                 United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 17-2759
                        ___________________________

                     Donna K. Rains; Alice Belle Laurendine

                       lllllllllllllllllllllPlaintiffs - Appellants

                                           v.

                       Oscar Homer “O.H.” Jones, III, et al.

                      lllllllllllllllllllllDefendants - Appellees
                                      ____________

                     Appeal from United States District Court
                 for the Eastern District of Arkansas - Little Rock
                                  ____________

                             Submitted: April 10, 2018
                             Filed: September 24, 2018
                                   ____________

Before SMITH, Chief Judge, WOLLMAN and LOKEN, Circuit Judges.
                             ____________

LOKEN, Circuit Judge.

       This is a dispute among six siblings primarily over ownership and control of
OKISDA, Inc. (OKISDA), a family corporation their mother, Eunice Ashabranner,
established in 1974. In their First Amended Complaint, the Plaintiffs, sisters Donna
Rains and Alice Laurendine, assert multiple claims against OKISDA, their brother,
Oscar Homer Jones, III (“O.H.”), and sisters Karen Loden, India Huddleston, and
Sandra Ballard. After substantial, contentious discovery, the district court1 concluded
that “nearly all [the claims] hinge on whether the transfer of Class A [voting
common] stock from [Ashabranner’s revocable] Trust to Mr. Jones was valid.” The
court held the transfer valid and granted Defendants summary judgment dismissing
all claims. Plaintiffs appeal, contending the court made five reversible errors.
Reviewing the grant of summary judgment de novo, we disagree and affirm.

                    I. Background and Procedural History.

       In 1974, Ashabranner (nee Eunice Jones) incorporated OKISDA to own and
operate roughly 1,100 acres of farmland in Jefferson County, Arkansas. The Articles
of Incorporation authorized OKISDA to issue 26,000 shares of Class A voting
common stock and 26,000 shares of Class B non-voting common stock. At the June
1, 1974, organizational meeting, attended by incorporator Ashabranner and her
attorney, the corporation resolved that Ashabranner would be the sole director; that
Ashabranner would serve as President, Vice President, and Secretary-Treasurer; and
that Ashabranner subscribed for the authorized 26,000 shares of Class A voting
common stock and 26,000 shares of Class B non-voting common stock in exchange
for her interest in the Jefferson County farmland. Later that year, Ashabranner
transferred 4,333 shares of Class B non-voting stock to each of her six children. As
of December 1974, Ashabranner owned 26,000 Class A shares and two Class B
shares, and each child owned 4,333 Class B shares.

       More than twenty-five years later, Ashabranner transferred her 26,000 Class
A voting shares and two Class B non-voting shares to the Eunice K. Ashabranner
Trust, a revocable trust drafted by an attorney in Conway, Arkansas. But by 2008,
trustee Ashabranner was dissatisfied with the Trust’s successor trustee provision and


      1
       The Honorable Billy Roy Wilson, United States District Judge for the Eastern
District of Arkansas.

                                         -2-
consulted her accountant, Kirk Stone, and attorney Ted Drake, who had drafted a
prior will in the 1980s and served as counsel to OKISDA. Drake testified that the
Conway attorney “had done a revocable trust that wasn’t at all what Miss
Ashabranner wanted.” It bothered Ashabranner that the Trust “favored Donna and
made her trustee and gave her control over OKISDA.” On February 1, 2011,
Ashabranner signed a Second Restatement to the Trust drafted by Drake. Among
other changes, the restated Trust appointed O.H. the primary successor Trustee,
followed by Loden and Huddleston. Drake’s notes from the meeting state: “Mrs. A
was alone and obviously mentally competent. We went over trust and . . . order of
trustees. She said that is what she has always wanted. O.H. knows the business.
Other two girls know it next best.”

      In March 2012, Ashabranner met with Stone, expressed concern that her
daughters might pressure O.H. to sell the farm, and said she wanted to give O.H.
control of OKISDA. After confirming that Ashabranner understood the import of a
decision to give up her sole control of the corporation, Stone emailed Ted Drake that
“[Ashabranner] would like to gift O.H. all the voting stock. . . . She understands this
gives O.H. control now. She is ok with O.H. having control. She does not want to
worry about the daughters being able to s[ell] the farm without O.H.’s approval.”
Drake then orchestrated a series of actions to implement Ashabranner’s decision.

