Justia Nebraska Supreme Court Opinion Summaries

Articles Posted in Business Law

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Ginger Cove Common Area Company sued Scott Wiekhorst for unpaid assessments. Wiekhorst filed a counterclaim alleging that Ginger Cover violated its fiduciary duty. After a bench trial, the district court entered judgment against Wiekhorst. Wiekhorst appealed, challenging an order entered two months earlier that overruled his motion to vacate or set aside an order of sanctions. The Supreme Court affirmed, holding (1) Wiekhorst properly waited until final judgment to appeal; but (2) because Wiekhorst failed to present a record to support his assigned error, this Court affirms the lower court’s decision regarding that error. View "Ginger Cove Common Area Co. v. Wiekhorst" on Justia Law

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Plaintiff, as an individual and as an assignee, brought this action pro se to recover for wrongs allegedly committed against the assignor, a limited liability corporation (LLC). The district court dismissed the action, concluding (1) Plaintiff was attempting to litigate “the claim of another which has merely been assigned to him” and that Plaintiff was therefore engaging in the unauthorized practice of law because an attorney is required when the action is derived from a wrong to an LLC; and (2) therefore, the pleadings were a nullity. The Supreme Court affirmed, holding (1) an assignment of a distinct business entity’s cause of action to an assignee who then brings such suit requires that the assignee must be represented by counsel and cannot bring such action pro se; (2) by bringing the assigned claim, Plaintiff engaged in the unauthorized practice of law; and (3) therefore, Plaintiff’s filings were a nullity as a matter of law. View "Zapata v. McHugh" on Justia Law

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A holdover franchisee is a franchisee who receives the benefits of an expired franchise agreement but fails to make payments to the franchisor per the agreement. Donut Holdings, Inc. (DHI) was the Nebraska parent corporation of LaMar’s Donuts International, Inc. (LaMar’s). LaMar’s was a franchise company with nine franchisees, including one in Springfield Missouri that was purchased by Risberg Stores, LLC, a Missouri entity, in 2002. At the time of the purchase, the store was operating under the terms of a 1994 franchise agreement entered into by Risberg Store’s predecessor. DHI filed a claim against Risberg Stores for royalty and marketing fees accruing after June 2009. Risberg Stores argued that it did not owe DHI fees because the parties’ written agreement ended in 2004. The district court ruled in favor of Risberg Stores, concluding that the franchise agreement ended in June 2009 and that DHI was not entitled to any payments thereafter. The Supreme Court affirmed, holding (1) DHI, the franchisor, did not have a breach of contract claim against Risberg Stores, the holdover franchisee; and (2) therefore, DHI was not entitled to fees under the contract. View "Donut Holdings, Inc. v. Risberg" on Justia Law
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This appeal was the third appeal from a judicial dissociation of four partners from a family agricultural partnership. The partnership had assets consisting primarily of real estate. At issue before the Supreme Court was whether the district court, in recalculating the buyout distributions, correctly implemented the Court’s mandate from the second appeal. The Supreme Court affirmed the district court’s judgment, holding that the district court did not err in (1) excluding certain evidence; (2) calculating the buyout distribution on remand; and (3) ordering that such distributions be paid to the clerk of the district court. View "Robertson v. Jacobs Cattle Co." on Justia Law
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DMK Biodiesel, LLC and Lanoha RVBF, LLC (collectively, Plaintiffs) brought an action against Renewable Fuels Technology, LLC and several individual defendants (collectively, Defendants), alleging that Defendants violated violated Neb. Rev. Stat. 8-1118(1) by selling a security by means of an untrue statement of material fact. Specifically, Plaintiffs alleged that Defendants, acting in concert as members and the manager of Republican Valley Biofuels, LLC (RVBF), made false oral representations and omissions in connection with RVBF and a proposed biodiesel facility that induced their investment. The district court granted Defendants’ motion to dismiss. The Supreme Court reversed because, in granting the motion to dismiss, the district court considered matters outside the pleadings without conducting an evidentiary hearing. On remand, the district court granted summary judgment for Defendants. The Supreme Court reversed, holding that the district court erred in entering summary judgment with respect to Plaintiff’s section 8-1118(1) claim because there remained genuine issues of material fact precluding summary judgment. View "DMK Biodiesel, LLC v. McCoy" on Justia Law

