Streck, Inc. v. Ryan Family
297 Neb. 773
| Neb. | 2017Background
- Streck, Inc. sued Ryan Family, L.L.C. seeking specific performance of an option to purchase real estate under a lease; Streck claimed it validly exercised the option and closing did not occur.
- The L.L.C. is member-managed by a management board (co-managers Wayne and Connie Ryan) and its sole asset is the leased property; a disagreement between co-managers led them to request a receiver to represent the L.L.C. in the litigation.
- A court appointed a receiver; the receiver answered and counterclaimed that Streck was in default when it tried to exercise the option.
- Stacy Ryan (a ~20% L.L.C. member) filed a Complaint in Intervention seeking to intervene personally and derivatively for the L.L.C., alleging the receiver and managers were not adequately protecting L.L.C. interests and seeking to challenge the receiver appointment.
- The district court denied Ryan’s motion to intervene and refused to continue the summary-judgment proceedings; Ryan appealed the denial of intervention.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the denial of intervention is appealable | Ryan: order denying intervention is final and appealable | Streck: § 25-1315 requires express language before an order is final | Court: Denial of intervention is a final, appealable order; § 25-1315 does not alter that rule |
| Whether Ryan may intervene in her individual capacity | Ryan: as a 20% member she will gain/lose financially and has a direct legal interest | Opposing parties: membership/financial interest is indirect; management/control lies with managers/receiver | Court: No — member’s indirect financial interest insufficient; LLC Act and operating agreement vest management in managers |
| Whether Ryan may intervene derivatively on behalf of the L.L.C. | Ryan: receiver/manager conflict left L.L.C. interests insufficiently protected; seeks to act for L.L.C. | Opposing parties: receiver was appointed and is defending the suit; any derivative remedy must follow LLC Act procedures | Court: No — Holmes exception inapplicable; Ryan did not allege receiver wholly failed to protect L.L.C., and she did not pursue proper derivative-action procedures |
| Scope of permissible issues for an intervenor | Ryan: sought to challenge receiver appointment and managers’ conduct | Opposing parties: intervention must involve same core issues as original suit (breach of lease/option) | Court: Denied — intervenor may only raise claims that sustain or oppose original parties’ contentions; challenges to receiver/operating agreement exceed scope |
Key Cases Cited
- Ruzicka v. Ruzicka, 262 Neb. 824, 635 N.W.2d 528 (2001) (intervention legal standards and appellate review)
- Basin Elec. Power Co-op v. Little Blue N.R.D., 219 Neb. 372, 363 N.W.2d 500 (1985) (orders denying intervention are final for appeal)
- Spear T Ranch v. Knaub, 271 Neb. 578, 713 N.W.2d 489 (2006) (standards for intervention and treating intervenor allegations as true)
- Steinhausen v. HomeServices of Neb., 289 Neb. 927, 857 N.W.2d 816 (2015) (members cannot maintain individual claims for harms to the LLC)
- State v. Holmes, 60 Neb. 39, 82 N.W. 109 (1900) (limited exception allowing shareholder intervention when corporation wholly fails to protect shareholder interests)
- Trainum v. Sutherland Assocs., 263 Neb. 778, 642 N.W.2d 816 (2002) (final order and jurisdiction principles)