Wayne L. Ryan Revocable Trust v. Ryan , 297 Neb. 761 ( 2017 )


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    www.nebraska.gov/apps-courts-epub/
    11/03/2017 09:14 AM CDT
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    Nebraska Supreme Court A dvance Sheets
    297 Nebraska R eports
    WAYNE L. RYAN REVOCABLE TRUST v. RYAN
    Cite as 
    297 Neb. 761
    Wayne L. Ryan R evocable Trust et al., appellees,
    v. Constance “Connie” Ryan and Streck, I nc.,
    appellees, and Timothy Coffey et al., all in their
    individual capacities and in their capacities as
    qualified beneficiaries of the            Eileen Ryan
    R evocable Trust,          appellants.
    ___ N.W.2d ___
    Filed September 15, 2017.     No. S-16-628.
    1.	 Interventions: Appeal and Error. Whether a party has the right to
    intervene in a proceeding is a question of law. On a question of law,
    an appellate court is obligated to reach a conclusion independent of the
    determination reached by the court below.
    2.	 Jurisdiction: Appeal and Error. Before reaching the legal issues
    presented for review, it is the duty of an appellate court to determine
    whether it has jurisdiction over the matter before it.
    3.	 Interventions: Final Orders: Appeal and Error. Neb. Rev. Stat.
    § 25-1315 (Reissue 2016) does not supersede Nebraska’s final order
    jurisprudence regarding orders denying intervention.
    4.	 ____: ____: ____. An order denying intervention is a final, appeal-
    able order.
    5.	 Interventions. As a prerequisite to intervention under Neb. Rev. Stat.
    § 25-328 (Reissue 2016), the intervenor must have a direct and legal
    interest of such character that the intervenor will lose or gain by the
    direct operation and legal effect of the judgment which may be rendered
    in the action.
    6.	 ____. An indirect, remote, or conjectural interest in the result of a suit
    is not enough to establish intervention as a matter of right.
    7.	 Interventions: Pleadings. Simply having a claim that arises out of the
    same facts as the claims at issue in the litigation does not constitute
    having a sufficient interest to support intervention.
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    WAYNE L. RYAN REVOCABLE TRUST v. RYAN
    Cite as 
    297 Neb. 761
    8.	 ____: ____. A person seeking to intervene must allege facts showing
    that he or she possesses the requisite legal interest in the subject matter
    of the action.
    9.	 ____: ____. For purposes of ruling on a motion for leave to intervene,
    a court must assume that the intervenor’s factual allegations set forth in
    the complaint are true.
    10.	 ____: ____. A prospective intervenor can raise his or her claims or
    defenses, but those claims or defenses must involve the same core issue
    as the claims between the existing parties. Intervenors can raise only
    issues that sustain or oppose the respective contentions of the origi-
    nal parties.
    11.	 Interventions. An intervenor is bound by any determinations that were
    made before he or she intervened in the action. In other words, an inter-
    venor must take the suit as he or she finds it.
    12.	 ____. It is generally understood that the right to intervene does not
    carry with it the right to relitigate matters already determined, and an
    intervenor is admitted to the proceeding as it stands with respect to any
    pending issues.
    13.	 Appeal and Error. An issue not presented to or decided by the trial
    court is not appropriate for consideration on appeal.
    Appeal from the District Court for Sarpy County: William
    B. Zastera, Judge. Affirmed.
    Paul Heimann, Bonnie M. Boryca, and Karen M. Keeler, of
    Erickson & Sederstrom, P.C., for appellants.
    Thomas H. Dahlk and Victoria H. Buter, of Kutak Rock,
    L.L.P., and Ronald E. Reagan, of Reagan, Melton & Delaney,
    L.L.P., for appellee Streck, Inc.
    Larry E. Welch, Jr., and Damien J. Wright, of Welch Law
    Firm, P.C., for appellee Constance “Connie” Ryan.
    Heavican, C.J., Wright, Cassel, Stacy, and Funke, JJ.
    Per Curiam.
    This case involves an appeal from an order denying
    intervention in a corporate dissolution action. Because we
    find the intervenors are seeking only to relitigate matters
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    WAYNE L. RYAN REVOCABLE TRUST v. RYAN
    Cite as 
    297 Neb. 761
    already decided by the court, we affirm the order denying
    intervention.
    FACTS
    1. Parties
    Streck, Inc., is a Nebraska corporation with its principal
    place of business in La Vista, Sarpy County, Nebraska. The
    company manufactures hematology, immunology, and molecu-
    lar biology products for clinical and research laboratories.
