Gordon v. Community First State Bank

• Decision Date: 04 December 1998
• Docket Number: Nos. S-97-618,S-97-1183,s. S-97-618
• Citation: 255 Neb. 637,587 N.W.2d 343
• Parties: Richard L. GORDON, appellant, v. COMMUNITY FIRST STATE BANK, formerly The Abbott Bank, et al., appellees.
• Court: Nebraska Supreme Court

Page 343

587 N.W.2d 343

255 Neb. 637

Richard L. GORDON, appellant, v. COMMUNITY FIRST STATE BANK, formerly The Abbott Bank, et al., appellees.

Nos. S-97-618, S-97-1183.

Supreme Court of Nebraska.

Dec. 4, 1998.

Syllabus by the Court

1. Judgments: Demurrer: Appeal and Error. An order sustaining a demurrer will be affirmed if any one of the grounds on which it was asserted is well taken.

2. Demurrer: Pleadings. In considering a demurrer, a court must assume that the

facts pled, as distinguished from legal conclusions, are true as alleged and must give the pleading the benefit of any reasonable inference from the facts alleged, but cannot assume the existence of facts not alleged, make factual findings to aid the pleading, or consider evidence which might be adduced at trial.

3. Demurrer: Pleadings. When a demurrer to a petition is sustained, a court must grant leave to amend the petition unless it is clear that no reasonable possibility exists that amendment will correct the defect.

4. 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.

5. Jurisdiction: Final Orders: Appeal and Error. In the absence of a judgment or order finally disposing of a case, an appellate court is without jurisdiction to act and must dismiss the purported appeal.

6. Demurrer: Final Orders: Appeal and Error. The sustaining of a general demurrer, not followed by a judgment of dismissal terminating the litigation, does not constitute a reviewable final order.

7. Actions: Proof. The two elements necessary to establish an action for abuse of legal process are the existence of an ulterior purpose and an act in the use of the process not proper in the regular prosecution of the proceeding.

8. Torts. Abuse of process and malicious prosecution are separate and distinct torts.

9. Actions: Proof. In a malicious prosecution case, the necessary elements for the plaintiff to establish are (1) the commencement or prosecution of the proceeding against him; (2) its legal causation by the present defendant; (3) its bona fide termination in favor of the present plaintiff; (4) the absence of probable cause for such proceeding; (5) the presence of malice therein; (6) damage, conforming to legal standards resulting to plaintiff.

10. Actions: Torts: Words and Phrases. Abuse of process differs from malicious prosecution in that the gist of the tort is not commencing an action or causing process to issue without justification, but misusing, or misapplying process justified in itself for an end other than that which it was designed to accomplish.

11. Actions. With respect to a cause of action for abuse of process, the judicial process must in some manner be involved. An administrative proceeding cannot form the basis of an action for abuse of process.

12. Res Judicata: Judgments. The doctrine of res judicata bars relitigation of a matter that has been directly addressed or necessarily included in a former adjudication if (1) the former judgment was rendered by a court of competent jurisdiction, (2) the former judgment was a final judgment, (3) the former judgment was on the merits, and (4) the same parties or their privies were involved in both actions.

13. Judgments: Appeal and Error. Where the record demonstrates that the decision of the trial court is correct, although such correctness is based on a different ground from that assigned by the trial court, the appellate court will affirm.

14. Constitutional Law: Jurisdiction: States. Although the states have concurrent jurisdiction to entertain actions pursuant to 42 U.S .C. § 1983 (1994), as a result of the Supremacy Clause found in U.S. Const. art. VI, federal law is controlling and preempts any conflicting state law in determining these claims.

15. Constitutional Law: Actions. In order to state a cause of action under 42 U.S.C. § 1983 (1994), a plaintiff must allege facts establishing conduct by a person acting under color of state law which deprived the plaintiff of rights, privileges, or immunities secured by the Constitution or laws of the United States.

16. Constitutional Law. An injury to reputation by itself is not a liberty or property interest protected under the 14th Amendment.

D.C. Bradford, of Bradford, Coenen & Welsh, Omaha, for appellant.

Terence P. Boyle, of Boyle Partnership, P.C., and J. Michael Coffey, of Stave & Coffey, Omaha, for appellee Community First State Bank.

Joseph K. Meusey, Joseph E. Jones, and Michael J. Mooney, Jr., of Fraser, Stryker, Vaughn, Meusey, Olson, Boyer & Bloch, P.C., Omaha, for appellees Chapin, Raum, Keslar, and Willnerd.

