Jardine v. McVey

conclude that such could have been accomplished much more
directly by other means, notably, omission of the very language
which we are now asked to interpret.
The 	district 	court’s 	interpretation 	of 	“contiguous” 	was
correct. The taxpayers’ final assignment of error is with-
out merit.
CONClUSION
The decisions of the district court are affirmed.
AFFirmed.
K ent l. JArdine , AppellAnt, v. WilliAm F.
mcvey, sr ., et Al ., Appellees.
759 N.W.2d 690
Filed January 9, 2009. 	No. S-07-1068.
1. Summary Judgment. Summary judgment is proper if the pleadings and admis-
sible evidence offered at the hearing show that there is no genuine issue as to any
material facts or as to the ultimate inferences that may be drawn from those facts
and that the moving party is entitled to judgment as a matter of law.
2. Summary Judgment: Appeal and Error. In reviewing a summary judgment, the
court views the evidence in the light most favorable to the party against whom the
judgment was granted, and the court gives that party the benefit of all reasonable
inferences deducible from the evidence.
3. Corporations. An officer or director of a corporation occupies a fiduciary rela-
tion toward the corporation and its stockholders.
4. ____. An officer or director must comply with the applicable fiduciary duties in
his or her dealings with the corporation and its shareholders.
5. Estoppel. Judicial estoppel may bar inconsistent claims against different parties.
6. ____. Whether judicial estoppel is applicable turns on whether the court has
accepted inconsistent positions from the plaintiff.
7. ____. For judicial estoppel to apply, the court must have accepted a previous
inconsistent position.
Appeal from the District Court for Douglas County: thomAs
A. otepKA, Judge. Affirmed.
edward 	D. 	hotz, 	Patrick 	M. 	Flood, 	and 	Michael 	R.
Peterson, of hotz, Weaver, Flood, breitkreutz & Grant, for
appellant.
JARDINe v. McVey 	1023
Cite as 276 Neb. 1023
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:52 AM CST

bryan S. hatch and Victor C. Padios, of Stinson, Morrison
& hecker, l.l.P., for appellees.
heAvicAn, 	c.J., 	Wright, 	connolly, 	gerrArd, 	stephAn,
mccormAcK, and miller-lermAn, JJ.
connolly, J.
SUMMARy
kent l. Jardine sued his former father-in-law, John N.
McVey, and the board of directors of John’s family corpora-
tions. kent’s claims for breach of fiduciary duty and fraudu-
lent misrepresentation arose out of his divorce from Julie A.
Jardine. During their marriage, Julie acquired stock in three
corporations owned by her family. Under the property settle-
ment agreement, John, on Julie’s behalf, paid kent $365,426
for any interest he claimed he had in the stock. About 8 months
after the divorce, two of the three family corporations were
sold at prices greater than what kent received for his claimed
interest in the shares.
kent sued the directors of the three corporations, alleging
two causes of action. kent alleged that the directors breached
their fiduciary duty. kent contends that he was a shareholder
and that the directors had a duty to inform him of the potential
sale of the corporations for a greater value when they knew
that he was going to receive a lower value for his stock. kent’s
second claim for false misrepresentation is against John, Julie’s
father. kent claims that John misrepresented to him that the
corporations were not for sale, which induced kent to sign the
property settlement.
The district court granted John and the directors’ motion
for 	summary 	judgment. 	The 	court 	determined 	that 	kent
failed to establish he was a shareholder and that he was judi-
cially estopped from seeking any further compensation for
Julie’s stock.
Regarding the breach of fiduciary duty claim, we affirm,
because kent was never a shareholder. Thus, the directors owed
him no duty. The false misrepresentation claim fails because
he was judicially estopped from claiming a position inconsist-
ent with statements he made during the divorce proceeding.
We affirm.
1024 	276 NebRASkA RePORTS

