# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 6- 31 49

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St acy Ry an

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

Co ns ta nc e “ Co nn ie ” Ryan; S tre ck , Inc

.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es

__ __ __ __ __ __
App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of Ne br as ka - Om ah a

__ __ __ __ __ __

Su bm it te d: Decem

be r 13 , 20 17
Fil ed : M ay

7, 2 01 8

__ __ __ __ __ __

Befo re WOL LMAN, LOKEN , and MELLOY, Circu it Ju dg es

.

__ __ __ __ __ __

LOKEN, Ci rcu it Ju dg e.

St reck

, I n c

. (“ St reck ”) is a su cces sf ul

, cl os el y he ld Neb ras ka co rp or at io n

fo un de d b y

Dr. W ay ne Ry an in 19 82 . In 1 98 5, Dr. Ry an an d h is wife Eil een gi fte d

eq ua l am ou nt s of vo ti ng an d no nv ot in g St reck st oc k to th ei r fiv e ch il dr en

. Dau gh te r

Co ns ta nc e Ry an (“ Co nn ie ”) ha s be en pr es id en t of St reck si nc e 19 93 an d CEO an d

ch ai rm an of th e bo ard si nc e 20 13

. In m id -2 01 2, ex erci si ng it s rig ht to pu rch as e un de r

a rev is ed Red em

pt io n Agr eem en t (“ RRA”)

, St reck pu rch as ed da ug ht er St acy Ry an ’svo ti ng an d no nv ot in g sh ares fo r $9 ,28 0,2 35

. In Aug us t 20 15

, St acy fil ed th is act io n

ag ai ns t St reck an d Co nn ie

, al le gi ng vi ol at io ns of § 10 (b ) of th e Secu rit ie s Exc ha ng e

Act o f 19 34 , 15 U.S.C. § 7 8j(b ); S ecu rit ie s and Exc ha ng e Co m m is si on Ru le 10 b- 5,

17 C.F.R. § 24 0.1 0b -5 ; an d m ul ti pl e v io la ti on s o f Neb ras ka law i n con ne ct io n with

St reck ’s red em

pt io n o f St acy’ s st oc k. The di st ric t co ur t gr an te d Defen da nt s’ 1 2

m ot io ns to di sm is s an d de ni ed po st -d is m is sa l m ot io ns to al te r or am en d th e jud gm en t

an d fo r le av e to fil e an am en de d co m pl ai nt

. St acy ap pe al s th os e ru li ng s. W e affi rm

th e or de r di sm is si ng th e Co m pl ai nt bu t rem an d fo r fu rth er co ns id erat io n of whe th er

St acy’ s po st -d is m is sa l m ot io n to al te r or am en d pr es en te d ne wly di sc ov ered ev id en ce

warra nt in g a lt erat io n o f th e o rd er d is m is si ng he r br each of c on tra ct cla im

.

I. Ba ck gr ou nd

The fo ll owi ng fact s are al le ge d in St acy’ s 12 4- pa rag rap h C o mp la in t an d are

ta ke n as tru e fo r th e pu rp os es of ru li ng on Defen da nt s’ m ot io ns to di sm is s un de r Ru le

12 (b )(6 ) of th e Fed eral Ru le s of Ci vi l Pro ced ur e. Tak in g in to acco un t s ub se qu en t

st oc k sp li ts

, th e Ry an s gi fte d each of th ei r ch il dr en 5,5 00 vo ti ng sh ares an d 2,7 89 ,47 0

no nv ot i n g sh ares of St reck st oc k. All fiv e ch il dr en ex ecu te d st oc k red em pt io n

ag reem en ts in 19 89 an d 20 03 pr ov id in g th at each wou ld rece iv e bo ok va lu e if he or
sh e red eem ed sh ares wit h S tre ck . In m id -2 00 7, wit ho ut St acy’ s kn owl ed ge , S tre ck

an d Co nn ie rev ok ed C o n ni e’s st oc k red em pt io n ag reem en t, an d Co nn ie pu rch as ed

15 4,0 00 St r eck vo ti ng sh ares , wit ho ut Bo ard ap pr ov al

, in ex ch an ge fo r he r

pr om is so ry

no te

.

Fo r cl ari ty an d co nv en ie nc e, we wil l refe r to th e Ry an si bl in gs who are pa rti es 1

to th is act io n a s St acy an d Co nn ie . We wil l re fer t o S tre ck an d C on ni e co ll ect iv el y

as Defen da nt s.

The Hon or ab le Lau rie Sm it h Cam p, Ch ie f Ju dg e, Uni te d St at es Dis tri ct Co ur t 2

fo r th e Dis tri ct of Ne br as ka

.

-2

-In Decem be r 20 07

, Co nn ie se nt St acy th e pr op os ed RRA, whi ch si gn ifi can tl y

rev is ed th e pr io r ag reem en t. Para gr ap h 7 of th e RRA pr ov id ed th at St reck “ sh al l ha ve

t h e r ig ht to rep ur ch as e th e st oc k, in who le or in pa rt, own ed by St oc kh ol de r a t a n y
ti m e.” Para gr ap h 9 p r o v i de d th at th e st oc k “ sh al l be pu rch as ed at th e fai r m ark et

va lu e of th e st oc k (s ub

ject to an y ap pl ic ab le di sc ou nt s or ad jus tm en ts ) as se t fo rth in

th e m os t rece nt va l u a t i o n pr ep ared by Ju ris Valu at io n Adv is or s [J VA]

. . . im m ed ia te ly pr eced in g th e da te of th e writ te n no ti fic at io n of th e op ti on ex erci se d by

St oc kh ol de r or th e Co rp or at i o n

. ” Co nn ie ad vi se d th at fai r m ark et va lu e wou ld be

de te rm in ed by J VA o n an an nu al ba si s. Tho ug h in it ia ll y h e s it an t, St acy s ig ne d th e

R R A a f te r be in g to ld it was in te nd ed fo r us e if St reck was so ld to a th ird pa r t y a n d

ne go ti at in g a “ ta g- al on g/ dr ag -al on g” pr ov is io n gi vi ng he r th e rig ht t o r e c ei ve th e

sa m e pr ic e as co nt ro ll in g sh areh ol de rs if at le as t 51 % of St reck ’s st oc k wa s s o l d

. Unb ek no wns t t o S ta cy , whi le he r ot he r si bl in gs si gn ed RRAs , Con ni e d id no t.

