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The NE Law Express is available to members of the Nebraska State Bar at no additional charge.

Nebraska State Bar Association NE Law Express for May 9, 2008

Use our Short Cuts to link to the area of today's
NE Law Express that interests you.

Cases affecting the following practice areas are summarized in today's NE Law Express:

Administrative License Revocation, Sworn Report, Requirements of Notary
Arbitration, Waiver of Arbitration, Determinatoin by Arbitrator or Judge
Damages, Calculation
Damages, Proof
Guarantee, Interpretation
Guarantee, Waiver, Creditor's Impairment of Capital
Guarantee, Words and Phrases
Non Competition Agreement, Enforceability
Summary Judgment, Cross-Motions for Summary Judgment
Tortious Interference with a Business Relationship
Waiver of Arbitration, By Participating in Litigation, Prejudice

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May 29, 2008 - NCLE Teleseminar: Ethics in Litigation, Part 1 (Live Replay)
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Case Summaries

Administrative License Revocation, Sworn Report, Requirements of Notary

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The sole question presented by this appeal is whether the Nebraska Department of Motor Vehicles (DMV) had jurisdiction to revoke the driver’s license of petitioner when the arresting officer was not placed under oath prior to signing the sworn report initiating the administrative license revocation process. Here, the officer signed the report in the presence of the notary. No other action was required by either the officer or the notary as the notary was not required to confirm the truth of the statements. The very fact that the officer signed the report in the presence of a notary and that her signature was in fact notarized was sufficient as an oath or affirmation.

Moyer v. Nebraska Dept. Of Motor Vehicles, 275 Neb. 688 (2008)

Supreme Court Headnotes

Administrative Law:

1. Motor Vehicles:

a. Jurisdiction: Proof: Appeal and Error. Whether the sworn report of a law enforcement officer is sufficient to confer jurisdiction of the Department of Motor Vehicles is a question of law, and an appellate court reaches a conclusion independent of that reached by the lower court.

b. Licenses and Permits: Revocation: Affidavits: Words and Phrases. Sworn reports in administrative license revocation proceedings are, by definition, affidavits.

Affidavits:

1. Words and Phrases. An affidavit is a written or printed declaration or statement of facts, made voluntarily, and confirmed by the oath or affirmation of the party making it, taken before a person having authority to administer such oath or affirmation.

2. Proof: Public Officers and Employees. An affidavit must bear on its face, by the certificate of the officer before whom it is taken, evidence that it was duly sworn to by the party making the same. ••• An affidavit does not require a notary to confirm the truth of the facts stated in the affidavit; rather, the certificate, also known as a jurat, confirms only that the affiant appeared before the notary, attested to the truth of his or her statements, and signed the affidavit.

3. Oaths and Affirmations: Police Officers and Sheriffs: Proof. Oaths to affidavits ordinarily are not required to be administered with any particular ceremony, but the affiant must perform some corporal act before the officer whereby the affiant consciously takes upon himself or herself the obligation of an oath. The signature of the officer is a corporal act which is generally sufficient to meet the requirement of execution under oath.

Date Filed and Case No.: May 9, 2008. No. S-07-884.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may9/s07-884.pdf

Court Appealed From: District Court for Hamilton County: Michael J. Owens, Judge.

Attorneys for the Appeal: Jon Bruning and Kevin J. Edwards for Nebraska Department of Motor Vehicles, appellant. Arthur S. Wetzel for Sam L. Moyer, appellee.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Heavican , C. J.

Summary: On February 9, 2007, Deputy Sheriff Thea Edmunds responded to a motor vehicle accident in Hamilton County, Nebraska. Upon arriving at the scene, Edmunds encountered Sam L. Moyer. Edmunds detected the odor of alcohol on Moyer and requested that he take a preliminary breath test. Moyer refused and was then arrested for driving under the influence and was transported to the Hamilton County sheriff’s office, where he was asked to take a breath test. Moyer again refused.

After Moyer refused to submit to the breath test, Edmunds filled out a sworn report pursuant to Neb. Rev. Stat. § 60-498.01 (Reissue 2004). The report contained Edmunds’ signature, as well as a notation stating that the signature was “acknowledged” before a notary public. This report was then forwarded to the DMV.

