Streck, Inc. v. Ryan Family
901 N.W.2d 284
Neb.2017Background
- Streck, Inc. sued Ryan Family, L.L.C. seeking specific performance of an option to purchase leased real property, alleging the L.L.C. breached the lease by failing to close after Streck properly exercised the option.
- The L.L.C. is manager-managed; co-managers Wayne and Connie Ryan appointed a receiver to represent the L.L.C. in the litigation due to management disagreement; the receiver answered and counterclaimed that Streck was in default.
- Stacy Ryan (a nonmanaging ~20% member of the L.L.C.) filed a Complaint in Intervention seeking to intervene both individually and derivatively on behalf of the L.L.C., alleging the receiver and managers were not adequately protecting the L.L.C.’s interests.
- The district court denied Ryan’s motion to intervene and denied her request to continue or reopen the summary judgment proceedings; Ryan appealed from those orders.
- The Nebraska Supreme Court reviewed whether Ryan had a direct and legal interest under Neb. Rev. Stat. § 25-328 sufficient to permit intervention and whether the order denying intervention was appealable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the order denying intervention final and appealable? | Ryan: order is final; she appealed. | Streck: § 25-1315 requires express determination for partial final judgments, so order might not be final. | Court: Order denying intervention is a final, appealable order; § 25-1315 does not alter precedent on intervention orders. |
| May Stacy Ryan intervene in her individual capacity as an L.L.C. member? | Ryan: as a ~20% member she will gain/lose financially and thus has a direct legal interest. | L.L.C./Streck: members in a manager-managed LLC lack authority; financial stake alone is indirect and insufficient. | Court: No—mere potential effect on member distributions is indirect; member lacks authority to act for L.L.C.; no individual right to intervene. |
| May Ryan intervene derivatively/on behalf of the L.L.C.? | Ryan: receiver and managers are not fully protecting L.L.C.; she sought to defend the L.L.C.’s sole asset and assert additional claims. | L.L.C./Streck: derivative claims must follow statutory procedure; receiver is representing L.L.C.; Holmes exception inapplicable. | Court: No—Ryan did not satisfy derivative-action prerequisites and Holmes’s narrow exception (shareholder intervening where corporation cannot/will not protect interests) does not apply. |
| Could Ryan expand litigation scope (challenge receiver appointment / managers’ breaches) via intervention? | Ryan: sought to challenge receiver appointment and managers’ conduct. | L.L.C./Streck: intervention must be limited to same core issues between original parties (lease/option dispute). | Court: Such claims are beyond the proper scope for intervention here and were not considered. |
Key Cases Cited
- Spear T Ranch v. Knaub, 271 Neb. 578, 713 N.W.2d 489 (Neb. 2006) (standards for intervention and treating intervention orders as final)
- Steinhausen v. HomeServices of Neb., 289 Neb. 927, 857 N.W.2d 816 (Neb. 2015) (member of LLC may not maintain individual claim for harms to the LLC)
- State v. Holmes, 60 Neb. 39, 82 N.W. 109 (Neb. 1900) (narrow exception allowing shareholder intervention where corporation will not or cannot protect its interests)
- Ruzicka v. Ruzicka, 262 Neb. 824, 635 N.W.2d 528 (Neb. 2001) (intervention standards and appellate review)
- Trainum v. Sutherland Assocs., 263 Neb. 778, 642 N.W.2d 816 (Neb. 2002) (procedural posture and jurisdictional considerations regarding interlocutory orders)