## Facts

- McCann Ranch & Livestock Company, Inc. was a closely held family corporation created by William McCann, Sr.
- In the 1970s, Ronald McCann and his brother William McCann, Jr. were each gifted 36.7% of the corporation’s shares; the remaining shares were later placed in a trust benefiting their mother, Gertrude, with Gary Meisner as trustee with authority to vote and, in limited circumstances, sell the trust shares.
- After William Sr.’s death in 1997, Bill became president and a director; Ron served as a director until 2003.
- Ron alleged that Bill and Gertrude, through corporate control, engaged in conduct that excluded Ron from participation and diverted corporate value, including:
  - increasing Bill’s salary and providing additional benefits,
  - paying Gertrude a consulting fee,
  - removing Ron from the board and not employing him,
  - having the corporation purchase Gertrude’s home to provide her cash.
- Ron sued seeking equitable relief or, if necessary, judicial dissolution under Idaho Code § 30-1-1430, alleging breach of fiduciary duty and oppressive conduct.
- The district court granted summary judgment for defendants, reasoning that Ron could not satisfy the statute absent a showing of irreparable injury to the corporation, and limited discovery; it denied defendants’ request for attorney’s fees.

## Issues

1. Whether a shareholder’s claim for relief under Idaho Code § 30-1-1430 based on alleged oppression is properly brought as a direct action rather than solely as a derivative action.
2. Whether Idaho Code § 30-1-1430(2)(b) requires proof of irreparable injury to the corporation, and whether summary judgment was proper given disputes about oppression.
3. Whether the district court improperly limited discovery relevant to the oppression and fiduciary-duty allegations.
4. Whether defendants were entitled to attorney’s fees.

## Decision

- The Idaho Supreme Court reversed the summary judgment and remanded for further proceedings.
- The Court held that the district court applied an improper standard by requiring an extra-statutory showing of irreparable injury to the corporation under Idaho Code § 30-1-1430(2)(b).
- The Court treated Ron’s oppression-based request for dissolution or equitable relief as a direct shareholder claim in the closely held corporation context.
- The Court affirmed the denial of attorney’s fees to defendants.

## Legal Principles

- Under Idaho Code § 30-1-1430(2)(b), a shareholder may seek dissolution (or related equitable relief) upon showing that those in control have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent.
- An oppression-based claim under the dissolution statute in a closely held corporation may be brought directly because it protects the shareholder’s personal interests and reasonable expectations of participation, not only the corporation’s interests.
- Courts may not add requirements to § 30-1-1430(2)(b) that the legislature did not state; the statute does not require proof of irreparable injury to the corporation as a prerequisite to relief.
- Summary judgment is inappropriate where there is a genuine dispute of material fact about whether controllers’ conduct was oppressive, including disputes about compensation, insider transactions, and exclusion from governance.
- A party whose summary-judgment victory is reversed is not a prevailing party for purposes of attorney’s fees on that ruling.

## Conclusion

The Idaho Supreme Court held that a shareholder in a closely held corporation may pursue a direct oppression claim for dissolution or equitable relief under Idaho Code § 30-1-1430(2)(b), and that courts may not require a separate showing of irreparable injury to the corporation; factual disputes concerning allegedly oppressive conduct required reversal of summary judgment and remand, and defendants were not entitled to attorney’s fees.


McCann v. McCann, 152 Idaho 809, 275 P.3d 824 (Idaho 2012)