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Ryan v. Ryan

United States District Court, D. Nebraska

June 14, 2016

STACY RYAN, Plaintiff,
v.
CONSTANCE CONNIE RYAN, AND STRECK, INC., Defendants.

          MEMORANDUM AND ORDER

          Laurie Smith Camp Chief United States District Judge

         This matter is before the Court on the Motion to Alter or Amend the Judgment or in the Alternative to File an Amended Complaint (Filing No. 20) (“Motion to Alter”) and the Motion for Leave to File an Amended Complaint (Filing No. 23) (“Motion to Amend”) (collectively “Motions”), filed by Plaintiff Stacy Ryan (“Stacy Ryan”). For the reasons discussed below, the Motions will be denied.

         BACKGROUND

         The following is a summary of the facts that were alleged in Stacy Ryan’s Complaint (Filing No. 1), assumed true for purposes of the Court’s Order (Filing No. 18) (“Order”) and Judgment (Filing No. 19), granting the Motions to Dismiss (Filing Nos. 6 & 10) filed by Defendant Constance Ryan (“Connie Ryan”) and Streck, Inc. (“Streck”) (collectively “Defendants”) and dismissing the case.[1]

         Stacy Ryan is the daughter of Dr. Wayne Ryan (“Dr. Ryan”), founder of Streck. Stacy and her siblings each were given a large amount of Streck voting and non-voting stock in 1985. On November 10, 2008, Stacy Ryan and Streck executed a redemption agreement (“Redemption Agreement”), which, among other things, gave Streck the right to redeem Stacy Ryan’s shares at Streck’s election. According to the terms of the Redemption Agreement, the price to be paid for these shares was to be “the fair market value of the stock (subject to any applicable discounts or adjustments) as set forth in the most recent valuation prepared by Juris Valuation Advisors, LLC . . . .” (Filing No. 1 at ECF 34 ¶ 9.)

         In a letter dated June 19, 2012, Dr. Ryan informed Stacy Ryan that Streck elected to redeem her shares; she was required to sign an enclosed stock purchase agreement (“Purchase Agreement”); and upon Streck’s receipt of the executed Purchase Agreement Streck would send Stacy Ryan a check for $9, 280, 235. The redemption price was calculated based on the most recent valuation by Juris Valuation Advisors, LLC (“Juris”), dated September 28, 2011, reflecting the value of the stock as of July 29, 2011 (“2011 Valuation”).

         On June 28, 2012, Stacy Ryan sent Dr. Ryan and Connie Ryan-Streck’s CEO-a request for Streck’s corporate records, pursuant to Neb. Rev. Stat. § 21-20, 183. Streck refused the request in a letter dated July 3, 2012, because Stacy Ryan was no longer a Streck shareholder. Although Streck maintained that Stacy Ryan was no longer a shareholder of Streck, Streck’s attorneys continued to request that Stacy Ryan execute the Purchase Agreement.

         On August 22, 2012, Stacy Ryan executed the Purchase Agreement, which stated that the purchase price for Stacy Ryan’s shares was $9, 280, 235 and that such an amount was equal to, or greater than, the purchase price that would be due under the Redemption Agreement.

         A June 5, 2014, Juris valuation valued Streck’s voting stock at $8.33 per share and its non-voting stock at $8.09 per share as of March 7, 2013 (“2014 Valuation”).

         On August 21, 2015, Stacy Ryan filed this action alleging violations of the Securities Act of Nebraska[2] and the Exchange Act of 1934, [3] fraudulent misrepresentation and inducement, breach of fiduciary duty, shareholder oppression, conversion, tortious interference with business expectancy, unjust enrichment, and breach of contract. Relevant to the present Motions, Stacy Ryan alleged in her Complaint that the Juris Valuation used at the time of redemption did not reflect the actual fair market value of her stock.

         In its Order and Judgment, the Court dismissed all of Stacy Ryan’s claims, finding that her allegation that she was not paid the fair market value of her stock failed to state a claim upon which relief could be granted. This was because the Court determined that Stacy Ryan alleged that she was paid an amount calculated in accordance with the Redemption Agreement. In other words, although Stacy Ryan alleged that the price she received for her stock did not reflect the actual fair market value at that time of redemption, she did not dispute that the price reflected the fair market value as calculated by the 2011 Valuation, which she admitted was the most recent Juris valuation at the time. Because this was all the Redemption Agreement required Streck to pay to redeem the stock, Stacy Ryan could not establish that any wrongful conduct by Defendants caused her to incur a loss, nor that Defendants breached the Redemption Agreement. This finding proved fatal to all of her claims, and the Court granted Defendants’ Motions to Dismiss.

         On March 17, 2016, Stacy Ryan filed the present Motions before the Court, asking this Court to alter its Judgment, pursuant to Federal Rule of Civil Procedure 59(e), or grant her leave to amend her Complaint.

         STANDARD OF REVIEW

         “Rule 59(e) motions serve the limited function of correcting ‘manifest errors of law or fact or to present newly discovered evidence.’” United States v. Metro. St. Louis Sewer Dist., 440 F.3d 930, 933 (8th Cir. 2006) (quoting Innovative Home Health Care v. P. T.-O. T. Assoc. of the Black Hills, 141 F.3d 1284, 1286 (8th Cir. 1998)). “Such motions cannot be used to introduce new evidence, tender new legal theories, or raise arguments which could have been offered or raised prior to entry of judgment.” Id. ...


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