Kulko v. DavailAnnotate this Case
David Kulko, Ilsa Kaye, and Michael Horn were the sole shareholders, directors, and officers of Davail, Inc. Kulko sued Kaye, Horn, and Davail for dissolution of Davail, shareholder oppression, fraudulent conduct, and breach of fiduciary duties. Eventually, the parties agreed to dissolution of Davail. The district court entered an order granting dissolution and appointed a receiver. The court then dismissed Kulko’s claims for lack of subject matter jurisdiction, concluding that dissolution is an exclusive remedy and that dissolution of Davail eliminated the case or controversy. The Supreme Court reversed and remanded for reinstatement of the case, holding that the district court (1) erred when it concluded that Kulko could not pursue punitive or compensatory damage claims against Davail’s other shareholders because he already sought and obtained dissolution of Davail; and (2) erred in dismissing Kulko’s claim because the court did not lose subject matter jurisdiction over the case upon entering the dissolution order.