McGladrey, Hendrickson & Pullen v. Syntek Finance Corp.

WEBB, Justice.

The determination of this case depends on the application of N.C.G.S. § 55-50(k), in effect when this action was filed, which provided in part:

Any action by a shareholder to compel the payment of dividends may be brought against the directors, or against the corporation with or without joining the directors as parties. The shareholder bringing such action shall be entitled, in the event that the court orders the payment of a dividend, to recover from the corporation all reasonable expenses, including attorney’s fees, incurred in maintaining such action.

We affirm the Court of Appeals. The plaintiff is entitled to recover its attorney’s fees under the plain language of this section of the statute. When the language of a statute is clear and unambiguous, judicial construction is unnecessary and its plain and definite meaning controls. Food House, Inc. v. Coble, Sec. of Revenue, 289 N.C. 123, 221 S.E.2d 297 (1976). The plaintiff is a shareholder who brought an action to compel the payment of dividends. The court ordered the payment of the dividends and under the plain language of this section the plaintiff is entitled to recover reasonable attorney’s fees.

The defendant argues that this is not an action to “compel the payment of dividends” within the meaning of former section 50(k) and no attorney’s fees should be allowed. The defendant says that the former N.C.G.S. § 55-50 provided for the circumstances under which a corporation could be compelled to pay dividends and this action was not brought pursuant to such requirements of section 50. The defendant argues that subsection 50(k) applies only to actions brought pursuant to section 50 to compel the payment of dividends. We do not believe we should read this restriction into subsection 50(k). The subsection does not say it is limited to actions brought under section 50 and indeed it refers to “any action” which would include actions other than those brought under section 50.

The defendant contends that the new Business Corporation Act, which became effective 1 July 1990, offers compelling evidence that the former N.C.G.S. § 55-50(k) authorizes the award of attorney’s fees only in actions brought pursuant to N.C.G.S. § 55-50. N.C.G.S. § 55-6-40(h) is the reenactment of former subsection 50(k) and it provides that shareholders may recover attorney’s fees only in actions brought under Chapter 55. We do not believe a legislative change in a statute is persuasive as to the meaning of a statute whose meaning is clear from reading the plain language of the statute.

The defendant argues that there was never any dispute about the propriety of its payment of dividends. Dividends were properly declared and paid to other stockholders. The question, says the defendant, involved the mutual releases in the federal court cases and whether the plaintiff had released its right to a dividend. Whatever defense was interposed in this case to the payment of a dividend, the action of the plaintiff was to compel the payment of a dividend.

The decision of the Court of Appeals is affirmed.

Affirmed.