bACkGROUND
We glean the following facts from exhibits received at the
summary judgment hearing.
the divorce And property
settlement Agreement
In 1980, kent married Julie. before the marriage, kent
worked for Continental Fire Sprinkler Company, one of the
three corporations owned and operated by Julie’s family.
During their marriage, John gave stock to Julie in all three
corporations. The record shows that kent never voted the
shares of stock, never participated in any elections, and never
served as proxy with the corporations and that all dividend
checks were payable only to Julie. both John, a founder of
the corporations, and kerry N. McVey, Julie’s brother and the
current president of two of the corporations, testified that Julie
was the sole shareholder. The buy-sell agreements for the cor-
porations showed that Julie was a shareholder.
In 2003, kent filed for divorce. In the property settle-
ment agreement, kent received payment for a one-half inter-
est he claimed in stock held by Julie in the corporations
owned by Julie’s family: Continental Fire Sprinkler Company,
Continental Alarm & Detection, and Grif-Fab Corporation.
Acting on Julie’s behalf, John negotiated the settlement agree-
ment with kent. The main contention between the parties was
the stock value. And to evaluate his alleged one-half interest
in the stock, kent retained a certified public accountant who
examined the corporations’ business records.
kent also had discussions with kerry regarding the stock. In
the summer of 2004, kerry proposed a division of the marital
assets. In October, John used this proposal and stated to kent
that the values assigned to the stock were fair and reasonable.
he stated that he believed kent should receive around $850,000
when the stock, cabin, boats, jet skis, cars, and all other assets
were taken into account.
On November 19, 2004, 4 days before the court entered
the divorce decree, John met with kent and they discussed
the terms of the property settlement. At one point, after the
conversation with the attorneys had concluded, kent asked
JARDINe v. McVey 	1025
Cite as 276 Neb. 1023

John if Continental Fire Sprinkler Company was for sale and
John responded that it was not. kent then signed the settlement
agreement, which provided that he would receive $365,426
for his claimed one-half interest in the stock. In total, kent
received $540,000 in cash, including the stock payment, plus
other property valued at $350,000. John paid the $540,000 with
his personal check. In exchange, Julie executed a promissory
note to her father, John.
During the divorce negotiations, kent had requested that any
settlement agreement contain a “look-back” provision. This
provision would have allowed kent to receive more money
for the shares if any of the corporations were sold within a set
time after the signing of the property settlement agreement.
Julie’s attorneys rejected the request, and the provision was not
included in the property settlement agreement.
In the agreement, kent acknowledged and agreed that (1) he
did not rely upon any representations whatsoever, whether by
Julie or any other person, concerning the stock or the present
or future value or prospects or potential income with respect to
said stock; (2) he waived and relinquished any further inquiry
regarding the stock; (3) he directed his counsel not to pursue
any further inquiry regarding the stock; and (4) he argued the
allocation of stock to Julie and the payment of $365,426 was
“final, absolute and not subject to adjustment, question or chal-
lenge for any reason, whether known or unknown and whether
now existing.”
district court A pproves property
settlement Agreement
The district court held a hearing to establish that the settle-
ment agreement was fair, just, and not unconscionable. In
response to questioning from his attorney, kent testified that
he (1) believed that the agreement was fair, reasonable, and
not unconscionable; (2) agreed that any changes to the stock’s
value or changes in the corporations’ structures, such as a sale,
could not be considered in determining whether he received fair
value for the stock; and (3) acknowledged that the agreement
was final, absolute, and not subject to adjustment, question,
or challenge for any reason, whether known or unknown and
1026 	276 NebRASkA RePORTS

whether now existing or arising in the future. On November 23,
2004, the district court approved the property settlement agree-
ment and entered the divorce decree.
K ent discovers thAt the
corporAtions Were sold
In July 2005, kent discovered that two of the three corpo-
rations were sold. kent claims that the directors were aware
of the divorce proceedings and knew the price that he was to
receive in the property settlement agreement was substantially
less than the value per share in any potential sale. Thus, kent
alleges that the directors had a duty to inform him of the nego-
tiations to sell the corporations and that they breached that
duty. kent also alleges that John misrepresented to him in the
fall of 2004 that there were no ongoing negotiations to poten-
tially sell the corporations.
kerry, who was the president of the corporations at the time,
stated that during November 2004, the corporations received
two offers. In July 2005, the corporations were sold to a
new bidder.
STANDARD OF ReVIeW
[1,2] Summary judgment is proper if the pleadings and
admissible evidence offered at the hearing show that there is
no genuine issue as to any material facts or as to the ultimate
inferences that may be drawn from those facts and that the
moving party is entitled to judgment as a matter of law.1 In
reviewing a summary judgment, we view the evidence in the
light most favorable to the party against whom the judgment
was granted, and we give that party the benefit of all reason-
able inferences deducible from the evidence.2
ASSIGNMeNTS OF eRROR
kent assigns, restated, that the district court erred in find-
ing that (1) he failed to establish his status as a shareholder
and (2) the doctrine of judicial estoppel precluded his claim
against John.
1 Thone v. Regional West Med. Ctr., 275 Neb. 238, 745 N.W.2d 898 (2008).
2 Amanda C. v. Case, 275 Neb. 757, 749 N.W.2d 429 (2008).
JARDINe v. McVey 	1027
Cite as 276 Neb. 1023

