Tolley v. Thi Co.

92 P.3d 503, 140 Idaho 253, 2004 Ida. LEXIS 89
CourtIdaho Supreme Court
DecidedMay 5, 2004
Docket28454, 28735
StatusPublished
Cited by34 cases

This text of 92 P.3d 503 (Tolley v. Thi Co.) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tolley v. Thi Co., 92 P.3d 503, 140 Idaho 253, 2004 Ida. LEXIS 89 (Idaho 2004).

Opinion

SCHROEDER, Justice.

Marsha K. Tolley (“Marsha”), and Lee Tolley (“Lee”) divorced. The dispute regards the community’s shares in THI Company, f.k.a. LMT Inc. (together with its shareholders referred to as “THI”). Marsha claims THI is obligated to make a cash payment to her for her community property interest in the eighty (80) shares of stock Lee held in THI — shares which she was awarded in the divorce proceedings and currently holds. The district court granted summary judgment in favor of THI, dismissing Marsha’s complaint with prejudice. THI was awarded costs as a matter of right but denied discretionary costs and attorney fees. Marsha and THI appeal.

I.

FACTUAL AND PROCEDURAL BACKGROUND

Marsha was married to Lee, the son of Garry and Darlene Tolley (“Garry” and “Darlene”). Garry and Darlene acquired and operated successful roofing and siding businesses in Idaho and Utah, gradually bringing their children into the various businesses. In 1995 Garry and Darlene began to transfer their interests in the various businesses to their children by creating a holding company known as THI Company and dividing the stock of THI equally among their five children. The children signed a Stock and Transfer Agreement which limited their abilities to transfer their shares of THI and provided for certain types of events, such as death or divorce, which might affect stock ownership. The spouses of the children, including Marsha, signed, a Spouses’ Consent to the Stock Purchase and Redemption Agreement. In 1998, THI Company merged with one of the companies whose stock it owned, LMT, Inc., leaving LMT, Inc. as the surviving entity. Shortly thereafter, however, LMT, Inc. officially changed its name to THI Company (“THI”). In March of 1998 the Tolley children signed another Stock Purchase and Redemption Agreement (the “Agreement”) and their spouses signed another Spouses’ Consent (the “Consent”). References to the Agreement and to the Consent are to the documents signed in 1998 which are virtually identical to the agreement and consent signed in 1995.

In February of 2001 Marsha and Lee Tolley were divorced retroactive to December 28, 2000. In a subsequent property settlement agreement (“Property Settlement Agreement”) Marsha and Lee agreed that Marsha would receive all of Lee’s shares in THI as her separate property. Relevant portions of these documents are as follows:

Divorce Property Settlement Agreement:
3. As a result of the parties’ divorce, all of the subject 80 shares of THI should be awarded and transferred to Marsha as her sole and separate property. The parties agree and acknowledge that the award and transfer referenced in the proceeding [sic] sentence is in addition to, and not in lieu of, Marsha’s rights to compensation upon divorce for her community interest in said 80 shares under and pursuant to that *257 Stock Purchase and Redemption Agreement dated March 31, 1998, by and between THI Company fka LMT, Inc., and Idaho corporation ... and that Spouses’ Consent to Stock Purchase and Redemption Agreement, dated March 31, 1998, executed Ronald W. Hatch, JoAnna Tolley, RaeAnn Tolley, Kim V. Tolley, and Marsha Tolley (Consent). Specifically, Lee and Marsha agree and acknowledge it was the intent and understanding of the signatories to the Agreement and Consent that in the event of death or divorce of any signatory to the Agreement, the spouse of that party would be entitled to payment from the corporation, and/or shareholders of the corporation, of the value of that spouse’s community interest in shares held in the name of said named shareholder. Lee and Marsha agree and acknowledge that Marsha’s right to such payment vested in her upon the effective date of the above-referenced Partial Decree of Divorce, and the transfer of the 80 shares standing in Lee’s name to Marsha is not, and should not be considered, a waiver or revocation by Marsha of those rights.
The Agreement:
1.2 The term “involuntary transfer” means any transfer or disposition of shares under judicial order, legal process, execution, attachment or enforcement of a pledge, trust or other security interest.
1.3 The term “involuntary transferee” means anyone who acquires an interest in or title to the shares by virtue of an involuntary transfer. As used herein, the reference to “Shareholders” shall include an involuntary transferee(s).
3.1 Restriction on Shares and Transfer. A shareholder shall not dispose of, transfer, encumber, pledge or assign (hereafter “transfer or encumber”) any shares of the Corporation without the prior written consent of the owners of a majority of a majority of the issued and outstanding shares of the common stock of the Corporation and, further, unless all of such shares are first offered for sale to the Corporation, the other Shareholders then holding shares or their nominee in the manner hereafter provided. Any purported transfer or encumbrance of shares in violation of the terms of this Agreement shall be void and the Corporation shall not recognize or give any effect to such transaction. Any purported involuntary transfer of shares shall be treated as an offer to transfer or encumber under this Section 3. (Emphasis added)
3.2 Requirement of Offer. In the event a Shareholder (“offering Shareholder”) desires to transfer or encumber all or any portion of the shares owned by him (hereafter “Target Shares”), he shall first make an offer to the Corporation and to the other Shareholders then holding shares (“remaining Shareholders”), which offer shall consist of an offer to sell or encumber the Target Shares, to which shall be attached a statement of intention to transfer or encumber, as the case may be, the name and address of the prospective purchaser or lienor, the number of shares involved in the proposed transfer or encumbrance and the terms of said transfer or encumbrance.
3.3 Acceptance of Offer. Within forty-five (45) days after the receipt of such offer, the Corporation may, at its option, elect to purchase all, but not less than all, of the Target Shares. If the offer is not accepted by the Corporation, the remaining Shareholders may, within forty-five (45) days following the end of the period allowed to the Corporation, at their option, purchase all, but not less than all, of the Target Shares. Each of the remaining Shareholders then holding shares shall have the right to purchase his proportionate percentage of the Target Shares. If any of the Target Shares are not purchased by the remaining Shareholders then holding shares first entitled hereto, the term “proportionate percentage” shall include that percentage of the Target Shares not purchased by the remaining Shareholder first entitled thereto determined by dividing the number of the shares owned by the remaining Shareholder by the number of shares owned by all remaining Shareholders then holding *258 shares other than the remaining Shareholder first entitled to purchase.

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Cite This Page — Counsel Stack

Bluebook (online)
92 P.3d 503, 140 Idaho 253, 2004 Ida. LEXIS 89, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tolley-v-thi-co-idaho-2004.