Streck, Inc. v. Ryan Family
297 Neb. 773
| Neb. | 2017Background
- Streck, Inc. sued Ryan Family, L.L.C. seeking specific performance of a lease option to purchase property the L.L.C. owned and leased to Streck; Streck alleged it validly exercised the option and closing did not occur.
- The L.L.C. is manager-managed; co-managers Wayne and Connie Ryan disagreed how to respond, so a receiver was appointed to represent the L.L.C. in the litigation.
- The receiver filed an answer and counterclaim asserting Streck was in default when it attempted to exercise the option.
- Stacy Ryan (a ~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., challenging the receiver’s handling and asserting additional claims (including breach of the operating agreement and challenging the receiver appointment).
- The district court denied Ryan’s motion to intervene and denied her continuance request to conduct additional discovery; Ryan appealed the denial of intervention. The Nebraska Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether denial of intervention is appealable | Ryan assumed the order was appealable; she appealed denial | Streck argued § 25-1315 requires finality language and thus denial may not be final | Court held order denying intervention is a final, appealable order; § 25-1315 does not alter that rule |
| Whether Ryan may intervene individually as an L.L.C. member | Ryan: as a 20% member she has a direct legal interest (financial distributions) and thus may intervene individually | L.L.C./Streck: member lacks authority under operating agreement/LLC Act to act for L.L.C.; financial impact is indirect | Court held no individual right to intervene; member’s possible reduced distributions are an indirect interest insufficient to support intervention |
| Whether Ryan may intervene derivatively/on behalf of the L.L.C. | Ryan: receiver/manager failed to fully protect L.L.C.; intervention on behalf of L.L.C. is needed | L.L.C./Streck: managers (and receiver) are representing L.L.C.; statutory derivative action procedures exist and were not followed; Holmes exception doesn’t apply | Court held Ryan failed to allege facts showing the limited Holmes exception (complete failure to protect corporation) or to meet derivative-action requirements; no right to intervene on L.L.C.’s behalf |
| Whether Ryan could expand scope of litigation via intervention (e.g., challenge receiver or breach of operating agreement) | Ryan sought to litigate receiver appointment and managers’ breach as part of intervention | L.L.C./Streck: intervenor may raise only claims sharing the same core issue as existing parties; those topics are outside lease dispute | Court held intervenor cannot broaden litigation; claims about receiver appointment and operating-agreement breaches are outside the core lease dispute and not proper grounds for intervention |
Key Cases Cited
- Ruzicka v. Ruzicka, 262 Neb. 824 (jurisdiction and intervention standards)
- Basin Elec. Power Co-op v. Little Blue N.R.D., 219 Neb. 372 (order denying intervention is final)
- Spear T Ranch v. Knaub, 271 Neb. 578 (intervention interest requirements)
- Steinhausen v. HomeServices of Neb., 289 Neb. 927 (members cannot sue individually for harms to LLC)
- State v. Holmes, 60 Neb. 39 (limited exception allowing shareholder intervention where corporation utterly fails to protect shareholder interests)
- Freedom Fin. Group v. Woolley, 280 Neb. 825 (distinguishing individual versus corporate claims)
- Trainum v. Sutherland Assocs., 263 Neb. 778 (final order and appellate jurisdiction principles)
- Johnson v. Nelson, 290 Neb. 703 (appellate courts need only reach necessary issues)