ANAlySIS
kent brought two claims: a breach of fiduciary duty against
the board of directors, and a claim against John for fraudulent
misrepresentation. The court granted summary judgment on
both claims. First, it concluded that kent was not a shareholder
and that the directors therefore owed him no fiduciary duties.
Second, it concluded that because of kent’s representations
in the divorce proceedings, he was judicially estopped from
claiming John made misrepresentations about a potential sale
of the corporations.
BreAch oF F iduciAry duty
[3,4] An officer or director of a corporation occupies a
fiduciary relation toward the corporation and its stockhold-
ers.3 An officer or director must comply with the applicable
fiduciary duties in his or her dealings with the corporation and
its shareholders.4 because a director’s fiduciary duties extend
only to shareholders and the corporation,5 kent’s claim hinges
on whether he was a shareholder when he signed the property
settlement agreement.
In support of their motion for summary judgment, the direc-
tors presented evidence that kent’s name was not on the stock
certificates; he never signed any stock purchase agreement or
stock transfer statement acknowledging he was a shareholder
in the corporations; he never signed any buy-sell agreement;
he never received or endorsed any dividend checks; he never
served as an officer; he never attended any annual meetings;
and he never voted any shares, participated in any elections, or
served as a proxy for the corporations.
In opposition to the motion for summary judgment, kent
offered the following evidence: (1) he received payment for
the stock in the divorce proceeding; (2) Julie obtained the stock
3 See, Trieweiler v. Sears, 268 Neb. 952, 689 N.W.2d 807 (2004); Woodward
v. Andersen, 261 Neb. 980, 627 N.W.2d 742 (2001).
4 Trieweiler, supra note 3.
5 See, id.; Doyle v. Union Ins. Co., 202 Neb. 599, 277 N.W.2d 36 (1979).
See, also, Neb. Rev. Stat. §§ 	21-2014, 21-2050, and 21-2055 (Reissue
2007).
1028 	276 NebRASkA RePORTS

during their marriage; (3) during the divorce negotiations with
John and kerry, they “acknowledged” kent’s one-half owner-
ship in the stock; (4) kerry’s statement that if kent had not
worked for the corporations, Julie may not have received the
stock when she did; and (5) when the corporations were sold,
all shareholders were either employees or former employees
of the corporations except Julie. kent argues that this evidence
supports an inference that he had to be a shareholder for Julie
to be considered a shareholder.
A shareholder is a “person in whose name shares are reg-
istered in the records of a corporation or the beneficial owner
of shares to the extent of the rights granted by a nominee
certificate on file with a corporation.”6 The directors presented
undisputed evidence that kent’s name was not on the stock
certificates. but kent contends that issuance of a stock certifi-
cate in his name is not essential for him to be a shareholder.
yet, absent a stock certificate, “some sort of subscription or
contract, express or implied, is required, whereby the person
obtains the right to (1) hold stock or, upon some condition,
demand stock; and (2) exercise the rights of a stockholder.”7
We have discussed facts indicating shareholder status. In
Evans v. Engelhardt,8 we stated:
During the operation of the corporation, [Paul] evans
was recognized by [the two other remaining corporate
shareholders] as an active shareholder and participant
in the corporation until June 1989. Distributions from
the corporation were based on the percentage of stock
ownership. The corporation’s income tax returns for 1986
through 1990 list evans as a shareholder, and evans’
shareholder distributions were reported on a schedule
k-1. [The two other shareholders] notified evans of
shareholders’ and directors’ meetings, which notice evi-
denced their acknowledgment of evans as a shareholder
of the corporation.
6 § 21-2014(20).
7 18A Am. Jur. 2d Corporations § 614 at 450 (2004). See Renner v.
Wurdeman, 231 Neb. 8, 434 N.W.2d 536 (1989).
8 Evans v. Engelhardt, 246 Neb. 323, 326, 518 N.W.2d 648, 651 (1994).
JARDINe v. McVey 	1029
Cite as 276 Neb. 1023

