At common law, the shareholders in a close corporation owe one another a fiduciary duty. See Fewell v. Tappan, 223 Minn. 483, 494, 27 N.W.2d 648, 654 (1947); Pedro v. Pedro, 489 N.W.2d 798, 801 (Minn.App. 1992) ( Pedro II), review denied (Minn. Oct. 20, 1992); Evans v. Blesi, 345 N.W.2d 775, 779 (Minn.App. 1984). Courts impose the fiduciary duty because they find that close corporations are really more like "partnership[s] in corporate guise."
Id. at 288. Later, in Pedro v. Pedro , 489 N.W.2d 798 (Minn. App. 1992)( Pedro II ) , review denied (Minn. Oct. 20, 1992), we clarified that damages also may be measured by the amount a defendant gained from a breach of a fiduciary duty.
A district court's "findings of fact shall not be set aside unless clearly erroneous," and when reviewing the district court's findings, "this court is limited to deciding whether the findings are clearly erroneous." Pedro v. Pedro, 489 N.W.2d 798, 801 (Minn. App. 1992) (quotation omitted), review denied (Minn. Oct. 20, 1992) (Pedro II). "Clearly erroneous means manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole."
The relationship among the shareholders of a closely held corporation is analogous to that of partners in a partnership. Pedro v. Pedro, 489 N.W.2d 798, 801 (Minn.App. 1992) [hereinafter Pedro II], review denied (Minn. Oct. 20, 1992).
Shareholders in a closely-held corporation owe each other a fiduciary duty of good faith and loyalty. Berreman, 615 N.W.2d at 370; Pedro v. Pedro, 489 N.W.2d 798, 801 (Minn.Ct.App. 1992). This duty includes dealing "openly, honestly and fairly with other shareholders."
The reasonable expectations of closely held corporation shareholders include "a job, salary, a significant place in management, and economic security for [the shareholder's] family." Pedro v. Pedro, 489 N.W.2d 798, 802 (Minn. App. 1992); see also Gunderson v. All. of Comput. Prof'l., 628 N.W.2d 173, 189 (Minn. App. 2001) (noting that "[t]ypical close-corporation shareholders commonly have an expectation of continuing employment with the corporation" and "because of the unique characteristics of close corporations, employment is often a vital component of a close-corporation shareholder's return on investment and a principal source of income").
A district court's "findings of fact 'shall not be set aside unless clearly erroneous.'" Pedro v. Pedro, 489 N.W.2d 798, 801 (Minn. App. 1992) (quoting Minn. R. Civ. P. 52.01), review denied (Minn. Oct. 20, 1992).
Rothmeier relies on Pedro v. Pedro (Pedro I), 463 N.W.2d 285 (Minn.App. 1990), review denied (Minn. Jan. 24, 1991), and Pedro v. Pedro (Pedro II), 489 N.W.2d 798 (Minn.App. 1992), review denied (Minn. Oct. 20, 1992).
Assuming that Medtronic owed a fiduciary duty to ConvaCare, ConvaCare and Johnson presented insufficient evidence to prove a breach of that duty. Although the terms of the parties' agreement created an obvious conflict of interest, the record on appeal reveals no evidence that Medtronic's competition with ConvaCare was anything other than open, honest, and fair. See Freese v. Smith, 428 S.E.2d 841, 847 (N.C.Ct.App. 1993) (fiduciary duty to act fairly and in good faith); Pedro v. Pedro, 489 N.W.2d 798, 801 (Minn.Ct.App. 1992) (fiduciary duty is to deal openly, honestly, and fairly with other shareholders). Specifically, the record does not show that Medtronic used its position as a ConvaCare shareholder or its power to appoint two directors in order to gain inside information, to gain an unfair competitive advantage, or otherwise to harm ConvaCare. Furthermore, we find no evidence to support the assertion that the two ConvaCare directors appointed by Medtronic were involved in a plot to destroy ConvaCare. Thus, the district court appropriately dismissed the breach of fiduciary duty claim.
2006) (elements of negligence claim); Padco, Inc. v. Kinney & Lange, 444 N.W.2d 889, 891 (Minn. Ct. App. 1989) (negligence and breach of fiduciary duty claims use same elements). Members of a closely held company are analogous to partners. See Pedro v. Pedro, 489 N.W.2d 798, 801 (Minn. Ct. App. 1992) (citing Westland Capital Corp. v. Lucht Eng'g Inc., 308 N.W.2d 709, 712 (Minn. 1981) (describing closely held corporation as "partnership in corporate guise")).