Tegra Corp. v. Boeshart

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
07/08/2022 09:07 AM CDT
- 783 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783Tegra Corporation, individually and on behalf
of Lite-Form Technologies, L.L.C., appellant
and cross-appellee, v. Patrick E. Boeshart
et al., appellees and cross-appellants.
___ N.W.2d ___
Filed June 17, 2022. No. S-21-547.
1. Jurisdiction. The question of jurisdiction is a question of law.
2. Jurisdiction: Appeal and Error. It is the power and duty of an appel-
late court to determine whether it has jurisdiction over the matter before
it, irrespective of whether the issue is raised by the parties.
3. Judgments: Final Orders: Words and Phrases. A judgment is the
final determination of the rights of the parties in an action.
4. Judgments: Words and Phrases. Every direction of the court made or
entered in writing and not included in a judgment is an order.
5. Final Orders: Appeal and Error. To be appealable, an order must
satisfy the final order requirements of Neb. Rev. Stat. § 25-1902(Cum. Supp. 2020) and, additionally, where implicated, Neb. Rev. Stat.
§ 25-1315(1) (Reissue 2016).
6. Actions: Parties: Final Orders: Appeal and Error. Neb. Rev. Stat.
§ 25-1315(1) (Reissue 2016) is implicated where there are multiple
causes of action or multiple parties and the court enters a final order as
to one or more but fewer than all of the causes of action or parties.
7. Claims: Parties: Final Orders. In the absence of an express determi-
nation that there is no just reason for delay upon an express direction
for the entry of judgment, orders, however designated, adjudicating
fewer than all claims or the rights of fewer than all the parties are
not final.
8. Actions: Parties: Final Orders: Appeal and Error. One may bring
an appeal pursuant to Neb. Rev. Stat. § 25-1315(1) (Reissue 2016)
only when (1) multiple causes of action or multiple parties are present,
(2) the court enters a final order within the meaning of Neb. Rev. Stat.
§ 25-1902 (Cum. Supp. 2020) as to one or more but fewer than all of
- 784 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783the causes of action or parties, and (3) the trial court expressly directs
the entry of such final order and expressly determines that there is no
just reason for delay of an immediate appeal.
9. Claims: Parties: Appeal and Error. Absent an entry of judgment under
Neb. Rev. Stat. § 25-1315 (Reissue 2016), no appeal will lie unless all
claims have been disposed as to all parties in the case.
10. Final Orders: Appeal and Error. Final orders under Neb. Rev. Stat.
§ 25-1902 (Cum. Supp. 2020) are carefully circumscribed to avoid
piecemeal review, chaos in trial procedure, and a succession of appeals
granted in the same case to secure advisory opinions to govern further
actions of the trial court.
11. Final Orders: Words and Phrases. A special proceeding occurs where
the law confers a right and authorizes a special application to a court to
enforce the right.
12. Actions: Final Orders: Statutes. A special proceeding includes every
special statutory remedy that is not in itself an action; thus, special pro-
ceedings and actions are mutually exclusive categories.
13. Actions: Statutes: Words and Phrases. An action is any proceeding
in a court by which a party prosecutes another for enforcement, protec-
tion, or determination of a right or the redress or prevention of a wrong
involving and requiring the pleadings, process, and procedure provided
by the statute and ending in a final judgment.
14. Actions: Final Orders. While a special proceeding may be connected
with an action in the sense that the application for the benefit of it and
the other papers and orders concerning it may be filed in the case where
the record of the filings in the action are made, it is not an integral part
of the action.
15. ____: ____. None of the many steps or proceedings necessary or per-
mitted to be taken in an action to commence it, to join issues in it, and
conduct it to a final hearing and judgment are special proceedings.
16. Actions: Final Orders: Statutes. Regardless of a statutory remedy’s
location within Nebraska’s statutes, actions and special proceedings are
mutually exclusive.
17. Statutes: Public Officers and Employees. Where the Revisor of
Statutes happens to put a proceeding does not alter the nature of the
proceeding.
18. Statutes. A proceeding is not special by the sole virtue of it being placed
outside of chapter 25 of the Nebraska Revised Statutes.
19. Derivative Actions. Derivative actions are not special proceedings.
20. Derivative Actions: Equity: Words and Phrases. A derivative action
is an equitable proceeding in which a member of a limited liability cor-
poration asserts, on behalf of the corporation, a claim that belongs to the
corporation rather than to the member.
- 785 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 78321. Derivative Actions: Complaints. While a derivative action requires the
extra step of making a demand on the other members or managers to
cause the company to bring the action to enforce the right and requires
that the complaint state the fact of such demand or that it was futile, it
is an action.
22. Corporations. The purpose of a special litigation committee is to inves-
tigate the claims made in the action and determine whether pursuing the
action is in the best interests of the company.
23. Corporations: Derivative Actions. The special litigation committee
balances the rights and duties of the board and dissenting share­holders
by providing a corporation with an important tool to rid itself of merit­
less or harmful litigation while preventing directors from using the
committee to wrest control of bona fide derivative claims away from
well-meaning plaintiffs.
24. Final Orders: Words and Phrases. A substantial right is an essential
legal right, not a mere technical right.
25. Final Orders: Appeal and Error. A substantial right is affected if an
order affects the subject matter of the litigation, such as by diminishing
a claim or defense that was available to an appellant before the order
from which an appeal is taken.
26. Final Orders. It is not enough that the right itself be substantial; the
effect of the order on that right must also be substantial.
27. Final Orders: Time. The duration of an order is relevant to whether it
affects a substantial right.
28. Final Orders: Appeal and Error. Whether the effect of an order is
substantial depends on whether it affects with finality the rights of the
parties in the subject matter.
29. Final Orders. Substantial rights under Neb. Rev. Stat. § 25-1902 (Cum.
Supp. 2020) include those legal rights that a party is entitled to enforce
or defend.
30. Final Orders: Appeal and Error. An order affects a substantial right
when the right would be significantly undermined or irrevocably lost by
postponing appellate review.
31. Final Orders. The mere fact that a person is subjected to inconvenience,
annoyance, discomfort, or even expense by a decree does not entitle that
person to appeal from it, as long as he or she is not thereby concluded
from asserting or defending claims of personal or property rights in any
proper court. Being subjected to trial does not affect an essential legal
right and thus does not affect a substantial right.
32. ____. An order to mediate does not affect any substantial right of
the parties.
33. Final Orders: Appeal and Error. It would undermine the efficien-
cies inherent to mediation to allow interlocutory appeals of such
- 786 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783orders, which do not, in any event, diminish the underlying issues of
the action.
