Loading...
HomeMy WebLinkAbout98-1790 equityPENNSYLVANIA MOBILE DRUG AND ALCOHOL TESTING, INC. Plaintiff V. BARRY A. TIENTER Defendant Ve SAMUEL A. BOORE and KENNETH R. BROWN, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 98-1790 EQUITY TERM Additional Defendants IN RE: ADJUDICATION BEFORE GUIDO, J. AND NOW, this DECREE NISI day of FEBRUARY, 1999, after hearing, and for the reasons set forth in the accompanying opinion, it is ordered and directed as follows: 1) Defendant Tienter shall return the 1998 Toyota Camry to Plaintiff Corporation within five (5) days. 2) Plaintiff Corporation shall pay Defendant Tienter $594.00, representing unpaid wages, within five (5) days. 3) Plaintiff Corporation shall hold Defendant Tienter harmless and shall indemnify him from any loss in connection with the $60,000 loan from Commerce Bank. It shall secure his release from liability in connection with said indebtedness within sixty (60) days. 4) Plaintiff Corporation shall pay Defendant Tienter $1000, representing his contribution to the purchase price of the 1998 Toyota Camry, within sixty (60) days. 5) Defendant Tienter shall sell, and Plaintiff PMDAT shall purchase, all of Defendant Tienter's shares in the corporation for $8354.00 with interest at the rate of 5% per annum from December 17, 1997. One half of the principal and all accrued interest shall be paid within sixty (60) days, at which time Defendant Tienter shall tender his shares. The balance shall be paid in accordance with Article VI Section IV of the Corporate bylaws. 6) Ail other claims of Defendant Tienter against Plaintiff Corporation and Additional Defendants Boore and Brown are DENIED. By the Edward E. Guido, J. David A. Baric, Esquire For the Plaintiff & Additional Defendants Thomas Gacki, Esquire For Defendant Barry A. Tienter :sld LCi :'1 t, tcl 833 66 PENNSYLVANIA MOBILE DRUG AND ALCOHOL TESTING, INC. Plaintiff Ve BARRY A. TIENTER Defendant V® SAMUEL A. BOORE and KENNETH R. BROWN, : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : : : : : : : NO. 98-1790 EQUITY TERM : : : · · · · : : Additional Defendants IN RE: ADJUDICATION BEFORE GUIDO, J. OPINION AND DECREE NISI GUIDO, J., February 12, 1999: This action was commenced by a complaint in equity filed by Plaintiff corporation on April 1, 1998. Plaintiff requested that Defendant Tienter be enjoined from selling, encumbering or otherwise transferring his shares in the corporation. It further requested that Tienter return a corporate vehicle in his possession. Finally it asked us to direct Defendant Tienter to convey his shares to the corporation in accordance with the provisions of its bylaws. Defendant Tienter filed a counterclaim asking that he be declared owner of the corporate vehicle in his possession. He also requested that we direct the corPoration to pay sums to him NO. 98-1790 EQUITY TERM and on his behalf in accordance with certain alleged agreements between the corporation and its shareholders. Defendant Tienter also filed a complaint against Additional Defendants Samuel Boore and Kenneth Brown. He alleged that they, as majority shareholders of Plaintiff corporation, breached their fiduciary duty to him as minority shareholder by freezing him out of the corporation. He requested that they pay him the fair market value for his shares of stock in the corporation. He also requested an award of counsel fees and punitive damages. Trial in this matter was held on January 14 and 15, 1999. Based upon the facts presented at the hearing the following Findings of Fact, Discussion, Conclusions of Law and Decree Nisi are made and entered. FINDINGS OF FACT 1) Plaintiff Pennsylvania Mobile Drug & Alcohol Testing, Inc. (hereinafter PMDAT) is a Pennsylvania corporation with a principal place of business at 70 East Shady Lane, Enola, Cumberland County, Pennsylvania. 2) Defendant Barry Tienter, (hereinafter Tienter) is an adult individual with a residence address of R.D.# 2, Box 63, New Bloomfield, Perry County, Pennsylvania. 3) PMDAT is in the business of providing on site drug and alcohol testing for employees of various commercial concerns. 4) Additional Defendant Kenneth R. Brown (hereinafter Brown) had retired from the Pennsylvania State Police in 1993. After NO. 98-1790 EQUITY retirement he worked for several years as an employee for another drug and alcohol testing company. 5) PMDAT was the brainchild of Brown. 