Thompson v. Thompson's Hardware
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STATE OF MAINE PENOBSCOT, SS. I SUPERIOR COURT ~ d c k eNo. CV-04-244 t APR 1 3 2006 CHRISTOPHER THOMPSON, v. PENOBSCOT CBU NTY 1 i--- ) ) ) THOMPSON'S HARDWARE, ) INC., and Raymond Thompson, ) Defendants. ) DECISION AND TUDGMENT T h s dispute concerns the ownership and operation of a retail hardware store in Enfield, Maine. The store is operated by Defendant Thompson's Hardware, Inc., a Maine corporation. Plaintiff Christopher Thompson (herein, "Chris") asserts that he is an actual or equitable part owner of the corporation based upon the actions of lus father, Defendant Raymond Thompson (herein, "Ray"). Chris has commenced a multiple count Complaint alleging various theories of recovery. The parties disagree upon virtually all of the salient facts concerning this dispute. After trial, w h c h commenced on March 15, 2006, the court finds the following facts: FACTS Ray and Chns are father and son respectively. Ray has undertaken a variety of occupational and entrepreneurial ventures in h s lifetime including the establishment of the Thompson's Hardware store in Enfield, Maine, w h c h he started in 1980.' The store had operated earlier under previous owners and was performing satisfactorily when a large retail store - Nation's Hardware - opened nearby and Ray's store experienced a notable decline. At various points, the store was on a week-to-week payment plan with Bangor Hydro-Electric for electriaty service and the bank was threatening foreclosure. At approximately the same time, Chris was worlung for the Town of Howland plowing snow. Although he received full employment benefits, he was not entirely happy with h s circumstances there. He and Ray engaged in discussions about the prospect of h s joining h s father in the operation of the store. In 1987, he left h s employment and came to work at Thompson's Hardware. The record shows that C h s was a regular employee and contributor at Thompson's Hardware. He assisted in all aspects of the operation of the store including management decisions regarding products and expansion. He worked approximately five days per week. During h s tenure, the store's fortunes continued to swing upward, 1 Ray created a corporate entity - Thompson's Hardware, Inc. - of which he was the sole stockholder to actually own and operate the store. although it is not clear whether the upswing was the result of h s contributions, the closing of the Nation's Hardware store, or a combination of both. During the years between 1987 and 2003, Ray frequently expressed an intent to transfer or bequeath the store to Chris in one fashon or another. During the same period, and particularly toward the end of the period, friction and animosity arose between Chris and Ray. The record suggests that each had their own strongly held beliefs about how the store was to be operated and their relationshp occasionally devolved into argument and bickering. On one or more occasions, Chris left the store for a period of days. Each of the men had a vocal confrontation with the other's wife over issues related to the operation of the store. Chris made disparagng comments regarding Ray and h s operation of the store; he expressed frustration and exasperation regarding h s (Chris') role in the store. Ray made comments indicating his dissatisfaction with Chris' lack of contribution and commitment to the store operation. Vulgar language was used in the exchanges and Chris was physically aggressive and intimidating on at least on occasion. In 2001, Chris started an entry into the real estate sales industry and eventually received an associate broker's license in 2003. He operated a real estate brokerage out of the store. At first, he simply used the telephone occasionally and displayed h s brochures, but by 2003, h s business had grown to the point where he was anticipating talung over office space w i h n the store property to operate his brokerage. Although Ray was initially supportive of the brokerage undertalung, by 2003, he was upset by the extent that it interfered with the operation of the. store and Chns' investment of time. At some point, Ray may have executed a Will whch bequeathed the store operation to Chris (although later refinements may have included other family members). The initial issuance of the corporation's total authorized stock was made exclusively to Ray. Additional stock certificates were filled out purportedly to subdivide the total stock between Ray and Chris, although the corporate ledger book never reflects such transactions. Income tax returns and corporate tax returns were generated whch offered inconsistent references to Chris as a shareholder or officer. In approximately late September, 2003, an incident occurred which drove a deep division into the widening chasm in the relationship between Ray and Chris. Each individual apparently had commitments over the Halloween holiday and wanted the other to work. Ray told Chris, "You working [the Halloween period] !" and told h m not to come back if he did not. Chns did not work. Upon h s return, Chns found h s brochure stand broken. Ray would not refer real estate calls to h m . The parties' work schedules had them overlapping on Tuesdays and Wednesdays, but they spoke little. Thngs continued to degenerate until early March, 2004, when Ray told Chris he was fired. Chns left and has not returned. Chns commenced this action seelung conveyance an interest in the store and other damages including lost wages and compensatory darn age^.