In Mar ch 20 12

, Dr. Ry an no ti fie d t h e Ry an si bl in gs he pl an ne d to bu y al l

ou ts ta nd in g St reck st oc k an d rem ai n CEO wit h ne w m an ag em en t, and th at th e m os t

rece nt st oc k va lu at io n was $3 .32 pe r no nv ot in g s h a re an d $3 .49 pe r vo ti ng sh are, gi vi ng th em each a to ta l va lu at io n of al m os t $9 .3 m il li on

. In Apr il

, he em ai le d th e
si bl in gs as ki ng if th ey wan te d to ret ai n own ers hi p of th ei r sh ares

. St acy rep li ed th at

sh e was c o n c e rn ed ab ou t Co nn ie ’s in vo lv em en t in St reck an d wan te d m or e

in fo rm at io n b efo re d eci di ng whet he r to sel l h er s ha res . She rece iv ed no res po ns e.

On Ju ne 19

, Dr. Ry an wro te St acy th at St reck ha d de ci de d to red eem he r sh ares

fo r $9 ,28 0,2 35 an d sh e was req ui red to si gn th e en cl os ed St oc k Pu rch as e Agr eem en t (SPA) to co m

pl et e th e tra ns act io n. St acy refu se d to s i g n th e SPA. St reck wire d

pa y m en t for her sh ares to he r ba nk acco un t. W he n S ta cy ret ur ne d t he pa y m en t, Dr.
Ry an wro te th at St acy was no lo ng er a St reck sh areh ol de r, th e m on ey was av ai la bl e

to he r, an d St reck wou ld fo ll ow th e Neb ras ka gu id el in es fo r un cl ai m ed pr op ert y if sh e
di d no t cl ai m it

. St reck ’s co un se l de ni ed St acy’ s req ue st fo r co rp or at e reco rd s
be cau se sh e was no t a sh areh ol de r. The no te s of a Ju ne 11 m eet in g be twee n Co nn ie

,

-3

-Dr. Ry an , an d h i s es ta te -p la nn in g la wy er refl ect th at red em pt io n of th e sh ares of

si bl in gs ot he r th an Co n n i e wou ld be co m pl et ed by th e en d of St reck ’s fis cal y ear,

aft er whi ch St reck wou ld di st rib ut e $1 0 m il li on to each of th e rem ai ni ng sh areh ol de rs

-- Dr. Ry an , Eile en , a nd Co nn ie

. On Ju ly 1 3, Dr. Ry an se nt a m em o to th e si bl in gs

ot he r th an St acy an d Co nn ie of feri ng to pu rch as e t h e i r s t o c k fo r $3 .49 pe r vo ti ng
sh are a nd $3 .32 pe r no nv ot in g s ha re i f th ey ag reed to sel l b efo re J ul y 27 , 20 12

.

St reck ’s a tt or ne y s co nt in ue d to ur ge St acy to si gn th e SPA, ad vi si ng th at he r
si bl in gs -- in cl ud in g Co nn ie
-- ha d si gn ed SPAs an d wou ld be rece iv in g th e sa m e

pr ic e as St acy fo r th ei r vo ti ng an d no nv ot in g sh ares

. On Aug us t 22

, St acy si gn ed th e SPA, cro ss in g ou t a m

ut ua l rel eas e of cl ai m s pr ov is io n, a ch an ge th at St reck acce pt ed

. The SPA pr ov id ed th at St acy’ s $9 ,2 8 0

, 2 3 5 p ay m en t was “ de te rm in ed acco rd in g to

pa rag rap h 9 of th e [RRA].” Unb ek no wns t to St acy, Co nn ie di d no t ex ecu te an SPA

an d ret ai ne d he r sh ares

. W he n Eil een di ed in 20 13

, Co nn ie in he rit ed 15 9,5 00 vo ti ng
sh ares pu rs ua nt to a 20 07 ch an ge to Eil een ’s tru st

, gi vi ng Co nn ie two -th ird s v ot in g

co nt ro l of St reck

. St acy al le ge d th at a pr of es si on al ap pr ai sa l co m

p l et ed in 20 14

de te rm in ed th at th e fai r m ark et va lu e of ou ts ta nd in g St reck st oc k on Mar ch 7, 20 13

, wit h ap pl ic ab le di sc ou nt s, was $8 .33 pe r vo ti ng sh are an d $8 .09 pe r no nv ot in g sh are.

Afte r vo lu nt ari ly di sm is si ng an am en de d com pl ai nt fil ed in st at e co ur t, St acy

fil ed th is act io n in fed eral co ur t, al le gi ng th at a se rie s of wro ng fu l act s by Co nn ie an d

St reck cau se d he r to ex ecu te th e SPA an d c om pl et e th e red em

pt io n o f he r sh ares in

St reck “ fo r su bs ta nt ia ll y le ss th an fai r m ark et va lu e un de r th e te rm s o f th e [RR A] .”