Moyer requested an administrative hearing and at that hearing, Edmunds testified regarding the events surrounding Moyer’s arrest. An exchange was had between Edmunds and Moyer’s counsel regarding Edmunds’ signature on the sworn report, where Edmunds could not state that when he signed the copy he was placed under oath by a notary public. Following the hearing, Moyer’s driver’s license was revoked.

Moyer appealed the revocation to the district court, which reversed the revocation and ordered the DMV to reinstate Moyer’s license. The district court reasoned that “the sworn report was never sworn because the notary public did not put the arresting officer under oath.” As such, the district court concluded that the sworn report did not confer jurisdiction on the DMV to revoke Moyer’s license. The DMV appealed and the Nebraska Supreme Court wrote the opinion.

On appeal, the DMV contends that the district court erred in finding that the report detailing Moyer’s arrest was not sworn under § 60-498.01 and was therefore insufficient to confer jurisdiction on the DMV to revoke Moyer’s license.

Did the district court err in concluding that Edmunds needed to be placed under oath before signing the sworn report? The Court said that question presented is whether a sworn report complied with § 60-498.01 and vested the DMV with jurisdiction when the arresting officer’s signature was “acknowledged” rather than “sworn.”

The Nebraska Supreme Court has previously noted that sworn reports in administrative license revocation proceedings are, by definition, affidavits. An affidavit is a written or printed declaration or statement of facts, made voluntarily, and confirmed by the oath or affirmation of the party making it, taken before a person having authority to administer such oath or affirmation. An affidavit must bear on its face, by the certificate of the officer before whom it is taken, evidence that it was duly sworn to by the party making the same. An affidavit does not, however, require a notary to confirm the truth of the facts stated in the affidavit; rather, the certificate, also known as a jurat, confirms only that the affiant appeared before the notary, attested to the truth of his or her statements, and signed the affidavit.

In this case, Edmunds signed the report and the report was notarized. Edmunds testified that she signed the report in the presence of the notary. No other action was required by either Edmunds or the notary. The notary was not required to confirm the truth of the statements; the very fact that Edmunds signed the report in the presence of a notary and that her signature was in fact notarized was sufficient as an oath or affirmation.

Moyer argued that Edmunds’ testimony indicated that at the time she signed the report, she did not have any conscious notion that she was “swearing” to the contents of the document or that she was taking an oath of any sort.” The Court disagreed with Moyer’s characterization of Edmunds’ testimony and noted that the report itself states that “[t]he undersigned officer(s) hereby swear(s) . . . .” This was a clear and objective indication that Edmunds was aware at the time she signed the report that she was swearing to the contents of the report.

The Court therefore concluded that the district court erred by finding that because the report stated the notary acknowledged Edmunds’ signature rather than swearing and subscribing that signature, the DMV lacked jurisdiction to revoke Moyer’s license.

Conclusion: The Nebraska Supreme Court concluded that the district court erred in finding that the DMV lacked jurisdiction to revoke Moyer’s license. They therefore reversed the order of the district court and remanded the cause with directions to reinstate the administrative revocation of Moyer’s driver’s license. REVERSED.

Arbitration, Waiver of Arbitration, Determination of Arbitrator or Judge

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In this arbitration case before the Nebraska Supreme Court, the primary issue presented is whether the question of waiver of arbitration based on litigation activity should be decided by a court or an arbitrator. Here at the Court decides that the question was properly decided by the district court and affirms the decision.

Good Samaritan Coffee Co. v. LaRue Distributing, 275 Neb. 674 (2008)

Supreme Court Headnotes

Arbitration and Award.

1. Whether a stay of proceedings should be granted and arbitration required is a question of law.

2. Waiver: There is a liberal federal policy favoring arbitration; nevertheless, the right to arbitration may be waived. ••• A party seeking arbitration may be found to have waived its right to arbitration if it (1) knew of an existing right to arbitration, (2) acted inconsistently with that right, and (3) prejudiced the other party by these inconsistent acts.

a. Presumptions: Intent. A waiver defense raised in the context of prior litigation- related activity is presumed to be decided by a court, rather than an arbitrator. And shifting of this issue to an arbitrator is only proper where there is clear and unmistakable evidence of such an intent in the parties’ arbitration agreement.

Judgments:

1. Appeal and Error. When reviewing questions of law, an appellate court has an obligation to resolve the questions independently of the conclusion reached by the trial court.

