Justia Nebraska Supreme Court Opinion Summaries

Two individuals, Kellogg and Mathiesen, formed a limited liability company (LLC) to provide in-home personal care services. Over time, disputes arose regarding ownership interests, capital contributions, and management of the company. The parties executed several agreements, including a 2017 contract transferring Mathiesen’s ownership to Kellogg due to his ineligibility as a Medicaid provider, and a 2019 contract in which Kellogg sold Mathiesen a 50% interest in the LLC’s assets. Allegations of mismanagement, misuse of company funds, and inappropriate conduct by Mathiesen led to litigation between the parties, including derivative claims and counterclaims. Kellogg also sought judicial dissolution of the LLC, citing unlawful conduct and irreconcilable differences.The District Court for Douglas County held a bench trial and found both Kellogg and Mathiesen to be 50-percent co-owners or managers of the LLC. The court denied all derivative claims and counterclaims, citing unclean hands by both parties. However, the court granted Kellogg’s application for dissolution, finding Mathiesen’s conduct oppressive and fraudulent, and ordered the appointment of a receiver to oversee the dissolution and possible sale of the company. Mathiesen appealed both the judgment and the receiver’s appointment.The Nebraska Supreme Court reviewed the consolidated appeals, limiting its review to plain error due to deficiencies in Mathiesen’s appellate briefing. The court determined it had jurisdiction over both appeals and addressed Mathiesen’s argument that Kellogg lacked standing. The court held that Kellogg remained a member of the LLC at the time of filing her derivative action and thus had standing. Finding no plain error in the record, the Nebraska Supreme Court affirmed the district court’s judgment and the order appointing a receiver. View "Kellogg v. Mathiesen" on Justia Law

A pathologist who was an officer, director, shareholder, and employee of a closely held professional corporation was subject to annual employment agreements and the corporation’s bylaws, which required shareholders to be employed by the corporation. The employment agreement allowed for termination “for any reason or no reason,” and the bylaws provided that a shareholder who ceased to be an employee would have their shares redeemed at book value. After several incidents involving the pathologist’s performance, the board voted not to renew his employment agreement. As a result, his employment ended, and the corporation sought to redeem his shares at book value, as specified in the bylaws.The pathologist filed suit in the District Court for Lancaster County, alleging breach of fiduciary duty, shareholder oppression justifying judicial dissolution, and seeking declaratory relief regarding the value of his shares and the enforceability of a noncompetition provision. The corporation moved for summary judgment. The district court granted summary judgment in part, dismissing claims related to termination of employment and the noncompetition provision, but allowed discovery and further proceedings on the valuation and redemption of shares. After additional discovery, the corporation again moved for summary judgment. The district court granted summary judgment on the remaining claims, finding no genuine issue of material fact and that the corporation had acted in accordance with the agreements. The court also denied the pathologist’s motions to compel further discovery and to continue the summary judgment hearing.On appeal, the Nebraska Supreme Court reviewed the grant of summary judgment de novo and the discovery rulings for abuse of discretion. The court held that the pathologist had no reasonable expectation of continued employment given the clear terms of the agreements he signed, and that the corporation’s actions in redeeming his shares at book value did not constitute a breach of fiduciary duty or shareholder oppression. The court affirmed the district court’s judgment in all respects. View "Noel v. Pathology Med. Servs." on Justia Law

A dispute arose after Howard Misle, acting as lender, provided funds to Abram, LLC, under a promissory note to support the company’s real estate ventures. The note, initially executed in 2004 and later amended, allowed advances up to $5 million at 3% interest. In 2007, after selling a property known as Park Place, Howard was paid sums from the sale proceeds, including a payoff for the note and reimbursement for advances. Later, Howard continued to make advances to Abram for new properties in Pennsylvania. In 2020, Howard demanded repayment on the note, and when Abram did not pay, he filed suit. Abram responded by asserting a defense of recoupment, claiming Howard had been overpaid in 2007, and also filed counterclaims for breach of fiduciary duty and fraudulent concealment.The District Court for Lancaster County granted summary judgment for Howard on the recoupment defense, finding the 2007 payment was a separate transaction from the advances Howard sought to recover. After a bench trial, the court also found that the statute of limitations barred Abram’s counterclaims, concluding that Abram’s agents had knowledge of the relevant facts and that the discovery rule did not toll the limitations period. The court adopted Howard’s calculation of interest on the note without an evidentiary hearing, overruling Abram’s objections.The Nebraska Supreme Court reviewed the case de novo. It held that Abram’s recoupment defense regarding the alleged 2007 overpayment should not have been dismissed on summary judgment, as it arose from the same transaction as Howard’s claim on the note. However, the court affirmed summary judgment for Howard on recoupment related to a personal loan to a third party. The court also found that the statute of limitations was tolled for Abram’s breach of fiduciary duty counterclaim but affirmed the dismissal of the fraudulent concealment claim. The case was affirmed in part, reversed in part, and remanded for further proceedings, including a determination of whether interest should be calculated as simple or compound. View "Konecne v. Abram, LLC" on Justia Law