^ 2 Chris' real estate business had experienced significant gross revenues after that date. CONCLUSIONS At virtually all points in time through late 2003, Ray wanted Chris to ultimately have all or part of the ownershp of the store at some point in the future . Despite the contention between the parties, the court is satisfied that Ray truly want Chns to have the store some day. The court is equally satisfied that Ray was extremely reluctant to surrender control of the store to Chris until he was fully satisfied with Chris' commitment to the store (and h m ) . Upon the evidence submitted at trial, the court cannot find that anything approachng a binding contract had been acheved by the parties. Although Ray expressed a unilateral intention, or hope, or conditional expectation, that Chris would someday own and operate the store, clearly there was no quid pro quo agreed upon between the parties for its transfer. Although Chns worked and contributed during h s association with the store, he was compensated for such, and the parties never suggested that h s compensated efforts would constitute consideration for a contract to convey the business. Nor did Ray's unilateral expressions create an estoppel of any sort. His comments were little more than statements of what was on h s mind at the time. The court has little hesitation to conclude that they were simply the hopeful wishes of a father to have a mutually satisfactory partnership with h s son (albeit with the father setting and controlling the conditions). Chris never sought a written commitment to the future course of their relationshp in the early years. In later years when he became concerned and asked for such a document, none was produced. Without attempting to delve too deeply into Ray's thought processes, it appears that he continued to be committed to the ultimate transfer of the business to C h s even in the face of bitter arguments and conflicts. After a particularly ugly confrontation in December, 1998, he still met with h s attorney (Thatcher Adams) shortly thereafter to discuss the mechanics of transferring ownershp to Chris. The court perceives Ray's motivation in this action to provide a basis to go to C h s and say, in effect, "Look ! I still am committed to bringing you into the store operation as an owner, but you have to modify your behaviors and commit yourself to the store ! I am not giving up on you." In other words, Ray was still hoping that Chris' behaviors would change and that the prospect of ownershp would bring him around. In short, the court finds that Ray occasionally expressed a heartfelt, but vague, intention to convey partial ownershp to Chris at some future date. The court also finds that Ray was never completely comfortable in doing so unless he was satisfied that Chris was committed to the store (and to h m after the transaction was complete). As such, Ray never intended to commit any act w h c h would irrevocably vest Chris with ownershp - although he was prepared to walk right up to the line in hopes that Chris would change h s attitude. Did he inadvertently go over the line ? The case narrows to the irreconcilable accounts of the parties regarding he stock certificates. The court finds that the mere filling out of blank stock certificates in the absence of a corporate resolution (and the return of the original issuance by Ray)3and the lack of transfer noted in the ledger book, does not otherwise constitute an issuance of stock to Chris. However, if Ray presented or otherwise delivered the executed certificates to Chris, the court is satisfied that the transaction occurred. Chris says the shares were presented to h m . Ray says they were not. Each party testified credibly regarding the occasion - or lack thereof - when certificates were allegedly presented by Ray to Chris. The court is left to resolve the issue. The court finds that Ray consulted with attorney Thatcher Adams regarding the stock question. Adams reports that Ray spoke of his "up and down" relationshp with Chris and the fact that he still intended to make a transfer to h m , but wanted to wait until he was "ready." Adams advised h m that the stock certificates could be filled out but would be without legal import until they were actually delivered. Based upon the court's belief that Ray was not comfortable in irrevocably transferring partial corporate ownershp to Chns in 2003, and Ray knew and undertook that the delivery of executed stock certificates would constitute a valid and legal transfer, the court resolves the credibility question regarding whether the delivery of stock certificates took place in the store in favor of Ray (i.e. - it did not take place). The court further finds that Chris is not owed any additional wages. Accordingly, as Plaintiff has failed to sustain his burden of proof, Judgment must be rendered in favor of the Defendants on all counts of the Complaint. In similar fashon, Judgment is rendered in favor of the Plaintiff on the Counterclaim. The court declines to award costs. So Ordered. The Clerk may incorporate h s Order upon Dated: April 13, 2006 - 3 - No new shares were authorized after the corporation was initially incorporated. Accordingly, in order to "subdivide" Ray's stocks, they would first have to be reacquired by the corporation and reissued in an aggregate amount which would not exceed the total amount initially authorized. The record suggests no such surrender or reacquisition. Although the corporation's annual reports list Chris occasionally as an officer or shareholder, the court is satisfied that these entries (generally prepared by Dianne McKechnie, a store employee) are the result of inadvertence and do not, ipso facto, constitute or reflect stock conveyances. 04/18/2006 MAINE JUDICIAL INFORMATION SYSTEM ksmi t h mjxxi048 PENOBSCOT COUNTY SUPERIOR COURT CASE PARTY ADDRESS BOOK CHRISTOPHER THOMPSON VS THOMPSONS HARDWARE INC ET AL 1ITN:AOCSsr -2004-0126302 CASE #:BANSC-CV-2004-00244 ................................................................................ CHRISTOPHER THOMPSON ATTY GILBERT, CHARLES I11 T e l # (207) 947-2223 ATTY ADDR:82 COLUMBIA ST P BOX 2339 BANGOR M 04402-2339 O E PL THOMPSONS HARDWARE INC ATTY COUGHLIN, EUGENE T e l # (207) 947-6915 O E ATTY ADDR:23 WATER STREET P BOX 919 BANGOR M 04402-0919 DEF RAYMOND THOMPSON ATTY COUGHLIN, EUGENE T e l # (207) 947-6915 O E ATTY ADDR:23 WATER STREET P BOX 919 BANGOR M 04402-0919 D F E M=More, Space = Exit:M S e l e c t t h e EXIT KEY f o r page s e l e c t i o n l i n e .
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