Federal Acts:

1. Arbitration and Award:

a. Contracts. The Federal Arbitration Act applies to contracts evidencing a transaction involving commerce.

b. Intent: Words and Phrases. The phrase “evidencing a transaction” in the Federal Arbitration Act has been construed to include transactions involving interstate commerce even where the parties did not contemplate an interstate commerce connection.

Date Filed and Case No.: May 9, 2008. No. S-07-300.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may9/s07-300.pdf

Court Appealed From: District Court for Douglas County: Marlon A. Polk, Judge.

Attorneys for the Appeal: John C. Nimmer and Michael T. Levy for LaRue Distributing, Inc., a Nebraska Corporation, doing business as LaRue Coffee, et al., appellants. Mark A. Weber and Kylie A. Wolf for Good Samaritan Coffee Company, a Nebraska Corporation, appellee.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack, and Miller-Lerman, JJ.

Authored By: Gerrard, J.

Summary: Good Samaritan Coffee Company (Good Samaritan) filed a complaint against the defendants, alleging breach of contract and tortious interference with a business relationship. The contract at issue contained an arbitration clause. More than 3 years after Good Samaritan filed its original complaint, the defendants filed a motion to stay the case and compel arbitration. The district court denied the defendants’ motion, finding that the defendants had waived their right to arbitration by actively litigating the present case. LaRue appealed and the Nebraska Supreme Court issued the opinion.

Does the the Federal Arbitration Act (FAA) apply to this case? This is the first question answered by the Court. The FAA created a body of federal substantive law that applies to a contract “evidencing a transaction involving commerce.” The U.S. Supreme Court has held that the phrase “involving commerce” requires a broad interpretation in order to give effect to the FAA's basic purpose, which is to put arbitration provisions on the same footing as a contract’s other terms. Given their broad interpretation of the phrase “involving commerce” in 9 U.S.C. § 2, the Court found that it is clear that the contracts at issue in this case come within the scope of the FAA. The undisputed evidence in the record reflects that in order for Good Samaritan to meet its contractual obligations to LaRue, Good Samaritan had to purchase coffee beans from sources outside of the continental United States. And once the coffee beans were purchased, the beans were shipped to Good Samaritan in Nebraska, where Good Samaritan processed and sold the beans to LaRue. Thus, the FAA applies and questions relating to LaRue’s motion to compel arbitration implicate federal law.

Should a court or an arbitrator decide if a party has waived its right to arbitrate when the waiver allegation is based on that party’s litigation-related activity? The U.S. Supreme Court, in Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 123 S. Ct. 588, 154 L. Ed. 2d 491 (2002) has set forth the rules that govern the allocation of functions between a court and an arbitrator. The Howsam court noted that “procedural” questions which grow out of the dispute and bear on its final disposition’ are presumptively not for the judge, but for an arbitrator, to decide. In the present case, LaRue contends relying on Howsam, that Good Samaritan’s waiver defense should be resolved by an arbitrator and not a court.

While the Nebraska Court noted that viewed in isolation, statements in Howsam provide general support for LaRue’s position, “However, since the Court’s decision in Howsam, several courts have squarely addressed the issue now raised by LaRue in the present case.” These courts have persuasively concluded that when this language from Howsam is properly considered within the context of the entire opinion, it was referring only to waiver, delay, or like defenses arising from noncompliance with contractual conditions precedent to arbitration. Not to claims of waiver based on active litigation in courts. The statutory language of the FAA provides further support for the holding that waiver based on litigation conduct be decided by a court, rather than an arbitrator.

“Given the considerations of, among other things, comparative expertise and judicial economy,” the Nebraska Supreme Court held that a waiver defense raised in the context of prior litigation-related activity is presumed to be decided by a court, rather than an arbitrator. And shifting of this issue to an arbitrator is only proper where there is clear and unmistakable evidence of such an intent in the parties’ arbitration agreement. The arbitration agreement at issue here fails to meet this standard. Accordingly, the question whether LaRue waived its right to arbitrate due to its participation in the present litigation was properly for the district court.

Did the district court err in determining that LaRue waived its right to arbitration based on its active participation in the present litigation? The legal determination of waiver of arbitration is reviewed de novo, and the factual findings underlying that ruling are reviewed for clear error. There is a liberal federal policy favoring arbitration, grounded in the FAA and despite this strong federal policy favoring arbitration, the right to arbitration may be waived. A party seeking arbitration may be found to have waived its right to arbitration if it (1) knew of an existing right to arbitration; (2) acted inconsistently with that right; and (3) prejudiced the other party by these inconsistent acts. The Court found that each of these factors strongly weighed in favor of a finding that LaRue has waived its right to arbitration in this case.

