Per Curiam.
In January 2016, Streck, Inc., filed a complaint against the Ryan Family, L.L.C. (L.L.C.), in the district court for Sarpy County. Streck's complaint alleged the L.L.C. breached a lease agreement containing an option to purchase real property and sought specific performance. The L.L.C. responded and defended the action. In June, a member of the L.L.C. moved to intervene in her own behalf and on behalf of the L.L.C. She appeals from the district court's order denying her motion. We affirm.
Streck is a Nebraska corporation with its principal place of business in La Vista,
The L.L.C. leased the property to Streck pursuant to an agreement dated December 1999 and subsequently amended. The lease gave Streck an option to purchase the property from the L.L.C. based on certain conditions. Streck claims it met the conditions and properly exercised the option. Based on the date Streck exercised the option, closing should have occurred no later than January 3, 2016. When no closing occurred, Streck filed suit against the L.L.C.
Streck filed its complaint January 13, 2016, in the district court. It sought an order declaring the L.L.C. in breach of the lease and ordering specific performance of the option to purchase.
The L.L.C. operating agreement vests all management duties in a management board consisting of comanagers Wayne Ryan and Connie Ryan. After being served with the complaint, the comanagers of the L.L.C. filed an application for appointment of a receiver to represent the L.L.C., citing a conflict which they described as follows:
No party opposed the comanagers' request, and the court appointed a receiver to represent the L.L.C.'s interest in the lawsuit.
On March 3, 2016, the receiver, on behalf of the L.L.C., filed an answer and counterclaim. The counterclaim alleged that Streck was in default of the lease agreement when it attempted to exercise the option and that the default voided Streck's right to exercise the option.
On June 15, 2016, Streck moved for partial summary judgment, asking the court to find as a matter of law that it was not in default at the time it exercised the option to purchase. At the hearing on the partial summary judgment motion, the parties offered a joint stipulation, which the court received. Posthearing briefing was permitted, and the matter was set for further proceedings on July 5.
On June 22, 2016, Ryan filed a "Complaint in Intervention" seeking to intervene "on her own behalf and derivatively on behalf of the [L.L.C.]" On June 27, she moved to continue the summary judgment hearing scheduled for July 5. On June 29, Ryan filed a "Motion for Order Permitting
All of Ryan's motions were taken up at a hearing on July 1, 2016. On July 5, the court entered two orders. One order overruled Ryan's motion to intervene, and the other overruled her motion to continue the summary judgment hearing. Neither order set forth the court's reasoning. Ryan appeals from both orders. We moved the appeal to our docket on our own motion.
Ryan assigns, restated, that the district court erred in (1) disallowing her complaint in intervention; (2) denying her motion to intervene, including her request for access to the parties' prior discovery and her request to conduct additional discovery; and (3) failing to continue the hearing on Stack's motion for summary judgment or to reopen the summary judgment record to allow her an opportunity to conduct necessary discovery and to participate in the summary judgment proceedings.
Whether a party has the right to intervene in a proceeding is a question of law.
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.
Streck argues that the order denying Ryan's motion to intervene did not meet the requirements of § 25-1315, because it did not contain an express determination that there was no just reason for delay and it did not expressly direct entry of judgment.
The right to intervene is granted by statute in Nebraska. Neb. Rev. Stat. § 25-328 (Reissue 2016) provides:
Ryan bases her intervention rights solely on § 25-328, so we begin by reviewing the legal propositions governing such intervention.
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.
Our jurisprudence also recognizes some practical limitations on the right to intervene. 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.
With these principles in mind, we review Ryan's complaint in intervention to determine whether she has alleged a direct and legal interest sufficient to support intervention.
Ryan alleges she has a nearly 20-percent interest in the L.L.C. as a member thereof. She further alleges the interests of the L.L.C. are not being "fully protected" by the receiver, and she alleges the receiver should have asserted additional claims and defenses on behalf of the L.L.C. She also seeks by intervention to challenge the appointment of the receiver and to present a claim that the comanagers of the L.L.C. breached the operating agreement by requesting appointment of a receiver.
Before we address whether Ryan has shown a direct and legal interest sufficient to allow her to intervene, we note that to the extent Ryan seeks by intervention to challenge the appointment of the receiver or allege the L.L.C. managers have breached the operating agreement, she is attempting improperly to expand the scope of the litigation. As stated earlier, the claims or defenses of an intervenor must involve the same core issues as the claims between the existing parties,
To support her claim of a direct and legal interest sufficient to support the right to intervene in her own behalf, Ryan argues she is a 20-percent member of the L.L.C. and stands to lose or gain financially depending on how the court resolves the dispute between the L.L.C. and Streck. Before addressing this argument, we clarify the nature of Ryan's rights as a member of the L.L.C.