After a storm damaged a warehouse owned by Distribution, Inc., D&M Roofing and Siding, Inc. performed a free inspection and damage report. The parties entered into a written agreement stating that D&M would perform repair work approved by Distribution’s insurer, with the contract price to equal the total claim amount agreed to by the insurer. The agreement included a cancellation fee provision, stating that if Distribution did not engage D&M to complete the building after insurance approval, Distribution would pay D&M a fee equal to 20% of the proceeds paid by the insurer for work done by D&M. Distribution ultimately hired a different contractor for the repairs, and D&M sued for breach of contract and unjust enrichment.The District Court for Lancaster County first found the contract enforceable and that Distribution had breached it, but determined D&M was not entitled to damages under the cancellation fee provision because D&M had performed no repair work. The court also granted summary judgment to Distribution on the unjust enrichment claim. In subsequent summary judgment proceedings, D&M attempted to pursue an alternative theory of damages, but the district court refused to consider it, relying on D&M’s earlier concession that its damages were limited to those under the cancellation fee provision. The district court later issued a final order dismissing D&M’s claims in full.On appeal, the Nebraska Supreme Court reviewed the district court’s grant of summary judgment de novo. The court held that D&M was not entitled to damages under the cancellation fee provision, as the contract unambiguously limited the fee to work actually performed by D&M. The court further held that D&M was precluded from seeking other damages due to its earlier concession, applying the invited error doctrine. The judgment of the district court was affirmed. View "D & M Roofing & Siding, Inc. v. Distribution, Inc." on Justia Law

A bank holding company sued two guarantors for breach of their personal guaranties on a $1.5 million loan extended to an entity they were involved with. The guarantors argued that the bank holding company lacked standing to sue because there was no written assignment of the loan documents from the original lender, a bank, to the holding company. The district court admitted the written assignment into evidence and found that the holding company had standing. The court also granted summary judgment in favor of the holding company, finding the guarantors liable under the terms of their guaranties.The guarantors had counterclaimed against the holding company and other parties, alleging fraudulent concealment, fraudulent misrepresentation, civil conspiracy, and breach of the implied covenant of good faith and fair dealing. They argued that the bank and its president conspired with a now-deceased individual to conceal the financial instability of the individual’s entities, which led to the guarantors entering into the guaranties. The district court found no genuine issue of material fact regarding these counterclaims and granted summary judgment for the holding company.The guarantors also attempted to file a document in which the personal representative of the deceased individual’s estate confessed judgment against the estate. The district court ruled this filing a nullity, as the personal representative’s appointment had been terminated before the filing, and he was not authorized to act on behalf of the estate.The Nebraska Supreme Court affirmed the district court’s rulings, holding that the holding company had standing, the guarantors were liable under the guaranties, and the counterclaims were unsupported by evidence. The court also upheld the ruling that the purported confession of judgment was a nullity. View "Henderson State Co. v. Garrelts" on Justia Law

A resident taxpayer of Omaha challenged the City of Omaha's contract for residential solid waste collection, alleging it was an illegal expenditure of public funds and violated the Integrated Solid Waste Management Act (ISWMA). The contract, awarded to FCC Environmental Services Nebraska, LLC (FCC-Nebraska), included a yard waste sticker program where residents could purchase stickers for additional yard waste disposal.The district court for Douglas County granted summary judgment in favor of the City and FCC-Nebraska, dismissing the taxpayer's claims. The court found that the City acted within its discretion in seeking a postopening bid clarification from FCC-Spain (the original bidder) to standardize the unit price for yard waste stickers, which did not materially alter the bid or give FCC an unfair advantage. The court also determined that the yard waste sticker fee charged by FCC did not require voter approval under § 13-2020(4) of the ISWMA, as the fee was charged by and paid to the contractor, not the City.The Nebraska Supreme Court affirmed the district court's decision. It held that the City did not act in bad faith or with favoritism in seeking the bid clarification and that the clarification did not result in a material variance from FCC's original bid. The court also agreed that the voter approval requirement in § 13-2020(4) did not apply to the yard waste sticker fee, as it was governed by § 13-2020(5), which allows contractors to charge service rates without voter approval. The court concluded that the district court did not abuse its discretion in denying the taxpayer's motion to amend the complaint to add a new theory of invalidity based on the identity of the contracting party. View "Johnson v. City of Omaha" on Justia Law

The case involves a dispute where Pranay Bajjuri and others (appellees) sued Anand Karney, Sudha Karney (appellants), and others for unjust enrichment, fraud, and civil conspiracy. The appellees alleged that the appellants fraudulently induced them to invest in various limited liability companies (LLCs) for purchasing and operating rental properties, but the appellants diverted the investments for personal gain. The appellants failed to produce financial and organizational documents related to the LLCs during discovery, leading to the current appeal.The District Court for Douglas County issued a scheduling order for discovery and trial. Despite repeated requests and a court order to compel, the appellants did not produce the required documents. The appellees filed a motion for sanctions, seeking default judgment and attorney fees. The district court found that the appellants had repeatedly violated discovery rules and had been previously warned of sanctions. The court granted the motion for sanctions, entering a default judgment of $2,201,385.82 and awarding attorney fees of $180,645.68 against the appellants.The Nebraska Supreme Court reviewed the case and upheld the district court's decision. The court found that the appellants had frustrated the discovery process and failed to comply with the court's order to compel. The court determined that the appellants, as members and managers of the LLCs, had the ability to obtain and produce the required documents but did not do so. The court concluded that the sanctions of default judgment and attorney fees were appropriate given the appellants' inexcusable recalcitrance and history of discovery abuse. The Nebraska Supreme Court affirmed the district court's orders, finding no abuse of discretion. View "Bajjuri v. Karney" on Justia Law

