Streck, Inc. v. Ryan Family
297 Neb. 773
| Neb. | 2017Background
- Streck, Inc. sued Ryan Family, L.L.C. (the L.L.C.) seeking specific performance of an option to purchase leased real property after Streck claimed it validly exercised the option.
- The L.L.C. is a manager-managed company; two co-managers (Wayne and Connie Ryan) disagreed on litigation strategy, and a court-appointed receiver was appointed to represent the L.L.C. in the suit.
- The receiver filed an answer and counterclaim asserting Streck was in default when it attempted to exercise the option.
- Stacy Ryan (a nonmanaging ~20% member) filed a Complaint in Intervention asserting she should intervene both in her individual capacity and derivatively on behalf of the L.L.C.; she also sought to challenge the receiver appointment and managers’ conduct.
- The district court denied Ryan’s motion to intervene and to continue the summary judgment hearing; Ryan appealed the denial of intervention. The Nebraska Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument (Ryan) | Defendant's Argument (Streck/L.L.C.) | Held |
|---|---|---|---|
| Whether the denial of intervention is appealable | Order denying intervention is final and appealable | Order is final; §25-1315 does not preclude appeal | Denial of intervention is a final, appealable order; §25-1315 does not change prior precedent |
| Whether Ryan can intervene in her individual capacity | As a ~20% member she has a direct legal interest because litigation outcome affects her distributions | Member lacks managerial authority; financial impact is indirect and insufficient | No: a nonmanaging member’s potential reduced distributions is too remote to confer a direct legal interest to intervene individually |
| Whether Ryan can intervene derivatively on behalf of the L.L.C. | L.L.C.’s sole asset is at stake; receiver/ managers are not fully protecting L.L.C. interests | Derivative relief requires statutory procedure; receiver is defending the suit; no showing receiver cannot or will not protect L.L.C. | No: Ryan did not plead facts to show the narrow Holmes exception (corporation wholly unprotected) or follow derivative-action requirements, so she cannot intervene for the L.L.C. |
| Scope of permissible intervention claims | Ryan sought to challenge receiver appointment and allege managers breached the operating agreement | Intervention must involve same core issue between original parties (lease/option dispute) | Claims outside core dispute (challenging receiver or operating agreement breaches) are not proper bases for intervention |
Key Cases Cited
- Ruzicka v. Ruzicka, 262 Neb. 824, 635 N.W.2d 528 (Neb. 2001) (standards on intervention and appellate review of legal questions)
- Spear T Ranch v. Knaub, 271 Neb. 578, 713 N.W.2d 489 (Neb. 2006) (intervention interests; treating intervenor allegations as true when ruling)
- Steinhausen v. HomeServices of Neb., 289 Neb. 927, 857 N.W.2d 816 (Neb. 2015) (members cannot maintain claims for wrongs to LLC in their individual capacity)
- Basin Elec. Power Co-op v. Little Blue N.R.D., 219 Neb. 372, 363 N.W.2d 500 (Neb. 1985) (order denying intervention is final for appeal)
- State v. Holmes, 60 Neb. 39, 82 N.W. 109 (Neb. 1900) (narrow exception allowing shareholder intervention where corporation utterly fails to protect shareholders)