Klingelhoefer v. Parker
| Citation | 20 Neb.App. 825,834 N.W.2d 249 |
| Decision Date | 04 June 2013 |
| Docket Number | No. A–12–477,A–12–477 |
| Court | Court of Appeals of Nebraska |
| Parties | Donald G. Klingelhoefer, Individually, as Beneficiary of the Constance K. Klingelhoefer Revocable Trust, and as Representative of Constance Klingelhoefer, L.L.C., Appellant, v. Parker, Grossart, Bahensky & Beucke, L.L.P., Appellee. |
OPINION TEXT STARTS HERE
Appeal from the District Court for Buffalo County: James E. Doyle IV, Judge. Affirmed.
David J. Lanphier, of Broom, Clarkson, Lanphier & Yamamoto, for appellant.
Anne Marie O'Brien, of Lamson, Dugan & Murray, L.L.P., for appellee.
[20 Neb.App. 825]1. Appeal and Error. An appellate court addresses only issues assigned and argued.
2. Standing: Jurisdiction. Standing requires that a litigant have a personal stake in the outcome of a controversy that warrants invocation of a court's jurisdiction and justifies exercise of the court's remedial powers on the litigant's behalf.
3. Standing: Claims: Parties: Proof. To have standing, a litigant must assert its own rights and interests and demonstrate an injury in fact, which is concrete in both a qualitative and temporal sense.
4. Corporations: Derivative Actions. A member of a limited liability company bringing a derivative action must set forth in the complaint what actions were taken to comply with Neb. Rev. Stat. § 21–165 (Reissue 2012).
[20 Neb.App. 826]5. Trusts: Actions. Beneficiaries of a trust may generally enforce a cause of action that the trustee has against a third party only if the trustee cannot or will not do so.
6. Corporations: Actions: Parties. 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. Such a cause of action is in the corporation and not the shareholders. The right of a shareholder to sue is derivative in nature and normally can be brought only in a representative capacity for the corporation.
7. Corporations: Actions: Parties: Proof. If a shareholder can establish an individual cause of action because the harm to the corporation also damaged the shareholder in his or her individual capacity, then the individual can pursue his or her claims.
8. Corporations: Actions: Parties: Proof: Words and Phrases. In order to establish an individual harm, the shareholder must allege a separate and distinct injury or a special duty owed by the party to the individual shareholder. A “special duty” is a duty owed to the shareholder separate and distinct from the duty owed to the entity.
9. Corporations: Actions: Parties: Damages. Even if a shareholder establishes that there was a special duty, he or she may only recover for damages suffered in his or her individual capacity, and not injuries common to other shareholders.
10. Corporations: Trusts: Actions: Parties. The duty a third person owes to an individual trust beneficiary or member of a limited liability company must be separate and distinct from the duty owed to the trust or the limited liability company.
11. Attorney and Client: Parties: Negligence: Liability. The Nebraska Supreme Court set out factors the court is to examine to determine the extent of an attorney's duty, if any, to a third party. These factors include: (1) the extent to which the transaction was intended to affect the third party, (2) the foreseeability of harm, (3) the degree of certainty that the third party suffered injury, (4) the closeness of the connection between the attorney's conduct and the injury suffered, (5) the policy of preventing future harm, and (6) whether recognition of liability under the circumstances would impose an undue burden on the profession.
12. Appeal and Error. In the absence of plain error, an appellate court considers only claimed errors which are both assigned and discussed.
Donald G. Klingelhoefer appeals the decision of the district court for Buffalo County granting summary judgment in favor of Parker, Grossart, Bahensky & Beucke, L.L.P. (Parker Grossart), and denying Donald's motion to alter or amend the judgment. The district court found Donald lacked standing to bring this professional malpractice action because Parker Grossart owed no duty to Donald as a member of Constance Klingelhoefer, L.L.C. (LLC); as a beneficiary of the Constance K. Klingelhoefer Revocable Trust (Trust); or as one of the heirs of his mother, Constance K. Klingelhoefer. Becausewe find no merit to the issues raised on appeal, we affirm.
