
[3]	No. 22157-8-II No. 23087-9-II (consolidated)
[4]	Washington Court of Appeals
[5]	Source of Appeal: Appeal from Superior Court of Pierce County Docket No: 96-2-07722-0 Judgement or order under review Date filed: 06/10/1997 Judge signing: Hon. Nile E. Aubrey
[6]	February 12, 1999
[7]	Counsel: Counsel for Appellant(s) Robert L. Wilson Karr Tuttle Campbell Suite 2900 1201 3rd Ave Seattle, WA 98101 Counsel for Respondent(s) Timothy J. Whitters Gordon Thomas Honeywell Malanca Peterson & Daheim 2200 1st Interstate Plaza P.o. Box 1157 Tacoma, WA 98401
[8]	The opinion of the court was delivered by: Seinfeld, J.
[9]	Judges: Authored by Karen G. Seinfeld Concurring: J. Dean Morgan David H. Armstrong
[10]	[Editor's note: originally released as an unpublished opinion]
[11]	Bruce Miller, a minority shareholder and a former director, president, and employee of B & B Services, Inc., appeals a Judgement dismissing his claims against the majority shareholder, Gordon Robertson, and against B & B. The trial court found no corporate oppression, no wrongful termination, no agreement to sell Miller a portion of the corporate stock, and no breach of a fiduciary duty. Because the evidence is sufficient to support the court's findings and because we find no reversible error of law, we affirm. But finding no legal authority that allows the trial court to retain jurisdiction to oversee the sale of Miller's corporate shares, we reverse that ruling.
[12]	FACTS
[13]	In 1977, Miller, along with Terry Huber, came to Washington to start a restaurant. According to Miller, he wanted a business that would employ him as long as he wished or "basically for life."
[14]	In January 1978, Miller and Huber formed B & B Services, Inc., found a desirable location, and met with a potential investor, Philip "Peter" Stanley. The three of them ultimately agreed that Stanley and Miller would each own 35 percent of the corporate shares in B & B and Huber would own 30 percent.
[15]	In a written memorandum describing the parties' mutual understanding, Stanley's attorney wrote that Miller and Huber would conduct the day-to-day operation of the business "on an established employment contract with B & B Services, Inc." and would "devote their full time and effort to the operation of the business until it {was} operating with a net profit and {had} operated with a net profit for more than one (1) year." At such time, Miller and Huber could negotiate for a reduced commitment, or explore the possibility of other ventures.
[16]	In July 1978, the corporate directors issued shares according to the earlier agreement and elected Miller as president. Stanley, acting through the partnership E.R. ROGERS ASSOCIATES, purchased a building that it leased to the corporation.
[17]	Sometime after July 1978, Stanley's attorney prepared a Co-Manager Employment Contract for Miller and Huber, but Miller and Huber refused to sign. Miller objected to the contract because, among other things, it limited his employment to three years. Stanley then consented to Miller and Huber's continued employment as co-managers of the business "without a specific contract," but, as Stanley understood it, Miller's employment was at the will of the majority of the Board of Directors.
[18]	Miller and Huber opened the E.R. ROGERS restaurant to the public in April 1979. Initially, the restaurant's financial performance was poor and a few years later, Huber resigned.
[19]	With Stanley's approval, Miller invited Gordon Robertson to join the business. Robertson went to work as a manager and purchased Huber's shares. Miller and Robertson became close friends but Miller did not tell Robertson that lifetime employment went with corporate ownership. The corporation's gross sales and net profit steadily increased; it paid off shareholder loans and made distributions to the shareholders for each year after Robertson's arrival until 1996. Miller considered Robertson's involvement in the management of the business "a substantial factor in the turnaround."
[20]	At some point, Miller drafted an employee orientation manual that included a policy of providing written warnings to employees before they could be dismissed for job performance deficiencies. Miller sought to use the manual at trial to show that E.R. ROGERS' employees were not terminable at will. But the court found that the manual did not apply to the two co-owners.
[21]	According to Miller, he and Robertson occasionally discussed their mutual desire to buy Stanley out of the business. Miller testified that Robertson had indicated his desire to "negotiate for the both of us" because Stanley "doesn't like you personally and I can get a better price if I do the negotiations." Miller agreed because they were "best friends."
