Streck, Inc. v. Ryan Family
297 Neb. 773
Neb.2017Background
- Streck, Inc. sued Ryan Family, L.L.C. (LLC) seeking specific performance of an option to purchase LLC-owned real property, alleging the LLC breached the lease after Streck properly exercised the option.
- The LLC is manager-managed; management authority is vested in co-managers Wayne and Connie Ryan under the operating agreement.
- Co-managers disagreed on how to respond; they jointly moved for and the court appointed a receiver to represent the LLC in the litigation.
- The receiver answered and counterclaimed for the LLC, asserting Streck was in default when it attempted to exercise the option.
- Stacy Ryan (a ~20% nonmanaging member) filed a Complaint in Intervention (seeking both individual and derivative/LLC intervention), asserting the receiver and managers were not fully protecting LLC interests. The district court denied her motion to intervene and to continue summary judgment; she appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether order denying intervention is appealable | Ryan: the denial is final and appealable | Streck: § 25-1315 requires express language before orders disposing of fewer than all claims are final | Court: Order denying intervention is a final, appealable order; § 25-1315 does not supersede prior final-order rule for intervention denials |
| Whether Ryan may intervene in her individual capacity | Ryan: as a 20% member she has direct financial interest and will gain/lose from outcome | LLC/Streck: nonmanaging members lack authority; possible distribution changes are indirect/insufficient | Court: No—member’s potential reduced distributions are indirect; no direct legal interest to intervene individually |
| Whether Ryan may intervene on behalf of the LLC (derivatively) without a derivative suit/demand | Ryan: LLC’s sole asset is at stake and receiver/ managers aren’t protecting LLC; she sought to intervene for LLC’s protection | LLC/Streck: derivative rights governed by LLC Act; member must follow derivative-action procedures or show futility; Holmes exception limited | Court: No—Holmes exception inapplicable; Ryan did not plead a derivative action nor sufficiently allege receiver utterly failed to protect LLC |
| Whether Ryan could expand litigation scope (challenge receiver/manager conduct) via intervention | Ryan: may challenge receiver appointment and managers’ conduct as part of intervention | LLC/Streck: intervention confined to issues core to existing dispute (lease/option); challenges to receiver/operating agreement are outside scope | Court: No—intervenor’s claims must involve same core issue; challenges to receiver/operating agreement exceed scope and cannot be basis to intervene |
Key Cases Cited
- Spear T Ranch v. Knaub, 271 Neb. 578 (Neb. 2006) (describing the standard for intervention and treating orders denying intervention as final)
- Steinhausen v. HomeServices of Neb., 289 Neb. 927 (Neb. 2015) (members cannot sue individually for wrongs to the LLC; such claims are derivative)
- State v. Holmes, 60 Neb. 39 (Neb. 1900) (very limited exception allowing shareholder intervention where corporation utterly fails to protect shareholders)
- Basin Elec. Power Co-op v. Little Blue N.R.D., 219 Neb. 372 (Neb. 1985) (earlier Nebraska precedent treating intervention-denial orders as final)