      On June 15, 2012, Ashabranner as sole voting shareholder elected herself,
O.H., Huddleston, and Loden to OKISDA’s Board of Directors. The next day, at a
special meeting, the expanded Board elected new officers2 and added a provision to
the Bylaws allowing “Informal Action” without a meeting if a majority of the Board
signed written consents describing the actions taken. The following month, the Board
amended the Articles of Incorporation to authorize the issuance of 26,000 shares of


      2
     The Board elected Ashabranner President, O.H. Vice-President and General
Manager, Huddleston Secretary, and Loden Treasurer.

                                         -3-
Class C non-voting stock “with distribution on liquidation of the corporation limited
to [$1.00 per share] par value.” By contrast, the Class A and Class B shares
continued to have a par value of one dollar per share, but there was no limit to the per
share distribution they would receive upon liquidation. At the same meeting, the
Board authorized OKISDA to exchange 25,998 Class C shares for 25,998 Class A
voting shares held by Ashabranner’s revocable Trust. After this exchange, only two
Class A voting shares remained outstanding, held by the Trust. On September 24,
2012, with Ashabranner as sole Trustee, the Trust transferred these two shares to O.H.

        Rains, Laurendine, and Ballard received no notice of these 2012 transactions.
On August 14, 2013, Ashabranner sent Rains, Laurendine, and Ballard a letter
expressing “my disappointment in each of you” and declaring: “Nothing has been
done behind anyone[’]s back as I am the sole owner of OKISDA, Inc., to this point
and will remain so until my death . . . .” Plaintiffs allege that, by August 16, two days
later, they learned the Trust had transferred the only two outstanding voting shares
to O.H. in September 2012. Ashabranner died on April 30, 2014.

       In June 2015, attorney Gene Ludwig sent all six siblings a letter stating that he
owned land adjacent to the OKISDA property and expressing interest in buying any
of the siblings’ interests in the land. Rains replied that she, Laurendine, and Ballard
would be willing to sell. On April 15, 2016, Plaintiffs represented by Ludwig filed
their initial complaint against O.H. and OKISDA. Plaintiffs alleged that the Trust’s
September 2012 transfer of two Class A shares violated the share transfer restriction
in OKISDA’s Bylaws. Plaintiffs sought specific enforcement of the restriction and
also asserted damage claims against O.H. for unjust enrichment, conversion, breach
of contract, and fraud committed by the share transfer and later actions. Defendants
asserted various affirmative defenses including that claims were barred by the statute
of limitations and the action should be dismissed for failure to join necessary parties.




                                          -4-
       Plaintiffs filed the First Amended Complaint on September 23, 2016, adding
Loden, Huddleston, and Ballard as defendants. Plaintiffs alleged that O.H., Loden,
and Huddleston breached their fiduciary duties as OKISDA directors by facilitating
the September 2012 share transfer without notice to Plaintiffs; approving a loan from
OKISDA to O.H. at a below-market interest rate; mismanaging leasing of OKISDA
farmland; authorizing O.H. to drive a corporate truck; and having OKISDA
indemnify them for the costs of defending Plaintiffs’ suit. Plaintiffs sought a
declaration that Loden and Huddleston had waived any claim to the two Class A
shares and added Ballard as a necessary party defendant to assert any interest she had
in those shares. Plaintiffs also sought a statutory right to inspect OKISDA’s financial
records3 and expanded their fraud claim against O.H. to include an allegation that he
made misleading disclosures to the federal government regarding his work farming
the OKISDA land.

       After months of discovery, all parties except Ballard moved for summary
judgment. All sought summary judgment on Plaintiffs’ claim that the September
2012 transfer violated the share transfer restriction in OKISDA’s Bylaws. The
district court granted the Defendants’ motions for summary judgment. Central to its
decision was the court’s conclusion that Plaintiffs’ breach of contract, breach of
fiduciary duty, conversion, unjust enrichment, and fraud claims, and much of the
relief sought, turned on the validity of the September 2012 transfer of Class A shares
from the Trust to O.H. The court held that the share transfer did not violate the
Bylaws’ transfer restriction. The court also concluded that the unlawful share transfer
claim, and all of Plaintiffs’ tort claims that accrued before April 15, 2013, were time-
barred because Plaintiffs presented no evidence showing that the applicable three-
year statute of limitations should be tolled because of fraudulent concealment.



      3
       The district court did not address this claim; Plaintiffs do not raise it on
appeal. See generally Ark. Code Ann. § 4-26-715.