In contrast, kent has failed to show that the corporations
recognized him as a shareholder or that he had any share-
holder rights.
Finally, kent argues that he has standing as a shareholder
because of his equitable interest in the stock Julie acquired
during the marriage.
kent relies on cases involving divorce proceedings in which
courts recognized a spouse’s interest in corporate stock, even if
that spouse was not the record holder of the stock.9 The New
hampshire Supreme Court held in Bursey v. Town of Hudson10
that a husband’s former wife had standing to challenge a tax
lien on property owned by a corporation of which the husband,
but not the wife, was a shareholder. Although the wife lacked
title to the property, the court determined that because the cor-
poration was marital property and a final divorce decree had
not been entered, the wife could still have been awarded stock
in the divorce decree. Therefore, the court concluded that the
wife had a sufficient equitable interest in the property to chal-
lenge the tax lien.
Relying on Bursey, kent contends he should be given share-
holder status based upon an alleged equitable interest in the
stock when he filed for divorce. he argues that because the
alleged breach of fiduciary duties occurred after he filed for
divorce and before the entry of the decree, he has shareholder
status. kent’s contention fails for several reasons.
First, Bursey is distinguishable. Julie’s stock was gifted
to her. It was not marital property. Second, to the extent that
kent had any basis for claiming the stock as marital prop-
erty, he agreed to accept a cash settlement for any claim in
the stock.
Most important, whether the directors had a duty to inform
kent of any possible purchase negotiations is different from
the issue raised in Bursey. The New hampshire Supreme
Court did not hold that a spouse’s marital interest in stock
9 See Bursey v. Town of Hudson, 143 N.h. 42, 719 A.2d 577 (1998). See,
also, Kaplus v. First Continental Corp., 711 So. 2d 108 (Fla. App. 1998);
LaHue v. Keystone Inv. Co., 6 Wash. App. 765, 496 P.2d 343 (1972).
10 Bursey, supra note 9.
1030 	276 NebRASkA RePORTS

created shareholder status. Nor did it create a duty for a direc-
tor to inform a non-record-holding spouse of a director’s
planned action. here, the directors presented undisputed evi-
dence that the corporations intended and considered Julie as
the shareholder.
In reviewing a summary judgment, an appellate court views
the evidence in a light most favorable to the party against
whom the judgment was granted and gives such party the bene-
fit of all reasonable inferences deducible from the evidence.11
Giving kent the benefit of all reasonable inferences deducible
from the evidence, we conclude no genuine issue of material
fact exists whether he was a shareholder. The district court did
not err in granting summary judgment on the breach of fidu-
ciary duty claim.
F rAudulent misrepresentAtion
kent alleged that John represented to him that there were
no ongoing negotiations to potentially sell the corporations.
kent alleged that the representations were false and that
John knew them to be false when he made them. he con-
cludes that he suffered damages, because the corporations
were later sold for substantially more than he received. The
district court granted John summary judgment. It determined
that kent’s false misrepresentation claim was barred by judi-
cial estoppel.
[5] Judicial estoppel may bar inconsistent claims against dif-
ferent parties.12 And, we have previously set out the contours
of judicial estoppel:
The doctrine of judicial estoppel holds that one who
has successfully and unequivocally asserted a position in
a prior proceeding is estopped from asserting an incon-
sistent position in a subsequent proceeding. . . . The
doctrine protects the integrity of the judicial process by
preventing a party from taking a position inconsistent
with one successfully and unequivocally asserted by the
same party in a prior proceeding. . . . It has been said that
11 See Amanda C., supra note 2.
12 See Melcher v. Bank of Madison, 248 Neb. 793, 539 N.W.2d 837 (1995).
JARDINe v. McVey 	1031
Cite as 276 Neb. 1023

unlike equitable estoppel, judicial estoppel may be applied
even if detrimental reliance or privity does not exist. . . .
however, the doctrine is to be applied with caution so as
to avoid impinging on the truth-seeking function of the
court because the doctrine precludes a contradictory posi-
tion without examining the truth of either statement. . . .
Absent judicial acceptance of the inconsistent position,
application of the rule is unwarranted because no risk of
inconsistent results exists.13
[6] Whether judicial estoppel is applicable turns on whether
the court has accepted inconsistent positions from the plaintiff.
In adopting judicial estoppel in Melcher v. Bank of Madison,14
we relied on a Sixth Circuit case.15 There, the court determined
that the requirement that the position be successfully asserted
means that the party must have been successful in getting the
first court to accept the position. And absent such acceptance,
the doctrine of judicial estoppel does not apply.16 The court fur-
ther stated that “judicial acceptance” requires not that a party
prevail on the merits, but “only that the first court has adopted
the position urged by the party, either as a preliminary matter
or as part of a final disposition.”17
[7] We have similarly recognized that for judicial estoppel
to apply, the court must have accepted a previous inconsistent
position.18 Therefore, whether judicial estoppel applies depends
upon whether kent “successfully and unequivocally” asserted a
position in the divorce proceeding that is inconsistent with his
position in this lawsuit. kent claims that John misrepresented
at their November 19, 2004, meeting that the corporations
were not for sale. yet, the property settlement agreement states
that kent did not rely “upon any representations whatsoever,
13 Id. at 798, 539 N.W.2d at 842 (citations omitted).
14 Melcher, supra note 12.
15 Edwards v. Aetna Life Ins. Co., 690 F.2d 595 (6th Cir. 1982).
16 Id.
17 Id. at 599 n.5.
18 In re Loyal W. Sheen Family Trust, 263 Neb. 477, 640 N.W.2d 653
(2002).
1032 	276 NebRASkA RePORTS