In ad di ti on to cl ai m s un de r Sect io n 10 (b ) of th e Exc ha ng e Act an d SEC Ru le 10 b- 5,

sh e al le ge d vi ol at io ns of th e Secu rit i e s Act of Neb ras ka

, br each of fid uc ia ry du ty, 3

sh areh ol de r op pr es si on , co nv ers io n, to rti ou s in te rfer en ce wit h bu si ne ss ex pe ct an cy ,

un jus t en ric hm en t, frau du le nt m is rep res en ta ti on an d in du ce ment

, an d br each of

co nt ract

. Fo r rel ie f, St acy s ou gh t to in va li da te Co nn ie ’s 2 00 7 pu rch as e of 15 4,0 00

Neb

. Rev

. St at

. § 8- 11 02 (1 ) (2 00 7)

, am en de d by 20 17 Neb

. Laws L.B. 14 8 § 3. 3

-4

-vo ti ng sh ares , res ci nd th e SPA, se t as id e th e r e d e mp t i o n of St acy’ s sh ares , an d

“ da m ag es to whi ch Pla in ti ff i s en ti tl ed .”

In th e Feb ru ary 20 16 or de r gr an ti ng Defen da nt s’ m ot io ns to di sm is s, th e
di st ric t co ur t to ok jud ic ia l no ti ce of an Octo be r 20 11 JVA va lu at io n de te rm in in g th at

St rec k st oc k was wor th $3 .49 pe r vo ti ng sh are an d $3 .32 pe r no nv ot in g sh are, th e

pr ic es at whi ch St reck red eem ed St acy’ s sh ares

. The di st ric t co ur t di sm is se d St acy’ s
cl ai m s un de r fed eral an d Neb ras ka se cu rit ie s la ws, an d he r cl ai m s of frau d, br each of

fid uc ia ry du ty an d sh areh ol de r op pr es si on , be cau se St acy di d no t pl au si bl y al le ge th at

wro ng fu l act s c a u s e d h e r lo ss -- sh e ha d “ co ns en te d to St reck ’s rep ur ch as e of th e

st oc k at St reck ’s so le el ect io n” in th e RRA an d di d no t pl ead “ su ffi ci en t fact s to rai se

an in fere nc e th at Defen da nt s so m eh ow m an ip ul at ed th e 20 11 Valu at io n it se lf.” The

co ur t di sm is se d co nv ers io n, to rti ou s in te rfer en ce, an d un jus t en ric hm en t cl ai m s
be cau se “ th e fact s as pl ed in th e Co m pl ai nt rev eal th at St reck red eem ed St acy Ry an ’s

sh ares in a m et ho d co ns is te nt wit h [h er] rig ht s un de r th e [ R R A ]. ” The co ur t

di sm is se d th e br each of co nt ract cl ai m s be cau se hi gh er sh are va lu at io ns in th e 20 14

ap pr ai sa l were no t ev id en ce co nt rad ic ti ng th e SPA pr ov is io n th at th e pu rch as e pr ic e

pa id for Sta cy ’s sh ares was “ de te rm in ed acco rd in g t o p arag rap h 9 of t he [RRA].”

Fo ll owi ng en try of jud gm en t of di sm is sa l, St acy fil ed a ti m el y m ot io n to al te r

or am en d th e jud gm en t an d fo r le av e to fil e an am en de d co m pl ai nt

. See Fed

. R. Ci v.

P. 15 (a)( 2)

, 59 (e). The di st ric t co ur t de ni ed th at m ot io n an d a su bs eq ue nt Ru le 59 (e)

m ot io n. We will di sc us s t he se rul in gs in Part III o f th is op in io n.

II . The Or der Di smis si ng the Co m pl ai nt

On ap pe al

, St acy co nt en ds th at th e di st ric t co ur t erre d by (1 ) t ak in g jud ic ia l

no t i c e o f t h e 20 11 JVA Valu at io n wit ho ut co nv ert in g th e m ot io ns to di sm is s in to

-5

-m ot io ns fo r su m m ary jud gm en t; an d (2 ) di sm is si ng he r cl ai m s fo r fai li ng to pl au si bl y
al le ge act io na bl e fra ud an d s el f-d eal in g. 4

A

. J u d i c ia l Not ic e of the 20 11 JVA Val ua tio n. St acy arg ue s th e di st ric t

co ur t erre d in ta ki ng jud ic ia l no ti ce of ex cerp ts fro m th e 20 11 JVA Valu a t i on
sh owi ng va lu es of $3 .49 pe r vo ti ng sh are an d $3 .32 pe r no nv ot in g s h a r e be cau se

th es e were “ m at te rs ou ts id e th e pl ead in gs ” th at m ay no t be co ns id ered wit ho ut

co nv ert in g Defen da nt s’ m ot io ns to di sm is s in to m ot io ns fo r su m m ary jud gm en t. See

Fed

. R. Ci v. P. 12 (d ). Howev er, do cu m en ts “ ne ces sa ril y em br aced by th e co m

pl ai nt ”

m ay be co ns id ered in ru li ng on a Ru le 12 (b )(6 ) m ot io n to di sm is s. Ene rv at io ns , In c.

v. Mi nn

. Mi ni ng & Mfg

. C o ., 38 0 F.3 d 10 66

, 10 69 (8 th Ci r. 20 04 ). Thi s in cl ud es

“ do cu m en ts who se co nt en ts are al le ge d in a co m pl ai nt an d who se au th en ti ci ty n o

pa rty qu es ti on s, bu t whi ch are no t ph y si cal ly at ta ch ed to th e pl ead in g.” Ash an ti v.
Ci ty of Gol de n Vall ey , 66 6 F.3 d 11 48

, 11 51 (8 th Ci r. 20 12 ) (q uo ta ti on om it te d) ; se e

Mi ll er v . Red woo d To xi co lo gy Lab., Inc ., 68 8 F .3d 92 8, 9 31 n.3 (8t h C ir. 2 01 2)

.