[22]	In the summer of 1993, Robertson first talked to Stanley about purchasing Stanley's corporate shares. By August, the Discussions had progressed to negotiations over price. In September, when Robertson told Miller about his negotiations with Stanley, Miller indicated that he was interested in participating.
[23]	At trial, the parties presented conflicting testimony regarding their intentions. Miller claimed that he and Robertson had an agreement whereby Robertson would buy Stanley's 35 percent interest and transfer 15 percent to Miller after the completion of the sale at the same price Robertson paid to purchase the shares from Stanley. Miller claimed that they had agreed to be 50/50 partners and to resolve any disputes by flipping a coin. But Robertson denied that his negotiations with Stanley were partially on Miller's behalf and he flatly denied any agreement with Miller to become 50/50 partners or to transfer 15 percent of the shares to Miller.
[24]	In December, Stanley informed Miller "{t}hat at no time ever would he sell {him} his stock" even if Miller paid more than Robertson. Miller said that he was very upset by this statement, but Robertson assured him that they had a deal.
[25]	In January 1994, Robertson and Stanley finally agreed upon a price of $145,000 for all of Stanley's shares. Robertson paid $10,000 of the purchase price in cash, obtained a bank loan for $120,000, and Stanley financed the remaining $15,000. The bank loan was secured by B & B's assets. According to Robertson, he could have obtained the loan using only his house as security; he testified that the collateralization agreement with B & B was not essential to the deal.
[26]	Although Miller signed the collateralization agreement, he testified that the reason he did so was because he and Robertson "had an agreement in place that we would be splitting the stock afterwards. And, the securing of the loan seemed appropriate under those circumstances." Robertson and his wife denied that Miller signed the collateralization agreement based upon such an agreement.
[27]	After Robertson acquired Stanley's shares, Miller repeatedly sought to purchase sufficient shares from Robertson to become a 50 percent owner. Robertson repeatedly denied the existence of an agreement and refused to sell. This disagreement led to heated arguments, during one of which Robertson allegedly asked Miller why he was "badgering" him for the stock when "you're going to be employed forever." Robertson began avoiding Miller and the two began to communicate by letter.
[28]	In late March 1994, Miller met with B & B's corporate accountant, Tony Maki. Miller acknowledged in a deposition that his emotions were running high and that he "probably said some very derogatory things about Mr. Robertson." Robertson testified that Maki called him after Miller left and told him that there was a conflict of interest because of the derogatory things Miller had said about Robertson and Stanley. Robertson further testified that Maki's supervisor, Harry Pritchard, told him that Miller was Sbad-mouthing and defacing me as a person and Mr. Stanley." Pritchard testified that he called Robertson and told him that "things were heading down the wrong road" and he did not want to be "in the middle of a battle." When Miller returned to the restaurant from the accountant's office, Robertson advised him that he "couldn't put up with it anymore," that "it's over with us" and "{y}ou're fired." When Miller asked for a reason, Robertson told him what Pritchard had just told him on the phone. Then Robertson told Miller to "stay on until we have a directors' meeting and we call {for a} vote on it, but you're fired." At the April Board of Directors meeting, the Board terminated Miller's employment and voted upon new officers, electing Robertson as the new president.
[29]	After Miller's termination, he opened another restaurant in Tumwater and hired the kitchen manager/chef from E.R. ROGERS to work there. Consequently, E.R. ROGERS went through some major changes. Robertson had to assume substantial additional responsibilities until he was able to train another employee to take on more duties. Consequently, Robertson substantially increased his own salary during 1994 and 1995, but decreased it in 1996 as the other employee's duties and compensation increased. During this time, Robertson's wife also started helping out, performing bookkeeping functions and answering the phone when the assistant manager had surgery and when the bookkeeper left.
[30]	The corporation's accountant testified about the declining gross revenues from 1994 to 1996. According to Robertson, this decline was consistent with declining revenues experienced during this time period by similar full-service restaurants in the region. In addition, the corporation's legal and accounting expenses increased substantially in 1995 and 1996 over previous years. As a result, shareholder distributions declined from $60,000 in 1994, to $15,000 in 1995, and then to zero in 1996.
[31]	In March 1995,

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