879 N.W.2d 385
Neb.2016Background
- The Lindsays, minority shareholders of 304 Corporation (whose principal asset was Mid City Bank), sued James G. Fitl alleging breaches of fiduciary duty in his roles with Mid City Bank and 304 Corporation.
- Mid City Bank was placed into FDIC receivership; the FDIC, as receiver, filed a federal suit against Fitl asserting he breached fiduciary duties and claiming the FDIC succeeded to the bank’s and its shareholders’ claims under 12 U.S.C. § 1821(d)(2)(A)(i).
- The Lindsays filed multiple amended complaints alleging tort (fiduciary duty) claims; they later argued at a hearing for the first time that a Buy-Sell Agreement created contract claims.
- The personal representative of Fitl’s estate moved to dismiss under Neb. Ct. R. Pldg. § 6-1112(b)(6); the district court considered an affidavit and the Buy-Sell Agreement, converting the motion to one for summary judgment.
- The district court held the Lindsays’ claims were derivative (corporate) rather than direct, and that the FDIC’s federal suit divested the Lindsays of standing to pursue those derivative claims; it denied further amendment as futile.
- The Nebraska Supreme Court affirmed, concluding the claims were derivative, the FDIC’s suit vested exclusive authority in the FDIC as receiver, and no genuine issue of material fact precluded judgment as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Lindsays’ claims are derivative or direct | Lindsays: breaches (including alleged Buy-Sell Agreement breach) caused individual harms distinct from corporate injury, so claims are direct | Personal representative: pleaded injuries are corporate (loss in stock value) and thus derivative | Held: Claims are derivative; injury not separate and distinct from corporate injury |
| Whether FDIC receivership and federal suit divest Lindsays of standing to pursue claims | Lindsays: claimants retain right to pursue individual contract claims (raised at hearing) | Personal representative: § 1821 gives FDIC successor rights; FDIC’s suit occupies exclusive field for shareholder/corporate claims | Held: FDIC, as receiver, succeeded to institution and shareholders’ claims; Lindsays lacked standing to bring derivative action |
| Whether the district court properly considered the Buy-Sell Agreement (conversion to summary judgment) | Lindsays: agreement supported direct contract theory; should be allowed to amend/argue contract claim | Personal representative: Agreement was not pleaded and its introduction converted dismissal motion to summary judgment, which was proper | Held: Court properly treated motion as summary judgment because materials outside the pleadings were considered; summary judgment standard applied correctly |
| Whether leave to amend to assert contract claim should have been permitted | Lindsays: could amend to allege Buy-Sell Agreement breach and individual contract damages | Personal representative: amendment would be futile because FDIC controls claims; no motion to set aside judgment or timely amendment request | Held: Denial of further amendment not erroneous; amendment would be futile and no proper post-judgment motion was filed |
Key Cases Cited
- DMK Biodiesel v. McCoy, 285 Neb. 974 (discussing when courts may consider materials outside pleadings and mandatory treatment of such motions as summary judgment)
- Waldron v. Roark, 292 Neb. 889 (standards for affirming summary judgment)
- In re Invol. Dissolution of Wiles Bros., 285 Neb. 920 (standing requires a personal stake and injury in fact)
- Butler Cty. Sch. Dist. v. Freeholder Petitioners, 283 Neb. 903 (standing requires assertion of own rights and concrete injury)
- McGill v. Lion Place Condo. Assn., 291 Neb. 70 (definition of derivative action)
- Freedom Fin. Group v. Woolley, 280 Neb. 825 (shareholder must allege separate and distinct injury or special duty to bring individual claim)
- Meyerson v. Coopers & Lybrand, 233 Neb. 758 (shareholders cannot sue individually for rights belonging to the corporation)
- Hamilton Cty. EMS Assn. v. Hamilton Cty., 291 Neb. 495 (appellate courts may affirm on any correct ground shown by the record)