    Streck was founded by Dr. Wayne L. Ryan in 1971. Dr.
    Ryan is one of Streck’s directors and is the sole beneficiary
    of the Wayne L. Ryan Revocable Trust (RRT), which owns
    33 percent of Streck’s voting stock and a majority of Streck’s
    nonvoting stock. The sole trustee of the RRT is Dr. Ryan’s
    daughter Carol Ryan. Dr. Ryan is also the primary benefi-
    ciary of his late wife’s trust, the Eileen Ryan Revocable Trust
    (ERRT), which owns about 40 percent of Streck’s nonvot-
    ing stock.
    Another of Dr. Ryan’s daughters, Constance Ryan (Connie),
    is the president and chief executive officer of Streck. Connie
    holds a majority of Streck’s voting stock and about 8 percent
    of its nonvoting stock.
    Stacy Ryan, one of the intervenors in this action, is also one
    of Dr. Ryan’s daughters. Stacy redeemed her voting and non-
    voting shares of Streck several years ago, but she remains an
    income beneficiary of the ERRT, which, as stated previously,
    owns nonvoting shares of Streck.
    2. Lawsuit Between RRT
    and Streck
    In October 2014, the RRT filed suit against Streck and
    Connie in the Sarpy County District Court. The suit alleged
    shareholder oppression under Neb. Rev. Stat. § 21-20,162
    (Reissue 2012) and breach of fiduciary duty. The relief sought
    included, among other things, “the dissolution of Streck.”
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    WAYNE L. RYAN REVOCABLE TRUST v. RYAN
    Cite as 
    297 Neb. 761
    On January 19, 2015, Streck filed an “Election to Purchase”
    the RRT’s shares pursuant to the provisions of Neb. Rev. Stat.
    § 21-20,166 (Reissue 2012). That statute allows a corporation
    involved in a judicial dissolution action brought by sharehold-
    ers to elect to purchase the shares owned by the petitioning
    shareholders rather than dissolve.1 If, within 60 days after fil-
    ing the election, the parties reach agreement on the fair value
    of the shares, the court “shall enter an order directing the
    purchase of the petitioner’s shares upon the terms and condi-
    tions agreed to by the parties.”2 If the parties are unable to
    reach an agreement, the court, “upon application of any party,
    shall stay such proceedings and determine the fair value of the
    petitioner’s shares” as of the day before the date the election
    was filed or any other date the court deems appropriate.3 After
    an election has been filed under this statute, the underlying
    dissolution action may not be “discontinued or settled, nor
    may the petitioning shareholder sell or otherwise dispose of
    his or her shares, unless the court determines that it would be
    equitable to the corporation and the shareholders, other than
    the petitioner, to permit such discontinuance, settlement, sale,
    or other disposition.”4
    Although not raised by the parties, we note for the sake of
    completeness that § 21-20,166 was repealed by the Legislature
    in 2014.5 Originally, the repeal was to be operative in 2016, but
    the operative date was amended by 2015 Neb. Laws, L.B. 157,
    § 10, to January 1, 2017. The repeal was due to the Legislature’s
    2014 adoption of the Nebraska Model Business Corporation
    Act (NMBCA) and repeal of Nebraska’s Business Corporation
    Act. The Legislature’s intent in adopting the NMBCA was
    1
    § 21-20,166(1).
    2
    § 21-20,166(3).
    3
    § 21-20,166(4).
    4
    § 21-20,166(2).
    5
    2014 Neb. Laws, L.B. 749, § 298.
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    WAYNE L. RYAN REVOCABLE TRUST v. RYAN
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    to harmonize inconsistent terminology and move Nebraska
    to the same statutory scheme as 31 other jurisdictions.6 The
    election provisions under the new NMBCA statute are substan-
    tially similar to the election provisions under the now-repealed
    § 21-20,166.7 And, more important, the NMBCA contains a
    saving provision that expressly provides that the repeal of
    any statute by the NMBCA “does not affect” any “dissolution
    commenced under the statute before its repeal, and the . . . dis-
    solution may be completed in accordance with the statute as if
    it had not been repealed.”8 As such, we conclude the repeal of
    § 21-20,166 does not materially affect our analysis.
