Nebraska Supreme Court reverses Court of Appeals decision that dismissed appeal of landlord's complaint for indemnificaiton against tenant bank arising from a bank customer's personal injury lawsuit. Kuhn v. Wells Fargo Bank of Neb., S-08-141, 278 Neb. 428 The burden of proving mootness is on the party seeking dismissal "Maintenance of a building," within the meaning of Neb. Rev. Stat. § 25-21,187(1) (Reissue 2008), does not encompass the ordinary activities associated with management of commercial property. Indemnification is distinguishable from the closely related remedy of contribution in that the latter involves a sharing of the loss between parties jointly liable. "The Court of Appeals erred by dismissing this appeal as moot, because the burden had not yet been placed on (landlord) to prove damages, and the record does not foreclose the possibility that (landlord) was liable to (injured plaintiff). The district court erred in concluding that paragraph 20 was ambiguous, and we find no merit to the Bank’s alternative reasons why paragraph 20 was purportedly unenforceable. The judgment of the Court of Appeals is reversed, and the cause remanded to the Court of Appeals with directions to reverse the judgment of the district court and remand the cause to the district court for further proceedings consistent with this opinion

Nebraska Supreme Court upholds subrogation waiver clause between owner and contractor when a television tower under construction collapsed, also the contractor was liable for damage the construction work and other property to the subrogated insurance company, even when the subrogated insurance company complained that gross negligence caused the accident. Lexington Ins. Co. v. Entrex Comm. Servs., S-06-1452, 275 Neb. 702 "the danger with exculpatory clauses is that a party injured by another’s gross negligence will be unable to recover its losses. But such danger is not present in cases involving waivers of subrogation because the waiver only applies to losses covered by insurance, so “there is no risk that an injured party will be left uncompensated.”..Waivers of subrogation serve in avoiding disruption of construction projects and reducing litigation among parties to complicated construction contracts. Concluding that waivers of subrogation cannot be enforced against gross negligence claims would undermine this underlying policy by encouraging costly litigation to contest whether a party’s conduct was grossly negligent. Therefore, we conclude that “public policy favors enforcement of waivers of subrogation even in the face of gross negligence [claims]..the majority approach furthers the policy underlying the use of waiver of subrogation clauses in construction contracts. That court explained that a waiver of subrogation is useful in construction contracts because it avoids disrupting the project and eliminates the need for lawsuits.37 The majority approach furthers this purpose. Applying the waiver to all losses covered by the owner’s property insurance policy eliminates litigation over liability issues and whether the claimed loss was damage to the Work or non-Work property."

In another guaranty dispute, the Nebraska Supreme Court reverses the Nemaha County District Court in party when the Supreme Court finds a guarantor's obligation to guarantee the payment of two promissory notes his son and daughter-in-law signed extended only to his unconditional promise to guarantee payment on the first promissory note, but not to the Bank's extension of credit to the son and daughter-in-law from a second promissory note when the primary borrowers showed they were creditworthy according to the financial disclosures they made to the bank. The Nemaha County Court found the guarantor liable for the entire indebtedness, including the second extension of credit. The District Court dismissed the guarantor entirely. The Supreme Court holds the guarantor liable for the initial indebtedness, but not for the extension. First Nat. Bank of Unadilla v. Betts, S-07-023, 275 Neb. 665

Nebraska Supreme Court affirms judgment that non-compete agreement between and insurance agency and one of its brokers was enforceable even after the broker's original employer had merged with another firm. The successor company had valid consideration for a non-compete agreement that barred the defendant from soliciting the company's customers for 2 years after his termination. The Nebraska Supreme Court upheld the trial court's damage calculation by which the Douglas County District Court determined the damages from breaching the non-compete agreement by finding the amount of revenue the defendant generate from the prohibited customers for two years after his termination minus the expenses the plaintiff would have incurred had it retained the business. While the trial court rejected the plaintiff's CPA experts conclusions, it accepted some of his findings as to revenues and expenses. Because the court took the expert's testimony as fact testimony, it did not need to determine if the CPA's testimony passed the Daubert test. Aon Consulting v. Midlands Fin. Benefits, S-06-1256, S-07-034 , 275 Neb. 642