The di st ric t cou rt con cl ud ed th at th e 20 11 JVA Valu at io n m ay be co ns id ered

be cau se Sta cy ’s Complai nt “ al le ge [d ] th at it was t hr ou gh th is do cu m en t t ha t St reck

de te rm in ed he r st oc k’s pu rch as e pr ic e.” The Co m pl ai nt al le ge d th at st oc k wou ld be

red eem ed un de r th e RRA at fai r m ark et va lu e “ de te rm in ed on an an nu al ba si s by Ju ris

Valu at io n Adv is or s, LLC,” an d th at Dr. Ry an to ld th e Ry an si bl in gs in Mar ch 20 12

St acy al so arg ue s th e di st ric t co ur t erre d in de nyin g a req ue st m ad e at th e en d 4

of he r m em or an du m in op po si ti on to Defen da nt s’ m ot io ns to di sm is s: “ If the Co ur t fin ds th e Co m

pl ai nt ’s al le ga ti on s in su ffi ci en t wit h reg ard to an y el em en t, St acy Ry an
req ue st s le av e to am en d.” Thi s co nt en ti on is wit ho ut m eri t. See Dud ek v. Pru de nt ia l Sec., In c., 29 5 F.3 d 87 5, 88 0 (8 th Ci r. 20 02 ). As i n Du de k, St acy’ s re qu es t d id no t in cl ud e a pr op os ed am en de d c o m pl ai nt , a s Dis tri ct of Neb ras ka Loc al Ru le 15 .1(a )

req ui res

. Mo reo ve r, St acy h ad pr ev io us ly am en de d th e co m pl ai nt sh e fil ed in st at e

co ur t b efo re v ol un ta ril y

di sm is si ng th at act io n an d fil in g th is act io n. The re was no ab us e of di sc ret io n in de nyin g he r a “ fo ur th bi te at th e ap pl e.” See Mo se s.co m Sec.,

In c. v. Co m

pr eh en si ve So ftwa re Sy s., In c., 40 6 F.3 d 10 52 , 1 06 6 (8 th Ci r. 20 05 ).

-6

-th at “ at it s la st va lu at io n St reck ’s no n- vo ti ng st oc k was wor th $3 .32 pe r sh are an d it s

vo ti n g s t o ck was wor th $3 .49 pe r sh are.” Thu s, th e co ur t jud ic ia ll y no ti ced sh are

v al ue fact s co ns is te nt wit h th e Co m pl ai nt

. The Co m

pl ai nt al le ge d th at t h e 2 0 1 1

Valu at io n was “ m an ip ul at ed ,” no t th at St acy was no t pa id th e am ou nt se t fo rth in th e

20 11 Valu at io n. Sh e arg ue s th at sh e ha d no op po rt u n i t y t o rev ie w th e en ti re 20 11

JVA rep or t “ to de te rm in e au th en ti ci ty or va li di ty.” Bu t th e Co m pl ai nt di d no t m ak e

au th en ti ci ty a di sp ut ed fact

. W he th er a pa rty “ ha d acce ss to an d rev ie wed th e

pr of fere d do cu m en ts is a m at te r un rel at ed to th ei r au th en ti ci ty -- i.e.

, w h e t h e r th e
do cu m en ts are wha t it s pr o p o n e n t c l a im s.” Dav is v. HSBC Ban k Nev

., N.A., 69 1

F.3 d 11 52

, 11 60 -6 1 (9 th Ci r. 20 12 ) (q uo ta ti on om it te d)

. The di st ric t co ur t di d no t err

in co ns id eri ng th e Oct ob er 2 01 1 J VA per -s ha re v al ua ti on s in ru li ng on th e m ot io ns

to di sm is s.

B. Dis m is sa l of S t a c y’ s Cla ims. On ap pe al

, we rev ie w a Ru le 12 (b )(6 )

di sm is sa l fo r fai lu re to st at e a cl ai m de no vo , “ ta ki ng al l fact s al le ge d in th e co m pl ai nt

as tru e, an d m ak in g reas on ab le in fere nc es in fav or of t h e n o nm ov in g pa rty.”

Sm it hr ud v. Ci ty of St

. Pau l, 74 6 F.3 d 39 1, 39 7 (8 th Ci r.), cert

. de ni ed

, 13 5 S. Ct

. 36 1
(2 01 4)

. To av oi d di sm is sa l, a co m pl ai nt m us t pl ead “ en ou gh fact s to st at e a cl ai m to

rel ie f th at is pl au si bl e on it s face .” Bel l Atl an ti c Co r p. v. Twom bl y , 55 0 U.S. 54 4,

57 0 (2 00 7)

. “ A cl ai m ha s faci al pl au si bi li ty whe n th e pl ai nt iff pl ead s fact ua l co nt en t

th at al lo ws th e co ur t to dr aw th e reas on ab le in fere nc e th at th e de fen da nt is li ab le fo r

th e m is co nd uc t al le ge d.” Ash cro ft v . Iqb al , 55 6 U.S. 6 62 , 67 8 (2 00 9)

.

A. St acy fir st arg ue s th at he r Co m pl ai nt ad eq ua te ly al le ge d Defen da nt s’ se lfde al in g an d m an ip ul at io n of t h e s t o ck va lu at io n pr oc es s, th at de te rm in at io n of fai r

m ark et va lu e is a qu es ti on of fact un de r Neb ras ka la w, a n d th at “ Co nn ie owe d a
fid uc ia ry du ty to St acy.” Bu t wit h on e ex cep ti on , th es e as se rti on s, ev en if accu rat e,

a re irr el ev an t be cau se th ey ig no re th e ba si s fo r th e di st ric t co ur t’s de ci si on -- th at

St acy did no t p la us ib ly ple ad th at wron gf ul act s ca us ed he r lo ss

.

