Lindsay v. Fitl

Decision Date27 May 2016
Docket NumberNo. S–15–757,S–15–757
Citation879 N.W.2d 385,293 Neb. 677
PartiesStephen Lindsay, Special Administrator of the Estate of Mary F. Lindsay, et al., Appellants, v. Patricia M. Fitl, Personal Representative of the Estate of James G. Fitl, Appellee.
CourtNebraska Supreme Court

293 Neb. 677
879 N.W.2d 385

Stephen Lindsay, Special Administrator of the Estate of Mary F. Lindsay, et al., Appellants,
v.
Patricia M. Fitl, Personal Representative of the Estate of James G. Fitl, Appellee.

No. S–15–757

Supreme Court of Nebraska.

Filed May 27, 2016


Thomas M. White, C. Thomas White, and Amy S. Jorgensen, of White & Jorgensen, Omaha, for appellants.

Michael S. Degan, of Husch Blackwell, L.L.P., Omaha, for appellee.

Heavican, C.J., Wright, Connolly, Miller–Lerman, Cassel, Stacy, and Kelch, JJ.

Kelch, J.

NATURE OF CASE

Mary F. Lindsay, Mary H. Lindsay, Daniel Lindsay, Michael Lindsay, Alice Lindsay, Stephen Lindsay, and Marguerite Ford (collectively the Lindsays) filed suit against James G. Fitl (Fitl) for breach of various fiduciary duties. A motion to dismiss was granted on the bases that the Lindsays' claims were derivative and that they were divested of their standing when the Federal Deposit Insurance Corporation (FDIC) filed an action in federal court. Now, the Lindsays have appealed to this court. We affirm.

FACTS

This case arises out of the Lindsays' claim that Fitl, another minority shareholder, breached fiduciary duties in connection

293 Neb. 679

with his role as an officer and director of Mid City Bank, Inc., and the 304 Corporation. The Lindsays were minority shareholders of the 304 Corporation, a Nebraska corporation, its principal asset being Mid City Bank.

Although unrelated to issues presented in this appeal, we note that the Lindsays have twice amended their complaint to reflect substitutions of the parties. Mary F. Lindsay passed away in 2013, and in August 2014, Stephen Lindsay, as the special administrator of her estate, was substituted in her place. Defendant Fitl also passed away, and in the third amended complaint, Patricia M. Fitl, the personal representative of Fitl's estate (personal representative), was substituted in his place.

In August 2010, the Nebraska Department of Banking and Finance and the FDIC began a joint examination of the condition of Mid City Bank. On November 4, 2011, the Department of Banking and Finance appointed the FDIC as receiver of the bank, stating as its reason that “ ‘large commercial real estate loan and poor management practices ... led to a deterioration of the bank's capital’ ” and that the department was left with “ ‘no option but to declare the insolvent institution receivership.’ ” After some time, the bank reopened, and the receiver continued to operate the bank, which was in good standing as of the date of the hearing. The FDIC did not place any of the 304 Corporation's other assets into receivership.

On July 17, 2012, the Lindsays filed their first complaint against defendant Fitl, now defendant personal representative, alleging breach of fiduciary duties. The complaint was amended with minor changes in August and October 2014 and in April 2015. The Lindsays did not allege breach of contract in any version of the complaint.

On November 4, 2014, the FDIC filed a federal action against Fitl's estate in the U.S. District Court for the District of Nebraska, in case No. 8:14–cv–00346, alleging, among other things, that Fitl “was grossly negligent and breached his fiduciary duties” and that because of the receivership, and pursuant

293 Neb. 680

to

879 N.W.2d 389

12 U.S.C. § 1821(d)(2)(A)(i) (2012), the FDIC succeeded to all rights, titles, powers, and privileges of Mid City Bank and its shareholders, accountholders, and depositors, “including, but not limited to, [the bank's] claims against [its] former directors and officers.”

On April 16, 2015, the personal representative filed a motion to dismiss the third amended complaint pursuant to Neb. Ct. R. Pldg. § 6–1112(b)(6). In support of this motion, the personal representative alleged that all the claims asserted by the Lindsays in their third amended complaint were “the exclusive province of the [FDIC], as receiver for Mid–City Bank,” and were the subject of pending litigation in federal court.

On May 27, 2015, before the hearing on the personal representative's motion to dismiss, the Lindsays filed a motion for leave to file a fourth amended complaint. The proposed fourth amended complaint merely added an allegation that the Lindsays filed a claim with the personal representative, which was disallowed.

The hearing on the personal representative's motion to dismiss was held on June 16, 2015. Although the Lindsays had not previously alleged a breach of contract, they argued at the hearing that Fitl breached the “Fitl Lindsay 304 Corporation Buy–Sell Agreement” (Buy–Sell Agreement).

On July 29, 2015, the district court granted the personal representative's motion to dismiss, finding that the Lindsays' claims were derivative of the corporation and that as a result of the FDIC's federal action, the Lindsays' claims were exclusively vested with the FDIC. Therefore, the Lindsays had no standing to pursue them. The district court also denied the Lindsays' motion to amend and found that any further amendments would be futile due to the FDIC's federal action. The trial court signed and filed the same order again on August 3, without any explanation. The Lindsays appeal from both the July 29 and August 3 orders.

293 Neb. 681

ASSIGNMENTS OF ERROR

The Lindsays assign, combined and restated, that the district court erred (1) in finding that their claims were derivative of the corporation, (2) in finding that the FDIC's federal action divested them of their standing, and (3) in stating that further amendment would be futile.

STANDARD OF REVIEW

An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from the facts and that the moving party is entitled to judgment as a matter of law. Waldron v. Roark, 292 Neb. 889, 874 N.W.2d 850 (2016). In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted and gives that party the...

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4 cases
  • Meints v. Vill. of Diller
    • United States
    • Court of Appeals of Nebraska
    • 1 Junio 2021
    ...be given reasonable opportunity to present all material made pertinent to such a motion by statute.However, in Lindsay v. Fitl, 293 Neb. 677, 682, 879 N.W.2d 385, 390 (2016), the Nebraska Supreme Court qualified:For purposes of a motion to dismiss, "'"the court generally must ignore materia......
  • DeGeorge v. DiGiorgio's Sportswear, Inc.
    • United States
    • Court of Appeals of Nebraska
    • 12 Enero 2021
    ...must allege a separate and distinct injury or a special duty owed by the party to the individual shareholder. Lindsay v. Fitl, 293 Neb. 677, 879 N.W.2d 385 (2016). Even if a shareholder establishes that there was a special duty, he or she may only recover for damages suffered in his or her ......
  • Boppre v. Overman, A-15-1135.
    • United States
    • Court of Appeals of Nebraska
    • 22 Noviembre 2016
    ...reasoning, we affirm the district court's denial of the writ in regards to paragraphs 1-5, 7, 11-17, and 19-20. Lindsay v. Fitl, 293 Neb. 677, 879 N.W.2d 385 (2016) (where record demonstrates that decision of trial court is ultimately correct, although such correctness is based on ground or......
  • Burns v. Burns
    • United States
    • Supreme Court of Nebraska
    • 27 Mayo 2016

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