Building supplier sued widow of deceased construction company owner for over $1 million of defaulted construction loans that the defendant and her husband had guaranteed. The Douglas County District Court after cross-motions for summary judgment dismissed the bank's complaint. Nebraska Supreme Court reverses, awarding full judgment to the plaintiff. The Supreme Court finds the widow did not limit her liability to $525000 in their company's financing agreement with the Plaintiff, and further the plaintiff's releasing deeds of trust on the defendant's office buildings in 1991 did not impair the widow's collateral because she allowed new substantial loans with other banks to encumber the same property. Builders Supply Co. v. Czerwinski, S-06-1138, 275 Neb. 622We recognize that the A greement contains language relative to the $525,000 upon which Czerwinski relies. However, aguaranty is an independent contract that imposes responsibilities different from those imposed in an agreement to which it is collateral. S ee National Bank of Commerce Trust & Sav. Assn. v. Katleman, 201 Neb. 165, 266 N.W.2d 736 (1978). It is the guaranty agreement that contains the express condition on the guarantor’s liability and that defines the obligations and rights of both guarantor and guarantee. Id. T he language relied upon by Czerwinski in the A greement relative to the $525,000 merely described B uilders’ obligation to extend credit to B enchmark to a specific amount.the record indicates that she signed deeds of trust on the office building in 1999 and 2000 for $100,000 and $600,000 respectively, suggesting that she was aware of the availability of the office building to serve as collateral in a substantial amount. T he $600,000 encumbrance remained into 2006, the inference from which is that through her actions, Czerwinski impaired the office building collateral rather than B uilders

Excellent example of the Nebraska Supreme Court's use of the "absurdity" method of statutory interpretation: An agricultural services company sued the personal representative of an estate for its past due account. J.R. Simplot Co. v. Jelinek, S-06-666, 275 Neb. 548The Nebraska Supreme Court agreed with the estate's personal representative that the agricultural services company missed its deadline to file suit against the estate. The services the company provided to the estate's farming operations were not "administrative expenses" that do not have a four month limitation period on them because these expenses arose from the contract between the company and the personal representative. Section 30-2485(b)1 includes contracts with the personal representative in the claims subject to the four month deadline. The Nebraska Supreme Court falls back on the "absurdity" argument, " If this court were to adopt Simplot’s reasoning—that the services in question should be considered administration expenses—then § 30-2585(b)(1) (sic) would be rendered virtually meaningless." Indeed, there is no 30-2585(b)1 in my code book.

A records storage management company charged its law firm customer a $10,000 fee to permanently remove all of its records from the storage facility. The Omaha law firm filed a declaratory judgment complaint against the company claiming the removal fee was an illegal penalty provision. the Douglas County District Court agreed finding the removal fee was a penalty and not a legitimate liquidated damages fee. The Nebraska Supreme Court reverses holding the removal fee was neither a liquidated damages provision nor a penalty, rather it was a fee for a service. Berens & Tate v. Iron Mt. Info. Mgmt., S-07-193, 275 Neb. 425 The district court erred in finding that the “Permanent Withdrawal” fee was unenforceable. We conclude that the “Permanent Withdrawal” fee is neither a liquidated damages clause nor an illegal penalty provision. Rather, the provision is an enforceable contractual term that sets forth the payment required for services to be performed under the contract. T he judgment of the district court is reversed."