6) In 1996 Brown approached several of his friends from the Pennsylvania State Police to join him in the new business endeavor. 7) Eventually Tienter and additional Defendant Samuel A. Boore (hereinafter Boore) joined with Brown as incorporators of PMDAT. 8) PMDAT was incorporated on May 22, 1996. 9) On or about June 1, 1996, 200 shares of PMDAT were issued to each of the incorporators. 10) The Share Certificates issued for said stock contained the following restriction on the reverse side thereof: The shares represented by this certificate may not be sold, assigned, transferred, pledged or otherwise disposed of, except in accordance with the terms and conditions of the bylaws of the corporation 11. Boore and Tienter each paid $6000 in cash for their shares. Brown contributed personal property, client base and expertise for his shares. 12. Retired State Policeman Gary Mysel (hereinafter Mysel) had intended to be an incorporator and an initial shareholder of PMDAT. However, he did not immediately become a part of the corporation because of marital problems. 13. In part because of the marital problems experienced by Mysel, the parties discussed adopting buyout provisions in the event someone left the corporation. NO. 98-1790 EQUITY 14) The parties agreed to include a buyout provision in the by- laws of the corporation. Section 606 of the bylaws provides in relevant part as follows: (b) Offer upon termination of employment. In the event that any shareholder retires from the employ of the corporation or leaves the employ of the corporation for any reason whatsoever, such retirement or cessation of employment shall constitute an offer on the part of the shareholder to the corporation to sell the shareholder's shares to the corporation. (c) Price of shares. The price at which shares shall be offered to the corporation under the terms of subsection (a) shall be the book value of the shares determined from the records of the corporation as of the last day of the calendar quarter immediately preceding the date of the offer... 15) Pursuant to Section IV of Article VI of the corporate by- laws payment for the shares is to be as follows: (a) Notwithstanding any of the foregoing provisions, in the event that an offer of shares is accepted by the corporation or a registered shareholder, payment for the shares offered shall be made as follows: (I) the purchasing party shall execute and deliver to the selling party four promissory notes in equal amounts each representing one-quarter of the purchase price, (II) the promissory notes shall bear an interest rate of five (5%) percent simple interest per annum, (III) the promissory notes shall be due and payable at six (6) month periods spanning a two year period from date of their execution. 16) Brown has been the president of PMDAT at all times since its inception. 17) Tienter, like Brown, had retired from the Pennsylvania State Police. Boore was still employed by the Pennsylvania State NO. 98-1790 EQUITY Police at the time PMDAT was formed. 18) During 1996 Brown worked at the office almost every day. 19) During 1996 Tienter worked at the office a couple of days per week. 20) During 1996 Boore was only able to work on the business during evenings and weekends because of his employment with the State Police. 21) During 1996 Brown and Tienter did most of the marketing, business development and actual testing. Boore did the administration, including billing and planning. 22) Tienter was having trouble with the fact that Boore continued to work for the Pennsylvania State Police. 23) Brown was having a difficult time with the fact that Tienter was not in the office as much as Brown would have liked. 24) Sometime in 1996 Gary Mysel decided to buy into the business. He received two hundred (200) shares for $6000. 25) At the time Mysel received his shares, Brown received an additional one hundred (100) shares for his efforts in the business. 26) All of the additional shares issued were subject to the same restrictions and buyout provisions as the original shares. 27) Mysel did some work for the business, but the parties were not happy with his efforts. 28) Mysel was not willing to devote the time and energy necessary to work in the business. NO. 98-1790 EQUITY 29) In January of 1997, Mysel left the business. The corporation paid back his original $6000 investment in return for his stock. Ail parties to this law suit agreed to that arrangement. 