Dick v. Koski Prof. Group
950 N.W.2d 321
Neb.2020Background
- Robert Dick, a 30% shareholder and vice president of Koski Professional Group, P.C. (KPG), left in 2015 to work for Bland & Associates (Bland); many clients followed him; no noncompete existed.
- Dick invoked a shareholder agreement that required mandatory buyout of a departing shareholder at 80% of adjusted book value (formula reduced for clients retained by the departing shareholder), with payment via a promissory note and stock pledge.
- KPG refused to repurchase under the agreement, alleging Dick breached fiduciary duties, corporate bylaws, misappropriated confidential information, and failed to deliver shares free of liens; KPG counterclaimed against Dick and sued Bland as a third party for tortious interference, misappropriation, malicious prosecution, and unjust enrichment.
- At trial the jury awarded Dick the buyout price ($470,312.51) and found for Dick and Bland on KPG’s counterclaims/third-party claims; KPG appealed raising 15 assignments of error (peremptory strikes, directed verdicts, excluded evidence, and multiple jury-instruction errors).
- The Nebraska Supreme Court affirmed, rejecting KPG’s arguments on peremptory challenge allocation (procedural waiver), conditions precedent/prior-breach defenses, fiduciary-duty directed-verdict/burden-shifting theories, corporate-opportunity and clawback instructions, and exclusion of commission-expert evidence related to NSBPA rules.
Issues
| Issue | Plaintiff's Argument (Dick) | Defendant's Argument (KPG) | Held |
|---|---|---|---|
| Allocation of peremptory challenges | Dick/Bland: entitled to separate three strikes each because interests were adverse on some claims | KPG: Dick and Bland were on same side; allocating 3 each gave 6 v. 3 unfairly prejudiced KPG | Court: KPG failed to show it exhausted its strikes in record; no reversible error; allocation discretionary and not shown abusive |
| Condition precedent / prior material breach to block buyout | Dick: Shareholder agreement triggered buyout on voluntary departure; he tendered performance and KPG refused so obligation arose | KPG: Dick failed to deliver certificates free of liens; prior breaches (fiduciary, bylaws, good faith) excuse KPG’s duty | Court: delivery-free-of-liens was part of simultaneous closing (mutual tender); Koski’s refusal waived tender; prior-tort breaches not pleaded or germane to contract buyout; no instruction warranted |
| Breach of fiduciary duty — directed verdict and burden shifting | Dick: negotiating and preparing to compete while employed is permissible; no self-dealing transaction occurred that shifts burden to him | KPG: Dick concealed negotiations, shared billing data, accepted 10% commission — these established breach and should shift burden to prove fairness | Court: planning to compete and concealed negotiations alone are not per se breaches; burden shifting requires transactions amounting to self-dealing or unfairness to the corporation; directed verdict and proposed burden-shift instructions properly denied |
| Tortious interference / NSBPA commission evidence | Dick/Bland: Bland’s 10% commission policy lawful and not a prohibited commission under NSBPA rules as applied; evidence of commission legality properly resolved pretrial | KPG: commission was improper/ethical violation; expert should have been allowed to show commission was improper and thus Bland used improper means | Court: NSBPA rules bar accepting certain commissions, not offering an employee commission; excluded expert testimony would not have overcome competitor’s privilege; no prejudicial error |
Key Cases Cited
- Gestring v. Mary Lanning Mem’l Hosp., 259 Neb. 905 (Neb. 2000) (factors and standard for allocating peremptory challenges among multiparty litigants)
- InterCall, Inc. v. Egenera, Inc., 284 Neb. 801 (Neb. 2012) (instructions must be read together and will be upheld if, taken as a whole, they correctly state the law)
- Trieweiler v. Sears, 268 Neb. 952 (Neb. 2004) (doctrine of corporate opportunity and remedy via constructive trust where fiduciary usurps corporate opportunity)
- Anderson v. Clemens Mobile Homes, 214 Neb. 283 (Neb. 1983) (examples of burden-shifting where fiduciary self-dealing or misuse of corporate funds requires the fiduciary to prove fairness)