Perkins, L.L.C. v. RMR Building Group, LLC, and Robert M. Ryan II

Summary

The Nebraska Supreme Court considered whether the corporate veil of RMR Building Group, LLC, should be pierced to impose personal liability on its sole member and manager for construction funds not used as required under a cost-plus contract. The court held that the evidence did not establish sufficient grounds to disregard RMR’s separate legal entity and reversed the Court of Appeals. The case was remanded with direction to affirm the district court’s judgment.

Holdings

1. RMR's separate legal entity should not be disregarded because the evidence did not establish by a preponderance of the evidence that RMR was used to perpetrate fraud or another unjust act against Perkins.
2. RMR's breach of its cost-plus contract did not, by itself, justify imposing personal liability on Ryan or piercing RMR's company veil.
3. Perkins failed to prove fraudulent misrepresentation by Ryan personally because the evidence did not show that Ryan made, authorized, or knowingly or recklessly participated in the alleged representation in RMR's invoice.
4. Perkins failed to establish conversion by Ryan because Perkins no longer had an immediate right to possession of the funds after transferring them to RMR, and the claim did not establish Ryan's personal possession of the funds.

Questions Presented

1. Whether the Court of Appeals applied the correct standard of review in determining whether RMR's company veil should be pierced.
2. Whether the evidence established by a preponderance of the evidence that RMR's separate legal entity should be disregarded to impose personal liability on Ryan.
3. Whether Ryan was personally liable for fraudulent misrepresentation based on the invoice sent by RMR.
4. Whether Ryan was personally liable for conversion of the funds Perkins paid to RMR.

Disposition

reversed_and_remanded