34. Appeal and Error. While the parties may consider themselves incon-
venienced by an order to mediate, the fact that a person is subjected to
inconvenience by a court’s order does not in and of itself entitle one
to appeal.
Appeal from the District Court for Dakota County: Bryan
C. Meismer, Judge. Appeal dismissed.
Mathew T. Watson and Erin R. Robak, of McGill, Gotsdiner,
Workman & Lepp, P.C., L.L.O., for appellant.
Scott D. Jochim, of Croker Huck Law Firm, for appellees.
Miller-Lerman, Cassel, Stacy, Funke, Papik, and
Freudenberg, JJ., and Bataillon, District Judge.
Freudenberg, J.
I. INTRODUCTION
In a derivative action, a minority shareholder brought suit
on behalf of the manager-managed limited liability company
(LLC). Pursuant to Neb. Rev. Stat. § 21-168 (Reissue 2012),
the manager-defendants appointed a single-member special
litigation committee to investigate and determine whether it
was in the LLC’s best interests to pursue the derivative action.
The committee determined it was in the LLC’s best interests
for the derivative action to be settled on terms approved by the
committee, which were to disclose to the LLC members cer-
tain issues and conduct a majority vote as to how they should
be resolved. In reviewing the committee’s report, the district
court found that the committee acted with “enough disinter-
ested independence and good faith,” but that its recommenda-
tion for disclosure to and vote of the members was beyond the
committee’s statutory authority. The court ordered the parties
to attempt mediation and thereafter report the outcome of the
mediation and make further recommendations to the court. The
minority shareholder appeals, and the defendants cross-appeal
the order.
- 787 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783II. BACKGROUND
1. Parties and Ownership Interests
Lite-Form Technologies, L.L.C. (Lite-Form), is an LLC
with its principal place of business in South Sioux City,
Nebraska. Patrick Boeshart is the president and sole manager
of Lite-Form, and his wife, Sandra Boeshart, is the office man-
ager and provides bookkeeping services to Lite-Form. Boeshart
Management Company, L.L.C. (Boeshart Management), is
an Iowa LLC that conducts business in Nebraska. Boeshart
Management is wholly owned and controlled by Patrick and
Sandra, with Sandra designated as the registered agent in
Nebraska for Boeshart Management. Pat Boeshart Construction,
L.L.C. (Boeshart Construction), is an Iowa LLC that con-
ducts business in Nebraska. Boeshart Construction is wholly
owned and controlled by Patrick. Patrick, Sandra, Boeshart
Management, and Boeshart Construction are collectively
referred to hereafter as “the Boesharts.” Tegra Corporation
(Tegra) is an Iowa corporation with its principal place of
business in Sioux City, Iowa, and is a minority shareholder
of Lite-Form.
There is some slight discrepancy between the parties’ plead-
ings as to ownership percentages for Lite-Form. Accounting
for this discrepancy, Tegra owns approximately 2.521 to
2.5237 percent of the membership units of Lite-Form, Patrick
owns approximately 7.084 to 7.1714 percent of the member-
ship units of Lite-Form, and Sandra owns approximately 7
to 7.0662 percent of the membership units of Lite-Form.
The remaining minority members collectively own approxi-
mately 22.671 to 24.313 percent of the membership units of
Lite-Form. Lite-Form International, L.C. (Lite-Form Int’l),
owns approximately 60 to 60.5677 percent of Lite-Form. Tegra
owns approximately 37.44 to 37.5755 percent of the member-
ship units of Lite-Form Int’l, and therefore, it indirectly owns
approximately 22.46 to 22.7586 percent of Lite-Form. Patrick
owns approximately 49.766 to 49.9678 percent of the member­
ship units of Lite-Form Int’l, and therefore, he indirectly
- 788 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783owns approximately 29.86 to 30.2643 percent of Lite-Form.
Finally, Sandra owns approximately 6.745 to 6.7480 percent
of the membership units of Lite-Form Int’l, and therefore,
she indirectly owns approximately 4.05 to 4.08711 percent
of Lite-Form.
2. Tegra’s Lawsuit
Tegra, individually and on behalf of Lite-Form, filed a
complaint against the Boesharts alleging breach of fiduciary
duty, misappropriation and waste of corporate assets, unjust
enrichment, conversion, and, as to Sandra, aiding and abetting
a fiduciary breach. Tegra also alleged in its individual capac-
ity that it had made a demand upon Lite-Form to produce
information and documentation related to the claims set forth
and that Lite-Form had wrongfully withheld that information
from Tegra.
3. Appointment of Special Litigation
Committee and Its Findings
Patrick, under the authority granted to LLCs by § 21-168,
appointed Cody Carse as a single member special litigation
committee (Committee) to investigate the claims asserted by
Tegra and to determine whether pursuing the action was in the
best interests of Lite-Form. The derivative action was stayed
during the pendency of the Committee’s investigation. The
Committee subsequently timely filed its report and statement
of determination with the court. Carse outlined his qualifica-
tions, which consisted of the fact that Carse is a certified public
accountant, a certified fraud examiner, and certified in finan-
cial forensics. The report generally addressed the allegations of
the complaint.
(a) Conflicting-Interest Leases
The Committee found that leases between Boeshart
Construction and Lite-Form and Boeshart Management and
Lite-Form, challenged in the action, were for equipment
- 789 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783used by Lite-Form for legitimate business purposes but that
some of the leases had rental rates that appeared to be above
market. The Committee recommended that the leases be dis-
closed to all the members of Lite-Form and that the members
holding at least a majority of all outstanding units vote to
either (1) approve or modify any of the terms of the related-
party leases retroactively back to the start of each lease, (2)
determine if member approval must be required in the future
before entering into any related-party lease, or (3) choose not
to address the leases at all or take any action.
(b) Diversion of Profits to
Boeshart Family
On a claim of diversion of profits, the Committee found
that on October 30, 2018, Lite-Form paid $600,000 to Patrick,
$200,000 to Patrick and Sandra’s son, and $200,000 to Patrick
and Sandra’s daughter. Patrick loaned the $600,000 back to
Lite-Form, but the loan was reduced to $487,194.03 by July
3, 2019. The $512,805.97 net cash paid out by Lite-Form was
repaid to Lite-Form by a deposit of $234,867.03 made on
December 23, 2019, and a deposit of $277,938.94 made on
January 17, 2020. While the derivative action alleged Lite-Form
had lost use of the $1 million for over a year, incurred addi-
tional professional fees to unwind the transaction, and incurred
Internal Revenue Service penalties and interest due to the pay-
ment and unwinding of the transaction, the Committee noted it
had not been provided with any documentation regarding addi-
tional professional fees or Internal Revenue Service penalties
and interest. As a resolution, the Committee recommended that
all the details of the $1 million bonus transaction be disclosed
to the members of Lite-Form, including any expenses incurred
by Lite-Form due to the loss of use of the money that was paid
out on October 31, 2018, and not fully repaid until January
17, 2020, and that the members thereafter vote to determine if
Lite-Form should be reimbursed by Patrick for any expenses
incurred due to the transaction.
