Klinicki v. Lundgre

298 Or. 662, 695 P.2d 906 (1985)

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Nature of the Case

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Facts

Klinicki (P) and his friend Lundgren (D), who were both furloughed Pan American pilots stationed in West Germany, decided to enter the air transportation business, planning to begin the operations with an air taxi service and later expand into other services, such as regularly scheduled flights or charter flights. In April 1977, they incorporated Berlinair, Inc. as a closely held Oregon corporation. P was a vice president, and a directors and D was a president and a director. Each man owned 33% of the stock, Lelco, Inc. a corporation owned by D and his family owned 33% of the stock. The corporation's attorney owned the remaining 1% of the stock. D was responsible for developing and promoting the corporation. P was in charge of operations and maintenance. In November P and D met with representative of the Berliner Flug Ring charter flights to take German tourists to sunnier climes. D believed that they could not obtain the contract because BFR had another carrier. However, in January 1978, D learned that there was a good chance that the contract might be available. He informed BFR that he would make a proposal on behalf of a new company. On July 7, 1978, he incorporated Air Berlin Charter Co. (ABC) and was its sole owner. On August 20, ABC presented BFR with a contract proposal, and after a series of discussions, it was awarded the contract. D concealed negotiations from P although he used Berlinair working time, staff, money and facilities. The trial court found that ABC, acting through D, had wrongfully diverted the BFR contract, which was a corporate opportunity of Berlinair. ABC appealed. The Court of Appeals ruled in P's favor.