Darnall v. Parrish Project
A-16-672
Neb. Ct. App.Jun 13, 2017Background
- Parrish Project, LLC owned a building; Shawn and Stephanie Darnall operated a bar there and owned 19.55% membership interest.
- In July 2012 Parrish Project loaned the Darnalls $10,840 to pay IRS liabilities; the Darnalls signed a Promissory Note (12‑month amortization, $932.96/month, 6% interest) and a Purchase Agreement transferring their 19.55% interest to the LLC until loan payoff.
- The Darnalls made some payments through January 2013, then stopped; they claimed they could pay in August 2013 and sent a lawyer’s letter offering to pay and request return of membership interest.
- Parrish Project did not reconvey the membership interest; the Darnalls sued in 2015 for breach of contract and later added an unjust enrichment claim.
- After a bench trial, the district court found the Darnalls failed to timely tender payment, rejected their post‑trial argument that the agreements were void for lack of corporate authority, and dismissed the unjust enrichment claim because valid contracts existed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the promissory note and purchase agreement were void for lack of authority under the Operating Agreement | Darnalls: Special meeting required unanimous attendance; because not all members attended, actions (loan and agreements) were void | Parrish: Issue not pleaded or tried; parties treated documents as binding contracts | Court: Issue not pleaded or tried with consent; Darnalls had treated documents as binding; court refused to consider voidness claim |
| Whether Darnalls timely tendered payment and were refused acceptance | Darnalls: Tendered payment Aug 8, 2013 (via counsel) and were refused; thus Parrish breached | Parrish: No proper tender or present ability to pay before loan accelerated; Darnalls stopped payments Jan 2013 and could have deposited funds earlier | Court: No proper tender — letter did not show present ability; even if tendered, it was 12 days late beyond 12‑month term; no breach found |
| Whether Parrish was unjustly enriched by retaining membership interest | Darnalls: Shares were worth more than loan; retaining them without compensation is unjust enrichment | Parrish: There is an express contract governing transfer and forfeiture of interest | Court: Unjust enrichment unavailable where valid contracts govern; claim fails |
| Standard for permitting unpleaded issue to be considered | Darnalls: Post‑trial written argument raised the Operating Agreement authority issue | Parrish: No express or implied consent at trial; defendant lacked opportunity to respond | Court: Nebraska rule requires recognition at trial; no express/implied consent here, so issue excluded |
Key Cases Cited
- Anderson Excavating & Wrecking Co. v. Sanitary Imp. Dist. No. 177, 265 Neb. 61 (trial court factual findings in bench trial will not be disturbed)
- Henderson v. City of Columbus, 285 Neb. 482 (trial court as sole judge of witness credibility)
- Welsch v. Graves, 255 Neb. 62 (purpose of pleadings to frame issues)
- Blinn v. Beatrice Community Hosp. & Health Ctr., 270 Neb. 809 (when unpleaded issue is tried by consent)
- United Gen. Title Ins. Co. v. Malone, 289 Neb. 1006 (analysis of express or implied consent under pleadings rule)
- Graff v. Burnett, 226 Neb. 710 (tender requires present ability to perform at time of offer)
- Washa v. Miller, 249 Neb. 941 (unjust enrichment unavailable when an express contract governs)