- 790 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783(c) Unauthorized Salaries,
Bonuses, and Benefits
With respect to alleged unauthorized salaries, bonuses, and
benefits, the Committee found that, except for the $1 million
bonus in 2018, Sandra and Patrick and Sandra’s son were paid
salaries comparable to other Lite-Form employees and that
Patrick and Sandra’s daughter’s salary was based on her previ-
ous employer. It was a condition of her joining Lite-Form that
Lite-Form would match the salary she was receiving previ-
ously. With respect to Patrick’s salary, the Committee found
that the operating agreement states the manager’s salary and
other compensation are subject to the approval of the members
but does not state the manager must request approval from the
members. It appeared that for the 18 years of Lite-Form’s exis-
tence, the members had chosen not to specifically approve the
salary and other compensation of the manager of the company.
The Committee found it did not have a basis to evaluate the
amount of Patrick’s salary. It recommended that the relevant
section of the operating agreement be discussed at the next
member meeting.
(d) Luxury Vehicles
With respect to allegations concerning luxury vehicles, the
Committee found that on July 28, 2002, Lite-Form entered into
two leases with Lite-Form Int’l, which owned the vehicles,
for a term from July 1 to December 31, 2002. The leases
included $400 per month for general office and computer
equipment and $4,800 per month for “Autos and Trailers.” The
Committee noted that although the written leases terminated
on December 31, the monthly rental payments have continued
through the present point in time for the same amounts and
Lite-Form Int’l continued to provide Lite-Form with all the
company-provided vehicles driven by Lite-Form employees.
The Committee found that the vehicles were for the business
and personal use of the Lite-Form employees and opined that
providing company vehicles and having the employer pay for
- 791 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783license, taxes, and registration for company-provided vehicles
is a common business practice. The Committee further found
that the monthly rental payment of $4,800 has never changed
over the years and that the cost to Lite-Form has been the
same whether the company provided “‘new and luxury cars’
or ‘old and cheap cars.’” Thus, the Committee concluded the
purchase price of the vehicles had no impact on the cost to
Lite-Form. The Committee recommended that the leases be
discussed at the next Lite-Form member meeting, as well as
whether Lite-Form should continue providing company vehi-
cles to employees for business and personal use and paying for
license, taxes, and registration of those vehicles.
(e) Financial Mismanagement
In addressing the derivative action’s allegations of finan-
cial mismanagement, the Committee found that Patrick uses
a personal American Express credit card for both Lite-Form
business purposes and personal purposes. The monthly state-
ment is reviewed by Sandra, and she identifies which charges
are personal and which are Lite-Form business expenses. The
business expenses are then coded to the applicable Lite-Form
general ledger account and are paid by Lite-Form to American
Express. The personal purchases are paid by Patrick person-
ally to American Express. The Committee’s recommendation
concluded, “This is a small business and Sandra . . . is very
familiar with all of the charges made to [the American Express]
account each month. She is quite capable of accurately iden-
tifying which charges are [Lite-Form] expenses and which
charges are personal.” Further, the Committee noted that Tegra
had failed to provide the Committee with documentation sup-
porting these allegations.
(f) Wrongful Withholding of Information
With respect to allegations of wrongful withholding of
information, the Committee stated, “It is the [Committee’s]
understanding that [the Boesharts] are following the advice
- 792 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783of their legal counsel with regard to production of the informa-
tion requested in [Tegra’s] October 22[, 2019,] Demand.”
(g) Statement of Determination
In a “Statement of Determination” in the report, the Com­
mittee “determined that it is in the best interests of [Lite-Form]
that the derivative proceeding be settled on terms approved
by the Committee.” This was because, in Carse’s professional
opinion, “[the Boesharts’] actions do not justify continuing the
derivative proceeding under the control of [Tegra]”:
In summary, all the issues identified in the [Com­
mittee’s] investigation can be resolved by the Members
of [Lite-Form]. After the Members have been properly
informed about the issues, the Members holding at least
a majority of all outstanding Units and entitled to vote
can determine how these issues should be resolved. In my
professional opinion, the “majority of voting members”
are quite capable of making the final decision on all of
these issues.
Once the Members have met and voted, counsel shall
report back to the Committee. Based upon the results of
the meeting, the Committee may file a request with the
Court to dismiss the pending action.
4. Evidentiary Hearing on
Committee’s Report
An evidentiary hearing was held to determine whether the
district court would adopt the determinations in the report or
continue the litigation in the control of Tegra. Carse was the
only witness to testify.
Carse testified that all his opinions were made to a reason-
able degree of accounting certainty. He viewed his role as
the Committee to simply investigate and then have the court
make a decision, and he “never made any decisions on behalf
of the company.”
Carse testified that in his role as the Committee, he did not
“do anything from a legal interpretation standpoint,” since
- 793 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783he was “not a lawyer.” However, the Committee’s legal counsel
“didn’t make any decisions on how to do [his] investigation”
and was simply a “conduit” for information to the parties and
to file things for the court.
Carse repeatedly stated that throughout his investigation, he
believed it was “up to Tegra” to bring the evidence to him to
support the allegations it was making.
Carse testified that as an accountant and business person
reading the allegations and weighing the evidence he was
provided, he felt the facts presented to him did not satisfy
the claims that were in the lawsuit. Carse admitted he did
not conduct a cost-benefit analysis in determining which of
the four options to recommend. Instead, he simply deter-
mined there was no support for the alleged claims. Carse
explained, “Based on what [Tegra] provided to me, I didn’t
think it would hold up in court.” Therefore, he found no sup-
port for choosing options that would continue the litigation.
However, Carse admitted that he did not know the legal ele-
ments of any of the allegations and, throughout his investiga-
tion, never asked the Committee’s counsel for any legal advice
or legal interpretations.
Still, Carse found evidence that some expenditures were
“out of line.” He believed his solutions of disclosure and
voting on those matters would resolve those matters without
requiring a lawsuit. Carse admitted in regard to the $1 million
bonus that he did not quantify the cost of pursuing the claims
or the potential recovery. He just “estimated it in [his] own
mind” that a member meeting would be cheaper than to “tie up
four attorneys and a judge and a court.”