    On March 23, 2015, Streck filed an application to stay the
    proceedings, pursuant to § 21-20,166(4). In support of its
    motion, Streck alleged 60 days had elapsed and the parties had
    been unable to reach agreement regarding the fair value of the
    RRT’s shares. Streck asked the court to stay further proceed-
    ings and determine the fair value of the RRT’s shares as of
    October 29, 2014 (the day before the RRT’s complaint was
    filed). On the same date, Connie filed a motion to determine
    fair value and stay further proceedings, which motion sought
    substantially the same relief as Streck’s application.
    On April 28, 2015, the court granted the applications and
    motions for stay. The court stayed the case to permit limited
    discovery on the issue of fair value and to allow the par-
    ties to reach possible agreement regarding the fair value of
    the shares.
    3. Stacy’s First Complaint
    in I ntervention
    On June 16, 2015, while the case was stayed, Stacy filed
    a complaint in intervention. She alleged that 3 years earlier,
    6
    Introducer’s Statement of Intent, L.B. 749, Committee on Banking,
    Commerce, and Insurance, 103d Leg., 2d Sess. (Feb. 3, 2014).
    7
    See Neb. Rev. Stat. § 21-2,201 (Cum. Supp. 2016).
    8
    Neb. Rev. Stat. § 21-2,232 (Cum. Supp. 2016).
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    WAYNE L. RYAN REVOCABLE TRUST v. RYAN
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    Streck and Connie had fraudulently induced her to redeem her
    voting and nonvoting shares of Streck for a purchase price that
    was substantially less than was legal and equitable. Although
    Stacy was not a shareholder of Streck at the time she filed her
    complaint in intervention, she asserted a variety of theories
    against both Streck and Connie, the details of which are not
    relevant to the issues on appeal.
    On July 9, 2015, the court entered an order denying Stacy’s
    complaint in intervention, finding that the claim she was
    asserting did not involve the same core issue as the claims
    between Streck and the RRT.9 No appeal was taken from
    this order.
    4. Cross-Motions for Partial
    Summary Judgment
    On January 20, 2016, the RRT filed a motion for partial
    summary judgment, seeking an order that discounts should
    not be applied to the determination of the fair value of the
    RRT’s shares. Shortly thereafter, Streck also filed a motion
    for partial summary judgment, seeking a determination that
    as a matter of law, it had validly exercised its election to
    purchase the RRT’s shares, and that § 21-20,166(2) did not
    permit the RRT to challenge the election, because it autho-
    rized setting an election aside only if it was found not to be
    in the best interests of the corporation or the nonpetitioning
    shareholders.
    On April 25, 2016, the court entered an order granting both
    parties’ motions for partial summary judgment. With respect
    to the RRT’s motion, the court held that discounts should
    not be applied to the determination of the fair value of the
    RRT’s shares. With respect to Streck’s motion, the court held
    that Streck was entitled to exercise an election to purchase
    the RRT’s shares pursuant to § 21-20,166 and had validly
    done so. With the election declared valid, the only matter
    9
    See Ruzicka v. Ruzicka, 
    262 Neb. 824
    , 
    635 N.W.2d 528
    (2001).
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    WAYNE L. RYAN REVOCABLE TRUST v. RYAN
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    remaining for the court to consider was the determination of
    the “fair value” of the shares, subject to the election pursuant
    to § 21,20-166. Trial on that issue was scheduled to begin
    July 5.
    5. Second Complaint
    in I ntervention
    On May 13, 2016—more than 1 year after Streck filed its
    election and several weeks after the district court granted sum-
    mary judgment finding the election valid—Stacy filed a second
    complaint in intervention, joined by her adult children Timothy
    Coffey, Sean Coffey, and John Ryan Coffey (collectively the
    intervenors). The intervenors are 4 of the 16 Ryan family
    members who are income beneficiaries of the ERRT. They
    alleged a statutory right to intervene pursuant to Neb. Rev.
    Stat. § 25-328 (Reissue 2016).
    The intervenors’ complaint did not allege any issue with
    respect to the fair value of the RRT’s shares. Instead, it
    addressed the issue of whether Streck’s election to purchase
    the RRT’s shares was valid. The intervenors alleged they had
    been prevented from “showing the Court that the election to
    purchase is not in the best interests of [the ERRT]” and wanted
    to show that Streck’s special litigation committee “did not act
    independently, did not perform due diligence, and [was] not
    objective when making [its] decision to purchase” the RRT’s
    shares. The intervenors alleged that “[t]he purchase of Dr.
    Ryan’s Streck shares will dilute or diminish the value of the
    [ERRT’s] shares and the [intervenors’] future interest in them.”
