Nature of the Case
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Facts
P is a Delaware corporation whose principal place of business is in Dade County, Florida. P is a publicly held real estate investment trust ('REIT') that invests in commercial real estate. Wiener has served as P's Chairman of the Board and Chief Executive Officer. Gray was at all relevant times a director, President, and Treasurer of P. Gray also served as President, Treasurer, director, and a 40% shareholder in the Adviser. Gray and Fieber were also two of the five directors at P. Saffell is Gray's sister. Saffell was from 1984 to 1986 one of two general partners in Martine Avenue Associates. All recommendations regarding P's real estate investments flow through the Adviser and are presented by the Adviser to the Board. Wiener and Gray were the key decision-makers at the Adviser. They approach Fieber about entering into a joint venture. Fieber was a member of the P Board. Gray and Fieber had a lasting and deep business friendship that involved investing in each other's projects. Gray told Fieber that Martine would be interested in investing in Fieber's side of any Transaction with P. Neither Gray nor Fieber informed Wiener or any other member of the P Board that Gray wished to invest on Fieber's side of the Joint Venture. Gray negotiated a deal for P for the sale of P real estate to NAF Associates (NAF). Fieber owned an interest in NAF and disclosed this to P's directors and abstained from voting. Gray, who owned an interest through Saffell, did not disclose that interest. Gray voted on the sale and voted for approval. Fieber knew of Gray’s interest and said nothing. P sued Gray and Fieber (Ds) for breach of their fiduciary duties of loyalty and care and for defrauding P. In preparation for closing the NAF Transaction, P requested to learn the identity of the Fiebers' co-investors. The Fiebers sent a copy of the agreement to P. The copy sent to P identified each of the partners in NAF, including Martine. They listed Martine's address as Fieber's home address; a location with no proper connection to Martine. Neither Gray nor Fieber disclosed Martine's interest in the Transactions. Neither abstained from voting to ratify them. Each year, P asks its directors to fill out a disclosure document designed in large measure to identify possible conflicts of interest and to help the company meet its disclosure obligations under the federal securities laws. Gary and Fieber both did not disclose their knowledge about Martine. In 1996, Wiener and Rothstein first learned of Gray's interest in the NAF Transaction. P commenced this litigation. P claims that Ds breached their fiduciary duties and defrauded the company.
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