Upah v. Ancona Bros. Co.
| Decision Date | 23 September 1994 |
| Docket Number | No. S-91-699,S-91-699 |
| Citation | 521 N.W.2d 895,246 Neb. 585 |
| Parties | Josephine UPAH, Appellee, v. ANCONA BROS. CO. et al., Appellants. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Corporations: Conspiracy: Pleadings: Proof. In order to prevail on a claim of civil conspiracy against a company, the plaintiff is required to plead and prove that the individual defendants acted outside the scope of their authority or other than in the normal course of their corporate duties in furtherance of the conspiracy.
2. Limitations of Actions: Pleadings. If a petition alleges a cause of action ostensibly barred by the statute of limitations, such petition, in order to state a cause of action, must show some excuse tolling the operation and bar of the statute.
3. Limitations of Actions: Pleadings: Appeal and Error. A petition which shows on its face that the action is barred by the statute of limitations may be attacked on appeal. However, on appeal, the petition will be liberally construed to determine whether it states a cause of action.
4. Conspiracy: Liability. A claim of civil conspiracy is not actionable in itself, but serves to impose vicarious liability for the underlying wrongs of those who are party to the conspiracy.
5. Conspiracy: Limitations of Actions. The statute of limitations applicable to civil conspiracy is that applicable to the underlying wrong.
6. Limitations of Actions. The point at which a statute of limitations commences to run must be determined from the facts of each case. A cause of action accrues and the statute of limitations begins to run when the aggrieved party has the right to institute and maintain a suit. Generally, this is true even though the plaintiff may be ignorant of the existence of the cause of action.
7. Fraud: Limitations of Actions: Proof. Under the doctrine of fraudulent concealment, the plaintiff must show that he or she exercised due diligence to discover his or her cause of action before the statute of limitations expired and that the defendant committed some affirmative act of fraudulent concealment which prevented the plaintiff from discovering his or her cause of action. Unless there is a fiduciary relationship between the parties, mere silence is not enough to overcome the applicable period of limitation.
8. Appeal and Error. When reviewing a question of law, an appellate court is obligated to reach a conclusion independent of the trial court's ruling.
9. Equity: Appeal and Error. In an appeal of an equitable action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, an appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another.
10. Trusts: Notice. A trustee who disposes of part of the trust property without the knowledge of or notice to a beneficiary has a duty to notify the beneficiary as to the transaction.
Jerrold L. Strasheim, Gerald P. Laughlin, and Mary L. Swick, of Baird, Holm, McEachen, Pedersen, Hamann & Strasheim, Omaha, for appellant Ancona Bros. Co.
Fredric H. Kauffman, Shawn D. Renner, and Gregory S. Heier, of Cline, Williams, Wright, Johnson & Oldfather, Lincoln, for appellants Samuel A. Ancona, Joseph I. Ancona, and Carl Ancona.
William Jay Riley, Lisa M. Henkel, and Gerald L. Friedrichsen, of Fitzgerald, Schorr, Barmettler & Brennan, P.C., Omaha, for appellee.
The plaintiff, Josephine (Ancona) Upah, filed this action in the Douglas County District Court for civil conspiracy against the defendants, Samuel A. Ancona, Joseph I. Ancona, Carl Ancona, and Ancona Bros. Co. (Company), on March 1, 1989. The individual defendants are the plaintiff's brothers, who are shareholders, officers, and directors of the Company. The case was tried to a jury upon the third amended petition. The jury returned a verdict for the plaintiff in the amount of $3,766,000.
The plaintiff and the individual defendants are the children of Ignatius and Dorothy Ancona and the niece and nephews of Charles Ancona and Vita Ancona, Ignatius' bachelor brother and sister. Ignatius and Charles founded the Company, which is primarily a wholesale food-service distributor, in 1915.
In support of her claim of the defendants' conspiracy to deprive her of stock ownership in the Company, the plaintiff's petition specifically alleges in paragraph 12 various acts of conversion, denial of preemptive rights, and excessive compensation of the individual defendants. It is important to note that other than the use of the words "fraud" and "defraud" the plaintiff does not make any specific allegations of fraud.
