Mauer v. Kircher

587 N.W.2d 512, 1998 WL 865125
CourtCourt of Appeals of Minnesota
DecidedFebruary 18, 1999
DocketC7-98-1004
StatusPublished
Cited by2 cases

This text of 587 N.W.2d 512 (Mauer v. Kircher) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mauer v. Kircher, 587 N.W.2d 512, 1998 WL 865125 (Mich. Ct. App. 1999).

Opinions

OPINION

SHORT, Judge.

On August 20, 1997, Kent Kircher, president of the Citizens Bank of Olivia, received requests from five of the bank’s twelve stockholders to call a special stockholders’ meeting. Kircher refused to call the meeting because a majority of bank stockholders did not submit requests and four of the requesting stockholders subsequently petitioned for a writ of mandamus. On appeal from the trial court’s issuance of a peremptory writ of mandamus, Kircher argues the trial court erred in: (1) finding the stockholders’ requests obligated Kircher to call a special meeting; (2) denying his motion to amend his answer; and (3) failing to conduct a trial.

FACTS

The Citizens Bank of Olivia is a state-chartered bank controlled by twelve stockholders. Kent Kircher is president of the bank and chairman of the board. His mother, Marjorie Kircher, is also on the board and holds 46.91 percent of the shares. Jane Mauer, Helmut Mauer, A. Richard Kircher and Faye K. Weimann (collectively “respondents”) are minority stockholders and together hold 26 percent of the bank’s shares.

In 1997, Marjorie Kircher removed herself from bank business by giving her daughter, Jane Mauer, authority over her shares through a shareholder voting agreement and proxy, an irrevocable proxy, and a durable power of attorney. That same year, respondents and Marjorie Kircher individually submitted requests to Kircher to call a special stockholders’ meeting. One week after her submission, Marjorie Kircher rescinded both her request and the documents awarding Jane Mauer authority over her shares.

Section 3 of the bank’s bylaws provides:

Special meetings of the stockholders * * * shall be called by the president or cashier * * * upon application made to the president or cashier by a majority of the stockholders.

(Emphasis added.) Kircher never called the special meeting because only five of the [514]*514bank’s twelve stockholders submitted requests and thus a majority of the stockholders did not apply for a meeting. Respondents petitioned the trial court for a writ of mandamus to compel Kireher to call a special meeting. Using a provision stamped directly next to section 3 that states “[wjhere a majority of the outstanding stock is not represented * * * no business can be transacted,” to interpret section 3, the trial court concluded the bylaws require an- application for special meeting from owners of a majority of stock, not from a majority of stockholders. (Emphasis added.) Because the requesting stockholders held approximately 73 percent of the bank’s common stock at the time of their requests, the trial court ordered a writ of mandamus to compel Kireher to call a special meeting. Kireher appealed the trial court’s order and, because judgment had not been entered, we dismissed the appeal as premature. On remand, Kireher moved to amend his answer. The trial court denied Kircher’s motion, ordered a peremptory writ of mandamus based on the same interpretation of the bank’s bylaws, and entered judgment accordingly.

ISSUES

I. Did the trial court err in issuing a writ of mandamus?

II. Did the trial court err in denying Kircher’s motion to amend his answer and in failing to conduct a trial?

ANALYSIS

A writ of mandamus compels performance of a legal duty, and will only be reversed when there is no evidence reasonably tending to sustain the trial court’s findings. Minn.Stat. § 586.01 (1996); State ex rel. Banner Grain Co. v. Houghton, 142 Minn. 28, 30, 170 N.W. 853, 853 (1919). Trial courts may issue a writ of mandamus to require a corporation’s director to call a meeting of stockholders. State ex rel. Lake Shore Tel. Co. v. De Groat, 109 Minn. 168, 176, 123 N.W. 417, 419 (1909). However, when issuing such a writ, courts must examine corporate bylaws to determine the director’s actual duties and adhere to the document’s usual and accepted meaning. See American Commerce Ins. Brokers, Inc. v. Minnesota Mut. Fire & Cas. Co., 551 N.W.2d 224, 227-28 (Minn.1996) (holding language must be given its plain meaning); Stole by Humphrey v. Delano Community Dev. Corp., 571 N.W.2d 233, 236 (Minn.1997) (noting rules of construction apply to corporate documents as well as contracts).

I.

Kireher argues the trial court incorrectly interpreted the bank’s bylaws to compel a special stockholders’ meeting upon the request of owners of a majority of stock and thus erred in issuing a writ of mandamus based on this interpretation. In the absence of ambiguity, courts are bound to attribute the usual and accepted meaning to contractual language. See Minn.Stat. § 645.08(1) (1996) (stating words and phrases must be construed according to common and approved usage); Carl Bolander & Sons, Inc. v. United Stockyards Corp., 298 Minn. 428, 215 N.W.2d 473, 476 (1974) (noting, where language may be interpreted according to its plain meaning, there is no room for construction).

We conclude the trial court erred in overlooking the plain meaning of the bank’s bylaws and ordering a writ of mandamus. Section 3 of the bank’s bylaws unambiguously sets forth the procedure for calling a special stockholders’ meeting; it requires a request from a majority of stockholders. See Black’s Law Dictionary 1419 (6th ed.1990) (defining “stockholder” as “person who owns shares of stock in a corporation”). The provision is not susceptible to more than one meaning and thus is not disturbed by an adjacent clause. See Republic Nat’l Life Ins. Co. v. Lorraine Realty Corp., 279 N.W.2d 349, 355 (Minn.1979) (describing how term’s ambiguity disappeared when contrasted with similar term in nearby clause). Instead, the drafters’ decision to place this stamped provision next to section 3 demonstrates their clear intention of creating different requirements for parallel issues. See Turna v. Commissioner of Econ. Sec., 386 N.W.2d 702, 706 (Minn.1986) (concluding that, where words of statute are clear from ambiguity, court has no right to construe or interpret statute’s [515]*515language); see also Taracorp, Inc. v. NL Indus., Inc., 73 F.3d 738, 744 (7th Cir.1996) (concluding that, when parties to contract use different language to address similar issues, it is reasonable to infer different meanings).

The two clauses, when interpreted together, explicitly demonstrate the drafters’ intent to provide a safeguard for minority stockholders by allowing them to call a special meeting while still reserving the power to transact business for the owners of a majority of outstanding stock. See Hydra-Mac, Inc. v. Onan Corp., 450 N.W.2d 913, 916 (Minn.1990) (interpreting contractual language in its context).

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Bluebook (online)
587 N.W.2d 512, 1998 WL 865125, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mauer-v-kircher-minnctapp-1999.