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 leased real property, alleging the L.L.C. breached the lease by failing to close after Streck exercised the option.
- The L.L.C. is a manager-managed LLC with two co-managers (Wayne and Connie Ryan); its only asset is the leased property. A receiver was appointed at the co-managers’ joint request to represent the L.L.C. in the litigation due to a management conflict.
- The receiver answered and counterclaimed on behalf of the L.L.C., alleging Streck was in default when it attempted to exercise the option.
- Stacy Ryan (a non-managing ~20% member) filed a Complaint in Intervention seeking to intervene on her own behalf and derivatively on behalf of the L.L.C.; she also sought access to discovery and a continuance of pending summary judgment proceedings.
- The district court denied Ryan’s motion to intervene and her motion to continue; Ryan appealed the denial of intervention. The Nebraska Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument (Ryan) | Defendant's Argument (Streck/L.L.C./Receiver) | Held |
|---|---|---|---|
| Whether Ryan has a right to intervene in her personal capacity | As a ~20% LLC member she will gain/lose financially from outcome, so she has a direct legal interest to intervene | Membership interest alone does not create a direct legal interest when management authority rests with managers | Denied — membership and potential reduced distributions are indirect/insufficient to support intervention in own right |
| Whether Ryan may intervene on behalf of the LLC | She claims the receiver and managers are not fully protecting the LLC’s interests and she should defend or advance additional claims | The receiver was appointed to represent the LLC and is actively defending; managers’ powers are vested in managers per operating agreement and LLC Act | Denied — no showing the LLC cannot or will not protect its interests; Holmes exception inapplicable |
| Whether an order denying intervention is appealable | Ryan argued maybe not due to § 25-1315 requirements | Precedent treats denial of intervention as a final, appealable order; § 25-1315 does not alter that rule for interventions | Held appealable; jurisdiction proper |
| Whether Ryan’s proposed intervention could expand scope of litigation (e.g., challenge receiver appointment or managers) | Ryan sought to challenge receiver appointment and managers’ conduct as part of intervention | Claims outside core lease/purchase dispute are not proper in intervention; intervenor may raise only issues that sustain or oppose original parties’ contentions | Held improper — those claims exceed permissible scope for intervention |
Key Cases Cited
- Steinhausen v. HomeServices of Neb., 289 Neb. 927 (2015) (members cannot assert claims personal to them for harms to the LLC; such claims belong to the LLC)
- State v. Holmes, 60 Neb. 39 (1900) (limited exception allowing shareholder intervention when corporation cannot or will not protect corporate interests)
- Spear T Ranch v. Knaub, 271 Neb. 578 (2006) (intervention standards and requirement of alleging direct legal interest)
- Ruzicka v. Ruzicka, 262 Neb. 824 (2001) (intervention and appellate review principles)
- Freedom Fin. Group v. Woolley, 280 Neb. 825 (2010) (distinguishing individual claims from corporate/LLC claims; duty owed to entity vs. members)