The district court, in finding that LaRue acted inconsistently with its right to arbitrate, observed that over the course of this litigation, LaRue served three sets of written discovery on Good Samaritan, exchanged pleadings, filed a counterclaim, and filed and received an unfavorable ruling on a motion for partial summary judgment.

“Over 3 years passed between the time Good Samaritan filed its initial complaint and the time LaRue, at last, raised its motion to stay trial and compel arbitration. During this 3-year period, the record indicates that LaRue actively participated in the litigation. LaRue filed a counterclaim against Good Samaritan seeking to recover funds that Good Samaritan allegedly owed LaRue. Moreover, LaRue acted inconsistently with its right to arbitrate by filing a motion for partial summary judgment requiring Good Samaritan to defend its claims on the merits and requesting resolution of the matter in a judicial forum. And it was not until after the court ruled against LaRue on its motion for partial summary judgment that LaRue ultimately filed its motion to compel arbitration” wrote the Court. “This conduct by LaRue evidences a clear intent to assent to the judicial resolution of the dispute and is entirely inconsistent with its right to arbitrate.”

The the Court further found that the record also supports a finding that Good Samaritan was prejudiced by LaRue’s inconsistent acts. The Court laid out the reasons set out above as showing how Good Samaritan had been prejudiced. “And to allow LaRue to now invoke its right to arbitration after such an extensive delay would undercut the very rationale—speed and efficiency—that supports the strong presumption in favor of arbitration in the first place.” The evidence in this record demonstrates the prejudice necessary to support the district court’s ruling that LaRue has waived its right to arbitration.

Conclusion: The Court wrote that the question whether a party has waived its right to arbitrate due to litigation-related activity is an issue presumptively for a court to decide and not an arbitrator. Here, the district court did not err in determining that LaRue waived its right to arbitrate by actively participating in the underlying proceedings before the court. AFFIRMED.

Damages, Calculation

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This decision by the Nebraska Supreme Court looks to a non-competition agreement between a salesman and his employer, whether that agreement was enforceable, and whether the damages for a breach of that agreement were properly calculated. There was also in this opinion, a decision regarding a companion case which the employer brought against the company which hired the salesman who was a party to the non-competition clause.

Aon Consulting v. Midlands Fin. Benefits, 275 Neb. 642 (2008)

Supreme Court Headnotes

Summary Judgment.

1. Summary judgment is proper when the pleadings and evidence admitted at the hearing disclose no genuine issue regarding any material fact or the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law.

2. Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted and gives such party the benefit of all reasonable inferences deducible from the evidence.

Judgments:

1. Appeal and Error. In a bench trial of a law action, the trial court’s factual findings have the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong.

Damages:

1. Appeal and Error. The amount of damages to be awarded is a determination solely for the fact finder, and the fact finder’s decision will not be disturbed on appeal if it is supported by the evidence and bears a reasonable relationship to the elements of the damages proved.

2. Proof. While damages need not be proved with mathematical certainty, neither can they be established by evidence which is speculative and conjectural. ••• There is no precise formula for determining lost profits, and the only requirement in Nebraska is that the calculation be supported by some financial data which would permit an estimate of the actual loss to be made with reasonable certitude and exactness.

Directed Verdict:

1. Evidence. A directed verdict is proper at the close of all the evidence only when reasonable minds cannot differ and can draw but one conclusion from the evidence, that is to say, when an issue should be decided as a matter of law. ••• The party against whom the verdict is directed is entitled to have every controverted fact resolved in his or her favor and to have the benefit of every inference which can reasonably be drawn from the evidence. If there is any evidence which will sustain a finding for the party against whom the motion is made, the case may not be decided as a matter of law.