Thus, Carse ultimately recommended that many of the
issues, such as the leases and the $1 million bonus, should
be disclosed to the members of Lite-Form for a vote. Carse
believed that recommendation constituted making a decision
under § 21-168(d)(3) to “be settled on terms approved by
the committee.”
- 794 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 7835. District Court Order
The district court found that Carse’s review was consistent
with someone of his background as a certified public account­
ant and a certified fraud examiner and that, in the court’s opin-
ion, “he reviewed the claims of [Tegra], did a records review,
and found enough to recommend that the parties attempt
settlement.” The court ultimately found that the Committee
acted “with enough disinterested independence and good faith
to support a determination that the parties attempt to settle
these claims.”
Still, the court took issue with the fact that the Committee had
made a recommendation directly beneficial to the Boesharts,
who chose Carse. And the court believed it was beyond the
statutory authority of the Committee to send matters to the
members for a majority vote, because,
[b]eyond the fact that these recommendations would seem
to put [the Boesharts], accused of self-dealing, in a posi-
tion to act in their own best interest and to the detriment
of [Tegra] and its other members, there is no language in
§21-168(d) that allows the [Committee] to make recom-
mendations for [Tegra] to complete.
Thus, the court stated, “The [Committee] was authorized by
statute to choose one of four options, it chose settlement, and
the additional recommendations of the [Committee] will not be
considered by this Court.”
The court ordered the parties to attempt mediation of the
claims outlined in the operative complaint. The court gave
the parties 30 days to choose a mediator, and if no media-
tor could be agreed upon, the court stated it would determine
the mediator.
The court stated that “[u]pon conclusion of Mediation,
the [Committee] is Ordered to report to the Court the out-
come of the mediation and make further recommendations
per §21-168.” It scheduled a status hearing for September
20, 2021.
- 795 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783III. ASSIGNMENTS OF ERROR
Tegra assigns that the district court erred in (1) concluding
the Committee satisfied its burden of establishing its inves-
tigation was conducted and its recommendation was made
independently, in good faith, and with reasonable care as
required by § 21-168; (2) concluding the Committee satisfied
its burden of establishing it was independent as required by
§ 21-168; (3) determining the Committee made a determina-
tion of settlement permitted by § 21-168 and in accepting that
determination despite finding aspects of it were not permitted
by statute and possessed the appearance of impropriety; (4)
excising aspects of the Committee’s determination that the
court found were improper and substituting mediation in an
effort to remedy the impropriety, which is not permitted by
§ 21-168; (5) deferring to the determination of a Committee
that was acting in a mere advisory capacity and without the
delegated power to exclusively and conclusively determine
whether pursuing the derivative action was in the best inter-
ests of Lite-Form; (6) failing to apply the correct standard of
review under § 21-168, failing to impose the burden upon the
Committee to satisfy § 21-168, and failing to address whether
the Committee satisfied certain requirements of § 21-168,
such as the requirement that the Committee conduct its inves-
tigation and make its recommendation with reasonable care;
and (7) affording the Committee an opportunity to make a
second determination under § 21-168.
In a cross-appeal, the Boesharts assign that the district court
erred in failing to enforce the entirety of the Committee’s rec-
ommendations after accepting its determination.
IV. STANDARD OF REVIEW
[1] The question of jurisdiction is a question of law. 1
V. ANALYSIS
[2] The parties dispute whether we have jurisdiction over
the present appeal. It is the power and duty of an appellate
1
Tyrrell v. Frakes, 309 Neb. 85, 958 N.W.2d 673 (2021).
- 796 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783court to determine whether it has jurisdiction over the mat-
ter before it, irrespective of whether the issue is raised by
the parties. 2
Under Neb. Rev. Stat. § 25-1911 (Reissue 2016), for an
appellate court to acquire jurisdiction of an appeal, there must
be a final judgment or final order entered by the tribunal from
which the appeal is taken. 3
[3] A judgment is the final determination of the rights of the
parties in an action. 4 In this case, there has not been a dismissal
of the action or a final determination of its merits.
[4,5] Rather, Tegra seeks review of an order. Every direction
of the court made or entered in writing and not included in a
judgment is an order. 5 To be appealable, an order must sat-
isfy the final order requirements of Neb. Rev. Stat. § 25-1902(Cum. Supp. 2020) and, additionally, where implicated, Neb.
Rev. Stat. § 25-1315(1) (Reissue 2016). 6
1. Multiple Claims
[6,7] Section 25-1315(1) is implicated where there are mul-
tiple causes of action or multiple parties and the court enters a
final order as to one or more but fewer than all of the causes of
action or parties. 7 In the absence of an express determination
that there is no just reason for delay upon an express direction
for the entry of judgment, orders, however designated, adjudi-
cating fewer than all claims or the rights of fewer than all the
parties are not final. 8
2
In re Estate of Lakin, 310 Neb. 271, 965 N.W.2d 365 (2021), modified on
denial of rehearing 310 Neb. 389, 966 N.W.2d 268.
3
In re Estate of Beltran, 310 Neb. 174, 964 N.W.2d 714 (2021).
4
Cinatl v. Prososki, 307 Neb. 477, 949 N.W.2d 505 (2020).
5
Id.6
Tyrrell v. Frakes, supra note 1.
7
Rafert v. Meyer, 298 Neb. 461, 905 N.W.2d 30 (2017).
8
TDP Phase One v. The Club at the Yard, 307 Neb. 795, 950 N.W.2d 640(2020).
- 797 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783[8,9] Section 25-1315(1) provides:
When more than one claim for relief is presented in an
action, whether as a claim, counterclaim, cross-claim, or
third-party claim, or when multiple parties are involved,
the court may direct the entry of a final judgment as to one
or more but fewer than all of the claims or parties only
upon an express determination that there is no just rea-
son for delay and upon an express direction for the entry
of judgment. In the absence of such determination and
direction, any order or other form of decision, however
designated, which adjudicates fewer than all the claims
or the rights and liabilities of fewer than all the parties
shall not terminate the action as to any of the claims or
parties, and the order or other form of decision is subject
to revision at any time before the entry of judgment adju-
dicating all the claims and the rights and liabilities of all
the parties.
One may bring an appeal pursuant to § 25-1315(1) only when
(1) multiple causes of action or multiple parties are present, (2)
the court enters a final order within the meaning of § 25-1902
as to one or more but fewer than all of the causes of action
or parties, and (3) the trial court expressly directs the entry of
such final order and expressly determines that there is no just
reason for delay of an immediate appeal. 9 Absent an entry of
judgment under § 25-1315, no appeal will lie unless all claims
have been disposed as to all parties in the case. 10
There is some suggestion from the record that § 25-1315
may be implicated in this appeal. Tegra explained at oral
arguments that its lawsuit stated a separate cause of action,
individually and not on behalf of Lite-Form, for wrongfully
withholding information and that the order herein appealed
pertains only to Tegra’s derivative claims brought on behalf
9
Id.
