The Nebraska Supreme Court issued an opinion Thursday in *Perkins v. RMR Building Group* that provides important guidance on corporate liability protections and the circumstances under which courts may pierce the corporate veil to hold individual owners personally responsible for business debts.
The case, filed as No. S-23-947 and reported at 320 Neb. 707, involved a dispute between Perkins, L.L.C., a Nebraska limited liability company, and RMR Building Group, LLC, along with Robert M. Ryan II. The court's decision addresses fundamental questions about corporate law and the protection of business entities from personal liability.
In its ruling, the Nebraska Supreme Court emphasized that "piercing the corporate veil is an equitable remedy, not an action in itself." This distinction is crucial for practitioners and business owners, as it clarifies that veil-piercing claims must be brought in conjunction with underlying causes of action rather than as standalone lawsuits.
The court also established clear appellate review standards for equity cases involving corporate liability issues. According to the opinion, "in an appeal of an equity action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court." However, the court noted an important caveat: when credible evidence conflicts on material factual issues, appellate courts may give weight to the trial judge's firsthand observations of witnesses and acceptance of one version of facts over another.
This appellate standard differs significantly from the review applied to bench trials in law actions, where "the trial court's factual findings have the effect of a jury verdict, and an appellate court will not disturb those findings unless they are clearly erroneous." The distinction highlights the unique nature of equitable remedies in corporate law disputes.
The court reaffirmed the fundamental principle that "a limited liability company's identity as a separate legal entity will be preserved, as a general rule, until sufficient reason to the contrary appears." This statement reinforces the strong presumption in favor of maintaining corporate liability protections that business owners rely on when structuring their operations.
While the full text of the decision was not completely available, the court's syllabus indicates that the ruling also addresses fraud-related grounds for disregarding corporate entities. The court stated that "a court will disregard" corporate protections under certain circumstances, though the complete parameters of this standard require review of the full opinion.
The decision comes at a time when corporate liability protections face increased scrutiny across various industries. Business owners, particularly in construction and real estate development sectors similar to those involved in this case, closely monitor such rulings as they can significantly impact operational and financial planning.
For appellate practitioners, the ruling clarifies the appropriate standard of review for corporate veil-piercing claims. The de novo review standard for equity actions means that appellate courts will independently evaluate the factual record rather than deferring to trial court findings, potentially leading to different outcomes on appeal.
The case also demonstrates the continuing evolution of LLC law in Nebraska. As limited liability companies have become increasingly popular business structures, courts continue to refine the legal standards governing when their liability protections can be set aside.
Legal experts note that veil-piercing claims typically arise in situations involving undercapitalization, commingling of personal and business assets, failure to observe corporate formalities, or fraudulent conduct. While the specific facts underlying the *Perkins* case were not detailed in the available materials, the court's emphasis on equitable principles suggests these traditional factors likely played a role in the analysis.
The ruling's impact extends beyond the immediate parties, as it provides guidance for future cases involving corporate liability questions. Trial courts will need to carefully consider whether veil-piercing claims are properly pleaded as equitable remedies supporting underlying causes of action rather than independent claims.
Business attorneys advising clients on entity formation and corporate governance will likely reference this decision when counseling on liability protection strategies. The court's reaffirmation of the presumption favoring corporate entity recognition provides some comfort to business owners, while the detailed discussion of when that presumption can be overcome serves as a reminder of the importance of proper corporate practices.
The Nebraska Supreme Court's decision in *Perkins v. RMR Building Group* thus serves as both a clarification of existing law and a guide for future corporate liability disputes in the state's courts.