Zapata v. Kelly's Carpet, A-16-1172

Background

Zapata, pro se, sued Kelly’s Carpet alleging breach of a subcontract to install flooring for 22 units at Ponderosa (owned by Central Nebraska Housing Corp.).
Original complaint alleged a December 8, 2015 acceptance of Kelly’s Carpet’s proposal; Kelly’s Carpet delivered materials for only 11 units and later sought a higher price to finish 22 units.
Kelly’s Carpet moved to dismiss under Neb. Ct. R. Pldg. § 6-1112(b)(1), arguing Zapata lacked standing and was not the real party in interest because the sales/ship-to terms referenced Ponderosa/Central.
The district court allowed Zapata to amend; his amended complaint attached the proposal (showing Ponderosa as buyer), an email to Zapata’s daughter (Cederburg) saying “We are all set up here,” and a subcontract between Zapata and Central.
After evidentiary hearings (affidavits and Secretary of State record), the court found Zapata failed to show a personal contract with Kelly’s Carpet, concluded he lacked standing as the real party in interest, and dismissed the amended complaint without further leave to amend.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the district court converted the Rule 12(b)(1) motion into summary judgment without notice	Zapata: court effectively treated the motion as summary judgment and deprived him of opportunity to present documents	Kelly’s Carpet: any consideration of outside materials was proper and harmless; court treated evidence as part of jurisdictional inquiry	Court: No conversion occurred; receipt of evidence on standing under Rule 12(b)(1) is permitted without turning motion into summary judgment
Whether Zapata is the real party in interest / has standing to sue in his own name	Zapata: he personally accepted the proposal and contracted with Kelly’s Carpet; attached proposal and email show agreement	Kelly’s Carpet: proposal and shipment were to Ponderosa/Central, not to Zapata; Zapata lacks a personal contractual interest	Court: Zapata failed to show any contract made with him personally; he lacked standing because claims belong to Central/Ponderosa
Whether a layperson may represent a corporation/bring claims on behalf of an entity	Zapata: (implicitly) he may pursue relief tied to his ownership interest without counsel	Kelly’s Carpet: a corporation (Central/Ponderosa) must be represented by counsel; Zapata cannot proceed pro se on entity’s claims	Court: Confirmed rule that entities must be represented by counsel; Zapata cannot prosecute corporate claims pro se
Whether dismissal without further leave to amend was proper	Zapata: district court erred by denying further amendment and discovery	Kelly’s Carpet: Zapata already had opportunity to amend and failed to cure jurisdictional defect	Court: Affirmed dismissal without further leave because prior amendment failed to cure lack of standing; further amendment would be futile

Key Cases Cited

In re Invol. Dissolution of Wiles Bros., 285 Neb. 920 (affirming that lack of standing is a Rule 12(b)(1) subject-matter jurisdiction defect and that evidentiary hearings on jurisdictional fact issues are permissible)
Sherman T. v. Karyn N., 286 Neb. 468 (de novo review standard for motions to dismiss; accept complaint allegations and draw inferences for nonmoving party)
RFD-TV, LLC v. Wildopenwest Fin., LLC, 288 Neb. 318 (affidavits may be considered on certain Rule 12(b) challenges without converting to summary judgment)
Citizens Opposing Indus. Livestock v. Jefferson Cty., 274 Neb. 386 (evidentiary hearing permitted where Rule 12(b)(1) raises factual challenges)
Harris v. P.A.M. Transp., Inc., 339 F.3d 635 (8th Cir.) (court may consider matters outside pleadings on jurisdictional challenge without converting to summary judgment; appellate review of factual findings for clear error)
Applied Underwriters v. S.E.B. Servs. of New York, 297 Neb. 246 (party must assert its own rights; cannot rest claim on third-party rights for standing)
Stevens v. Downing, Alexander, 269 Neb. 347 (standing/real-party-in-interest inquiry focuses on whether the plaintiff has legal or equitable interest in the subject matter)
Zapata v. McHugh, 296 Neb. 216 (corporations and distinct business entities must be represented by counsel; laypersons may not appear pro se on behalf of an entity)
Brockhaus v. Lambert, 259 Neb. 160 (appellate courts need not address unnecessary issues)