No action against general contractor by subcontractor's employee from construction site accident. Eastlick v. Lueder Constr. Co., S-06-721, 274 Neb. 467 . Bricklayer fell off scaffolding he and a co-worker negligently assembled and of course his attorneys needed someone other to blame. Bricklayer sued the general contractor who had nothing to do with the masonry subcontractor's work. Dodge County District Court gave summary judgment to the general contractor and bricklayer appealed. Nebraska Supreme Court (J. Wright) affirms summary judgment. Unlike the Omaha Public Power District in Parrish v. Omaha Pub. Power Dist., 242 Neb. 783, 496 N.W.2d 902 (1993), who kept its own safety personnel constantly checking the work site, the general contractor had nothing to do with the masonry subcontractor's own scaffolding. Closer to the mark the Supreme Court finds that as in Hand v. Rorick Constr. Co., 190 Neb. 191, 206 N.W.2d 835 (1973), "the instrumentality (scaffolding) which caused the injury was not the premises, but, rather, was the equipment owned, controlled, and erected by the subcontractor, who was the employer of the injured worker. The general contractor had no right to control the subcontractor's equipment. The duty of a general contractor to employees of a subcontractor extends only to providing a reasonably safe place to work as distinguished from apparatus, tools, or machinery furnished by the subcontractor for the use of his own employees.”

No complaint amendment to add promissory estoppel three after the plaintiff dropped it from his breach of employment contract lawsuit. Keating v. Ironwood Golf and Country Club voluntarily withdrew his promissory Bank, supra, if the district court had allowed (Not designated for permanent publication). Premier Omaha area golf club Ironwood Country Club hired Bradley Keating to be its chief operating officer in April 2001 with a five year employment contract, subject to the parties reaching within 90 days of starting employment agreement on work performance standards. Apparently Mr. Keating ran afoul of some big names, including Howard Hawks and Thomas Fitzgerald. The club terminated him after 90 days. Keating sued for breach of contract and for breached promissory estoppel. After Ironwood filed its initial demurrer to the promissory estoppel count, Keating withdrew this from his pleading. But nearly three years later in response to Ironwoods motion for a complete summary judgment he sought to reinstate it. Nebraska Court of Appeals, unpublished decision, affirms summary judgment. "Keating sought to change his lawsuit from a straightforward breach of a written contract action to a promissory estoppel cause of action only after the hearing on Ironwood’s motion for summary judgment, nearly 3 years after Keatingestoppel cause of action. Similarly to Cimino v. FirsTierKeating to amend his pleading, the basis of his lawsuit would have been significantly altered after 3 years of proceeding to defend a case based only on a breach of contract cause of action. For these reasons, the district court did not abuse its discretion in refusing to grant Keating’s motion for leave to file an amended petition to change his theory of recovery from a breach of contract claim to one of promissory estoppel."

Nebraska Supreme Court nixes North Carolina pig breeder's claim against hog farmers estate. The breeders officers mistakenly signed where the hog farm's principal should have signed to guarantee the farms breeding stock debts. Court affirms Gage County Probate Court's ruling that there was no guaranty agreement either by reforming the erroneously signed document nor by finding that the guaranty was the "leading object" of the agreement between the farm and breeder, so the court would not excuse the writing requirement of the statute of frauds (§ 36‑202(2) (Reissue 2004)). In re Estate of Dueck, S-06-538there was no written guaranty agreement between the parties. In the absence of a written agreement between GIS and Dueck, there was nothing to reform The leading object rule presumes that there has been an oral promise or some sort of an oral agreement.Dueck did not orally agree to guarantee Forward Trend’s debt to GIS, and it follows that the leading object rule was inapplicable.

Nebraska court of appeals rules against member of homeowners association that had tried to reach agreements with real estate developers. appeals court in unpublished opinion finds no enforceable contract from the negotiations between the developer and the homeowners that resulted in merely vague promises of covenant details. While the district court had found an enforceable contract, which the appeals court reversed, the reviewing court agrees that a plaintiff in a breach of contract case may not seek profit disgorgement in any even from the defendant. MERLE RAMBO V. SULLIVAN R.E. GROUP, "The district court was clearly wrong to find an enforceable contract from the (vague agreements at the) June 1998 city council meeting. For example, Sullivan and the RNA, whose members opposed the zoning change, clearly agreed to a nine-lot subdivision for purposes of the zoning change. Sullivan and the RNA also clearly contemplated that certain covenants would be entered into and that such covenants would contain provisions favored by the RNA and would be enforceable by the RNA in some manner. However, the draft covenants provided to the city council did not contain all such provisions, which were merely outlined in argument before the council. There were essential terms left open for future agreement, including an enforcement mechanism, a definition of which RNA members would have the ability to enforce the covenants, and what ability, if any, there would be to amend the covenants once filed. We conclude that what was reached at the June 1998 meeting was an agreement for future negotiations. In fact, such negotiations did occur. further disgorgement of profits is not an appropriate remedy in this breach of contract claim. Nebraska has not recognized disgorgement of the breaching party’s profits as damages available to an injured party.