Sidney and Brian Harchelroad, officers of Harchelroad Motors, Inc. (HMI), obtained loans from Waypoint Bank and Western States Bank, signing promissory notes individually and as officers. Sidney and Brian were accommodation parties, meaning they did not personally benefit from the loan proceeds. Sidney died in 2018, and his wife, Carol, was appointed as personal representative of his estate. Waypoint and Western filed claims in Sidney’s estate for unpaid promissory notes, which were allowed. Brian also filed a contingent claim against Sidney’s estate, stating he would seek contribution if he paid more than his share of the debts. Brian died in 2019, and his wife, Michelle, was appointed as personal representative of his estate.Waypoint and Western filed claims in Brian’s estate. Michelle, individually, paid the banks and took assignments of their rights. She then sought contribution from Sidney’s estate for one-half of the amounts paid. The county court largely granted her request, finding that the notes were not extinguished by her payments or the assignments.The Nebraska Supreme Court reviewed the case. It held that the notes were not extinguished by the judgments against Brian or by Michelle’s payments, as the agreements with the banks were assignments, not payments in full. The court affirmed the county court’s decision, requiring Sidney’s estate to pay Michelle, individually, $459,559.51 for the Waypoint note and $291,263.20 for the Western note, and $300,000 to Brian’s estate for his payments to Western. The court found that Michelle, as an assignee, had the right to seek contribution from Sidney’s estate, and that the proportionate share was correctly determined as one-half, given the joint and several liability of Sidney and Brian. View "In re Estate of Harchelroad" on Justia Law

Phillip and Jodi Peterson hired Brandon Coverdell Construction, Inc. (BCC) to perform work on their home following a hailstorm. The Petersons were dissatisfied with the quality of BCC's work, while BCC was unhappy with the Petersons' partial payment. Both parties accused each other of breaching their written agreement and filed lawsuits in the county court. The county court ruled in favor of BCC, finding that the Petersons committed the first material breach.The Petersons appealed to the District Court for Douglas County but failed to file a statement of errors. They obtained a continuance to amend the bill of exceptions in the county court. The district court eventually found that the county court had committed plain error by entering judgment in favor of BCC, concluding that the written agreement was an unenforceable illusory contract. BCC then appealed to the Nebraska Supreme Court.The Nebraska Supreme Court reviewed the case and found that the district court erred in considering the supplemental bill of exceptions, which was not properly part of the record. The Supreme Court also determined that the county court did not commit plain error. The county court's decision to focus on the issues presented by the parties, rather than the enforceability of the contract, did not result in damage to the integrity, reputation, or fairness of the judicial process. Consequently, the Nebraska Supreme Court reversed the district court's order and remanded the case with directions to affirm the county court's judgment. View "Peterson v. Brandon Coverdell Constr." on Justia Law

Active Spine Physical Therapy, LLC (Active Spine) and its owners, Sara and Nicholas Muchowicz, were sued by 132 Ventures, LLC (Ventures) for breach of contract and personal guarantee after failing to pay rent and common area maintenance (CAM) charges under a lease agreement. Ventures had purchased the property in a foreclosure sale and sought damages for unpaid rent and CAM charges from June 2020 to February 2021. Active Spine argued that the lease was invalid due to fraudulent inducement and that they were under a COVID-19-related rent abatement.The district court initially ordered restitution of the premises to Ventures and denied Active Spine's request for a temporary injunction. A separate bench trial found Active Spine and the Muchowiczes liable for breach of contract. On appeal, the Nebraska Supreme Court affirmed the restitution order but reversed the breach of contract judgment, remanding for a jury trial.At the jury trial, Ventures presented evidence of unpaid rent and CAM charges, while Active Spine argued that Ventures failed to provide notice of budgeted direct expenses, a condition precedent to their obligation to pay CAM charges. The jury found in favor of Ventures, awarding $593,723.82 in damages. Active Spine and the Muchowiczes moved for a new trial or judgment notwithstanding the verdict (JNOV), arguing errors in the jury's damage calculations and the lack of notice of budgeted direct expenses.The Nebraska Supreme Court reviewed the case and found that the district court did not abuse its discretion in admitting the exhibits as business records and not summaries under Neb. Rev. Stat. § 27-1006. The court also held that Active Spine and the Muchowiczes failed to preserve their arguments for appeal regarding the costs of new tenancy, COVID-19 abatement, and the amended lease. The court affirmed the district court's denial of the motion for new trial or JNOV, concluding that the jury's verdict was supported by sufficient evidence. View "132 Ventures v. Active Spine Physical Therapy" on Justia Law