    As such, they sought to intervene in order to ask that the court
    “alter, amend, or vacate” its earlier order granting summary
    judgment on the validity of the election and “stay adjudication
    of that issue” until after the intervenors had an opportunity to
    conduct full discovery and “be fully heard” on the validity of
    the election.
    Streck and Connie each filed motions to strike the interve-
    nors’ complaint. They argued the intervenors did not have a
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    WAYNE L. RYAN REVOCABLE TRUST v. RYAN
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    direct and legal interest in the matter being litigated, because
    (1) all that was left to decide was the fair value of the RRT’s
    shares and (2) the remaining issue had no direct bearing
    on the intervenors, who were not Streck shareholders, but
    merely income beneficiaries of the ERRT, which held non-
    voting Streck shares. They also argued that to the extent the
    intervenors were attempting to challenge issues previously
    determined involving the validity of Streck’s election, their
    intervention was untimely, because summary judgment already
    had been granted on the issues and allowing intervention to
    challenge the summary judgment would impermissibly expand
    the proceedings. Finally, they argued that intervention would
    be futile because, under Nebraska law, one who intervenes
    has to take the case as they find it and the issues the interve-
    nors wanted to challenge had already been decided on sum-
    mary judgment.
    On June 21, 2016, the court entered an order striking the
    complaint in intervention. The court stated its reasoning on the
    record, explaining that the intervenors had waited too long to
    intervene, had shown only an indirect interest in the subject
    matter of the litigation, and, in any event, were seeking relief
    the court could not grant. The intervenors timely appealed, and
    we moved the appeal to our docket.10
    II. ASSIGNMENTS OF ERROR
    The intervenors assign, renumbered, that the district court
    erred in (1) ruling they did not have a direct and legal interest
    in the proceedings and striking the complaint in intervention
    on that basis, (2) ruling the complaint in intervention was
    untimely and striking it on that basis, and (3) ruling it could
    not fashion relief for the intervenors on the claims in their
    complaint in intervention and striking it on that basis.
    10
    See Neb. Rev. Stat. § 24-1106(3) (Reissue 2016).
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    WAYNE L. RYAN REVOCABLE TRUST v. RYAN
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    III. STANDARD OF REVIEW
    [1] Whether a party has the right to intervene in a proceed-
    ing is a question of law.11 On a question of law, an appellate
    court is obligated to reach a conclusion independent of the
    determination reached by the court below.12
    IV. ANALYSIS
    1. Jurisdiction
    [2] Before reaching the legal issues presented for review, it
    is the duty of an appellate court to determine whether it has
    jurisdiction over the matter before it.13 Streck argues we lack
    jurisdiction over this appeal, because the order denying inter-
    vention did not comply with the provisions of Neb. Rev. Stat.
    § 25-1315 (Reissue 2016).
    [3,4] We recently addressed, and rejected, this same argu-
    ment in Streck, Inc. v. Ryan Family.14 There, we concluded that
    our jurisprudence regarding the finality of orders denying inter-
    vention15 had not been superseded by § 25-1315, and we reiter-
    ated that an order denying intervention is a final, appealable
    order.16 We conclude the intervenors have appealed from a final
    order, and Streck’s argument to the contrary is without merit.
    2. Statutory Intervention
    (a) Legal Framework
    The intervenors claim a right to intervene under § 25-328,
    which provides:
    11
    Ruzicka v. Ruzicka, supra note 9.
    12
    
    Id. 13 Trainum
    v. Sutherland Assocs., 
    263 Neb. 778
    , 
    642 N.W.2d 816
    (2002).
    14
    Streck, Inc. v. Ryan Family, post p. 773, ___ N.W.2d ___ (2017). Cf.
    Guardian Tax Partners v. Skrupa Invest. Co., 
    295 Neb. 639
    , 
    889 N.W.2d 825
    (2017).
    15
    See, e.g., Basin Elec. Power Co-op v. Little Blue N.R.D., 
    219 Neb. 372
    ,
    
    363 N.W.2d 500
    (1985).
    16
    Streck, Inc. v. Ryan Family, supra note 14.
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    Any person who has or claims an interest in the mat-
    ter in litigation, in the success of either of the parties to
    an action, or against both, in any action pending or to
    be brought in any of the courts of the State of Nebraska,
    may become a party to an action between any other per-
    sons or corporations, either by joining the plaintiff in
    claiming what is sought by the complaint, or by uniting
    with the defendants in resisting the claim of the plaintiff,
    or by demanding anything adversely to both the plaintiff
    and defendant, either before or after issue has been joined
    in the action, and before the trial commences.
