Summary
The Nebraska Supreme Court affirmed an order striking a complaint in intervention in a corporate dissolution action. The court held that the intervenors lacked a basis to relitigate the previously decided validity of the corporation’s election to purchase shares, and that the only remaining issue was the fair value of those shares. The court also held that equitable intervention was not properly preserved for appellate review.
Topics
Practice areas
Questions Presented
- Whether the Nebraska Supreme Court had jurisdiction over an appeal from an order striking a complaint in intervention.
- Whether the proposed intervenors had a direct and legal interest sufficient to support intervention under Neb. Rev. Stat. § 25-328.
- Whether intervention could be used to challenge or relitigate the district court's prior determination that Streck's election to purchase the shares was valid.
- Whether the proposed intervenors could obtain equitable intervention when that theory was not alleged or clearly argued in the district court.
Holdings
- Neb. Rev. Stat. § 25-1315 does not supersede Nebraska's final-order jurisprudence regarding orders denying intervention, and an order denying intervention is a final, appealable order.
- To intervene as a matter of right under Neb. Rev. Stat. § 25-328, a proposed intervenor must allege a direct and legal interest such that the intervenor will gain or lose by the direct operation and legal effect of the judgment; an indirect, remote, or conjectural interest is insufficient.
- A person who intervenes must take the action as it stands and may not use intervention to relitigate matters already determined by the court.
- The appellate court will not consider an equitable-intervention theory that was neither alleged as a basis for intervention nor clearly argued and decided in the district court.
Key quotations
“As a prerequisite to intervention under § 25-328, 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.” (at 770-771)
“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.” (at 771-772)
Factual background
Streck, Inc. is a Nebraska corporation whose stock is held in part by the Wayne L. Ryan Revocable Trust and the Eileen Ryan Revocable Trust. The Wayne L. Ryan Revocable Trust brought a shareholder-oppression and fiduciary-duty action seeking, among other relief, dissolution of Streck. Streck elected to purchase the Trust's shares, and the district court determined on partial summary judgment that the election was valid, leaving only the fair value of the shares for determination. Beneficiaries of the Eileen Ryan Revocable Trust later sought intervention to challenge the validity of that election, alleging that the purchase would dilute or diminish the value of the Eileen Ryan Revocable Trust's shares and their future interests.
Procedural history
The Wayne L. Ryan Revocable Trust sued Streck, Inc. and Constance Ryan, alleging shareholder oppression and breach of fiduciary duty and seeking dissolution of Streck. Streck elected to purchase the Trust's shares, and the district court granted partial summary judgment determining that the election was valid, leaving fair value as the only unresolved issue. Stacy Ryan and her adult children then sought to intervene to challenge the already-decided validity of the election; the district court struck their complaint, and the Nebraska Supreme Court affirmed.