Restrictive Covenants:

1. Employer and Employee. In determining whether a covenant not to compete is valid, a court considers whether the restriction is (1) reasonable in the sense that it is not injurious to the public, (2) not greater than is reasonably necessary to protect the employer in some legitimate interest, and (3) not unduly harsh and oppressive on the employee. ••• An employer has a legitimate business interest in protection against a former employee’s competition by improper and unfair means, but is not entitled to protection against ordinary competition from a former employee.

a. Goodwill: Where an employee has substantial personal contact with the employer’s customers, develops goodwill with such customers, and siphons away the goodwill under circumstances where the goodwill properly belongs to the employer, the employee’s resultant competition is unfair and the employer has a legitimate need for protection against the employee’s competition.

i. Words and Phrases. To distinguish between ordinary competition and unfair competition, courts focus on an employee’s opportunity to appropriate the employer’s goodwill by initiating personal contacts with the employer’s customers.

Contracts.

1. Generally, sufficient consideration for an agreement will be found if there is some benefit to one of the parties or a detriment to the other.

Breach of Contract:

1. Damages. In a breach of contract case, the ultimate objective of a damages award is to put the injured party in the same position the injured party would have occupied if the contract had been performed, that is, to make the injured party whole. ••• One injured by a breach of contract is entitled to recover all its damages, including the gains prevented as well as the losses sustained, provided the damages are reasonably certain and such as might be expected to follow the breach.

Trial:

1. Evidence: Appeal and Error. A trial court has the discretion to determine the relevancy and admissibility of evidence, and such determinations will not be disturbed on appeal unless they constitute an abuse of that discretion.

2. Expert Witnesses: Appeal and Error. The admission of expert testimony is ordinarily within the trial court’s discretion, and its ruling will be upheld absent an abuse of discretion.

Expert Witnesses.

1. Not every attack on expert testimony amounts to a claim under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993), and Schafersman v. Agland Coop, 262 Neb. 215, 631 N.W2d 862 (2001).

Corporations.

1. An officer must comply with all applicable fiduciary duties when dealing with the corporation and its shareholders. ••• Nominal corporate officers, with no management authority, generally do not owe fiduciary duties to the corporation. ••• An officer who participates in management of the corporation, exercising some discretionary authority, is a fiduciary of the corporation as a matter of law.

Torts:

1. Intent: Proof. To succeed on a claim for tortious interference with a business relationship or expectancy, a plaintiff must prove (1) the existence of a valid business relationship or expectancy, (2) knowledge by the interferer of the relationship or expectancy, (3) an unjustified intentional act of interference on the part of the interferer, (4) proof that the interference caused the harm sustained, and (5) damage to the party whose relationship or expectancy was disrupted.

2. Employer and Employee. Factors to consider in determining whether interference with a business relationship is “improper” include: (1) the nature of the actor’s conduct, (2) the actor’s motive, (3) the interests of the other with which the actor’s conduct interferes, (4) the interests sought to be advanced by the actor, (5) the social interests in protecting the freedom of action of the actor and the contractual interests of the other, (6) the proximity or remoteness of the actor’s conduct to the interference, and (7) the relations between the parties. 24. Actions: Intent. In order to be actionable, interference with a business relationship must be both intentional and unjustified.

Date Filed and Case No.: May 9, 2008. Nos. S-06-1256, S-07-034.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may9/s06-1256.pdf

Court Appealed From: District Court for Douglas County: J. Michael Coffey, Judge.

Attorneys for the Appeal: Richard J. Gilloon and Bradley B. Mallberg for Aon Consulting, Inc, appellant. Mark A. Fahleson for Midlands Financial Benefits, Inc, appellee. Frederick S. Cassman and Frank F. Pospishil for William Pearson, appellant.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Stephan, J.

Summary: While employed by Alexander & Alexander Services Inc. (A&A) in 1981, William Pearson signed an agreement which restricted his ability to solicit business from certain customers of the firm for 2 years after leaving its employment. Aon Consulting, Inc. (Aon), merged with A&A in 1997, and Pearson remained as an officer and employee of Aon until 2001, when he resigned and joined a competitor, Midlands Financial Benefits, Inc. (Midlands). In his new employment, Pearson solicited business from Aon customers with whom he had personal business relationships while employed by Aon. Aon sued Pearson for breach of contract and was awarded a money judgment from which Pearson appealed. Aon cross-appealed from the dismissal of its breach of fiduciary duty claim against Pearson.

In a separate case, Aon sued Midlands for intentional interference with a business relationship and appealed from a directed verdict of dismissal. The decision in both cases was issued by the Nebraska Supreme Court.

