Becker v. KnollAnnotate this Case
Shareholders in a Kansas irrigation corporation brought an action against the president of the corporation, alleging breach of a fiduciary duty and seeking removal of the president as an officer and director. The district court ruled for Defendant, and the Court of Appeals affirmed. In Becker I, the Supreme Court reversed on the question of whether the facts supported judgment for Defendant, holding that the courts below had applied incorrect legal standards. On remand, the district court ruled once again for Defendant, determining that Defendant sustained his burden of proving good faith. The Court of Appeals reversed, concluding that the president’s failure to maintain employment records undermined his position such that, as a matter of law, he acted in bad faith. The Supreme Court reversed the Court of Appeals and affirmed the district court, holding (1) the Court of Appeals applied an incorrect standard of review in reaching its decision; and (2) clear and convincing evidence supported a finding that the president acted in fairness and good faith to the corporation.