-7

-The ex cep ti on is St acy’ s as se rti on th at th e Co m pl ai nt all eg ed su ffi ci en t fact s

to rai se an in fere nc e th at Defen da nt s m an ip ul at ed th e 2 01 1 J VA Valu at io n. As th e
di st ric t co ur t reco gn iz ed

, th at as se rti on , if pl au si bl y pl ead ed

, m ig ht su pp or t cl ai m s

req ui rin g pr oo f th at wro ng fu l act s cau se d St acy’ s al le ge d lo ss

. Howev er, th e di st ric t

co u r t c o n c l ud ed , “ [a]lt ho ug h sh e al le ge s a ho st of tra ns gr es si on s in he r Co m pl ai nt

, im m at eri al to h e r c l a i ms , sh e ha s no t pl ed su ffi ci en t fact s to rai se an in fere nc e th at

Defen da nt s so m eh ow m an ip ul at ed th e 20 11 Valu at io n it se lf

. ” O n ap pe al

, St acy

arg ue s th e al le ga ti on th at a 20 14 ap pr ai sa l va lu in g St reck sh ares as of Mar ch 20 13 at

su bs ta nt ia ll y m or e th an wha t St acy was pa id pl au si bl y pl ead e d th at Defen da nt s

m an ip ul at ed th e 20 11 Valu at io n. Howev er, th at St reck sh ares ha d a gr eat er va lu e in

Mar ch 20 13 is no t ev id en ce th at Defen da nt s “ m an ip ul at ed ” th e va lu at io n de te rm in ed
by JVA in Octo be r 20 11

. “ [W] he re th e well -p le ad ed fact s do no t pe rm it th e co ur t to

in fer m or e th an th e m ere po ss ib il it y of m is co nd uc t, th e co m pl ai nt ha s all eg ed -- but

it ha s no t ‘ sh ow[ n]’ -- ‘ th at th e pl ead er is ent it le d to rel ie f.’” Iq ba l, 55 6 U.S. at 67 9,

qu ot in g Fed

. R. Ci v. P. 8( a)(2 ). St acy’ s Co m pl ai nt di d no t p l e a d f

a c ts pl au si bl y
sh owi ng th at Defen da nt s m an ip ul at ed th e 20 11 JVA V a l u a t i on in a m an ne r th at

cau se d h er al le ge d l os s.

B. Fi na ll y reac hi ng th e m eri ts of th e cri ti cal is su e, St acy arg ue s th e d i s t ric t

co ur t erre d in co nc lu di ng th at sh e di d no t su ffi ci en tl y pl ead th at Defen da nt s’ al le ge d

m is co nd uc t cau se d he r to ex ecu te th e SPA an d se ll he r sh ares whe n sh e ot h e r w i se

wou ld no t ha ve do ne so

. It is un di sp ut ed th at

, in a pr iv at e act io n u n de r SEC Ru le

10 (b )-5 or un de r th e s u b s t an ti al ly id en ti cal pr ov is io n in th e Secu rit ie s Act of

Neb ras ka

, th e pl ai n t i f

f m us t pr ov e “ lo ss cau sa ti on .” See St on eri dg e In v. Part ne rs , LLC v. Sci en ti fic -Atl an ta

, 55 2 U.S. 14 8, 15 7 (2 00 8)

. Pl ai nt iff m us t pr ov e a “ ne xu s 5

Und er Neb ras ka la w, f

r a ud ul en t m is rep res en ta ti on an d br each of fid uc ia ry 5

du ty cl ai m s ha ve a co mp a r a b le cau sa ti on req ui rem en t. See Agr i Affi li at es , In c. v. Bo ne s, 66 0 N.W .2d 16 8, 17 5 (Neb

. 20 03 ) (fra ud ul en t m is rep res en ta ti on ); McF ad de n Ran ch

, In c. v. McF ad de n, 80 7 N.W .2d 78 5, 78 9- 90 (Neb

. App

. 20 11 ) (b reac h of
fid uc ia ry du ty).

-8

-be twee n th e de fen da nt ’s frau du le nt co nd uc t an d t h e pl ai nt iff ’s pe cu ni ary lo ss .”

Harri s v. Uni on Elec

. Co

., 78 7 F.2 d 35 5, 36 6 (8 th Ci r.), cert

. de ni ed

, 4 7 9 U

. S

. 82 3
(1 98 6)

. Thu s, to de feat a m ot io n t o d i sm is s, th e pl ai nt iff m us t pl ead fact s th at pl au si bl y all eg e th at de fen da nt ’s m is co nd uc t ca us ed th e p la in ti ff’s lo ss

.

The di st ric t cou rt con cl ud ed th at St acy did no t p la us ib ly pl ead lo ss cau sa ti on
be cau se th e Co m

p l a i n t a l l eg ed th at th e RRA ga ve St reck th e rig ht to pu rch as e he r

st oc k at it s el ec t i o n , an d th eref or e, “ th e Defen da nt s’ al le ge d m is co nd uc t co ul d no t

ha ve cau se d St acy Ryan to se ll he r st oc k.” The co ur t no te d th at ou r de ci s i o n in St

. Lou is Uni on Trus t Co

. v. Mer ril l Ly nc h, Pi erce , Fen ne r & Sm it h, In c., 56 2 F.2 d 10 40

, 10 43 -4 4 (8 th Ci r. 19 77 ), ce rt. de ni ed

, 43 5 U.S. 92 5 (1 97 8)

, “ co m pe ls th is

co nc lu si on .” In St

. Lou is Uni on , pl ai nt iff s al le ge d th at th e de fen da nt r ed eem ed

sh ares wit ho ut di sc lo si ng th at it pl an ne d t o mak e a pu bl ic of feri ng

. Bec au se th e
sh ares w e r e p u r c ha se d pu rs ua nt to a st oc k res tri ct io n gi vi ng th e fir m th e ab so lu te rig ht to pu rch as e, wha t th e se ll in g sh areh ol de rs kn ew or di d no t kn ow ab ou t a fu tu re

pu bl ic of feri ng “ was who ll y irr el ev an t to th ei r de ci si on to se ll th e st oc k.” Id

. at 10 49

.

