Unpublished Disposition, 931 F.2d 897 (9th Cir. 1990)
Annotate this CaseSARATOGA SAVINGS & LOAN ASSOCIATION, California HousingSecurities, Inc., Jess A. Rodrigues, Donna R. Rodrigues,Resolution Trust Corporation, in its capacity as Conservatorfor Saratoga Savings & Loan Association, Saratoga Savingsand Loan Association, Plaintiffs-Appellants,v.James M. CIRONA, Michael Patriarca, Charles A. Deardorf,Delwin B. Fassett, Douglas Cook, Walter Santos, Jr., MarisaA. Gnusti, Federal Home Loan Bank Board, Danny M. Wall,Director of OTS, Office of Thrift Supervision-Director,Defendants-Appellees.
No. 89-16508.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted March 14, 1991.Decided May 2, 1991.
Before D.W. NELSON, KOZINSKI and THOMAS G. NELSON, Circuit Judges.
MEMORANDUM*
The Resolution Trust Corporation (RTC), in its capacity as conservator for Saratoga Savings & Loan Association, stipulated to a dismissal of its appeal in this case, Stipulation for Dismissal of Appeal (filed Aug. 30, 1990), and we have approved the stipulation. See Order Dismissing Appeal (filed Oct. 15, 1990). We consider whether the remaining appellants have standing to continue pursuing this cause of action.
" [I]t is a well established general rule that a stockholder of a corporation has no personal or individual right of action against third persons ... for a wrong or injury to the corporation which results in the destruction or depreciation of the value of his stock...." Shaw v. Empire Savings & Loan, 186 Cal. App. 2d 401; 9 Cal. Rptr. 204, 208 (1960); accord Sherman v. British Leyland Motors, Ltd., 601 F.2d 429 (9th Cir. 1979) (applying California law).1 In Sherman, we held that the president and sole stockholder of a corporation did not have individual standing to sue on his corporation's causes of action, even though he had personally guaranteed some of the corporation's obligations. Id. at 439-41.2 That the corporate veil may be pierced for the purpose of imposing liability on shareholders does not mean it can equally be pierced for the benefit of the shareholders. See R. Hamilton, The Law of Corporations in a Nutshell 99 (2d ed. 1987) ("The doctrine of piercing the corporate veil ... is not available for the benefit of shareholders, but only against shareholders.").
We note that appellants did not bring this as a derivative action. Apart from the fact that a derivative action cannot normally be maintained where the corporation is not a party, see Beyerbach v. Juno Oil Co., 42 Cal. 2d 11, 265 P.2d 1, 11 (1954), appellants have not met any of the procedural requirements for bringing a derivative action. They do not allege that they have made a demand on the corporation or that such demand would have been futile, see F.R.C.P. 23.1, nor has the corporation been afforded the opportunity to move for a bond for expenses under Cal.Corp.Code Sec. 800(c)-(e). We do not decide whether appellants would be entitled to initiate a derivative action by the normal means; we hold only that they have not done so in this case.
DISMISSED.
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
See also Sax v. World Wide Press, Inc., 809 F.2d 610, 614 (9th Cir. 1987) ("The general rule that a shareholder cannot enforce corporate rights in a direct action applies to actions arising out of either contract or tort law.")
At oral argument, counsel for appellants directed our attention to John Peterson Motors, Inc. v. General Motors Corp., 613 F. Supp. 887 (D.C.Minn.1985). In Peterson, the court granted standing to the president and sole shareholder of a corporation in the last stages of bankruptcy. Peterson, however, was the rare case in which a court found a complete identity of interest between shareholder and corporation, noting that the bankruptcy court had found that Peterson used the corporation for "his own purposes and personal whims rather than as a fully independent business operation." Id. at 902 (internal quotations omitted)
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