Divided Supreme Court reverses verdict in non-compete dispute

Gary's Implement v. Bridgeport Tractor Parts, 270 Neb. 286 Filed July 29, 2005. Nos. S-03-941, S-03-1242. Seller of an auto and machinery salvage business sued the purchaser after the purchaser stopped making installment payments to seller. Purchaser answered and counterclaimed alleging breach of their non-compete agreement. The Court determined that certain passages of the parties non-compete agreement were ambiguous Big River Constr. Co. v. L & H Properties, 268 Neb. 207, 681 N.W.2d 751 (2004).but then supplied additional meaning to the ambiguous wording; "However, once the district court determined that the Non-Competition Agreement was ambiguous, and given the record as we read it, the meaning of the ambiguous contract became a question of fact for the fact finder. See Dammann v. Litty, 234 Neb. 664, 452 N.W.2d 522 (1990). Because it was the role of the jury and not the court to determine the meaning of the ambiguous contract from all the facts and circumstances, the district court erred in instructing the jury as it did in instruction No. 9. See Luschen Bldg. Assn. v. Fleming Cos., 226 Neb. 840, 415 N.W.2d 453 (1987).the Supreme Court majority reverses because although the court correctly determined the contract was ambiguous, interpretation is up to the jury. Dissenting Justice Gerrard would abandon the rigid "four corners" rule of contract interpretation and adopt the more flexible Restatement approach of contract interpreation, as in § 212(1) at 125 (1981) which states : “[t]he interpretation of an integrated agreement is directed to the meaning of the terms of the writing or writings in the light of the circumstances." J Gerrard finds this test for contract ambiguity more sensible and practical. "Just as significantly, I believe this process accurately reflects what courts are actually doing when determining the meaning of contracts, even if not permitted to acknowledge it.... the dubious procedural posture of this case demonstrates the impracticality of the “four corners” rule for determining whether a contract is ambiguous." Because the trial court's supplying clarifying terms to the ambiguous contract, which the evidence supported fit the Restatement's expectations, J. Gerrard would have upheld the trial court's judgements. Nebraska Courts may well see Judge Gerrard's dissents become majority holdings, eg Phillips v Industrial machine 257 Neb. 256, 597 N.W.2d 377 (1999) , as it took several years of his dissents to make Daubert(Daubert v. Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993).the standard for expert testimony before the entire Supreme Court agreed with him Schafersman v. Agland Coop, 262 Neb. 215 (2001). No. S-98-623.