Jeffry L. Strohmyer, M.D., Appellant and Cross-Appellee,
Papillion Family Medicine, PC, a Nebraska Professional Corporation, et al., Appellees and Cross-Appellants.
Equity: Appeal and Error.
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 that where credible evidence is in conflict on a
material issue of fact, the 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.
existence of a fiduciary duty and the scope of that duty are
questions of law for a court to decide.
officer or a director of a corporation occupies a fiduciary
relation toward the corporation, and must comply with the
applicable fiduciary duties in his or her dealings with the
corporation and its shareholders.
Corporations: Liability: Damages.
violation by a trustee of a duty required by law, whether
willful, fraudulent, or resulting from neglect, is a breach
of trust, and the trustee is liable for any damages
proximately caused by the breach.
officer or a director of a corporation occupies a fiduciary
relation toward the corporation and its stockholders and
should refrain from all acts inconsistent with his or her
must exercise the utmost good faith in all their dealings
with the members of the firm and must always act for the
common benefit of all.
from the District Court for Sarpy County: William B. Zastera,
Judge. Affirmed in part, and in part reversed and remanded
for further proceedings.
Neb. 885] Russell S. Daub, and W. Eric Wood, of Downing,
Alexander & Wood, for appellant.
R. Forman, of Hillman, Forman, Childers & McCormack, for
Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, Kelch,
and Funke, JJ.
Jeffry L. Strohmyer, Dr. Robert G. Naegele, and Dr. Edward M.
Mantler formed Papillion Family Medicine, RC. (PFM), located
in Papillion, Nebraska. On December 31, 2013, Strohmyer
provided notice that he was leaving PFM to start his own
medical practice, effective March 31, 2014.
filed suit against PFM, Naegele, and Mantler due to PFM's
failure to "buy out" Strohmyer and pay associated
director fees following his departure. Strohmyer also
contests PFM's calculation of the value of its stock,
assets, and goodwill. PFM, Naegele, and Mantler
district court found that PFM was not a corporation under the
laws of Nebraska. It further (1) held that the value of
Strohmyer's stock was $104, 220, (2) awarded Strohmyer
$9, 389.27 in unpaid compensation, and (3) awarded PFM
damages in the amount of $30, 673 on its cross-complaint.
Strohmyer appeals. We affirm in part, and in part reverse and
remand for further proceedings not inconsistent with this
Formation of PFM
2000, Strohmyer, Naegele, and Mantler incorporated PFM, a
Nebraska professional corporation conducting a medical and
surgical practice, with its principal place of business in
Neb. 886] The articles of incorporation were filed on
September 15. 2000. The three doctors were listed as the sole
directors and shareholders of PFM. Naegele was elected to
serve as president, Strohmeyer as vice president, and Mantler
as secretary and treasurer. A document entitled "By-Laws
of the Papillion Family Medicine, P.C. As of October 16,
2000" contains a "Buy Out" section outlining
payment due to a doctor after death or departure, but it was
not signed by any of the doctors. Naegele testified that he
drafted this document and viewed it only as a draft for
discussion at a directors' meeting.
second document, entitled "Bylaws of Papillion Family
Medicine, PC, " was signed only by Mantler in his role
as secretary of PFM. With his signature, Mantler certified
that the bylaws were adopted by the board of directors on
December 4, 2000. The bylaws stated that "the majority
of the shares represented at the meeting and entitled to vote
on the subject matter shall be the act of the shareholders,
unless the vote of a greater number is required by law."
These bylaws did not include any process for a director's
departure from PFM, as a "buy out" or otherwise.
document, entitled "By-Laws of the Papillion Family
Medicine, P.C. As of October 16, 2000, " is identical to
the first bylaws, but was signed by Mantler on April 2, 2012.
With his signature, Mantler certified that the bylaws were
adopted by the board of directors on October 16, 2000.
Relevant Portions of Articles of Incorporation and Bylaws The
relevant portion of the October 16, 2000, bylaws states the
following under the "Buy Out" section:
Upon death or departure the doctor or his estate will be paid
every two weeks at the usual time, a pay check, which is the
actual accounts receivable that are collected, less 1/3
expenses of the corporation. These payments [296 Neb. 887]
will continue for 6 months regardless of the remaining
accounts receivable. . . .
. . . For 2nd 6 months of the year after leaving, the doctor
or his estate is paid 1/3 of the total assets at the time of
departure, d[i]vided by 1/3, pai[d] in equal amounts over 6
October 16, 2000, bylaws also describe physician
1. The basis for physician compensation shall be calculated
on the amount collected from a set of physician charges, not
on the amount billed.
a. To this amount collected, one third of the common charges
collected will be added. The common charges are all bills
submitted by the physician assistants and all lab and x-ray
b. From the collections shall be subtracted one third of the
common expenses, including but not limited to common
expenses, equipment, and supplies.
c. Also subtracted will be any expenses peculiar to the
d. Once the final amount is reconciled for a given pay
period, the physician will draw money equal to 90% of an
average of the . . . amount of money collect[ed] in the last
4 pay periods (a period of roughly 2 months).
relevant, article V of PFM's articles of incorporation
A director of the corporation shall not be personally liable
to the Corporation or its shareholders for monetary damages
for any action taken, or any failure to take action as a
director except for liability (i) for the amount of financial
benefit received by a director to which he or she is not
entitled; (ii) for intentional infliction of harm on the
corporation or its shareholders; (iii) for a violation of
Neb. Rev. Stat. §21-2096; and (iv) for an intentional
violation of criminal law.
