LLC Member Lacks Standing To Sue For Legal Malpractice – Says Nebraska Court

KLINGELHOEFER v. PARKER, GROSSART, BAHENSKY & BEUCKE, LLP, 20 Neb. App. 825 – Neb: Court of Appeals 2013 – Google Scholar.

This case concerns whether a member of an LLC can sue for legal malpractice the lawyers who represented the entity. The Nebraska Court of Appeals held that the plaintiff, Donald Klingelhoefer, lacked standing to sue.

Nebraska follows the traditional rule that the shareholder of a corporation or member of a limited liability company lacks standing because the corporation or LLC suffered the injury, not the shareholder or member.

The court further held that Klingelhoefer did not allege a special relationship with the lawyers that would have allowed him to pursue the case on his own. Further, he had no “individual” injury, in that he suffered only because the value of his interest in the LLC was reduced.

The court also noted that Klingelhoefer did not attempt to bring a derivative action for legal malpractice against the lawyers.

Edward X. Clinton, Jr.