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Case No. 19-1978

Richard J. Erwin
v.
Michael G. Erwin and Erwin Farms II, LLC

Appellant

Richard J. Erwin

Appellee

Michael G. Erwin and Erwin Farms II, LLC

Attorneys for Appellant

Elizabeth R. Meyer, Sarah K. Franklin, and Lucas B. Draisey

Attorneys for Appellee

Brant D. Kahler and James W. White

Court of Appeals

Court of Appeals Opinion

Opinion Number:
19-1978
Date Published:
Feb 03, 2021
Summary

            Appeal from the Iowa District Court for Warren County, Martha L. Mertz, Judge.  AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.  Heard by Bower, C.J., and Doyle and Mullins, JJ.  Opinion by Mullins, J.  (18 pages)

            Richard J. Erwin (R.J.) appeals, and Michael G. Erwin (Mike G.) and Erwin Farms II, LLC (Erwin II) cross-appeal, the district court’s orders regarding the management and administration of Erwin II.  R.J. argues Michael breached his fiduciary duties as the manager of Erwin II and appeals the district court’s findings regarding damages and injunctive relief.  Mike G. cross-appeals and argues there was no breach of fiduciary duties, he is entitled to injunctive relief, and the district court’s findings regarding a skid loader are errant.  OPNINION HOLDS: On our de novo review of the record, we agree with the district court that Mike G. did engage in conduct that breached fiduciary duties and the operating agreement but agree with the remedy fashioned by the district court.  We reverse the district court regarding the CRP incident, finding that Mike G.’s admittedly purposeful conduct was in bad faith and award R.J. damages in the amount of $2985.76.  We find no abuse of discretion in the district court’s decision to decline any award of attorney fees.  Finally, we find Mike G.’s bad-faith conduct regarding the CRP incident renders him ineligible for indemnification due to the clear terms of the operating agreement.  We remand the matter to the district court for entry of an order consistent with this opinion.

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