St acy arg ue s th at he r cas e is m or e li ke Ay res v. Mer ril l Ly nc h, Pi erce , Fen ne r

& Sm it h, In c., 53 8 F.2 d 53 2, 53 3- 34 (3 d Ci r.), cert

. de ni ed

, 42 9 U.S. 10 10 (1 97 6)

, th an St . Lo ui s Uni on . In Ay res , a ret ire d fo rm er em pl oyee an d st oc kh ol de r al le ge d

th at th e de fen da nt vi ol at ed fed eral an d st at e se cu rit ie s l a w s w he n it ex erci se d an

op ti on to red eem hi s sh ares on ret ire m en t wit ho ut in fo rm in g hi m t h a t i t p la nn ed to

m a ke a pu bl ic of

feri ng

. In co nc lu di ng th at th e em pl oyee’s frau d cl ai m was no t

arb it rab le

, a di vi de d pa ne l o f t he Thi rd Ci rcu it co nc lu de d th at th e de fen da nt ’s

no nd is cl os ur es were no t im m at eri al be cau se th ey m ay ha ve affe ct ed th e p l a i nt iff ’s

vo lu nt ary d eci si on to ret ire an d se ll hi s st oc k. Id . a t 53 7. W e co nc lu de th at Ay res ,

ev en if cor rect

, is di st in gu is ha bl e. Lik e th e pl ai nt iff s in St

. Lou is Uni on , St acy was
ob li ga te d to red eem he r s h a r e s whe n St reck ex erci se d it s rig ht to rep ur ch as e un de r

Para gr ap h 7 of t h e R R A

. As we sa id in di st in gu is hi ng Ay res in St

. Lou is Uni on ,

“ [St acy was ] po werl es s to pr ev en t th e co nt in ge nc y whi ch ga ve [St reck ] it s abs ol ut e

-9

-rig ht to pu rch as e.” 56 2 F.2 d at 10 54

. Thu s, th e di st ric t co ur t co rrec tl y co nc lu de d th at

Defen da nt s’ all eg ed m is co nd uc t co ul d n ot ha ve cau se d S ta cy to sel l h er s to ck

.

St acy arg ue s t h a t t he RRA’s te rm s were su pe rs ed ed by th e su bs eq ue nt

ne go ti at io n an d ex ecu ti on of th e SPA. Bu t th e SPA ex pr es sl y st at ed th at St reck “ ha s

ex erci se d it s rig ht s to pu rch as e th e Rel ev an t Sh ares fro m S h areh ol de r pu rs ua nt to

pa rag rap h 7 of [th e] Red em pt io n A g r e em en t,” an d th at St acy wou ld be pa id

$9 ,28 0,2 35 fo r he r sh ares , “ de te rm in ed acco rd in g to pa rag rap h 9 of th e Red em pt io n Agr eem en t.” W e wil l ha ve m or e to sa y ab ou t th e in t e r p l a y b e t ween th e two

ag reem en ts in Part III of th is op in io n. Bu t th e SPA di d n ot su pe rs ed e th e RRA n or

cas t do ub t on th e di st ric t co ur t’s cau sa ti on an al y si s. See H a g e r ba um er v. Hag erb au m er Br os ., Inc ., 30 5 N.W.2d 4 , 6-7 (Neb . 19 81 ).

Fo r th es e reas on s, we co nc lu de th e di st ric t co ur t co rrec tl y di sm is se d th e cl ai m s

req ui rin g pr oo f of lo ss cau sa ti on th at was no t pl au s i b l y pl ead ed
-- th e fed eral an d

st at e se cu rit ie s l aw cl ai m s an d s ta te law cl ai m s o f frau du le nt m is rep res en ta ti on an d

in du cem en t, br each of fid uc ia ry du ty, an d sh areh ol de r op pr es si on

. On ap pe al

, St acy

ha s no t m ean in gf

ul ly arg ue d th at th e rem ai ni ng cl ai m s -- co n ve rs io n, to rti ou s

in te rfer en ce, un

jus t en ric hm en t, an d br each of co nt ract -- were im pr op erl y di sm is se d.

Acco rd in gl y , ch al le ng es to th e di sm is sa l of th os e cl ai m s a r e waiv ed

. See, e.g ., Ahl be rg v. Ch ry sl er Co rp ., 48 1 F .3d 63 0, 6 34 (8t h C ir. 2 00 7)

.

II I. Deni al of Po st -Dis m is sa l Mo tio ns

Afte r en try of jud gm en t o f d is m is sa l, St acy ti m el y fil ed a Mo ti on to Alt er or

Am en d th e Ju dg m en t or in th e Alt ern at i ve to Fi le an Am en de d Co m pl ai nt an d

acco m pa ni ed th e m ot io n wit h a pr op os ed Fi rs t Am en de d Co m pl a i n t

. S t a cy arg ue d

th e m ot io n sh ou ld be gr an te d (i) be cau se th e jud gm en t was “ cl earl y wro ng ,” an d (ii )

be cau se of n ew ev id en ce d is co ve red aft er b rie fin g o n t he m ot io ns to di sm is s.

-1 0-Mo ti on s un de r Ru le 59 (e) “ se rv e th e l i m it ed fu nc ti on of co rrec ti ng m an ife st

erro r s o f l a w or fact or to pr es en t ne wly d is co ve red ev id en ce” an d “ can no t be us ed

to in tro du ce ne w ev id en ce, te nd er ne w le ga l th eo rie s, or rai se arg um en ts whi ch co ul d

ha ve be en of

fere d or ra is ed pri or to en try of jud gm en t.” Uni te d Stat es v. Metr o. St.

Lou is Sewer Dis t., 440 F.3 d 93 0, 93 3 (8 th Ci r. 20 06 ) (q uo ta ti on s om it te d)

. Dis tri ct

co ur t s ha ve “ br oa d di sc ret io n in de te rm in in g whe th er to al te r or am en d jud gm en t”

un de r Ru le 59 (e); we “ wil l no t reve rs e ab se nt a cl ear a bu se of di sc ret io n.” Bri eh l v.

