Northeast Harbor Golf Club, Inc. v. Harris

661 A.2d 1146 (1995)

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Nature of the Case

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Facts

Harris (D) was president of Northeast Harbor Golf Club, INC. (P) from 1971 until 1990 when she was asked to resign. In 1979, a real estate broker contacted D about three noncontiguous parcels located among the fairways of the golf course as he believed from the right of ways and easements associated with the properties that P would be interested in purchasing them. D immediately agreed to purchase the properties in her own name. D never informed P of the opportunity prior to her purchase. D then informed P at a board meeting that she had purchased the property and would hold it in her name and that P would be protected. The board took no action. In 1984, D learned of another property that was for sale that abutted P and D purchased that property in 1985. D told the board subsequent to the purchase and that she had no present plans to develop the property. No formal action was taken by the board. In 1990, D paid $275,000 for a lot and building separating her 1985 purchase from the road. D began an extensive plan to develop her purchases, and the board began to become concerned over those plans but did not oppose them initially as a board but did so individually. In 1990, these concerns came to a head and D was asked to resign. P sued D for a violation of the corporate opportunity doctrine. The court found that P was, for the most part, unable to buy the properties but that it had engaged in fundraising from time to time. The court found that D had not usurped a corporate opportunity because the acquisition of real estate was not in P's line of business. P appealed.