Please ensure Javascript is enabled for purposes of website accessibility
Home / Opinion Digests / Corporate / Corporate – Officers’ Liability – Tort/Negligence – Breach of Fiduciary Duty

Corporate – Officers’ Liability – Tort/Negligence – Breach of Fiduciary Duty

Plaintiff Scott alleges that, in return for his efforts in arranging defendant Catawba Valley Brewing Company’s purchase of another brewing company, he was promised both the opportunity to buy stock in Catawba and a consulting contract with Catawba. Where Scott alleges, among other things, that the individual defendants – who are Catawba’s owners and officers – (1) agreed to sell Scott an ownership interest in Catawba, (2) discussed Scott continuing to work for Catawba post-sale as a consultant, and (3) then reneged on their promises, the complaint’s allegations, if true, are sufficient to hold the individual defendants liable for the wrongful actions alleged in the complaint.

The court denies the individual defendants’ motion to dismiss.

Plaintiffs allege a breach of fiduciary duty, while defendants contend that no fiduciary duty existed.

The South Carolina Supreme Court has recognized that a fiduciary duty exists between the promoters of a corporation and that a fiduciary duty exists between directors of a corporation. Therefore, plaintiffs have sufficiently pleaded that a fiduciary duty existed by alleging that Scott helped negotiate and promote the acquisition of Palmetto Brewing Co. by Catawba and that Scott was briefly brought on as the chief financial officer at Catawba.

Plaintiffs further allege that the duty was breached and that damages resulted from the breach. Therefore, plaintiffs properly pleaded a breach of fiduciary duty.

Motion denied.

Scott v. Catawba Valley Brewing Co. (Lawyers Weekly No. 002-182-18, 7 pp.) (Richard Gergel, J.) 2:18-cv-01539. Christy Bergeron, George Trenholm Walker, John Phillips Linton and Michael Riess for plaintiffs; Hayley Wells, Julie Lauren Moore and Stephen Jenkins Bell for defendants. D.S.C.


Leave a Reply

Your email address will not be published. Required fields are marked *