10
Id.
- 798 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783of Lite-Form. If we assume that this wrongful withholding
of information allegation was a cause of action, rather than a
theory of recovery, 11 and that the order Tegra appeals, direct-
ing mediation and further recommendations, did not adjudicate
it or we assume Tegra, as an individual, was a separate party
whose rights and liabilities were not adjudicated by the order,
then the lack of an express determination by the court that
there is no just reason for delay and direction for the entry of
judgment would be fatal to our jurisdiction over this appeal.
However, we conclude that regardless of the possible addi-
tional impediment of failing to satisfy § 25-1315, the order was
not final under § 25-1902.
2. Final Order
[10] Final orders under § 25-1902 are carefully circum-
scribed to avoid piecemeal review, chaos in trial procedure,
and a succession of appeals granted in the same case to secure
advisory opinions to govern further actions of the trial court. 12
While there are four types of final orders under § 25-1902,
the relevant inquiry under the facts of this case is whether the
order directing mediation and further recommendations was
“made during a special proceeding” and “affect[ed] a substan-
tial right.”
(a) Special Proceeding
[11-13] A special proceeding occurs where the law con-
fers a right and authorizes a special application to a court
to enforce the right. 13 A special proceeding includes every
special statutory remedy that is not in itself an action; thus,
11
See Poppert v. Dicke, 275 Neb. 562, 747 N.W.2d 629 (2008).
12
See, In re Estate of Larson, 308 Neb. 240, 953 N.W.2d 535 (2021); In
re Interest of Kamille C. & Kamiya C., 302 Neb. 226, 922 N.W.2d 739(2019).
13
Champion v. Hall County, 309 Neb. 55, 958 N.W.2d 396 (2021).
- 799 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783special proceedings and actions are mutually exclusive cat-
egories. 14 An action is any proceeding in a court by which a
party prosecutes another for enforcement, protection, or deter-
mination of a right or the redress or prevention of a wrong
involving and requiring the pleadings, process, and procedure
provided by the statute and ending in a final judgment. 15
Every other legal proceeding by which a remedy is sought by
original application to a court is a special proceeding. 16
[14,15] While a special proceeding may be “connected
with” 17 an action in the sense that the application for the bene­
fit of it and the other papers and orders concerning it may be
filed in the case where the record of the filings in the action are
made, it is not an “integral part” 18 of the action. “None of the
many steps or proceedings necessary or permitted to be taken
in an action to commence it, to join issues in it, and conduct it
to a final hearing and judgment” are special proceedings. 19 For
example, a proceeding on a motion for summary judgment is
not a special proceeding under § 25-1902 because it is “merely
one particular tool that may be used to resolve certain issues
in the case.” 20
14
See, Kremer v. Rural Community Ins. Co., 280 Neb. 591, 788 N.W.2d 538(2010); Williams v. Baird, 273 Neb. 977, 735 N.W.2d 383 (2007); Pfeil
v. State, 273 Neb. 12, 727 N.W.2d 214 (2007); Keef v. State, 262 Neb.
622, 634 N.W.2d 751 (2001); O’Connor v. Kaufman, 255 Neb. 120, 582
N.W.2d 350 (1998).
15
In re Grand Jury of Douglas Cty., 302 Neb. 128, 922 N.W.2d 226 (2019);
In re Interest of D.I., 281 Neb. 917, 799 N.W.2d 664 (2011); Steven S. v.
Mary S., 277 Neb. 124, 760 N.W.2d 28 (2009). See, also, State v. Jacques,
253 Neb. 247, 570 N.W.2d 331 (1997).
16
Id.17
O’Connor v. Kaufman, supra note 14, 255 Neb. at 123, 582 N.W.2d at 353(internal quotation marks omitted).
18
Id. at 124, 582 N.W.2d at 353 (internal quotation marks omitted).
19
Id. at 123, 582 N.W.2d at 353 (internal quotation marks omitted). See,
also, e.g., State v. Vela, 272 Neb. 287, 721 N.W.2d 631 (2006).
20
O’Connor v. Kaufman, supra note 14, 255 Neb. at 124, 582 N.W.2d at
354.
- 800 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783We have said that a “special proceeding” entails civil statu-
tory remedies not encompassed in chapter 25 of the Nebraska
Revised Statutes. 21 Examples of special proceedings that are
outside of chapter 25 include juvenile court proceedings, 22
involuntary commitment, 23 license revocation, 24 dissolution, 25
probate actions, 26 proceedings under the Nebraska Uniform
Trust Code, 27 proceedings under the Uniform Deceptive Trade
Practices Act, 28 workers’ compensation cases, 29 condemna-
tion actions, 30 proceedings before the Department of Water
Resources, 31 and proceedings commenced by various motions
under chapter 29, including postconviction relief, absolute dis-
charge, competency, habeas corpus, public disclosure of grand
jury documents, 32 motions for new trial based on newly discov-
ered evidence, 33 motions to vacate and set aside judgments due
to DNA or other forensic testing, 34 and pleas in bar. 35
21
Williams v. Baird, supra note 14.
22
In re Guardianship of Rebecca B. et al., 260 Neb. 922, 621 N.W.2d 289(2000).
23
See, In re Interest of D.I., supra note 15; In re Interest of Saville, 10 Neb.
App. 194, 626 N.W.2d 644 (2001).
24
State v. Hansen, 249 Neb. 177, 542 N.W.2d 424 (1996).
25
Steven S. v. Mary S., supra note 15.
26
In re Estate of Peters, 259 Neb. 154, 609 N.W.2d 23 (2000). See, also, In
re Estate of Abbott-Ochsner, 299 Neb. 596, 910 N.W.2d 504 (2018).
27
In re Trust of Rosenberg, 269 Neb. 310, 693 N.W.2d 500 (2005).
28
Sid Dillon Chevrolet v. Sullivan, 251 Neb. 722, 559 N.W.2d 740 (1997).
29
Thompson v. Kiewit Constr. Co., 258 Neb. 323, 603 N.W.2d 368 (1999).
30
SID No. 1 v. Nebraska Pub. Power Dist., 253 Neb. 917, 573 N.W.2d 460(1998).
31
In re Applications A-14137, A-14138A, A-14138B, and A-14139, 240 Neb.
117, 480 N.W.2d 709 (1992).
32
In re Grand Jury of Douglas Cty., supra note 15.
33
State v. Harris, 307 Neb. 237, 948 N.W.2d 736 (2020).