The following are allegations made in paragraph 12 of the second amended petition:
a. Plaintiff became the owner of ten shares of Ancona Bros. Co. stock as evidenced by Ancona Bros. Co. stock certificate number 48 dated June 21, 1961.... Plaintiff never conveyed away such stock to any transferee yet the individual defendants as directors and managing officers of the company, without the knowledge or consent of plaintiff, caused the stock ledger records for Ancona Bros. Co. to reflect that the plaintiff was no longer the owner of said shares of stock after 1964, and they have deprived plaintiff of all benefits of a shareholder in the company. The individual defendants had custody of, control over and responsibility for the stock ledger records. The plaintiff has insufficient information to know which individual defendants physically made the stock ledger entries or directed the making of the entries.
b. On or about June 23, 1965, Samuel A. Ancona, Joseph I. Ancona and Carl Ancona, without notice to or the knowledge of the female shareholders, caused Ancona Bros. Co. to issue for each of themselves forty additional shares of stock. Defendants deprived plaintiff and other female shareholders, Dorothy and Vita Ancona, of their preemptive rights to acquire a proportionate amount of additional stock in their own name.
c. Ignatius S. Ancona died on November 6, 1965, owning 433- 1/2 shares of stock in Ancona Bros. Co. Plaintiff became the owner of 72- 1/4 shares of such stock pursuant to the decree on final account nunc pro tunc entered in such proceeding which divided the property of the estate in undivided proportions as follows: Dorothy G. Ancona, one-third; Samuel A. Ancona, one-sixth; Joseph I. Ancona, one-sixth; Carl Ancona, one-sixth; Josephine Ancona Upah, one-sixth. After the estate was closed and the Executors discharged, Samuel A. Ancona, Joseph I. Ancona and Carl Ancona as directors and managing officers of Ancona Bros. Co. with custody of, control over and responsibility for the corporate stock records failed to register plaintiff's shares in the corporate stock book and failed to issue her certificate of stock thereby depriving plaintiff of her benefits of ownership in the 72- 1/2 shares.
d. Likewise, after the Ignatius S. Ancona estate was closed and the Executors discharged, Samuel A. Ancona, Joseph I. Ancona and Carl Ancona as directors and managing officers of Ancona Bros. Co. with custody of, control over and responsibility for the corporate stock records failed to register Dorothy G. Ancona's shares in the corporation's stock book and failed to issue her certificate of stock for her 144- 1/2 shares of Ancona Bros. Co. stock. These 144- 1/2 shares which should have been issued to Dorothy G. Ancona would later have redounded to the benefit of the plaintiff as set forth in Paragraph 12(j) below.
e. On or about June 6, 1966, Samuel A. Ancona, Joseph I. Ancona and Carl Ancona, without notice to or the knowledge of the female shareholders, caused Ancona Bros. Co. to issue for each of themselves forty additional shares of stock. Defendants deprived plaintiff and other female shareholders, Dorothy and Vita Ancona, and the Ignatius S. Ancona Estate of their preemptive rights to acquire a proportionate amount of additional stock in their own name.
f. On or about May 14, 1968, Samuel A. Ancona, Joseph I. Ancona and Carl Ancona, without notice to or the knowledge of the female shareholders, caused Ancona Bros. Co. to issue for each of themselves fifty additional shares of stock. Defendants deprived plaintiff and other female shareholders, Dorothy and Vita Ancona, of their preemptive rights to purchase a proportionate amount of stock in their own name.
g. On or about October 21, 1969, Samuel A. Ancona, Joseph I. Ancona and Carl Ancona, without notice to or the knowledge of the female shareholders, caused Ancona Bros. Co. to issue for each of themselves four hundred additional shares of stock. Defendants deprived plaintiff and other female shareholders, Dorothy and Vita Ancona, of their preemptive rights to purchase a proportionate amount of stock in their own name.
h. On or about June 1, 1976, Vita Ancona made a gift of 61- 3/4 shares of said Ancona Bros. Co. stock to plaintiff. Subsequent thereto, the individual defendants without plaintiff's knowledge or consent cancelled the stock certificate with a date noted of June 11, 1976 and a signature of Sam Ancona and caused the corporate stock ledger to reflect transfer of this stock certificate from Josephine Ancona Upah to treasury stock. To the best of plaintiff's knowledge no value was transferred to plaintiff. The stock value referenced in the corporate records for the 61- 3/4 shares of stock, a par value of $100 per share or $6,175, was less than the fair market value of the stock.
i. Charles S. Ancona died on March 8, 1974, owning 489- 1/2 shares of Ancona Bros. Co. stock. Vita Ancona, sister of Charles S. Ancona, was the beneficiary of one-half of the residue of the estate and she received 244- 3/4 shares...
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