                                          -5-
                                   II. Discussion.

       The Statement of the Issues section of Plaintiffs’ Opening Brief presents five
issues on appeal. The fifth and last attacks the substantive core of the court’s
decision: “Whether the September 2012 transfer of the two Class A voting shares to
Oscar ‘O.H.’ Jones violated the OKISDA Inc. Bylaws.” Like the district court, we
will begin (and for the most part end) with that issue.

       A. The Transfer Restriction Issue. The share-transfer restriction at issue is
Article VI, Section 3, of OKISDA’s original 1974 Bylaws. It provides:

             (a) Before any shareholder in this corporation shall dispose of his
      or her shares of stock by an inter vivos transfer, whether by sale, gift or
      hypothecation, such shareholder shall first offer said stock for sale to the
      corporation at a price to be determined as herein set forth.

             (b) Any share not purchased by the corporation within sixty (60)
      days after receipt of such offer shall be offered to the other shareholders
      of the class of stock being transferred, each to have the right to purchase
      his or her aliquot part of the class to be transferred. If the offer is not
      accepted within thirty (30) days after receipt thereof, the shareholder
      desiring to transfer said stock shall have the right to transfer that portion
      remaining to any other person but shall not transfer such shares without
      giving the corporation and remaining shareholders the right to purchase
      at a price and on the terms offered by such other person.

            (c) The purchase price to be paid for the transfer of stock pursuant
      hereto shall be the book value of each share without consideration as to
      intangibles such as good will . . . .

(Emphasis added.) Defendants took no action pursuant to Section 3 before or after
the September 2012 transfer of two Class A voting shares from the Trust to O.H.
Plaintiffs do not claim the transfer violated subsection 3(a) because the shares were
not first offered to OKISDA, as purchase by OKISDA would have left no voting

                                          -6-
shares outstanding. Nor do they claim a violation of the first sentence of subsection
3(b) for the obvious reason that there were then no “other shareholders of the class
of stock being transferred” who would have a right to purchase the two shares.

       Thus, the dispute turns on the second sentence of subsection 3(b), more
specifically, on whether Plaintiffs Rains and Laurendine, as holders of Class B non-
voting shares, are “remaining shareholders [who had] the right to purchase at a price
and on the terms offered by such other person,” the transferee O.H. Plaintiffs argued
the plain language of this sentence required the Trust, before it gifted the two shares
to O.H., to offer all Class B shareholders the right to acquire those shares on the same
terms, namely, by gift. The district court concluded:

      Plaintiffs’ interpretation of the transfer restriction bylaw is
      unreasonable. Under Plaintiffs’ interpretation, the transfer-restriction
      bylaw gave Plaintiffs (who each held a little more than 8% of all
      outstanding shares, were not on the board of directors, and held no
      voting shares) veto power over the decision of a supermajority of all
      shareholders, the holder of all voting shares, and the corporation’s board
      of directors.

                                  *   *    *    *   *

      Essentially, this bylaw gave shareholders of the same class of stock
      being transferred a right of first refusal before shares were sold to an
      outsider -- or, in the transfer-restriction bylaw’s terms, “any other
      person.” Because [O.H.] Jones was a shareholder, he was not “any other
      person.”

             The transfer-restriction bylaw has four steps. . . . [Plaintiffs’]
      nonsensical interpretation is avoided when the terms “remaining
      shareholders” and “other shareholders of the class of stock being
      transferred” are read as interchangeable.




                                          -7-
           Reading other shareholders and remaining shareholders as
      synonymous, allows the only reasonable interpretation of the bylaw.

       On appeal, Plaintiffs argue their interpretation of subsection 3(b) is mandated
by the plain meaning of the terms “any other person” and “remaining shareholders,”
supported by evidence that Ashabranner always intended that each of her children
retain an equal interest in OKISDA. Like the district court, we disagree.

       Arkansas courts, like the courts of other States, apply contract-interpretation
principles in interpreting corporate bylaws. See Taylor v. Hinkle, 200 S.W.3d 387,
395-96 (Ark. 2004); see generally 8 Fletcher, Cyclopedia of the Law of Corporations
§ 4195 (2018). Like other contracts, when interpreting a contract among shareholders
restricting their freedom to transfer, “the rule is to ascertain the intention of the
parties and to give effect to that intention where this can be done consistently with
legal principles.” Owen v. Merts, 405 S.W.2d 273, 277 (Ark. 1966). Here, there
were not multiple “parties to a contract.” OKISDA was formed and its Bylaws
adopted by the sole owner of the corporation’s assets, Ashabranner. Under her
exclusive control, the corporation created two classes of stock, voting and non-voting,
and issued all authorized shares to Ashabranner, its sole stockholder and director,
who then retained all Class A voting shares and gifted all but two Class B non-voting
shares in equal portions to her six children.