Don Stenberg, Attorney General, and Fredrick F. Neid, Lincoln, for appellees Hansen, Glen, and Plummer.

WRIGHT, CONNOLLY, GERRARD, STEPHAN, and McCORMACK, JJ.

STEPHAN, J.

In this consolidated action, Richard L. Gordon seeks damages from Community First State Bank, formerly The Abbott Bank (Bank), and several of its officers, as well as the director and two other employees of the Nebraska Department of Banking and Finance (Department). Gordon asserts alternative theories of recovery, including abuse of process and denial of civil rights in violation of 42 U.S.C. § 1983 (1994). The district court for Douglas County sustained demurrers and entered an order of dismissal in each action, from which Gordon appeals. We conclude that we lack jurisdiction over Gordon's appeal in case No. S-97-618 with respect to the individual appellees because there is no final, appealable order as to them. We affirm the judgment in that case with respect to the Bank, and we affirm the judgment in case No. S-97-1183 in its entirety.

I. SCOPE OF REVIEW

An order sustaining a demurrer will be affirmed if any one of the grounds on which it was asserted is well taken. Parker v. Lancaster Cty. Sch. Dist. No. 001, 254 Neb. 754, 579 N.W.2d 526 (1998); Lawry v. County of Sarpy, 254 Neb. 193, 575 N.W.2d 605 (1998).

In considering a demurrer, a court must assume that the facts pled, as distinguished from legal conclusions, are true as alleged and must give the pleading the benefit of any reasonable inference from the facts alleged, but cannot assume the existence of facts not alleged, make factual findings to aid the pleading, or consider evidence which might be adduced at trial. Id.

When a demurrer to a petition is sustained, a court must grant leave to amend the petition unless it is clear that no reasonable possibility exists that amendment will correct the defect. Vanice v. Oehm, 255 Neb. 166, 582 N.W.2d 615 (1998); State ex rel. Wood v. Fisher Foods, 254 Neb. 982, 581 N.W.2d 409 (1998).

II. FACTUAL ALLEGATIONS

The operative petitions in both of these actions contain similar factual allegations, which we summarize here, recalling that we must assume the truth of such allegations under the aforementioned standard of review. The Bank is chartered by the State of Nebraska and maintains its principal place of business in Alliance, Nebraska. Approximately 99 percent of the Bank's outstanding common stock was owned by Abbott Bank Group, Inc. (ABGI), a bank holding company incorporated in Delaware. In June 1982, James E. Abbott became the majority shareholder of ABGI.

Prior to a reorganization which occurred between 1987 and 1989, Abbott's banking interests included 10 independent banks, each of which was owned by a separate holding company. In 1987, Abbott became chairman of each bank's board of directors. At that time, Gordon was a shareholder, director, and officer of an Omaha law firm which had represented the banking interests of Abbott and his family since 1978. Abbott designated Gordon as general counsel to the Abbott banks and their respective holding companies and gave Gordon broad authority to review all legal matters involving these entities. As general counsel, Gordon had an attorney-client relationship with the Bank which was founded on an oral contract.

Between 1987 and 1989, the 10 separate banks were reorganized into a single bank owned by ABGI, The Abbott Bank, resulting in the loss of each bank's local name, autonomy, and board of directors. In addition, the reorganization resulted in significant reductions in bank personnel. Gordon alleges that this reorganization created "extremely hard feelings" directed toward those perceived to be responsible for the changes, particularly Gordon and his law firm. As a part of the reorganization, the Bank instituted a credit card program, which met with resistance from the Bank's management. Also, various actions of the Bank taken to reform policies and collect delinquent accounts furthered animosity toward Abbott and his advisors.

In 1990, Gordon advised Abbott that unless issues regarding management and leadership were addressed, it was likely that the Bank's various professional fees would increase significantly. Rather than replace management, Abbott decided to pursue a sale or merger of the Bank into a larger organization in order to resolve the management issues and realize the value of the investment in the credit card operation. Abbott informed Gordon of this decision in confidence.

In 1993, Abbott retained an investment banking firm to assist in the sale of the Bank. He intentionally did not disclose this fact to some persons on the management team. In July, the decision to sell the Bank was disclosed to Richard J. Chapin, the chief financial officer of the Bank, who later became its president. Gordon alleges that Chapin pretended to support the decision while secretly planning to remove Abbott from controlling the Bank's policies and operations. Gordon alleges that Bank officers Darrell Raum, Pat Keslar, and Tom Willnerd conspired with Chapin (collectively referred to as "the individual officers") to remove Abbott from control of the Bank and place themselves in control. Gordon alleges that the individual officers determined that in order to...