Gen

. Mo to rs Co rp ., 17 2 F.3 d 62 3, 62 9 (8 th Ci r. 19 99 ) (q uo ta ti on om it te d)

. W he n a

co m pl ai nt is di sm is se d fo r fai lu re to st at e a cl ai m , th e di st ric t co ur t ha s “ co ns id erab le

di sc ret io n to de ny a po st -jud gm en t m ot io n fo r le av e to am en d be cau se su ch m ot io ns

are di sf av or ed

, bu t m ay no t ig no re th e Ru le 15 (a)( 2) co n si de rat io ns th at fav or

affo rd in g par ti es an op po rtu ni ty to te st th ei r cl ai m s on th e m eri ts .” Uni te d Stat es ex
rel

. Ro op v. Hy

po gu ard USA, In c., 55 9 F.3 d 81 8, 82 4 (2 00 9)

. “ [F]ut il it y co ns ti tu te s

a va li d reas on fo r de ni al of a m ot io n to am en d.” Uni te d St at es ex rel

. Raynor v. Nat’l

Ru ral Uti ls

. Co op

. Fi n., Co rp ., 69 0 F.3 d 95 1, 95 8 (8 th Ci r. 20 12 ) (q uo ta ti on om it te d)

.

In th e Mo ti on to Alt er o r Am en d, St acy argu ed th at th e d is tri ct co ur t er red in

di sm is si ng he r cl ai m s be cau se sh e pl ead ed fact s su pp or ti ng a cl ai m th at Defen da nt s

m an ip ul at ed th e ap pr ai sa l pr oc es s by pr ov id in g in accu rat e an d in co m p le te da ta to
JVA, “ th ereb y al lo win g Defen da nt s to rep ur ch as e Pl ai nt iff ’s s ha res at si gn ifi can tl y

l e ss th an fai r m ark et va lu e.” The di st ric t co ur t was un pe rs ua de d by t h i s maj o r

reca st in g o f th e Co m

pl ai nt :

Th e C ou rt di d no t in fer a frau du le nt sc he m e, be cau se no ne w a s

m en ti on ed in th e Co m

pl ai n t

. . . . The Co m

pl ai nt ack no wled ge d th at

un de r th e te rm s of th e [RRA], St reck co ul d rep ur ch as e St acy Ry an ’s
sh ares at St reck ’s so le el ect io n fo r fai r m ark et va lu e as de t e r m i n e d by
th e mos t re cen t ju ri s va lu at io n.

. . . [I]t di d no t al le ge th at th e pr ic e pa id

was le ss th an th e most rece nt Ju ris Valu at io n.

. . . Acco rd in gl y , th e Co m pl ai nt di d no t al le ge th at an y wro ng do in g by Defen da nt s c a u s ed

-1 1-St acy Ry an to su ffer a lo s s , o r th at an y co nd uc t of th e Defen da nt s

br each ed th e [RR A]

.

W e ag ree. The co ur t di d no t ab us e it s di sc ret i o n i n d e n yi ng th e Mo ti on to Alt er or

Am en d o n t hi s g ro un d.

St acy’ s m ot io n to al te r or am en d al so rel ie d on ne wly di sc ov ered ev id en ce, as
di d a se co nd m ot io n to al te r or am en d th at th e di st ric t co ur t de ni ed fo r l ack of
juri sd ic ti on be cau se it was fil ed aft er St acy’ s ap pe al was p en di ng . To su ccee d on a

Ru le 59 (e) m ot io n b as ed on ne wly di sc ov ered ev id en ce, t he m ov an t m us t s ho w:

(1 ) th at th e ev id en ce was di sc ov ered aft er th e co ur t’s or de r, (2 ) th at th e

m ov an t ex erci se d di li ge nc e to ob ta in th e ev id en ce be fo re en try of th e

or de r, (3 ) th at th e ev id en ce is no t m erel y cu m ul at iv e or im

pe ach in g, (4 )
th at th e ev id en ce i s m at eri al , and (5) th at th e ev id en ce woul d pro ba bl y ha ve pro du ced a di ffer en t re su lt

.

Mi ll er v . Bak er Im

pl em en t Co ., 43 9 F .3d 40 7, 4 14 (8t h C ir. 2 00 6)

.

The di st ric t co ur t rev ie wed th e ne w ev id en ce an d de ni ed th e m ot io n to al te r or

am en d bec au se it wou ld no t hav e “ ‘pro du ced a di ffer en t resu lt ’ th an th at reac he d in

th e Co ur t’s Ord er an d Ju dg m en t.” Met ro

. St

. Lou is Sewer Dis t., 44 0 F.3 d at 93 3. Fo r

th e m os t pa rt, we ag ree be cau se , whi le th e ev id en ce m ay te nd to sh ow th at th e ac tu al

fai r m ark et va lu e of St acy’ s st oc k is a di sp ut ed fact

, th at was no t th e gr av am en of th e
cl ai m s as se rte d in he r Co m pl ai nt

. Bu t on e pi ece of al le ge dl y n e w l y d i s c ov ered

ev id en ce may te nd to s h o w o n e or m or e m at eri al is su es of di sp ut ed fact as to th e
br each of c on tra ct cla im , whi ch pe rs ua de s u s t ha t a l im it ed rem an d i s re qu ire d.

Su bm it te d wit h th e m ot io n to a l t e r or am en d was an ex cerp t fro m a JVA

Valu at io n Rep or t da te d Ju ly 27

, 20 12 ap pe ari ng to st at e th at th e di sc ou nt ed fai r

m ark et va lu e of ou ts ta nd in g St reck st oc k was $4 .42 pe r vo ti ng sh are an d $4 .21 pe r

-1 2-no nv ot in g sh are. St acy av erre d th at sh e rece iv ed th is do cu m en t fro m Dr. Ry an “ aft er

Decem be r 23

, 20 15 ,” whe n Defen da nt s’ m ot i o n s t o di sm is s were br ie fed an d

su bm it te d. In co nc lu di ng th is do cu m en t wou ld no t ha ve ch an ge d th e co ur t’s de ci si on

to di sm is s, t he di st ric t co ur t ex pl ai ne d:

The 20 12 Valu at io n va lu ed St reck st oc k as of Ju ly 27

, 20 12

, m or e th an

a m on th aft er th e red em

pt io n. The ne w ev id en ce do es no t c o n t r a d ic t th at at th e ti m e of th e red em pt io n, th e 20 11 Valu at io n was st il l th e m os t

rece nt va lu at io n o f St reck st oc k.