30) The business and revenues grew, some major contracts were obtained, and things appeared to be going well in the early part of 1997. However, the business was still not showing a profit. 31) In April 1997, Brown, who was the heart and soul of the business, suffered a series of strokes. 32) After his strokes, Brown was hospitalized for two weeks and spent substantial time in rehab. 33) Tienter and Boore pitched in to keep the company running while Brown was recovering. 34) Notwithstanding our previous finding of fact, Brown's illness caused resentment among all parties. 35) Tienter was resentful of the fact that Boore still had not retired from the Pennsylvania State Police. 36) Boore was resentful that he had to use his vacation and sick time to work in the business with Tienter. This cost him several thousand dollars that he could have collected on his retirement from the State Police. 37) Brown was resentful of Tienter because he felt that he was not doing enough to help him with the business during his recuperation. 38) Boore eventually retired from the Pennsylvania State Police NO. 98-1790 EQUITY at the end of May. He began to work full time at the business in June of 1997. 39) The seeds of discontent that grew into this litigation were planted during that period of April through June 1997. 40) During that same time period the business grew substantially. 41) Beginning in June or July of 1997 all parties began drawing a salary of $1000 per month. Prior to that time, no profit or salary was paid to any of the shareholders. 42) In August of 1997 the corporation borrowed $60,000 from Commerce Bank, Harrisburg to purchase automobiles to be used by each of the shareholders. Each shareholder personally guaranteed said loan. 43) Each shareholder was given $20,000 to purchase a vehicle for his own use. Ail vehicles were titled in the name of the corporation and encumbered by Commerce Bank. 44) Each shareholder contributed some of his own money toward the purchase of his vehicle. The parties understood that some future accommodation would be made for each shareholder's contribution. 45) Tienter purchased a 1998 Toyota Camry and contributed $1000 of his own money toward the purchase price. 46) Throughout the summer of 1997 the shareholders found it to be increasingly difficult to work together. 47) Tienter, by his own admission, often argued with Brown or NO. 98-1790 EQUITY Boore. He would go days at a time refusing to talk to them. 48) Boore and Brown had no problem working with each other. 49) It became obvious that neither Boore nor Brown could work with Tienter. 50) On November 17, 1997, Brown fired Tienter. Boore consented to and approved of Tienter's dismissal. 51) On December 17, 1997 Boore and Brown offered to sell their shares of PMDAT to Tienter at $50 per share. In the alternative they offered to purchase his shares at $50 per share.~ 52) On December 17, 1997 PMDAT elected to purchase Tienter's shares pursuant to the bylaws. However, the election was contingent upon Tienter's refusal to accept the offers of Boore and Brown. 53) On December 17, 1997 Boore and Brown also suggested that the corporation be dissolved. 54) Tienter rejected all proposals. 55) Tienter has refused to return the 1998 Toyota Camry which is owned by the corporation. 56) The revenues of the corporation increased in 1998. Boore and Brown worked more hours. Their monthly salary increased in stages from $1000 per month, to $1250, to $1500 and eventually to $2250 per month. Those salaries were not excessive.2 57) The book value of Tienter's shares on the last day of the ~See Plaintiff's Exhibit 22 2This fact was acknowledged by Tienter's expert. NO. 98-1790 EQUITY quarter ending before November 17, 1997 was $8354. 58) PMDAT had steady growth for the first two and one half years of its existence. However, despite the good faith efforts and hard work of Boore and Brown, its prospects for 1999 and forward are not very good. It has lost its biggest, client representing nearly one third of its gross revenues. 59) The fair market value of Tienter's shares on December 31, 1998 was less than $6800.3 60) Since Tienter left PMDAT, he has kept the Toyota Camry in storage. He has no need for the vehicle. 61) Since Tienter left PMDAT, the corporation has made all loan payments on the Camry ($5477.90) and all insurance payments ($1076.50). 62) The corporation has made similar payments on the vehicles driven by Brown and Boore. 