whether by Wife or any other person, concerning such stock
or the present or future value or prospects or potential income
with respect to said stock.”
And remember, he specifically agreed to waive and relin-
quish any further inquiry into the stock, and he directed his
attorney not to pursue any further inquiry into the stock. he
also agreed that the allocation of the stock and the payment
for the stock is “final, absolute and not subject to adjust-
ment, question or challenge for any reason, whether known or
unknown and whether now existing or arising in the future.”
Additionally, he testified at the divorce proceedings that
cash payment to him for the stock was fair and reasonable.
he also agreed that any changes regarding the stock’s value
or changes to the corporations’ structure, mergers, sales, or
the like would not affect the value of the stock in which he
claimed an interest. In sum, kent represented in the divorce
proceeding that he did not rely upon anyone in entering
into the property settlement agreement regarding the stock.
his representations provided a basis for the court’s accept-
ance of the property settlement agreement. backpedaling, he
now argues that he did rely upon John’s statements that the
corporations were not for sale when he agreed to the prop-
erty settlement.
Despite any statements made to kent, the agreement was
clearly intended to preclude further claims related to the cor-
porations’ sale. kent cannot show that he did not understand
the consequences of signing the property settlement agreement.
These inconsistent positions support the district court’s deter-
mination that his claim is judicially estopped.
Giving kent the benefit of all reasonable inferences deduc-
ible from the evidence, we conclude no genuine issue of mate-
rial fact exists whether kent’s claim is judicially estopped. If
kent did not rely upon any representations regarding the stock
when he entered the property settlement agreement, this would
clearly include his representation that he did not rely upon any
statements regarding the potential sale of the stock, or the lack
thereof. The language of the property settlement is not limited
to foreclosing kent’s reliance solely on any values placed on
the stock. It also forecloses his reliance on any representations
JARDINe v. McVey 	1033
Cite as 276 Neb. 1023

regarding the stock, including the potential sale of the corpo-
rations. because kent is adopting inconsistent positions, his
claim is judicially estopped. The district court did not err in
granting summary judgment.
AFFirmed.
michAel p. WAlsh , AppellAnt, v. stAte oF neBrAsKA
ex rel . stAte BoArd oF puBlic AccountAncy
oF the stAte oF neBrAsKA, Appellee .
759 N.W.2d 100
Filed January 9, 2009. 	No. S-07-1083.
1. Administrative Law: Judgments: Appeal and Error. A judgment or final order
rendered by a district court in a judicial review pursuant to the Administrative
Procedure Act may be reversed, vacated, or modified by an appellate court for
errors appearing on the record. When reviewing an order of a district court under
the Administrative Procedure Act for errors appearing on the record, the inquiry
is whether the decision conforms to the law, is supported by competent evidence,
and is neither arbitrary, capricious, nor unreasonable.
2. Administrative Law: Accounting: Disciplinary Proceedings. The Nebraska
State board of Public Accountancy is authorized to discipline the holders of cer-
tificates and permits who fail to comply with the technical or ethical standards of
the public accountancy profession.
3. Administrative Law: Accounting. The Nebraska State board of Public
Accountancy has the authority to adopt and promulgate rules and regulations
of professional conduct appropriate to establish and maintain a high standard of
integrity and dignity in the profession of public accountancy and to govern the
administration and enforcement of the Public Accountancy Act.
4. Administrative Law: Accounting: Disciplinary Proceedings. After notice and
hearing, the Nebraska State board of Public Accountancy may take disciplinary
action against a permitholder for, among other reasons, violation of a rule of
professional conduct adopted and promulgated by the board under the authority
granted by the Public Accountancy Act.
5. ____: ____: ____. The types of disciplinary action available to the Nebraska State
board of Public Accountancy include reprimand, suspension, probation, place-
ment of limits on a permit or certificate, revocation of a permit or certificate, and
imposition of a civil penalty and costs.
6. Administrative Law. An administrative body has no power or authority other
than that specifically conferred by statute or by construction necessary to accom-
plish the plain purpose of the act.
7. Appeal and Error. An appellate court will not consider an issue on appeal that
was not presented to or passed upon by the trial court.
1034 	276 NebRASkA RePORTS