Winters v. Pund, 72413

• Decision Date: 12 June 1986
• Docket Number: No. 72413,72413
• Citation: 179 Ga.App. 349,346 S.E.2d 124
• Parties: WINTERS v. PUND et al.
• Court: Georgia Court of Appeals

Page 124

346 S.E.2d 124

179 Ga.App. 349

WINTERS v. PUND et al.

No. 72413.

Court of Appeals of Georgia.

June 12, 1986.

Alan Mullinax, Stone Mountain, for appellant.

Charles R. Desiderio, Atlanta, for appellees.

BIRDSONG, Presiding Judge.

Gigi Krause Winters, plaintiff below, appeals from the grant of summary judgment to John Pund, Linda Laube, and Back Stage, Inc. Pund is a hairdresser, and in 1976, with John Epting and Edwin Lusk, two other hairdressers, formed Back Stage, Inc., a hair salon, in Sandy Springs, Georgia. They decided to terminate their arrangement, and on May 26, 1980, at a meeting of the shareholders, Epting and Lusk surrendered their corporate shares, and Winters and Pund became co-owners, each owning 50% of Back Stage.

Pund was elected president and Winters was elected secretary-treasurer. Winters, Pund, and Linda Laube, a Back Stage employee, were elected directors. Winters agreed to the by-laws, which stated that the "president shall be the chief executive officer of the corporation and shall have general and active management of the operation of the corporation." At the shareholders meeting the corporate attorney advised Pund and Winters they should have an "employment agreement" in which the rights of the parties would be defined. The attorney drafted the agreement in accordance with instructions of the parties and forwarded it to them but neither signed the agreement.

Pund and Winters were hairdressers and received commissions according to the amount of income each brought in from their customers. Neither the officers nor the directors of the corporation were paid any amount as such. Winters and Pund shared equally in the management of Back Stage until late 1982 when Winters informed Pund she no longer wanted to work as a hairdresser but wanted to become a "PR person and manager of the salon...." Pund said he agreed to the new duties for Winters, on a trial basis, at a weekly salary of $400 for Winters. Laube was terminated as an employee of Back Stage but did not resign as a director of the corporation. Finally, Pund told Winters the new arrangement was not working out, because Winters was bringing no money into the corporation and was taking out $400 each week, she was coming to work late and leaving early, and took 2-3 hour lunch periods. Finally, Winters did not show up for an entire week. Winters said she was at a competitor's salon learning "updated techniques." Winters said that during October and November of 1982 she spent equal time at Back Stage and the other hair salon. Winters and Pund had a meeting in November of 1982 in which Winters said Pund gave her an ultimatum that "either I come back behind the chair and do hair or that I would be fired...." Apparently Winters walked out of the meeting and Pund took this as her answer and forwarded a letter to her on November 12, 1982, which terminated her as a Back Stage employee. On November 15, 1982, a meeting of Back Stage's board of directors upheld Pund's firing of Winters, by a 2 to 1 vote, Pund and Laube voting to affirm and Winters voting to rescind. Another directors' meeting was held February 7, 1983, in which Winters was removed as secretary-treasurer of Back Stage. A stockholder's meeting was held August 31, 1983, for the purpose of electing directors, to amend the by-laws concerning the number of directors, and to remove Linda Laube as a director. The meeting was deadlocked at 1-1 on all motions. A second stockholder's meeting met with the same result.

Winters filed an action in equity in Fulton Superior Court (C-92256) on November 15, 1982, against Pund, which requested a temporary and permanent restraining order against Pund from wasting, hypothecating or disposing of the assets of Back Stage, and to prevent Pund from interfering with Winters' interest in Back Stage, and to enforce Winters' right to share in Back Stage management and profits. The pleadings complained of her termination by Pund, of his refusal to share Back Stage's profits, and his refusal to permit her to participate in the control of the corporation as "an equal shareholder, officer and director." Attorney fees were demanded for prosecuting the action. Back Stage was permitted to intervene as a defendant, answered, and filed a counterclaim asking for actual and punitive damages and for a temporary restraining order against Winters.

While the Fulton County equity action was pending, on May 16, 1983, Winters filed this action in DeKalb Superior Court, in six counts, against Pund and Laube individually, and Back Stage. Count 1 alleged a conspiracy between Pund and Laube to refuse her a share in the profits and to exclude her from participation in the management and control of Back Stage. This count also alleged her termination was the means used to exclude her from participating in the profits and management. Count 2 alleged Laube's refusal to resign as director after leaving Back Stage employment was part of the conspiracy to expel Winters from participation in the management and profits of the corporation. Count 3 alleged that Pund and Laube breached their fiduciary duties because of their conspiracy. Count 4 averred Pund made false representations to her to induce her to purchase one-half of Back Stage. Count 5 charged that because of the conspiracy, fraud and deceit, and breach of their fiduciary duties, she was wrongfully terminated. Count 6 asked for attorney fees. Damages were prayed for in each of the counts.

On December 30, 1983, Winters filed a separate action in Fulton Superior Court (D-6360) asking for involuntary dissolution of the corporation because she and Pund were deadlocked in voting power, and requested a temporary injunction to prevent Pund and any other officer or director of Back Stage from wasting, hypothecating, selling or otherwise disposing of assets of Back Stage.

The first filed action, in equity, in Fulton County (C-92256) was terminated on June 21, 1983, by the grant of summary judgment to defendants Pund and Back Stage. The other Fulton County action, the dissolution petition, was settled on May 1, 1984, during a hearing in which Pund attempted to establish the book value of Back Stage assets according to the corporate by-laws. Pund testified the net worth of the corporation was $27,500 and under the by-laws the seller must first offer the stock to the corporation based on the book value. Hence, Pund offered Winters, in court, $14,000 for her one-half interest in the corporate stock, and an additional $2,000 for payments remaining due on her corporate car. Winters' counsel asked Pund if he would take $16,000 for his one-half share of Back Stage and Pund said "yes." Winters tendered Pund a check for $16,000 and the trial court ruled that there had been an offer, an acceptance, and a tender of the money and until a court said otherwise there was no need of proceeding further on the dissolution petition because Pund had sold his share of Back Stage to Winters.

On June 15, 1983, defendants had filed a motion to abate or dismiss Winters' DeKalb action for damages, alleging the DeKalb complaint was for "the same cause of action" because it contained "basically the same allegations of plaintiff's original complaint" filed in Fulton Superior Court (C-92256), except for inclusion of Linda Laube, and she also could have been added to the original complaint because she was a director of the corporation which was a party, and had petitioned the court to be made a party. On July 12, 1983, defendants amended their motion to allege the complaint should be dismissed on the grounds of res judicata. This motion was denied. On March 7, 1984, defendants moved for summary judgment, and on October 23, 1985, the trial court granted the motion, finding the complaint "and all counts contained therein, is barred as to all defendant...