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Lindsay v. Fitl

Supreme Court of Nebraska

May 27, 2016

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

Page 386

[Copyrighted Material Omitted]

Page 387

          Appeal from the District Court for Douglas County: MARLON A. POLK, Judge.

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

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

         HEAVICAN, C.J., WRIGHT, CONNOLLY, MILLER-LERMAN, CASSEL, STACY, and KELCH, JJ.

          OPINION

Page 388

         [293 Neb. 678] 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 ...


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