Fed-Mart Corp. v. Pell Enterprises, Inc.

The Fed-Mart Corporation (Fed-Mart) appeals from orders directing indemnification of its former president, Sol Price, for his expenses incurred in defense of a cross-complaint in the underlying litigation between Fed-Mart and a Fed-Mart franchisee and in his proceedings seeking indemnification for attorney fees and costs under Corporations Code section 317. The first order (Aug. 2, 1978) found Price had acted in good faith and in a manner he reasonably believed to be in the best interests of Fed-Mart and was therefore entitled to in demnification from Fed-Mart under Corporations Code section 317. The second order (Mar. 6, 1979) directed Fed-Mart to pay Price’s attorney fees of $70,000 and costs of $3,500.

Contentions

Fed-Mart contends the trial court erred in finding Price acted in good faith and in a manner he reasonably believed to be in the best interests of Fed-Mart. Fed-Mart argues Price, while chief executive of Fed-Mart, permitted the perpetration of per se violations of the antitrust laws and therefore could not have acted in the “good faith and best interest” manner required by section 317. Second, Fed-Mart makes the broad assertion Price failed to carry his…