Opinion ID: 1755180
Heading Depth: 1
Heading Rank: 2

Heading: myers' complaint

Text: In April 2003, Myers filed this class action against (1) the NIC, (2) the five NIC voting members, (3) Holsapple, (4) WG Trading, and (5) Jane Doe and John Doe, representing other unknown business entities that may have entered into partnership agreements or investment contracts with the State. In June, the NIC, Holsapple, the NIC members, and WG Trading moved to dismiss because the court lacked personal and subject matter jurisdiction and Myers' pleading failed to state a cause of action. In December 2003, Myers filed his operative complaint and included Westridge as a defendant. Myers alleged that he had made demand on the Attorney General to bring this action and that the Attorney General had declined. In Myers' first four claims, he alleged the following: (1) The NIC officials breached their statutory duties; (2) the NIC officials breached their fiduciary duties to act in the best interests of the equitable beneficiaries of the retirement funds; (3) Westridge, WG Trading, Walsh, and Greenwood breached their fiduciary duty to the State to disclose that the investment contract with the State were illegal and to refrain from investing the State's assets until they had obtained authorization from the Attorney General; and (4) the acts of the defendants constituted constructive fraud by injuring the public's interests. In his fifth claim, Myers asked the court to declare the Westridge and WG Trading contracts void ab initio because they were ultra vires, contrary to public policy, procured through constructive fraud and breach of fiduciary duties, contrary to statute, and prohibited by the Constitution of the State of Nebraska. He also requested the court to declare that §§ 72-1237 and 72-1239.01 were unconstitutional to the extent they purported to exculpate, exonerate or immunize NIC members from personal liability for breaches of their fiduciary or statutory duties. In his sixth claim, Myers sought a rescission of the contracts for the same reasons stated in his fifth claim. In his seventh claim, Myers requested an accounting and order returning all state moneys with interest that had come into the possession of Westridge, WG Trading, Walsh, or Greenwood. In the eighth claim, Myers alleged that the WG Trading contract was ultra vires and void for the additional reason that it constituted the giving or loaning of the State's credit to WG Trading, in violation of Neb. Const. art. XIII, § 3 (credit of the state shall never be given or loaned in aid of any individual, association, or corporation). In his ninth claim, Myers requested the court to declare the contracts void as an impermissible delegation of the State's legislative and police powers, vested in the NIC, to private individuals and entities. In his 10th claim, he requested restitution and alleged that in addition to the original $200 million the NIC transferred to Westridge, the NIC also transferred $15 million, $1.75 million, and amounts not yet determined for capital calls under the illegal contract with WG Trading. In his final claim, Myers alleged that if the court did not declare the contracts void, Westridge had breached the contract because Westridge knew or should have known that the NIC could not lawfully expend public funds on the WG Trading partnership. Myers prayed for a judgment against the NIC members individually for the full amount necessary to reimburse the retirement funds, plus interest. He also requested an order requiring WG Trading to disgorge all fees and pay all funds lost plus interest from the illegal contracts. In addition to his declaratory judgment request in the fifth claim, Myers also requested that the court declare in the eighth and ninth claims that (1) the contracts were void ab initio and (2) §§ 72-1237 and 72-1239.01 were unconstitutional to the extent they protected the NIC officials from individual liability. By February 9, 2004, all the defendants had moved to dismiss. On February 23, the NIC terminated the contracts with Westridge and WG Trading.