63) The corporation owes Tienter the sum of $594.00 for unpaid wages. DISCUSSION We will deal initially with the claim of Tientner against Boore and Brown. He alleges that, as majority shareholders, they have breached their fiduciary duty to him as a minority 3Tienter's expert testified that Tienter's shares had a fair market value of a little over $20,000 on December 31, 1998. However, we believe his valuation was flawed because he failed to make several necessary adjustments as pointed out by Plaintiff's expert, Susan Stott, CPA. We found her testimony to be credible. NO. 98-1790 EQUITY shareholder by squeezing him out of the corporation. While Pennsylvania Courts have recognized a right to recovery by a minority shareholder in "squeeze-out" or "freeze-out" 4 situations, we have been able to find only one appellate Court case which has addressed the matter. In Schecter v. Watkins, 395 Pa. Super. 363, 577 A.2d 585 (1990), the Superior Court approved the following jury charge: To determine whether or not a freeze out has occurred, you have to examine the entire course of dealings between the parties. Did the defendants have good reason to do what they did. Or did they engage in a course of conduct with the intent of forcing the plaintiff out of the business and financially harming him .... If you determine that what the defendants did was motivated by an unethical or unfair or improper motive, then you may conclude that a freeze out has occurred. If however you determine that what they did was properly motivated, then a freeze out has not occurred. 395 Pa. Super. at 375-376, 577 A.2d at 591. Applying the above standard to the case at bar we must conclude that an actionable freeze out has not occurred. The firing of Tienter was a direct result of his inability to work with Brown and Boore. It was done neither with the intent to harm Tienter financially nor with the intent to financially benefit Brown and Boore. It is clear that they were not trying to take advantage of him. Shortly after he was fired they offered to sell him their shares of stock for ~fifty ($50) dollars per share or to purchase his shares at the same price. 4See Orchard v. Covelli, 590 F.Supp. 1548 (W.D.Pa. 1984) and Perkin~.. v. For Your Information, Inc., 43 Cumb. 246 (1994). 10 NO. 98-1790 EQUITY PMDAT's offer to purchase Tienter's shares at book value was extended only to comply with the bylaws and was conditioned upon Tienter's refusal to accept one of the alternatives offered by Boore and Brown.s It is clear to this fact finder that the actions of Boore and Brown were not "motivated by an unethical or unfair or improper motive." To the contrary, given the strained and impossible working relationships, their actions were motivated by, and based upon, sound business objectives. As a result, we must deny Tienter's request for relief against Boore and Brown. We turn now to the corporation's claims against Tienter. The parties had the foresight to recognize that problems might occur among the shareholders. Therefore, they included certain buyout provisions in the corporate bylaws. It is clear from the testimony that all parties were aware of those provisions at the time the bylaws were adopted. Under the provisions of the Business Corporation Law, the shareholders are bound by the terms of the corporate bylaws. (15 Pa. C.S.A. § 1505). Therefore, Tienter is obligated to sell his shares to the corporation for the book value of those shares on September 30, 1997. The parties have stipulated that value to be $8354.00.6 SBoore and Brown also offered to agree to a voluntary dissolution of the corporation. Tienter objected vehemently to this proposal. 6Even if a "freeze out" had occurred, Tienter could only hope to receive the fair value of his shares. See Orchard v. Covelli, supra. The fact that we have found the fair value to be 11 NO. 98-1790 EQUITY The bylaws require that said sum be paid in four equal annual payments of principal plus interest on the unpaid balance at the rate of five (5%) percent per annum. Since more than a year has passed since PMDAT accepted Tienter's offer to sell, one half of the principal payment plus interest at 5% is due and payable immediately. The balance is payable in two equal principal installments of $2088.50 on June 17, 1999 and December 17, 1999 plus interest on the unpaid principal at 5%. PMDAT has asked that the 1998 Toyota Camry be returned immediately. It has also requested that Tienter be required to reimburse it for the payments made on the encumbrance