34
State v. Bronson, 267 Neb. 103, 672 N.W.2d 244 (2003).
35
State v. Milenkovich, 236 Neb. 42, 458 N.W.2d 747 (1990).
- 801 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783[16,17] However, in Kremer v. Rural Community Ins. Co., 36
we explicitly rejected the premise that a proceeding cannot be
a special proceeding for purposes of § 25-1902 simply because
the remedy is set forth in statutes encompassed in chapter
25. We stated “sometimes” special proceedings are located in
chapter 25 and that, “regardless of a statutory remedy’s loca-
tion within Nebraska’s statutes, actions and special proceedings
are mutually exclusive.” 37 While the Legislature may some-
times direct the Revisor of Statutes as to which chapter a sec-
tion must be assigned, 38 it often does not. In the latter circum-
stance, it has been said that “[w]here the Revisor of Statutes
happens to put a proceeding . . . does not alter the nature of
the proceeding.” 39
Within chapter 25, we have held that orders granting appli-
cations to compel arbitration, staying judicial proceedings
pending arbitration, 40 and denying motions to compel arbitra-
tion under alleged contractual agreements to arbitrate 41 are
made in special proceedings.
[18] The underlying order herein appealed was made,
broadly, within a derivative action on behalf of an LLC.
We have never addressed whether a derivative action is a
special proceeding. Derivative actions are governed by stat-
utes outside of chapter 25, and we recognize that, histori-
cally, we have often concluded that orders were made during
36
Kremer v. Rural Community Ins. Co., supra note 14. See, also, Sutton v.
Killham, 285 Neb. 1, 825 N.W.2d 188 (2013).
37
Kremer v. Rural Community Ins. Co., supra note 14, 280 Neb. at 597, 788
N.W.2d at 546.
38
State v. Sundling, 248 Neb. 732, 538 N.W.2d 749 (1995).
39
John P. Lenich, What’s So Special About Special Proceedings? Making
Sense of Nebraska’s Final Order Statute, 80 Neb. L. Rev. 239, 279 (2001).
See, also, Neb. Rev. Stat. § 49-705 (Reissue 2021).
40
Kremer v. Rural Community Ins. Co., supra note 14.
41
Speece v. Allied Professionals Ins. Co., 289 Neb. 75, 853 N.W.2d 169(2014); Webb v. American Employers Group, 268 Neb. 473, 684 N.W.2d
33 (2004).
- 802 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783special proceedings simply because the statutory remedies at
issue were not encompassed within chapter 25. 42 However, we
have recently held that a proceeding, which was governed by
statutes outside of chapter 25, was not a special proceeding. 43
This is consistent with our reasoning in Kremer that the loca-
tion of the governing statute is not determinative of whether
an order is made in a special proceeding as opposed to in an
action. We will no longer reason that a proceeding is special
by the sole virtue of it being governed by statutes outside of
chapter 25.
[19,20] We conclude that derivative actions are not special
proceedings. A derivative action is an equitable proceeding in
which a member of an LLC asserts, on behalf of the LLC, a
claim that belongs to the LLC rather than to the member. 44 It
is only a “derivative action” and governed by certain require-
ments of Neb. Rev. Stat. §§ 21-154 to 21-169 (Reissue 2012),
by virtue of it being maintained by a member on behalf of the
company. Otherwise, the nature of the derivative action is gov-
erned by whatever claims are made on behalf of the company,
which claims, in turn, are governed by the uniform procedural
rules found in chapter 25.
[21] Thus, while a derivative action requires the extra
step of making a demand on the other members or manag-
ers to cause the company to bring the action to enforce the
right 45 and requires that the complaint state the fact of such
42
Furstenfeld v. Pepin, 287 Neb. 12, 840 N.W.2d 862 (2013); Steven S. v.
Mary S., supra note 15; In re Estate of Peters, supra note 26. See, also, In
re Estate of Rose, 273 Neb. 490, 730 N.W.2d 391 (2007); State v. Silvers,
255 Neb. 702, 587 N.W.2d 325 (1998); SID No. 1 v. Nebraska Pub. Power
Dist., supra note 30; Sid Dillon Chevrolet v. Sullivan, supra note 28;
State v. Hansen, supra note 24; Hull v. Aetna Ins. Co., 247 Neb. 713, 529
N.W.2d 783 (1995).
43
See State v. Vela, supra note 19.
44
51 Am. Jur. 2d Limited Liability Companies § 48 (2021).
45
See § 21-165.
- 803 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783demand or that it was futile, 46 it is an action. It is a proceeding
in a court by which a party prosecutes another for enforce-
ment, protection, or determination of a right or the redress or
prevention of a wrong involving and requiring the pleadings,
process, and procedure provided by the statute and ending in a
final judgment.
Of course, the fact that derivative actions are not special
proceedings does not necessarily determine whether orders
under § 21-168, made when the LLC exercises the right set
forth in § 21-168 to appoint a special litigation committee, are
not made in a special proceeding. This is because, as stated,
a special proceeding may be “connected with” 47 an action in
the sense that the application for the benefit of it and the other
papers and orders concerning it may be filed in the case where
the record of the filings in the action are made. The question
is whether proceedings under § 21-168 are an integral part of
the main derivative action; i.e., whether they are just one of the
many steps or proceedings necessary or permitted to be taken
in the derivative action to commence it, to join issues in it, and
conduct it to a final hearing and judgment.
To understand if proceedings under § 21-168 are one of
the many steps of a derivative action or, instead, a special
application authorized by a law conferring a special right,
we must examine § 21-168 and the potential consequences of
orders issued pursuant to that section. Section 21-168 provides
in full:
(a) If a limited liability company is named as or
made a party in a derivative proceeding, the company
may appoint a special litigation committee to investi-
gate the claims asserted in the proceeding and determine
whether pursuing the action is in the best interests of the
company. If the company appoints a special litigation
46
§ 21-167.
47
O’Connor v. Kaufman, supra note 14, 255 Neb. at 123, 582 N.W.2d at 353(internal quotation marks omitted).
- 804 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783committee, on motion by the committee made in the
name of the company, except for good cause shown, the
court shall stay discovery for the time reasonably neces-
sary to permit the committee to make its investigation.
This subsection does not prevent the court from enforc-
ing a person’s right to information under section 21-139
or, for good cause shown, granting extraordinary relief
in the form of a temporary restraining order or prelimi-
nary injunction.
(b) A special litigation committee may be composed
of one or more disinterested and independent individuals,
who may be members.
