WahlcoMetroflex, Inc. v. Baldwin, 2010 ME 26

Summary

The Supreme Judicial Court of Maine held that Delaware law requires gross negligence to establish a breach of a corporate officer's fiduciary duty of care, even when the business judgment rule does not apply. It vacated the jury verdict because the trial court improperly instructed the jury that ordinary negligence could establish a breach, and remanded for a new trial on that count. The court also vacated and ordered dismissal of the unjust enrichment claim because it was based on the same conduct as the fiduciary-duty claim.

Holdings

1. Under Delaware law, gross negligence, rather than ordinary negligence, is required to establish a breach of the fiduciary duty of care even when the business judgment rule does not apply. The Superior Court therefore erred by instructing the jury that Baldwin could be liable for failing to act with care, competence, and diligence.
2. An unjust-enrichment claim cannot survive as an independent cause of action when it is based on the same facts as a breach-of-fiduciary-duty claim and merely characterizes the alleged enrichment as unjust because it resulted from that alleged breach. The unjust-enrichment claim therefore had to be dismissed.

Questions Presented

1. Whether the Superior Court improperly instructed the jury that Baldwin could breach his Delaware-law fiduciary duty of care through ordinary negligence or failure to act with care, competence, and diligence.
2. Whether WahlcoMetroflex could maintain an independent unjust-enrichment claim based on the same facts underlying its breach-of-fiduciary-duty claim.

Disposition

reversed_and_remanded