    [5-9] As a prerequisite to intervention under § 25-328, the
    intervenor must have a direct and legal interest of such char-
    acter that the intervenor will lose or gain by the direct opera-
    tion and legal effect of the judgment which may be rendered
    in the action.17 An indirect, remote, or conjectural interest in
    the result of a suit is not enough to establish intervention as
    a matter of right.18 Simply having a claim that arises out of
    the same facts as the claims at issue in the litigation does not
    constitute having a sufficient interest to support intervention.19
    Therefore, a person seeking to intervene must allege facts
    showing that he or she possesses the requisite legal interest
    in the subject matter of the action.20 For purposes of ruling
    on a motion for leave to intervene, a court must assume that
    the intervenor’s factual allegations set forth in the complaint
    are true.21
    [10,11] Our jurisprudence also recognizes some practical
    limitations on the right to intervene. A prospective interve-
    nor can raise his or her claims or defenses, but those claims
    17
    Spear T Ranch v. Knaub, 
    271 Neb. 578
    , 
    713 N.W.2d 489
    (2006).
    18
    
    Id. 19 See
    Kirchner v. Gast, 
    169 Neb. 404
    , 
    100 N.W.2d 65
    (1959).
    20
    Spear T Ranch v. Knaub, supra note 17.
    21
    
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    or defenses must involve the same core issue as the claims
    between the existing parties.22 Intervenors can raise only issues
    that “sustain or oppose the respective contentions of the [origi-
    nal parties].”23 The intervenor is bound by any determinations
    that were made before he or she intervened in the action.24
    In other words, “‘[a]n intervene[o]r must take the suit as he
    finds it . . . .’”25
    (b) Intervenors’ Complaint
    [12] It is settled law that one who intervenes is bound by
    any determinations that were made before he or she inter-
    vened in the action.26 In other words, “‘[a]n intervene[o]r must
    take the suit as he finds it . . . .’”27 It is generally understood
    that the right to intervene does not carry with it the right to
    relitigate matters already determined,28 and an intervenor is
    admitted to the proceeding as it stands with respect to any
    pending issues.29
    At the time the intervenors filed their complaint, the only
    disputed issue remaining for determination by the court in this
    judicial dissolution was the fair value of the RRT’s shares.
    The intervenors’ complaint, however, makes no allegations
    regarding that issue. The allegations in the complaint instead
    22
    See Ruzicka v. Ruzicka, supra note 9.
    23
    State ex rel. Nelson v. Butler, 
    145 Neb. 638
    , 650, 
    17 N.W.2d 683
    , 691
    (1945).
    24
    See School Dist. of Gering v. Stannard, 
    196 Neb. 367
    , 
    242 N.W.2d 889
          (1976).
    25
    Drainage District v. Kirkpatrick-Pettis Co., 
    140 Neb. 530
    , 538, 
    300 N.W. 582
    , 587 (1941).
    26
    School Dist. of Gering v. Stannard, supra note 24.
    27
    Drainage District v. Kirkpatrick-Pettis Co., supra note 
    25, 140 Neb. at 538
    , 300 N.W. at 587.
    28
    See, e.g., Arizona v. California, 
    460 U.S. 605
    , 
    103 S. Ct. 1382
    , 
    75 L. Ed. 2d
    318 (1983).
    29
    59 Am. Jur. 2d Parties § 227 (2012).
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    challenge only the already-settled question of the validity of
    Streck’s election. Because the intervenors are seeking to use
    intervention as a vehicle for relitigating issues previously
    determined by the court, the complaint in intervention was
    properly stricken.
    [13] The intervenors argue on appeal that even if their
    interests do not support statutory intervention, the district
    court should have permitted them to intervene as a matter of
    equity. Independent of the intervention statutes, we have held
    that a court with equitable jurisdiction may allow persons to
    intervene as a matter of equity in a proper case.30 But here,
    equitable intervention was neither alleged as a basis for the
    complaint in intervention nor clearly argued before the district
    court. An issue not presented to or decided by the trial court is
    not appropriate for consideration on appeal.31
    V. CONCLUSION
    For the foregoing reasons, we affirm the judgment of the
    district court.
    A ffirmed.
    Miller-Lerman and K elch, JJ., not participating.
    30
    See Department of Banking v. Stenger, 
    132 Neb. 576
    , 
    272 N.W. 403
          (1937).
    31
    Ameritas Invest. Corp. v. McKinney, 
    269 Neb. 564
    , 
    694 N.W.2d 191
          (2005).