Opinion ID: 1232235
Heading Depth: 1
Heading Rank: 6

Heading: was demand excused?

Text: As noted, Kubik makes an alternative argument in this appeal that he was excused from the demand requirement because demand would have been futile. We have held that a shareholder is not required to make [a demand] if it would be unavailing. Sadler v. Jorad, Inc., 268 Neb. 60, 66, 680 N.W.2d 165, 170 (2004). See, also, Anderson v. Clemens Mobile Homes, 214 Neb. 283, 333 N.W.2d 900 (1983) (minority shareholder not required to make demand where action would require majority shareholder to require his own accounting to corporation); Association of Commonwealth Claimants v. Hake, supra (it is generally accepted rule of corporate law that it is futile to request directors accused of wrongdoing to sue themselves); Carol B. Swanson, Juggling Shareholder Rights and Strike Suits in Derivative Litigation: The ALI Drops the Ball, 77 Minn. L.Rev. 1339, 1351 (1993) ([a]s a general rule, some level of directorial involvement in a challenged transaction excuses demand). However, the record does not reflect that Kubik ever made this argument in the district court. His operative amended petition alleged that a demand was made, not that it was futile, and his arguments to the court focused exclusively on the sufficiency of the demand. This court has previously held that [i]n order for appellants to state a derivative action, their petition must allege the fact that a demand has been made ... or that such a demand would be futile. (Emphasis supplied.) Weimer v. Amen, 235 Neb. 287, 304, 455 N.W.2d 145, 157 (1990). See, also, Association of Commonwealth Claimants v. Hake, 2 Neb.App. 123, 131, 507 N.W.2d 665, 670 (1993) ([w]here no demand was made because it was deemed futile, the petition must state with particularity the facts which excuse such demand). The purpose of pleadings is to frame the issues upon which a cause is to be tried, and the issues in a given case will be limited to those which are pled. Big Crow v. City of Rushville, 266 Neb. 750, 669 N.W.2d 63 (2003); V.C. v. Casady, 262 Neb. 714, 634 N.W.2d 798 (2001). As a general rule, an appellate court disposes of a case on the theory presented in the district court. American Fam. Mut. Ins. Co. v. Hadley, 264 Neb. 435, 648 N.W.2d 769 (2002). Likewise, an issue not presented to or decided by the trial court is not appropriate for consideration on appeal. Marcovitz v. Rogers, 267 Neb. 456, 675 N.W.2d 132 (2004); State ex rel. City of Alma v. Furnas Cty. Farms, 266 Neb. 558, 667 N.W.2d 512 (2003). Because the pleadings which were before the district court at the time of its ruling on the demurrer did not raise an issue that demand upon the directors and majority shareholders would have been futile and was therefore excused, the district court was not required or permitted to consider this issue in deciding whether the demurrer should be sustained. However, as noted above, when a demurrer to a petition is sustained, a court must grant leave to amend the petition unless it is clear that no reasonable possibility exists that amendment will correct the defect. Regier v. Good Samaritan Hosp., 264 Neb. 660, 651 N.W.2d 210 (2002); Northwall v. State, 263 Neb. 1, 637 N.W.2d 890 (2002). Because we cannot conclusively determine that Kubik would be unable to plead facts upon which a court could find that demand would have been futile and is therefore excused, we conclude that the district court erred in sustaining the demurrer without leave to amend and dismissing the action.