       Because the only intention to be determined is the intent of Ashabranner in
including Article VI, Section 3, in OKISDA’s 1974 Bylaws, it is not surprising that
neither Plaintiffs nor any Defendant argued to the district court that summary
judgment was improper because extrinsic evidence was needed to interpret an
ambiguous Bylaw. Rather, the two sides urged the court to adopt very different
interpretations of the second sentence of subsection 3(b). In these circumstances, the
role of the court is to determine, as a matter of law, the “more reasonable
construction” of Ashabranner’s intent. Fryer v. Boyett, 978 S.W.2d 304, 306 (Ark.

                                         -8-
App. 1998). This intent “is to be gathered, not from particular words and phrases, but
from the whole context of the agreement.” Owen, 405 S.W.2d at 277 (citation
omitted); see Spann v. Lovett & Co., 389 S.W.3d 77, 88-89 (Ark. App. 2012).

       1. Beginning with Plaintiffs’ textual argument, we disagree that, in this
context, the plain meaning of “any other person” necessarily includes O.H. Restraints
on alienation are generally disfavored. Thus, courts have interpreted similarly
worded restrictions -- preventing an existing shareholder from disposing of his or her
shares before offering them to the corporation or other shareholders -- as applying
only to transfers between current shareholders and outsiders. See, e.g., Birmingham
Artificial Limb Co. v. Allen, 194 So. 2d 848, 850 (Ala. 1967). Moreover, the second
sentence of subsection 3(b) gives remaining shareholders “the right to purchase at a
price and on the terms offered by such other person.” Here, there was no offer to
purchase by O.H.; the Trust transferred two Class A shares to O.H. by gift. As the
district court noted, it would be “nonsensical” to apply the four steps of Article VI,
Section 3, literally to this transfer.

      We also disagree that the plain meaning of “remaining shareholders” in this
context necessarily includes the holders of Class B non-voting shares. The word
“remainder” is defined as “the number left after subtraction or deduction.” Webster’s
Third New International Dictionary 1919 (1986). Here, Section 3 was obviously
intended to apply if one or more of Ashabranner’s six children wished to sell his or
her Class B non-voting shares. In this situation, a reasonable interpretation of the
second sentence of subsection 3(b) is that “remaining shareholders” are those Class
B shareholders who did not elect to purchase “his or her aliquot part” under the first
sentence of subsection 3(b).

       2. Turning to the other important inquiry in determining Ashabranner’s intent,
we disagree with Plaintiffs’ assertion that the summary judgment record established
that she intended that each of her children “retain an equal interest in OKISDA.”

                                         -9-
Rather, the evidence established that, in 1974 and thereafter, Ashabranner intended
to establish and to retain sole control over the corporation, while transferring to her
children equal financial interests in the corporation’s assets (a typical parental
objective in dealing with a family enterprise). This intent was reflected in the 2012
transactions that attorney Drake orchestrated. By exchanging all but two of her Class
A voting shares for newly-authorized Class C non-voting shares having a limited
value upon liquidation, Ashabranner reduced her financial interest in OKISDA in the
event of her death. By then gifting the remaining two outstanding shares of Class A
voting stock to O.H., she was able to transfer her sole control in a manner that did not
substantially affect the siblings’ equal financial interests in OKISDA’s assets.
       For these reasons, we conclude the district court correctly ruled that, because
“other shareholders of the same class” and “remaining shareholders” should be
interpreted as synonymous, and because O.H. was not “any other person,” the Trust
did not violate Article VI, Section 3, of OKISDA’s Bylaws when it did not offer two
Class A voting shares to the Class B non-voting shareholders before transferring the
two shares to O.H Jones.