Ryan's rights in that regard are governed by the Nebraska Uniform Limited Liability Company Act (LLC Act)
As pertinent here, the LLC Act provides that a member of a limited liability
The L.L.C. operating agreement, a copy of which was attached to Ryan's complaint in intervention, provides: "The Members of the Company vest the management of the Company in a Management Board, which shall have sole power and authority to conduct the affairs of the Company...." The operating agreement also gives the managers the right "[t]o employ ... managing agents or other experts to perform services for the Company and ... [t]o enter into any and all other agreements on behalf of the Company, with any other Person for any purpose, in such forms as the Managers may approve." Based on the provisions of the LLC Act and the operating agreement, Ryan has no legal authority to conduct the affairs of the L.L.C.
Ryan contends that despite being a nonmanaging member of the L.L.C., she nevertheless has a direct and legal interest in the suit which entitles her to intervene, because she stands to lose or gain financially depending on how the court resolves the dispute between the L.L.C. and Streck. We considered, and rejected, a similar argument in Steinhausen v. HomeServices of Neb.
There, the sole member of a limited liability company (LLC) filed a complaint on behalf of himself and the LLC, alleging a third party had engaged in tortious interference with the business relationships or expectancies of the LLC. We held that members of an LLC cannot, in their own behalf, maintain a claim for tortious interference with the business relationships or expectancies of an LLC, because such a claim can be maintained only by the parties to the business relationship.
Here, neither the operating agreement nor the LLC Act gives Ryan the authority to speak for, or make decisions for, the L.L.C., even in matters that may indirectly affect her financial interests. That power is vested exclusively with the managers of the L.L.C. and anyone they appoint pursuant to their power to employ others to perform services for the L.L.C. The fact that Ryan, as a member of the L.L.C., may experience reduced distributions, depending on the outcome of the lawsuit against the L.L.C., does not give her a direct and legal interest in the lawsuit sufficient to support intervention in her own behalf.
Moreover, Ryan does not allege she was owed a special duty by the receiver separate and distinct from the duty owed to the L.L.C.
Ryan also argues she has the right to intervene on behalf of the L.L.C. She asserts that Streck is seeking to buy the L.L.C.'s only asset and alleges that the interests of the L.L.C. have not been "fully protected" by the comanagers and receiver.
To determine whether Ryan has a direct and legal interest sufficient to allow her to intervene on behalf of the L.L.C., we find guidance in the law governing whether and when a shareholder of a corporation may intervene on behalf of the corporation. This is so because we have generally treated actions by a member of an LLC in the same manner as actions by a shareholder of a corporation.
As a general rule, a shareholder may not bring an action in his or her own name to recover for wrongs done to the corporation or its property.
The LLC Act provides a means to bring a derivative action. Section 21-165 states:
Ryan's complaint in intervention alleges that she "made demand upon the receiver" to assert the additional claims and defenses she wished to raise in this litigation, but that the receiver refused to do so. Alternatively, Ryan alleges that demand upon the managers and receiver would have been futile, because the managers admitted they could not agree to a course of action and the receiver refused to assert the claims and defenses Ryan wished to raise in this litigation. But Ryan has not filed a derivative action, nor does she argue that she has met the requirements for bringing such an action here.
Instead, Ryan primarily relies on this court's decision in State v. Holmes
Unlike the facts in Holmes, Ryan has not alleged the receiver is completely failing to protect the interests of the L.L.C. and its members, nor would the record support such an inference. The record shows the receiver was appointed at the joint request of the comanagers to "address, answer, and/or defend the Complaint filed ... by Streck" and has been doing so. Ryan's briefing argues that the receiver could or should be managing the litigation differently, but she has not alleged that the receiver cannot or will not protect the interests of the L.L.C. or its members. On these facts, Holmes is inapplicable, and Ryan has argued no other basis for claiming a direct and legal interest sufficient to authorize her intervention on behalf of the L.L.C.
On this record, we conclude Ryan has not alleged a direct and legal interest sufficient to support intervention in the litigation between the L.L.C. and Streck. As such, we do not address her remaining assignments of error. An appellate court is not obligated to engage in an analysis that is not necessary to adjudicate the case and controversy before it.
For the foregoing reasons, we affirm the judgment of the district court.
AFFIRMED.
Miller-Lerman and Kelch, JJ., not participating.