## Facts

- Milton R. Opdyke and George M. Smith agreed to open a liquor store venture in a Dover shopping center after Glenn A. Richter (for the landlord interests) required co-ownership as a condition of leasing space.
- The three retained attorney Herman C. Brown to incorporate the business; Kent Liquor Mart, Inc. issued 300 shares, with each man receiving 100 shares.
- The corporation borrowed $20,000 from a bank; the three shareholders and their wives signed the note.
- After the business performed poorly, Richter sought to withdraw. On October 20, 1960, Opdyke gave Richter a $415 check (equal to Richter’s initial contribution) endorsed “For equity in the corporation.”
- Opdyke claimed the $415 payment was an unconditional purchase of Richter’s 100 shares; Richter claimed any transfer was conditional on Opdyke relieving Richter of liabilities (including on the bank note), which Opdyke did not fully do.
- Richter later asserted the sale to Opdyke was not completed and transferred stock interests through later transactions.
- Brown, while continuing to act as legal advisor/mediator in disputes among the participants, purchased stock that Opdyke claimed he should have been able to acquire, allegedly without Opdyke’s fully informed consent.

## Issues

1. Whether the $415 check endorsed “For equity in the corporation” effected an unconditional purchase of Richter’s 100 shares by Opdyke.
2. Whether Brown breached fiduciary duties to Opdyke by purchasing stock in the venture in a manner adverse to Opdyke’s asserted interests and without informed consent, and, if so, what equitable remedy applied.

## Decision

- The Delaware Supreme Court affirmed the finding that Opdyke did not acquire Richter’s shares through the $415 transaction because any transfer was conditional and the condition was not satisfied.
- The court reversed the ruling in Brown’s favor, holding Brown breached fiduciary duties by acquiring an interest adverse to Opdyke arising from Brown’s role as counsel/advisor in the venture.
- The court imposed a constructive trust requiring Brown to hold the improperly acquired stock for Opdyke’s benefit.

## Legal Principles

- Appellate courts defer to trial-level fact-finding on disputed, condition-laden agreements in closely held corporations absent clear error.
- A lawyer functioning as counsel to a closely held venture and its participants owes fiduciary duties that bar acquiring, without full disclosure and informed consent, a proprietary interest adverse to a participant’s interests in the matter.
- When a fiduciary profits from a conflicted acquisition of an adverse interest, equity may require disgorgement by imposing a constructive trust over the acquired property.

## Conclusion

The court upheld the determination that Opdyke never completed an unconditional purchase of Richter’s shares, but held that the venture’s lawyer breached fiduciary duties by buying disputed shares adverse to Opdyke without informed consent, requiring the lawyer to hold those shares as a constructive trustee for Opdyke.


Opdyke v. Kent Liquor Mart, Inc., 181 A.2d 579 (Del. 1962)