Strohmyer v. Papillion Family Medicine, 296 Neb. 884

Three doctors (Strohmyer, Naegele, Mantler) formed Papillion Family Medicine, P.C. (PFM) in 2000 as a professional corporation; bylaws included a disputed "Buy Out" clause (October 16, 2000) that was unsigned or inconsistently executed.
Strohmyer gave notice he would leave effective March 31, 2014, then sued PFM alleging failure to buy out his shares, unpaid compensation, concealment of funds, diversion of assets, breach of fiduciary duties, and violations of the Nebraska Wage Payment and Collection Act.
PFM counterclaimed, alleging Strohmyer failed to attend director meetings, violated an oral obligation to work 4 days/week, accepted Medicaid patients contrary to a corporate decision, and was unjustly enriched.
The district court held PFM did not meet Nebraska Professional Corporation Act formalities, treated PFM as a business corporation, fixed the fair value of Strohmyer’s stock at roughly $104,720, awarded Strohmyer $9,389.27 unpaid compensation for March 2014, denied wage-act remedies, found no goodwill, and awarded PFM $30,673 for Medicaid-related fiduciary breach.
On appeal the Nebraska Supreme Court affirmed most valuation, goodwill, and wage-act rulings, but reversed the award to PFM for the Medicaid claim as PFM had ratified Strohmyer’s conduct by long inaction and remanded for further proceedings consistent with the opinion.

Issue	Plaintiff's Argument (Strohmyer)	Defendant's Argument (PFM/Naegele/Mantler)	Held
Fair value of shares / asset valuation	Trial court miscalculated share value; should rely on plaintiff’s expert and not average overlapping valuations	Trial court’s adjustments (favoring some defendant valuations) were reasonable	Court affirmed fair value (~$104,720); found trial numeric errors but no reversible error
Goodwill / intangible value	Practice had intangible assets worth substantial value (expert: $165,000)	No marketable goodwill because patients/staff left with departing physician	Court held no compensable goodwill because value depended on Strohmyer’s continued presence
Wage Payment Act coverage (employee status)	Entitled to wages, director fees, and attorney fees under Nebraska Wage Payment & Collection Act	Physicians were not employees (set own schedules, no employment contracts)	Court held physicians (including Strohmyer) were not employees under the Act; no wage-act remedies
Fiduciary breach for treating Medicaid patients	Either authorized or acquiesced; defendants ratified conduct by inaction	Strohmyer breached fiduciary duty by treating Medicaid patients after corporate decision to stop	Court reversed district-court award to PFM: found defendants had knowledge and effectively ratified Strohmyer’s conduct, so no recoverable breach

Trieweiler v. Sears, 268 Neb. 952 (2004) (directors/officers owe fiduciary duties to corporation and shareholders)
Taylor v. Taylor, 222 Neb. 721 (1986) (professional goodwill is compensable only if marketable independent of a particular practitioner)
Detter v. Miracle Hills Animal Hosp., 269 Neb. 164 (2005) (existence and value of professional goodwill is a question of fact)
Thomas v. Marvin E. Jewell & Co., 232 Neb. 261 (1989) (treatment of client files and who retains clients affects goodwill allocation)
D & J Hatchery, Inc. v. Feeders Elevator, Inc., 202 Neb. 69 (1978) (unauthorized corporate acts may be ratified by the corporation through silence and inaction)
Bellino v. McGrath North, 274 Neb. 130 (2007) (directors/officers should refrain from acts inconsistent with corporate duties; partners owe utmost good faith)
First Baptist Church v. State, 178 Neb. 831 (1965) (market value testimony need not be from experts exclusively; lay opinion allowed if witness has adequate knowledge)
Rauscher v. City of Lincoln, 269 Neb. 267 (2005) (appellate de novo review in equitable actions gives weight to trial court credibility findings)
In re Estate of Stuchlik, 289 Neb. 673 (2014) (existence and scope of fiduciary duties are legal questions for the court)