W e co nc lu de th at th is an al y si s fail s to vi ew m at eri al fact qu es ti on s in th e li gh t m os t

fav or ab le to th e n on -m ov in g p art y , as R ul e 1 2( b) (6 ) req ui res

.

It is Defen da nt s’ po si ti on th at St acy’ s st oc k was red eem ed

, fo r pu rp os es of

Pa r a g r a p h s 7 a nd 9 of th e RRA, whe n Dr. Ry an se nt St acy th e Ju ne 19 , 2 01 2 le tt er

no ti fy in g he r th at St reck ha d de ci de d to red eem he r sh ares , an d th en de cl ared th at sh e

was no lo ng er a st oc kh ol de r whe n St acy ret ur ne d th e pa y m en t an d de cl in ed to si gn

th e SPA. Howev er, t he act io ns of Dr. Ry an an d Stre ck ’s at to rn ey s afte r Ju ne 19

, as

al le ge d, were am

bi gu o u s

. J u s t be cau se St reck ha d a rig ht to rep ur ch as e St acy’ s
sh ares at an y ti m e do es no t e s t a b l i sh whe n St reck ex erci se d th at rig ht

. Here, th e

pa rti es ul ti m at el y en te red in to a m at eri al ly al te red SPA on Aug u st 22 reci ti ng th at

St acy own ed th e sh ares be i n g s o l d t ha t da y at pr ic es “ de te rm in ed acco rd in g to

Para gr ap h 9 of th e [RRA].” In di sm is si ng th e Co m pl ai nt

, th e di st ric t co u r t d i d no t

ne ed to de te rm in e “ th e da te of th e writ te n no ti fic at io n o f t h e o p t i on ex erci se d by
[St reck ], ” th e da te pr es cri be d in Para gr ap h 9, b e c a u se th e 20 11 Valu at io n was th e

un di sp ut ed “ m os t rece nt va lu at io n

. . . im m ed ia te ly pr eced in g” bo th Ju ne 19 an d
Aug us t 22

, 20 12

. Bu t if th e 2 0 1 2 V a lu at io n m eet s th e req ui rem en ts fo r ne wly

di sc ov ered ev id en ce, ex tri ns i c ev id en ce m ig ht th en es ta bl is h th at th e effe ct iv e da te

fo r th e Para gr ap h 9 de te rm in at io n un de r th e RRA an d th e SPA, read to ge t h e r , w a s

la te r th an Ju ly 2 7, 20 12

. In th at ev en t, th e cl ai m in Co un t IX of St acy’ s Co m pl ai nt

-1 3-th at “ St reck ’s fai lu re to red eem St acy’ s sh ares at f a i r mar k e t va lu e pu rs ua nt to th e

t e rm s of th e [SPA] an d [RRA] co ns ti tu te s a m at eri al br each of sa id ag reem en ts ”

be co m es ve ry pl au si bl e. Thu s, fu ti li ty is no t a ba si s to ig no re th is ne wly di sc ov ered

ev id en ce. And th ere is no ne ed to am en d th e Co m pl ai nt in th is reg ard be cau se , wit h

co mp a r ab le fo un da ti on , th e di st ric t co ur t m ay ta ke jud ic ia l no ti ce of th e pe r sh are

va lu es in th e 2 01 2 Val ua ti on , as i t d id wit h t he 20 11 Valu at io n.

Defen da nt s arg ue th at th e 20 12 Valu at io n can no t qu al ify as ne wly di sc ov ered

ev id en ce be cau se S t a c y av ers th at sh e rece iv ed th e ev id en ce fro m Dr. Ry an in

Decem be r 20 15

, be fo re th e di st ric t co ur t gr an te d th e m ot io ns to di sm is s in Feb ru ary

20 16 . Howev er, cas es su ch as Mi ll er sta ti ng th at ne w ev id en ce m us t be d is co ve red

a f te r th e co ur t’s or de r de al t wit h su m m ary jud gm en t m ot io ns

. Here, th e r e c o r d

re f l e c t s th at a do cu m en t in Defen da nt s’ cu st od y an d co nt ro l th at co nt rad ic ts th e

fact ua l ba si s fo r th ei r m ot io ns to di sm is s th e br e a c h o f co nt ract cl ai m was fir st

di sc ov ered aft er br ie fin g an d su bm is si on of th os e m ot io ns

. Giv en “ th e Ru le 15 (a)( 2)

co ns id erat io ns th at fav or affo rd in g p art ie s an op po rtu ni ty to t es t t he ir c la im s on th e

m eri ts ,” Ro op , 55 9 F.3 d at 82 4, we are no t pr ep ared to ru le ca t e go ric al ly th at th is

ev id en ce m ay no t qu al ify as ne w l y d is co ve red fo r pu rp os es of reco ns id eri ng Ru le

12 (b )(6 ) di sm is sa l o f th e b reac h o f co nt ract cla im . Furt he r in qu iry is re qu ire d.

Fo r th es e reas on s, th e Mem or an du m an d Ord er of th e di st ric t co ur t da te d Ju ne

14 , 20 16 , is rev ers ed in pa rt a nd th e cas e is rem an de d wit h di rect io ns to va cat e th at

po rti on of th e jud gm en t di sm is si ng Co un t IX o f th e Co m pl ai nt an d t o c on du ct su ch

fu rth er pr oc eed in gs no t in co ns is te nt wit h th is op in io n as th e di st ric t co ur t m ay de em

ap pr op ria te

. In al l ot he r res pe ct s, th e jud gm en t an d or de rs of th e di st ric t co ur t are

affi rm ed

.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

-1 4-