(c) A special litigation committee may be appointed:
(1) in a member-managed limited liability company:
(A) by the consent of a majority of the members not
named as defendants or plaintiffs in the proceeding; and
(B) if all members are named as defendants or plain-
tiffs in the proceeding, by a majority of the members
named as defendants; or
(2) in a manager-managed limited liability company:
(A) by a majority of the managers not named as
defend­ants or plaintiffs in the proceeding; and
(B) if all managers are named as defendants or plain-
tiffs in the proceeding, by a majority of the managers
named as defendants.
(d) After appropriate investigation, a special litigation
committee may determine that it is in the best interests of
the limited liability company that the proceeding:
(1) continue under the control of the plaintiff;
(2) continue under the control of the committee;
(3) be settled on terms approved by the committee; or
(4) be dismissed.
(e) After making a determination under subsection (d)
of this section, a special litigation committee shall file
with the court a statement of its determination and its
- 805 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783report supporting its determination, giving notice to the
plaintiff. The court shall determine whether the members
of the committee were disinterested and independent and
whether the committee conducted its investigation and
made its recommendation in good faith, independently,
and with reasonable care, with the committee having the
burden of proof. If the court finds that the members of
the committee were disinterested and independent and
that the committee acted in good faith, independently, and
with reasonable care, the court shall enforce the determi-
nation of the committee. Otherwise, the court shall dis-
solve the stay of discovery entered under subsection (a)
of this section and allow the action to proceed under the
direction of the plaintiff.
[22] The purpose of a special litigation committee is to
investigate the claims made in the action and determine whether
pursuing the action is in the best interests of the company. 48
This determination involves weighing, among other things, the
merits of the litigation against the direct expenses of litigation
and the indirect costs of litigation such as potential waste of
management time and adverse public relations. 49 Generally the
action is stayed during the investigation. 50
[23] The special litigation committee balances the rights
and duties of the board and dissenting shareholders by pro-
viding a corporation with an important tool to rid itself of
meritless or harmful litigation while preventing directors from
using the committee to wrest control of bona fide deriva-
tive claims away from well-meaning plaintiffs. 51 The court
enforces the special litigation committee’s business decision
48
§ 21-168.
49
See Minor Myers, The Decisions of the Corporate Special Litigation
Committees: An Empirical Investigation, 84 Ind. L.J. 1309 (2009).
50
See id.51
19 Am. Jur. 2d Corporations § 1965 (2015).
- 806 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783if the court finds that the members of the committee were
disinterested and independent and that the committee acted in
good faith, independently, and with reasonable care. 52 If the
special litigation committee fails to prove those things, the
suit continues under the control of the original plaintiff. 53
Under § 21-168, assuming the court finds the special liti-
gation committee has proved its members were disinterested
and independent and that the special litigation committee con-
ducted its investigation and made its recommendation in good
faith, independently, and with reasonable care, the determina-
tion the court shall enforce will be one of four options recom-
mended by the committee: (1) that the action continue under
the control of the minority member plaintiff who brought it, (2)
that the action continue under the control of the committee, (3)
that the action be settled on terms approved by the committee,
or (4) that the action be dismissed. 54 If the court does not find
the special litigation committee has proved its members were
disinterested and independent and that the committee con-
ducted its investigation and made its recommendation in good
faith, independently, and with reasonable care, then the result
is, in essence, option one.
Under all of these options the LLC remains the plaintiff.
Under options one and two, the action continues on its regular
course under either the minority member’s or the special liti-
gation committee’s direction as representative of the company
plaintiff. Options three and four effectively put the control of
the litigation in the hands of the special litigation committee,
which has elected to resolve the matter through settlement or
dismissal rather than litigate.
In the case of Platte Valley Nat. Bank v. Lasen, 55 we
found analogous proceedings were not special for purposes
52
See § 21-168.
53
See id.
54
See id.
55
Platte Valley Nat. Bank v. Lasen, 273 Neb. 602, 732 N.W.2d 347 (2007).
- 807 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783of § 25-1902. Therein we held that regardless of the method
under which revivor is sought, it is not a final order and
cannot be appealed until a final judgment in the case is ren-
dered. A revivor, we said, simply substitutes “‘one party for
another as an incident in the original cause’”; a representative
takes the place of the deceased party and the action contin-
ues. 56 We reasoned that such an order is not made in a spe-
cial proceeding; it is merely a step or proceeding within the
overall action.
Likewise, proceedings under § 21-168 are fundamentally
about which party controls the original cause. Either the minor-
ity member or the committee effectively takes the place of the
LLC. As such, any proceedings under § 21-168 are merely a
step in the underlying derivative action. Orders made pursuant
to § 21-168 are not made during a special proceeding.
(b) Substantial Right
[24-27] Furthermore, an order under § 21-168 does not
affect a substantial right. A substantial right is an essential
legal right, not a mere technical right. 57 A substantial right is
affected if an order affects the subject matter of the litigation,
such as by diminishing a claim or defense that was available to
an appellant before the order from which an appeal is taken. 58
It is not enough that the right itself be substantial; the effect
of the order on that right must also be substantial. 59 Thus, for
example, the duration of an order is relevant to whether it
affects a substantial right. 60
[28-30] Whether the effect of an order is substantial
depends on “‘whether it affects with finality the rights of the
56
Id. at 611, 732 N.W.2d at 353.
57
In re Estate of Beltran, supra note 3.
58
Id.59
In re Interest of Zachary B., 299 Neb. 187, 907 N.W.2d 311 (2018).
60
Yori v. Helms, 307 Neb. 375, 949 N.W.2d 325 (2020).
- 808 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783parties in the subject matter.’” 61 Substantial rights under
§ 25-1902 include those legal rights that a party is entitled to
enforce or defend. 62 Most fundamentally, an order affects a
substantial right when the right would be significantly under-
mined or irrevocably lost by postponing appellate review. 63
We held in Platte Valley Nat. Bank that revivor does not
affect a substantial right, reasoning: “The fact that an order
of revivor may move the case forward to trial does not mean
that the order affects a substantial right of the opposing party.
Ordinary burdens of trial do not necessarily affect a substantial
right.” 64 We said, further, that the order of revivor does not
determine the rights of the parties to the action; rather, the
cause is retained for further action. 65 We have similarly held
that orders substituting party plaintiffs do not affect substantial
rights of the parties in the cause. 66
In Cinatl v. Prososki, 67 we held that an order denying an
application to vacate an arbitration award does not affect a
substantial right, despite the appellant’s argument that the
right to challenge the validity of an award through an applica-
tion to vacate is an essential legal right. We reasoned that this
argument overlooked the imminent appealability of an order
confirming the award. We held that the right to challenge the
validity of the award can be vindicated in an appeal from
an order confirming the arbitration award, which must occur
61
In re Interest of Mekhi S. et al., 309 Neb. 529, 534, 960 N.W.2d 732, 757
(2021).