since his termination, as well as all insurance payments. We agree that the vehicle should be returned. However, since the corporation also paid the loan installments and insurance on the vehicles used by Boore and Brown, we are not willing to direct Tienter to reimburse said sums. Furthermore, the corporation should repay Tienter the $1000 he paid toward the purchase price of the vehicle. Except for his claim for unpaid wages, we find that Tienter's counterclaims are without merit. According to the undisputed testimony, the corporation owes Tienter $594.00 in unpaid wages. less then the book value, and the fact that Boore and Brown offered to purchase his shares for $10,000 (which is more than book value) makes us even more certain that a freeze out did not occur o 12 NO. 98-1790 EQUITY CONCLUSIONS OF LAW 1) The Court has jurisdiction over the parties and of the subject matter involved in this litigation. 2) Boore and Brown did not breach their fiduciary duty to Tienter as a minority shareholder by perpetrating a "freeze-out" upon him. 3) The shareholders of PMDAT are bound by its by-laws. (15 Pa. C.S.A § 1505). 4) The restriction on transfer of shares is valid. (15 Pa. C.S.A. § 1505). DECREE NISI AND NOW, this 12TH day of FEBRUARY, 1999, after hearing, and for the reasons set forth in the accompanying opinion, it is ordered and directed as follows: 1) Defendant Tienter shall return the 1998 Toyota Camry to Plaintiff Corporation within five (5) days. 2) Plaintiff Corporation shall pay Defendant Tienter $594.00, representing unpaid wages, within five (5) days. 3) Plaintiff Corporation shall hold Defendant Tienter harmless and shall indemnify him from any loss in .connection with the $60,000 loan from Commerce Bank. It shall secure his release from liability in connection with said indebtedness within sixty (60) days. 4) Plaintiff Corporation shall pay Defendant Tienter $1000, representing his contribution to the purchase price of the 1998 13 NO. 98-1790 EQUITY Toyota Camry, within sixty (60) days. 5) Defendant Tienter shall sell, and Plaintiff PMDAT shall purchase, all of Defendant Tienter's shares in the corporation for $8354.00 with interest at the rate of 5% per annum from December 17, 1997. One half of the principal and all accrued interest shall be paid within sixty (60) days, at which time Defendant Tienter shall tender his shares. The balance shall be paid in accordance with Article VI Section IV of the Corporate bylaws. 6) Ail other claims of Defendant Tienter against Plaintiff Corporation and Additional Defendants Boore and Brown are DENIED. By the Court, /s/ Edward E. Guido Edward E. Guido, J. David A. Baric, Esquire For the Plaintiff & Additional Defendants Thomas Gacki, Esquire For Defendant Barry A. Tienter : sld 14 PENNSYLVANIA MOBILE DRUG AND ALCOHOL TESTING, INC. , Plaintiff V , BARRY A. TIENTER, Defendant V , SAMUEL A. BOORE and KENNETH R. BROWN, · IN THE COURT OF COMMON PLEAS OF · CUMBERLAND COUNTY, PENNSYLVANIA · · · · NO. 98-1790 EQUITY TERM · · · · · Additional Defendants IN RE: MOTION OF PLAINTIFF FOR POST-TRIAL RELIEF BEFORE GUIDO, J. AND NOW, this ORDER OF COURT day of MAY, 1999, for the reasons set forth in the attached opinion, Plaintiff's Motion for Post-trial Relief is DENIED. The Decree Nisi entered on February 22, 1999, is hereby made a Final Decree. By the Edwa~ E. Gui do, J. David A. Baric, Esquire For the Plaintiff & Additional Defendants Thomas Gacki, Esquire For the Defendant -sld PENNSYLVANIA MOBILE DRUG AND ALCOHOL TESTING, INC., Plaintiff V , BARRY A. TIENTER, Defendant V. SAMUEL A. BOORE and KENNETH R. BROWN, · IN THE COURT OF COMMON PLEAS OF · CUMBERLAND COUNTY, PENNSYLVANIA · · : · · NO. 98-1790 EQUITY TERM : : : : : : Additional Defendants IN RE. MOTION OF PLAINTIFF FOR POST-TRIAL RELIEF BEFORE GUIDO, J.. OPINION AND ORDER OF COURT This case involved numerous claims., counterclaims, and cross claims among the various parties which arose out of the formation and eventual breakup of the Plaintiff Corporation (hereinafter Plaintiff). A hearing was held before this Court sitting as a Chancellor in Equity on January 14 and 15 of this year. On February 12, 1999 we made an adjudication which included the entry of a Decree Nisi as required by Section 1517 of the Pa. Rules of Civil Procedure. Plaintiff has filed a Motion for Post- Trial Relief in which it takes exception to two portions of our decision. In the first instance, Plaintiff alleges that