Donald is one of the 11 children of Constance. In 1996, Constance hired Damon Bahensky, an attorney and member of Parker Grossart, to assist her in developing and implementing a comprehensive estate plan. Constance's goals were to reduce estate taxes, avoid the need for probate, and ensure that her three sons who were actively engaged in farming had the opportunity to purchase some or all of the real estate she owned in Buffalo County.
To reduce estate taxes, Constance created the LLC and transferred her real estate into the LLC. She gave interests in the LLC to each of her 11 children and kept an interest for herself. To avoid the need for probate, Constance created the Trust, of which she was the initial trustee, and transferred her personal property into the Trust. Constance also executed a will, directing that upon her death, any remaining real or personal property in her possession be transferred to the Trust. Constance died on March 19, 2006. Donald filed his initial complaint on October 29, 2009. He brought the action solely in his name. Parker Grossart filed a motion to dismiss for failure to state a claim, primarily raising the issue of Donald's standing to bring an action in his own name for injuries he allegedly sustained as a member of the LLC and as a beneficiary of the Trust. Instead of granting the motion to dismiss, the district court allowed Donald 30 days to amend his complaint. The court noted that Donald was suing, in part, as a member of the LLC and that as such, he could bring a derivative action if it was properly alleged. The court granted Donald leave to file an amended complaint containing proper allegations for a derivative suit and otherwise clarifying his allegations. Particularly, the court noted that to properly assert a derivative action, Donald either must assert that he requested that the manager or appropriate member institute the action or explain why such request would be futile.
Donald filed an amended complaint, changing the caption to reflect himself individually and as “Beneficiary of [the Trust] and as Representative of [the LLC].” He inserted an allegation stating that he did not
secure an initiation of this action against [the] LLC by the manager of the LLC and certain other members, because the same would be futile since the acting manager and certain other named members ... were beneficiaries of the misconduct alleged in this Amended Complaint, and further were previously represented by [Parker Grossart].
(Emphasis supplied.) Donald did not include an allegation that he had requested that the LLC file the present action or why such request would be futile.
After Donald filed the amended complaint, Parker Grossart moved for summary judgment. The district court granted the motion, concluding that Donald lacked standing to maintain a professional negligence action against Parker Grossart based on his status as an heir of Constance or as a member of the LLC. The court further concluded that Parker Grossart owed no duty to Donald as a beneficiary of the Trust.
Donald filed a motion for a new trial, arguing that the district court should reconsider its previous ruling in light of Sickler v. Kirby, 19 Neb.App. 286, 805 N.W.2d 675 (2011), an opinion this court released just prior to the district court's grant of summary judgment. The district court, treating the motion as one to alter or amend, denied the motion. In a lengthy order, the court addressed its prior ruling as it related to Donald's status as a member of the LLC and as a beneficiary of the Trust. The court determined that Donald did not challenge the court's finding regarding his lack of standing to sue as Constance's heir. Expanding on its prior order, the court stated that Donald had no standing either as a member of the LLC or as a beneficiary of the Trust and that Parker Grossart owed Donald no duty in either of these capacities. This timely appeal followed.
Donald assigns, restated and renumbered, that the district court erred in (1) granting Parker Grossart's motion for summary judgment based on a finding that Donald lacked standing, (2) denying Donald's motion to alter or amend the court's previous ruling, and (3) requiring Donald to amend his complaint to allege a derivative action and then failing to allow him to present evidence as to damages.
Summary judgment is proper when the pleadings and evidence admitted at the hearing disclose no genuine issue regarding any material fact or the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law. Wolski v. Wandel, 275 Neb. 266, 746 N.W.2d 143 (2008). In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment is granted and gives such party the benefit of all favorable inferences deducible from the evidence. Id.
The record establishes that Constance employed Bahensky to assist her with legal matters relating to her estate. Donald does not allege he employed Bahensky; rather, his complaint seeks recovery on his status as a beneficiary of the Trust, an heir of the estate, and a member of the LLC to assert that Bahensky owed him a duty of reasonable care. Because Donald only assigns, and does not argue, that his status as an heir of the estate gives him standing, we do not address this assigned error. See Hass...
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