Plate

The subject of this appeal is the application of Corporations Code section 317, subdivision (e)(4), providing for court-ordered indemnification of an agent of a corporation against any judgment arising from the agent’s performance of his or her corporate duties. By this action, plaintiffs, H. R. Plate and H. R. Plate & Company, Inc. (Plate), sought damages for breach of contract and unfair competition against appellant, Sun-Diamond Growers of California (Sun-Diamond), a corporation, and Robert McElroy and Richard Branson (respondents here), who were former employees of Sun-Diamond, among others. A jury rendered a verdict in favor of Sun-Diamond but against McElroy and Branson. Thereafter, upon application of McElroy and Branson pursuant to section 317, subdivisions (b) and (e)(4), the trial court ordered Sun-Diamond to indemnify these former employees against the judgment. Sun-Diamond appeals from the order of indemnification.

We conclude the record fails to support the trial court’s findings that the prerequisites for indemnification under section 317 were met. We accordingly reverse.

I. Background Facts

Sun-Diamond is a corporation owned by four food cooperatives,…