we should have ordered the Defendant Tienter (hereinafter Defendant) to reimburse it for certain expenses paid in connection with an automobile which Defendant refused to return at the termination of his employment. Plaintiff further contends that we erred in ordering it to pay accrued interest to Defendant in connection NO. 98-1790 EQUITY TERM with its purchase of his corporate stock. The parties have briefed their respective positions. This matter is now ready for disposition. FACTUAL STATEMENT As part of our adjudication in this matter, we made sixty- three (63) separate findings of fact. The following findings of fact are germane to the instant motion- 5) PMDAT (Plaintiff Corporation) was the brainchild of Brown. 6) In 1996 Brown approached several of his friends from the Pennsylvania State Police to join him in the new business endeavor. 7) Eventually Tienter and additional Defendant Samuel A. Boore (hereinafter Boore) joined with Brown as incorporators o f PMDAT. 14) The parties agreed to include a buy-out provision in the bylaws of the corporation. Section 606 of the bylaws provides in relevant part as follows- (b) Offer upon termination of employment. In the event that any shareholder retires from the employ of the corporation or leaves the employ of the corporation for any reason whatsoever, such retirement or cessation of employment shall constitute an offer on the part of the shareholder to the corporation to sell the shareholder's shares to the corp. (c) Price of shares. The price at which shares shall be offered to the corporation under the terms of subsection (a) shall be the book value of the shares determined from the records of the corporation as of the last day of the calendar quarter immediately NO. 98-1790 EQUITY TERM preceding the date of the offer... 15) Pursuant to Section IV of Article VI of the corporate bylaws payment for the shares is to be as follows- (a) Notwithstanding any of the foregoing provisions, in the event that an offer of shares is accepted by the corporation or a registered shareholder, payment for the shares offered shall be made as follows. (I) the purchasing party shall execute and deliver to the sellin~ party four promissory notes in equal amounts each representing one-quarter of the purchase price, 30) The business and revenues grew, some major contracts were obtained, and things appeared to be going well in the early part of 1997. However, the business was still not showing a profit. 41) Beginning in June or July of 1997 all parties began drawing a salary of $1000 per month. Prior to that time, no profit or salary was paid to any of the shareholders. 42) In August of 1997 the corporation borrowed $60,000 from Commerce Bank, Harrisburg to purchase automobiles to be used by each of the shareholders. Each shareholder personally guaranteed said loan. 43) Each shareholder was given $20,000 to purchase a vehicle for his own use. Ail vehicles were titled in the name of the corporation and encumbered by Commerce Bank. 45) Tienter purchased a 1998 Toyota Camry and contributed $1000 of his money toward the purchase price. NO. 98-1790 EQUITY TERM 46) Throughout the summer of 1997 the shareholders found it to be increasingly difficult to work together. 49) It became obvious that neither Boore nor Brown could work with Tienter. 50) On November 17, 1997 Brown fired Tienter. Boore consented to and approved of Tienter's dismissal. 51) On December 17, 1997 Boore and Brown offered to sell their shares of PMDAT to Tienter at $50 per share. In the alternative they offered to purchase his shares at $50 per share. 54) Tienter rejected all proposals. 55) Tienter has refused to return the 1998 Toyota Camry which is owned by the corporation. 56) The revenues of the corporation increased in 1998. Boore and Brown worked more hours. Their monthly salary increased in stages from $1000 per month, to $1250, to $1500 and eventually to $2250 per month. Those salaries were not excessive. 60) Since Tienter left PMDAT, he has kept the Toyota Camry in storage. He has no need for the vehicle. 61) Since Tienter left PMDAT, the corporation has made all loan payments on the Camry ($5477.90) and all insurance payments ($1076.50) . 