Nebraska Supreme Court (J Miller-Lerman) reverses doctor's verdict against Norfolk Faith Regional Hospital for over $1.3 million because the court instructed the jury that the doctor was an employee of the Hospital rather than an independent contractor. Domjan v. Faith Regional Health Servs., S-05-1463, 273 Neb. 877. The court instructed the jury that the parties were in an employment relationship and further that termination was only for good cause rather than cause. The court suggested that the instruction's suggestion that the doctor was an employee and not a contractor probably swayed the jury to the doctor's favor. Further the jury instruction used the term good cause, one for employment relationships rather than "cause" from the contractor agreement, further misleading the jury. Employment good cause is the standard for a reasonable employer to dismiss and employee while contractual cause is material breach or default...in light of the actual custom of persons in the performance of contracts similar to the one involved in the specific case.” Phipps v. Skyview Farms, 259 Neb. 492, 499, 610 N.W.2d 723,730-31 (2000). Reversed for a new trial

Follow up on Dallas in the Panhandle: the defendants could have avoided the whole thing with more careful document drafting. Avoiding Arguments Over Whether Singular Also Means PluralLegal documents drafting experts didn't think much of the document preparation that led to the Dallas in the Panhandle dust up between oil drilling joint venturers. Although the partner who wanted out eventually won, "today’s case from the drafting hall of shame is a case recently decided by the Nebraska Supreme Court, Coral Production Corp. v. Central Resources, Inc., 273 Neb. 379 (Neb. 2007). To the trained agreement drafting expert, make sure singular and plural really mean what they say. Also you can "drive a truck through the caveat “Unless the context otherwise clearly indicates.”

Dallas in the Panhandle: Nebraska Supreme Court affirms oil driller's sale of joint venture interest over partner's objections, but reserves trial on sale of royalties. Oil driller sold its interests in drilling projects in Nebraska to outside entities. Participant in joint operating agreement countered that it had a right of refusal and also had a right to purchase part of the Driller’s overriding royalty interests. Driller sold off substantially all of its assets to more than one entity. Nebraska Supreme Court agrees that applying Texas law, the selling oil driller could sell to more than one entity substantially all of its assets without triggering the preferential rights of the other joint operating agreement participant. Summary judgment in favor of seller however reversed as to the other participants overriding royalty interests. Court upholds $6000 sanction against defendants also for failing to comply with discovery orders. Coral Prod. Corp. v. Central Resources, S-05-564

The district court determined the parties agreed in the JOA thatTexas law would govern their disputes and granted summaryjudgment to Central, E XCO, and Zecchi on Coral and K JJ’s claims of fraud, breach of contract, and tortious interference. Italso determined that the JOA did not apply to E XCO’s transfer ofoverriding royalty interests to Zecchi.We determine that Central’s sale of all of its oil and gas assetsfell within the parties’ typewritten exception to the preferentialright- to-purchase provision of the preprinted JOA. However,we conclude that the district court erred in determining Coral’spreferential right to purchase did not apply to overriding royaltyinterests. We reverse on that sole issue and affirm the districtcourt’s order of summary judgment in all other respects. We conclude that the district court did not err in determining that Central’s sale of all of its oil and gas assets fell within the parties’ typewritten exception to the preprinted preferential-rightto- purchase provision of their joint operating agreement. We also conclude that the district court did not abuse its discretion in ordering Coral and K JJ to pay attorney fees in the amount of $6,000 as a sanction for failing to produce documents that necessitated the retaking of a corporate deposition. However, we conclude that the district court erred in determining that Coral’s preferential right to purchase did not apply to overriding royalty interests and remand the cause for further proceedings on that single issue. The district court’s orders of summary judgment are affirmed in all other respects