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This case involved an intrachurch dispute between the members of Bethel Lutheran Church (Bethel), a nonprofit corporation organized under Nebraska law. The Bethel congregation voted by at least two-third majority vote to disaffiliate from the Evangelical Lutheran Church of America (ELCA) and instead sought to affiliate with the Lutheran Congregation in Mission for Christ. Bethel’s governing documents were subsequently amended, including its constitution. The minority members filed suit seeking a declaration that the majority members’ efforts in changing affiliation and adopting new corporate governance documents were prohibited and void because they were not given permission to do so by the ELCA. The district court dismissed the action for lack of subject matter jurisdiction. The Supreme Court reversed, holding that this case did not involve a doctrinal dispute but, rather, simply involved the interpretation and application of church governance documents and could be decided using neutral principles of law. Remanded. View "Aldrich v. Nelson" on Justia Law

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Marion’s Quality Services, Inc. was a Nebraska corporation doing business as It’s a Kidz World Child Care Center (Center) and as Deb’s Learning Place Family Child Care Home II (Home). In 2012, the Nebraska Department of Health and Human Services (DHHS), a state agency responsible for the enforcement of the Child Care Licensing Act, revoked Marion’s licenses to operate the Center and the Home. Marion’s submitted an administrative appeal, and the cases were consolidated. After an administrative appeal hearing, DHHS upheld the revocation of the license for the Home but reversed the revocation of the Center’s license. In lieu of revocation of the license, DHHS imposed an alternative penalty in the form of additional probation and a civil penalty. The Supreme Court affirmed, holding (1) the district court’s ruling upholding DHHS’ findings regarding the Center’s license was supported by competent evidence and was not arbitrary, capricious, or unreasonable; and (2) the district court’s ruling upholding DHHS’ findings regarding the Home’s license was supported by competent evidence, conformed to the law, and was not arbitrary, capricious, or otherwise unreasonable. View "Marion’s Quality Servs., Inc. v. Neb. Dep’t of Health & Human Servs." on Justia Law

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Plaintiff was a home inspector and the sole member of an LLC. Two years after Plaintiff inspected a house of the client of a real estate agent (“Agent”) affiliated with a brokerage firm (“Company”), the Agent sent an e-mail to the Company’s real estate agents and employees stating that Plaintiff was a “total idiot.” Plaintiff sued the Agent and the Company, alleging libel, false light invasion of privacy, and tortious interference with a business relationship or expectancy. The district court granted summary judgment for Defendants, concluding that a qualified privilege protected the e-mail and that the evidence failed to show that Plaintiff had a business relationship or expectancy with either the Agent or the Company. Defendant attempted to appeal for both himself and the LLC. The Supreme Court affirmed in part and reversed in part, holding (1) the district court did not err in its judgment regarding the claims asserted by Plaintiff in his personal capacity; and (2) the portion of the judgment as it related to the LLC must be vacated because, where Plaintiff was not licensed to practice law in Nebraska, his appeal for the LLC was a nullity. View "Steinhausen v. HomeServices of Neb., Inc." on Justia Law

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Martin Linscott, Rolf Shasteen and Tony Brock formed the law firm Shasteen, Linscott & Brock (SLB). Linscott drafted a proposed shareholder agreement contemplating that if a shareholder left the firm, he would receive one-third of all fees from existing in-process cases. After Linscott left the firm, Linscott brought suit individually and derivatively on behalf of SLB against Shasteen and Brock seeking to recover one-third of attorney fees recovered from the SLB cases that existed at the time he withdrew as a shareholder. The district court ultimately concluded (1) the agreement was unenforceable under the statute of frauds; (2) the “unfinished business rule” had no application to this case; and (3) therefore, Linscott was not owed any attorney fees. The Supreme Court reversed, holding that the district court erred in (1) determining that the absence of any definition of the term “net fees” prevented the formation of an implied in fact contract; and (2) determining that the statute of frauds rendered any implied contract void. Remanded. View "Linscott v. Shasteen" on Justia Law

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Appellants - four of the partners in the Jacobs Cattle Company partnership - sought dissolution and liquidation of the partnership. Appellees - the partnership and the remaining partners - filed a counterclaim seeking dissociation of Appellants instead of dissolution. The district court dissociated Appellants and ordered the partnership to buy out their interests. In a previous appeal, the Supreme Court held that judicial dissociation was proper but determined that the district court erred in calculating the proper distributions to buy out the dissociated partners. On remand, the district court determined that the profit from the hypothetical capital gain should be credited to the partners’ accounts in accordance with their capital percentages, rather than the income percentages. This resulted in a lower buyout distribution to the dissociated partners. The Supreme Court reversed, holding that the district court erred in calculating the distributions required for the buyout. Remanded. View "Robertson v. Jacobs Cattle Co." on Justia Law
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