Marvin Tipton v. Mill Creek Gravel, Inc. Ed Kelley Dixie Kelley

LAY, Circuit Judge.

Marvin Tipton brought this shareholder derivative action against Ed and Dixie Kelley (“the Kelleys”) on behalf of Mill Creek Gravel, Inc. (“Mill Creek”), alleging breach of a pre-incorporation agreement. The case went to trial, whereupon the jury found a breach of the agreement and awarded Mill Creek $1.5 million in damages. The Kelleys now appeal on numerous grounds; we affirm in part and reverse in part.

I. BACKGROUND

The Kelleys own a large tract of land near the Arkansas border in southwestern Missouri, which they refer to as “Lazy E Estates.” In April of 1999, Ed Kelly…