62
In re Estate of Beltran, supra note 3.
63
See, Porter v. Porter, 309 Neb. 167, 959 N.W.2d 235 (2021); Gem City
Bone & Joint v. Meister, 306 Neb. 710, 947 N.W.2d 302 (2020); Tilson v.
Tilson, 299 Neb. 64, 907 N.W.2d 31 (2018).
64
Platte Valley Nat. Bank v. Lasen, supra note 55, 273 Neb. at 611, 732
N.W.2d at 353.
65
See id.66
See Hall v. Vanier, 7 Neb. 397 (1878).
67
Cinatl v. Prososki, supra note 4.
- 809 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783within 60 days after a party’s application to do so. To allow
orders denying an application to vacate an arbitration award
to be immediately appealable would frustrate the purposes of
arbitration, which is to have quick resolution of disputes and
avoid the expense and delay associated with litigation. 68
The court orders enforcing special litigation committee
determinations of options three or four lead, like in Cinatl,
imminently to final judgments. Their effect as independent
orders is of limited duration, and any delay in their enforce-
ment does not substantially affect any substantial right.
Options one and two may result in protracted litigation that
a party might later contend was controlled by the wrong per-
son or entity, but, even so, such claimed right under § 21-168
can be effectively vindicated in an appeal from the final judg-
ment of the derivative action. Unlike, for example, certain
orders for the sale of real or personal property, 69 which we
have held cannot be effectively vindicated in an appeal from
the final judgment, any dispute about who controlled the deriv-
ative action is a dispute ultimately about money. The remedy
for prejudicial error would be reversal and a potential new trial
and its associated costs.
[31] As stated in Platte Valley Nat. Bank, ordinary bur-
dens of trial do not necessarily affect a substantial right. 70
Similarly, in the context of the attempted appeal from the
denial of a motion for summary judgment, wherein the appel-
lant complained of being subjected to a long and expensive
trial, we said, “The mere fact that a person is subjected to
inconvenience, annoyance, discomfort, or even expense, by
a decree does not entitle him to appeal from it, as long as
he is not thereby concluded from asserting or defending his
68
See id.
69
See, In re Estate of Beltran, supra note 3; In re Estate of McKillip, 284
Neb. 367, 820 N.W.2d 868 (2012).
70
Platte Valley Nat. Bank v. Lasen, supra note 55.
- 810 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783claims of personal or property rights in any proper court.” 71
Being subjected to trial does not affect an essential legal right
and thus does not affect a substantial right. 72
Moreover, a party who initially suspects the motives or
abilities of the person or entity controlling the litigation may
ultimately be satisfied with its outcome, making the question of
who represented the company moot. And it has been said that
a relevant consideration in determining if an order is immedi-
ately appealable as a final order is whether it “may be mooted
by subsequent developments in the litigation.” 73
We recognize that in this case the court neither enforced the
determination of the Committee nor allowed the action to pro-
ceed under the direction of Tegra, because it was unconvinced
the Committee properly chose one of the statutory options. In
other words, the order being appealed from did not have the
effect of one of the four statutory options discussed above.
The court instead ordered mediation and further recommenda-
tions by the Committee. Both parties argue in this appeal that
their right under § 21-168 to a binary choice between adopting
the Committee’s recommendation and allowing the action to
proceed under the minority member’s control was prejudiced
and that the court exceeded its authority in ordering mediation.
Tegra also asserts the Committee should not be given a second
chance to make a proper recommendation. Even considering
the unique nature of the order in question, we find it did not
affect a substantial right.
[32-34] Mediation means a process in which a mediator
facilitates communication and negotiation between parties to
assist them in reaching a voluntary agreement regarding their
dispute. 74 Any agreement or resolution made in mediation
71
Rehn v. Bingaman, 157 Neb. 467, 472, 59 N.W.2d 614, 617 (1953).
72
See id.73
Lenich, supra note 39 at 284.
74
Neb. Rev. Stat. § 25-2931 (Reissue 2016).
- 811 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783or another form of alternative dispute resolution shall be volun-
tarily entered into by the parties. 75 One of the purposes of medi-
ation is to efficiently reduce the volume of matters burdening
the court system. 76 While it does not appear we have addressed
the finality of mediation orders, in other jurisdictions, court
orders directing the parties to participate in mediation and
report back to the court are not immediately appealable. 77 We
hold that an order to mediate does not affect any substantial
right of the parties. It would undermine the efficiencies inher-
ent to mediation to allow interlocutory appeals of such orders,
which do not, in any event, diminish the underlying issues of
the action. While the parties may consider themselves inconve-
nienced by an order to mediate, again, the fact that a person is
subjected to inconvenience by a court’s order does not in and
of itself entitle one to appeal. 78
As for the part of the court’s order requiring further recom-
mendations by the special litigation committee following the
attempts at mediation, such order is inherently of temporary
duration and a matter retained by the court for further action.
Tegra’s arguments about the rights affected by the order can be
resolved in an appeal from the final judgment—in the event the
dispute is not settled through mediation.
VI. CONCLUSION
We understand that Tegra filed this appeal out of an
abundance of caution and that our final order jurisprudence
75
Neb. Rev. Stat. § 25-2943 (Reissue 2016).
76
Neb. Rev. Stat. § 25-2902 (Reissue 2016).
77
See, Tutu Park, Ltd. v. O’Brien Plumbing Co., Inc., 180 F. Supp. 2d 673(D.V.I. 2002); Ellis v. Reynolds, 368 Ark. 572, 247 S.W.3d 845 (2007);
Short Bros. Const. v. Korte & Luitjohan, 356 Ill. App. 3d 958, 828 N.E.2d
754, 293 Ill. Dec. 444 (2005); Fair Share Housing v. Cherry Hill, 242 N.J.
Super. 76, 576 A.2d 24 (1990); Valley Coal v. Intern. Union, UMWA, 402
Pa. Super. 141, 586 A.2d 436 (1991); Walsh v. Larsen, 705 N.W.2d 638(S.D. 2005).
78
Hernandez v. Blankenship, 257 Neb. 235, 596 N.W.2d 292 (1999).
- 812 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
TEGRA CORP. v. BOESHART
Cite as 311 Neb. 783has never addressed orders pertaining to special litigation
committees. But, for the foregoing reasons, we find that the
court’s order for mediation and further recommendation is not
a final order under § 25-1902. As a result, we lack jurisdiction
over Tegra’s appeal and the Boesharts’ cross-appeal.
Appeal dismissed.
Heavican, C.J., not participating.