62) The corporation has made similar payments on the vehicles driven by Brown and Boore. NO. 98-1790 EQUITY TERM DISCUSSION Plaintiff argues that since Defendant was required to return the car, he should also be required to reimburse it for the special damages sustained by the Corporation during the vehicle's improper detention. In support of its position, Plaintiff cites County Constr. Co. v. Levenqood Constr. Corp., 393 Pa. 39, 142 A.2d 9 (1958) for the proposition that an action in replevin is designed to provide a means for a plaintiff to compel the return of property as well as to recover damages for its wrongful detention. While we cannot argue with that proposition, it does not fully set forth the law on this matter. Equitable principles are applicable to an action in replevin. Brandywine Lanes, Inc. v. Pittsburqh Nat'l Bank, 220 Pa. Super. 363, 284 A.2d 802 (1971). The refusal to award special damages in a replevin action is appropriate if the Court feels that such an award would be unfair. Gemni Equip. Co. v. Pennsy Supply, Inc., 407 Pa. Super. 404, 595 A.2d 1211 (1991). In the instant case we concluded that it would be simply unfair to order Defendant Tienter to reimburse Plaintiff for the monthly payments and insurance on the vehicle. The Defendant and the two additional Defendants owned all the stock in Plaintiff Corporation. They all worked hard to make the business a success. Yet, as often happens, there were personality conflicts. Just as the business started making money, the additional Defendants fired the Defendant. Shortly thereafter NO. 98-1790 EQUITY TERM they increased their own salaries substantially. Each of the additional Defendants was also provided a car at the corporation's expense. Protracted litigation ensued over the various rights of the shareholders. During this litigation the Defendant maintained possession of the vehicle. He did not use it. Rather he kept it safely stored. While the litigation dragged on, all profits of the Corporation were used to pay the additional salaries of, and to provide vehicles for, the controlling shareholders.2 Under all the circumstances present in the case, we are satisfied that our refusal to award special damages for improper detention of the vehicle was the fair thing to do. Under the terms of the corporate bylaws, Defendant was required to sell his stock to the corporation upon termination of his employment. Plaintiff contends that we erred in ordering it to pay interest on the sums owed to Defendant for the purchase of ~Plaintiff argues in its brief that the testimony of the additional Defendants, as well as its own exhibit 16, shows that the vehicles provided to the additional Defendants were predominantly used in the course of the business. However, we did not find this to be a fact. Conveniently, both additional Defendants claimed the identical percentage of personal and business use. While we do not question that the vehicles were used in the business, it is clear from all circumstances that the vehicles were a fringe benefit provided to the shareholders when the revenues of the corporation were such that it could afford the monthly payments. ~-Defendant Tienter testified that he held the vehicle in storage to protect his interest in the corporation. In light of his perceived "freezeout" from the affairs and profits of the corporation, we cannot say that his actions were unreasonable. NO. 98-1790 EQUITY TERM his shares. Even though the buy-out provisions of the bylaws specifically provide for the payment of such interest, Plaintiff argues that the Defendant forfeited his right to interest by refusing to tender his stock without being ordered to do so as part of this litigation. However, this argument fails for two reasons. In the first instance, it ignores the fact that the Defendant hotly contested the applicability of the buy-out provisions in light of the circumstances surrounding his termination. The fact that we eventually determined that those provisions applied does not mean that a genuine and good faith dispute did not exist. Additionally, the Plaintiff had use of the money it would have had to pay Defendant if he had immediately tendered his shares. Therefore, the payment of interest to Defendant is appropriate. For the foregoing reasons we will enter the following order denying Plaintiff's Motion for Post-trial Relief. ORDER OF COURT AND NOW, this 20TH day of MAY, 1999, for the reasons set forth in the attached opinion, Plaintiff's Motion for Post-trial Relief is DENIED. The Decree Nisi entered on February 22, 1999, is hereby made a Final Decree. By the Court, David A. Baric, Esquire Thomas Gacki, Esquire :sld /s/ Edward E. Gui do Edward E. Gui do, J.