Neb. 888] And article X provides in part:
Any shareholder who ceases to be eligible to be a shareholder
as herein provided shall be obligated forthwith to dispose of
all of his shares to the Corporation or to some other person
qualified to be a shareholder, all on such terms and
conditions as the shareholders and the Board of Directors
Agreement to Work 4 Days Per Week
and Mantler claim that in forming the corporation, they had a
verbal agreement to each work 4 days per week at PFM, but
that this agreement was never recorded in writing. Naegele
testified that prior to this lawsuit, he never provided
Strohmyer anything in writing that stated Strohmyer had to
work 4 days per week. In addition, the directors did not sign
a noncompete document or any other document that might
establish liability to each other or to PFM for starting
testified that prior to and following the formation of PFM,
he worked as an associate medical director for Uninet
Healthcare Network. From 2001 to 2007, Strohmyer served in
various medical staff leadership positions for Alegent Health
(Alegent). In 2008, Strohmyer began working as the
"Campus Medical Director and Quality Officer" at
Alegent, requiring him to work VA days per week.
2009, Strohmyer became "Medical Director" at
Alegent, which required that Strohmyer work "two full
days" per week. Throughout that time, Strohmyer also
worked as a hospitalist at Alegent. This limited his time at
the clinic to 3 days per week. Naegele testified that prior
to this lawsuit, he never provided Strohmyer anything in
writing that said that he objected to Strohmyer's
involvement with Alegent or the outside work Strohmyer was
Neb. 889] (d) Nebraska Wage Payment and Collection Act
prayer for relief, Strohmyer sought his wages and attorney
fees pursuant to the Nebraska Wage Payment and Collection Act
48-1229 states in relevant part:
(1) Employee means any individual permitted to work by an
employer pursuant to an employment relationship or who has
contracted to sell the goods or services of an employer and
to be compensated by commission. Services performed by an
individual for an employer shall be deemed to be employment,
unless it is shown that (a) such individual has been and will
continue to be free from control or direction over the
performance of such services, both under his or her contract
of service and in fact . . . and (c) such individual is
customarily engaged in an independently established trade,
occupation, profession, or business. . . .
(6) Wages means compensation for labor or services rendered
by an employee, including fringe benefits, when previously
agreed to and conditions stipulated have been met by the
employee, whether the amount is determined on a time, task,
fee, commission, or other basis.
§ 48-1231 states in relevant part:
(1) An employee having a claim for wages which are not paid
within thirty days of the regular payday designated or agreed
upon may institute suit for such unpaid wages in the proper
court. If an employee establishes a claim and secures
judgment on the claim, such employee shall be entitled to
recover (a) the full amount of the judgment and all costs of
such suit and (b) if such employee has employed an attorney
in the case, an [296 Neb. 890] amount for attorney's fees
assessed by the court, which fees shall not be less than
twenty-five percent of the unpaid wages.
portion of Strohmyer's practice was devoted to Medicaid
patients. In an April 18, 2005, memorandum from Naegele to
all clinic staff, Naegele stated that "Mantler's
patient list is now closed to all Medicaid patients" and
that "Strohmyer and . . . Naegele will continue for the
moment to see current Medicaid patients, and will evaluate
new Medicaid patients on a case-by-case basis." The
directors' meeting minutes for January 27, 2006, state
that all three doctors were in attendance and discussed that
"Naegele chooses to leave Medicaid" and that
"Strohmyer and PA Gilroy will continue to serve Medicaid
population. Much of this will be in . . . Strohmyer's
nursing home rounds. No other providers at PFM will see
Medicaid patients." However, Naegele testified that in
2006, he verbally instructed Strohmyer and Mantler to close
their practice to Medicaid patients. Strohmyer testified that
he was never told that he could not take Medicaid patients.
Strohmyer's Departure From PFM
2012 or early 2013, Strohmyer stopped talking to Naegele and
Mantler. On April 19, 2013, Strohmyer sent Naegele a letter
requesting that the directors "define exit
strategies" for PFM. He requested that the directors
have the "office attorney formalize these documents over
the next few weeks." On April 24, Naegele sent Strohmyer
a letter referencing the bylaws and explaining the "Buy
Out" provisions set forth in the bylaws of October 16,
December 31, 2013, Strohmyer gave Naegele and Mantler notice
that he was leaving PFM, effective March 31, 2014, to open
his own medical practice. Naegele responded in his position
as president of PFM, and stated that PFM agreed [296 Neb.
891] to "follow the 'Buy Out' provisions of the
bylaws of October 16, 2000, upon which we three members
agreed." That same day, Naegele transferred a check in
the amount of $90, 000 from the PFM account for deposit to a
trust fund. Naegele testified that he "estimated to buy
a doctor out would be about $30, 000" and that Naegele
and Mantle would each receive $30, 000 when they retired. It
was listed in PFM's tax returns as a "Buy-Out
Escrow." That money was later refunded in its entirety
to PFM. On March 4, 2014, PFM distributed $30, 000 to Naegele
and $30, 000 to Mantler.
Strohmyer's notice of departure from PFM, Naegele updated
the office with new paint, carpet, and an x-ray machine.
Strohmyer claims he did not know about any of these costs
incurred, nor did he provide his approval for the purchases.
Naegele claims that the office was overdue for these updates