## Facts

- A closely held “two-man” corporation was formed in 1948 to continue Charles W. Easterday’s roofing and sheet metal business; Raymond F. Duckworth joined as the other stockholder.
- The corporation issued 1,500 shares of $10 par value stock, with Easterday receiving 51% and Duckworth 49%; Duckworth paid cash and Easterday contributed business assets and received corporate notes for transferred value beyond his shares.
- Easterday and Duckworth executed a survivor-purchase stock agreement placing their shares in trust with a bank as trustee.
- The agreement required the surviving stockholder, upon the other’s death, to purchase the decedent’s shares held in trust.
- The agreement set the purchase price at $10 per share “until modified in writing” by the parties, and allowed them, at least annually, to fix a new value by a written instrument delivered to the trustee.
- No written modification of the $10 per share price was ever made.
- Easterday died in 1956; Duckworth tendered payment at $10 per share.
- Easterday’s administratrix alleged the shares were worth about $80 per share at death and sought cancellation or effective adjustment of the agreement, alleging fraud and breach of a confidential or fiduciary relationship.

## Issues

1. Whether a survivor-purchase agreement fixing a $10 per share price “until modified in writing” is enforceable when no written modification occurred, despite allegations that actual value at death was much higher.
2. Whether the agreement should be rescinded or reformed for fraud based on an alleged promise to cooperate in later price revisions coupled with an alleged undisclosed intention never to agree to an increase.
3. Whether the agreement is voidable due to breach of a confidential or fiduciary relationship between the stockholders.
4. Whether summary judgment was proper given the pleadings and record on fraud and fiduciary-duty allegations.

## Decision

- The court affirmed summary judgment for Duckworth.
- The survivor-purchase agreement was enforced according to its written terms at $10 per share.
- The court found no sufficient evidentiary basis for fraud or for setting aside the contract due to a confidential or fiduciary relationship.
- The court held there was no genuine dispute of material fact and Duckworth was entitled to judgment as a matter of law.

## Legal Principles

- A fixed-price buy-sell (survivor-purchase) agreement in a closely held corporation is enforceable as written when the contract clearly fixes price and prescribes an exclusive method of modification that was not used.
- A contractual option or mechanism to revise valuation periodically does not, without more, impose a legal duty to revise; absent the required written modification, the stated price controls.
- Fraud generally requires a misrepresentation of existing fact; allegations resting on future intent or future performance must be supported by specific facts showing a present intention not to perform at the time of the statement.
- Claims that a contract is voidable due to a confidential or fiduciary relationship require a concrete showing of overreaching, concealment, or inequitable conduct; disparities in age or generalized trust are insufficient without proof of abuse.
- Summary judgment is appropriate when the material contractual terms and operative facts are undisputed and the opposing party offers only conclusory allegations on fraud or fiduciary breach.

## Conclusion

The court enforced the survivor-purchase agreement at the unmodified contract price of $10 per share and rejected efforts to cancel or revalue the arrangement because the record did not support actionable fraud or an abused fiduciary relationship, leaving no triable issue to prevent summary judgment.


Helms v. Duckworth, 249 F.2d 482 (D.C. Cir. 1957)