Midwest Renewable Energy v. American Engr. Testing
296 Neb. 73
| Neb. | 2017Background
- Midwest Renewable Energy, LLC sued to quiet title to real property in Lincoln County, Nebraska, naming Western Ethanol Company, LLC (a Nevada LLC) among defendants after Western Ethanol had earlier transcribed a California judgment and recorded a writ of execution against Midwest.
- Western Ethanol filed articles of dissolution in Nevada and a certificate of cancellation in California effective December 31, 2013; its managing member, Douglas Vind, executed an affidavit stating the LLC had distributed all assets (including the judgment) to its members.
- Midwest Renewable filed its quiet title action in September 2014; Western Ethanol remained the only named defendant at trial after defaults and settlements with others; Vind was never joined as an individual party.
- At trial the district court found Vind had been assigned the judgment and yet held the judgment lien remained valid against Midwest Renewable’s land and dismissed the claim against Western Ethanol with prejudice.
- On appeal the Nebraska Supreme Court considered (1) whether Western Ethanol, as a dissolved Nevada LLC, was amenable to suit; (2) whether the judgment/judgment lien were assigned to Vind; and (3) whether Vind was an indispensable party whose absence deprived the court of subject-matter jurisdiction.
- The Supreme Court held Nevada law governed Western Ethanol’s postdissolution amenability, but Vind was an indispensable party to ownership and validity issues regarding the judgment and lien; because he was not joined, the trial court lacked subject-matter jurisdiction to decide those issues and the judgment was vacated and remanded with directions to join Vind.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a dissolved LLC (Western Ethanol) is amenable to suit in Nebraska | Western Ethanol completed winding up under Nebraska rules and thus lacks capacity to be sued | Under Nevada law §86.505 the dissolved LLC can be sued for 2 years after dissolution; Nevada law governs internal affairs | Nevada law applies (internal affairs doctrine/§21-155) and Western Ethanol remained amenable because the suit was filed within 2 years of dissolution filing |
| Whether the judgment and its lien were assigned to Vind | Vind (via affidavit) owns the judgment and lien, extinguishing Western Ethanol’s interest | Western Ethanol contends transfer to members is not an assignment and disputes that the judgment is a transferable asset | A judgment is a chose in action and assignable; if assigned, assignee (Vind) alone can enforce or defend; thus ownership question required Vind’s joinder |
| Whether the district court could decide ownership and validity of the judgment and lien without joining Vind | Midwest relied on naming "all persons . . . real names unknown" to argue Vind had constructive notice | Western Ethanol argued it could defend and the court proceeded without Vind | Vind was an indispensable party whose absence deprived the court of subject-matter jurisdiction to determine assignment and validity; remand to join Vind required |
Key Cases Cited
- Christensen v. Boss, 179 Neb. 429 (discusses common-law rule that corporate capacity to sue/be sued ends at dissolution)
- Van Pelt v. Greathouse, 219 Neb. 478 (explains survival statutes operate on the right itself and limits postdissolution suits)
- Johnson v. Johnson, 272 Neb. 263 (adopts Restatement §302/internal affairs doctrine analysis)
- In re Estate of Evertson, 295 Neb. 301 (addresses subject-matter jurisdiction and related statutory interpretation issues)
- Mousel Law Firm v. The Townhouse, Inc., 259 Neb. 113 (recognizes judgment lien is incident to the judgment)
- Cache Nat. Bank v. Lusher, 882 P.2d 952 (discusses that a judgment lien cannot be assigned separately from the judgment)