       B. Plaintiffs’ Other Contentions on Appeal. Plaintiffs argue the district court
erred in dismissing other claims without providing Plaintiffs advance notice and an
opportunity to respond. Rule 56(f) provides that the court may grant summary
judgment on grounds not raised or on its own “[a]fter giving notice and a reasonable
time to respond.” Even without notice, however, summary judgment may be granted
“on an issue not properly raised in the summary judgment motion if the district
court’s findings on properly addressed issues foreclose the unraised issue.” Heisler
v. Metro. Council, 339 F.3d 622, 632 (8th Cir. 2003), citing Interco Inc. v. Nat’l Sur.
Corp., 900 F.2d 1264, 1269 (8th Cir. 1990). Here, the district court concluded:

            Because this [two-share] transfer was valid, Defendants breached
      no bylaws, contract, or fiduciary duties; no property was converted; no



                                         -10-
      one was unjustly enriched; and no fraud took place. Accordingly,
      Defendants are entitled to summary judgment on these points.

The issues raised by Plaintiffs on appeal do not include the merits of the district
court’s rulings dismissing their claims for unjust enrichment and breach of fiduciary
duty, only the court’s decision to grant summary judgment sua sponte without
providing Plaintiffs notice or an opportunity to respond. But this procedural
contention was waived. “Whether or not a party receives an advance signal that the
court might act sua sponte . . . any objection to that procedure is waived if the party
does not at least object after the court enters its order while the action is still
pending.” UnitedHealth Grp. Inc. v. Exec. Risk Specialty Ins. Co., 870 F.3d 856,
866-67 (8th Cir. 2017).

       Although the only issue raised on appeal was waived in the district court, we
agree with the court that the validity of the stock transfer established that Plaintiffs’
other claims are foreclosed.

       1. Count Two alleged that O.H. was unjustly enriched by receipt of the two
Class A shares. That claim was directly foreclosed by the transfer’s validity. See
Davis v. Davis, 480 S.W.3d 878, 885 (Ark. App. 2016) (“One is not unjustly enriched
by receipt of that to which he is legally entitled.”). Plaintiffs also alleged that O.H.
was unjustly enriched after the September 2012 share transfer by being allowed to
drive a corporate truck, receiving loans from OKISDA he has not repaid, and
engaging in self dealing. But these are claims that O.H. injured the corporation by
abusing control lawfully acquired by the share transfer. “Any action to recover for
the alleged losses was derivative in nature and an individual suit was not the proper
route for relief.” Hames v. Cravens, 966 S.W.2d 244, 247 (Ark. 1998).

       2. Count Six alleged that O.H., Loden, and Huddleston breached fiduciary
duties by facilitating the invalid share transfer. This claim was directly foreclosed by

                                          -11-
the transfer’s validity. “A person standing in a fiduciary relationship with another is
subject to liability to the other for harm resulting from a breach of the duty imposed
by the relationship.” Long v. Lampton, 922 S.W.2d 692, 696-97 (Ark. 1996)
(emphasis added). Plaintiffs also alleged that O.H., Loden, and Huddleston, as
officers and directors of OKISDA, breached their fiduciary duty to Plaintiffs as
shareholders after the share transfer by their actions in controlling the corporation --
a below-market loan to O.H., misuse of retained earnings, self-dealing and imprudent
leasing practices, and O.H.’s use of the corporate truck, all without notice to
Plaintiffs. As explained, these are claims of injury to the corporation that may only
be asserted in a shareholder derivative action. See Hames, 966 S.W.2d at 246-47;
Walker v. Hyde, 798 S.W.2d 435, 437 (Ark. 1990). Thus, even if fact intensive, the
claims were properly dismissed. The claim that the director Defendants breached a
fiduciary duty to hold annual OKISDA shareholder meetings in 2013, 2014, and after
2015 obviously fails for lack of injury, as Plaintiffs were not entitled to notice of or
the right to vote at these meetings.4

       3. Finally, Plaintiffs argue the district court erred in concluding (i) that their
share transfer tort claim is time-barred without considering their allegation that O.H.’s
fraudulent concealment tolled the three-year statute of limitations; and (ii) that unjust
enrichment and breach of fiduciary duty claims accruing before April 15, 2013, are
time-barred despite Plaintiffs’ allegations of fraudulent concealment and of
continuing wrongful acts after the two-share transfer. As we have concluded that the
district court correctly dismissed these claims on the merits, we need not consider
Plaintiffs’ appeal of the court’s alternative statute of limitations rulings.

      For the foregoing reasons, the judgment of the district court is affirmed.
                      ______________________________


      4
      The OKISDA Articles of Incorporation expressly provided that only
shareholders entitled to vote were entitled to notice of shareholder meetings.

                                          -12-