Was the nonsolicitation agreement enforceable? A legal issue common to both cases is whether the 1981 non-solicitation agreement between Pearson and A&A was enforceable by Aon following Pearson’s resignation in 2001. To resolve this question, the Court had to determine (1) whether, as the district court held, the agreement became an asset of Aon by virtue of the merger with A&A and, if so, (2) whether the agreement was reasonable with respect to the nature and scope of the restrictions it imposed upon Pearson.

(1) Effect of Merger: Pearson and Midlands argue that A&A's rights under the non-solicitation agreement were not assignable and that therefore, Aon had no right to enforce the agreement. Aon argues, and the district court held, that it acquired the right to enforce the agreement by operation of law as a result of the 1997 merger. The "Agreement and Plan of Merger” expressly stated that it is to be governed by the law of the State of Maryland (General Corporation Law of the State of Maryland.) The Court agreed with those cases which hold, under statutes similar to Maryland’s, that a covenant not to compete is an asset of a corporation which passes by operation of law to a successor corporation as the result of a merger, regardless of whether the agreement would otherwise be assignable. Accordingly, by virtue of the merger, Aon succeeded to A&A's right to enforce its nonsolicitation agreement with Pearson.

(2) Scope and Reasonableness of Nonsolicitation Agreement: Approaching the issue of enforceability from a different perspective, Midlands argued that the nonsolicitation agreement was unenforceable under Nebraska law because it imposes broader restrictions than our law permits. The nonsolicitation agreement signed by Pearson did not prevent him from engaging in “ordinary competition” with Aon after leaving its employment. It only prevented him from business contacts with those customers with whom he had personal business dealings during the last 2 years of his employment with Aon. The agreement was properly focused on the legitimate purpose of protecting Aon’s goodwill with its customers. Therefore, the Court concluded that the nonsolicitation agreement was reasonable in the sense that it is not injurious to the public, not greater than reasonably necessary to protect Aon’s legitimate interest in retaining the goodwill of its customers with whom Pearson dealt personally, and not unduly harsh and oppressive on Pearson. Accordingly, we conclude that the agreement was enforceable under Nebraska law.

(c) Consideration: Midlands also argued that the nonsolicitation agreement was invalid for lack of consideration arguing that Pearson’s continued employment after signing the agreement did not constitute adequate consideration. The Court did not address this specific argument, because they concluded that the nonsolicitation agreement recites other consideration. In the nonsolicitation agreement, A&A undertook to pay severance compensation in the event that Pearson left its employment for reasons other than death, disability, or retirement. This undertaking constituted a benefit to Pearson and a detriment to A&A which would not otherwise have existed in their employment relationship.

For the reasons discussed, the Court concluded that the nonsolicitation agreement between Pearson and A&A was valid under Nebraska law and that the right to enforce the agreement passed to Aon by operation of law when it acquired A&A by merger. Accordingly, the district court did not err in granting partial summary judgment in favor of Aon as to Pearson’s liability for breach of the nonsolicitation agreement.

Did the district court err with respect to its calculation of damages? Aon assigned error to the district court’s determination that evidence regarding damages allegedly incurred more than 2 years after Pearson’s breach of the nonsolicitation agreement, would be speculative and irrelevant and, therefore, inadmissible. The Supreme Court wrote that Pearson would have been free to solicit business from Aon customers after the 2-year restricted period, and there is evidence in the record that customers can change brokers whenever they choose to do so, without prior notice. Therefore, the Court concluded that the district court did not abuse its discretion in holding that evidence of lost profits beyond the 2-year period was speculative and, therefore, irrelevant and inadmissible.

Pearson assigned error to the district court’s overruling his motion in limine and receiving, over Pearson’s foundational objections, the expert witness testimony of Dennis R. Hein, CPA’s opinions with regard to lost profits. Pearson argued that the trial court failed to properly perform its “gatekeeper” function and that Hein’s methodology was suspect because he failed to include all relevant expenses. The Court said that not every attack on expert testimony amounts to a claim under Daubert/Schafersman and Pearson’s motion in limine and objections during trial did not raise a DaubertlSchafersman issue. Pearson’s assertion really is an attack on the factual basis of the opinion, a criticism that goes to its weight, not its admissibility. As the admission of expert testimony is ordinarily within the trial court’s discretion, the Court concluded that the district court did not err in receiving Hein’s opinions regarding damages over Pearson’s objections.

Revisiting the calculation of the damages awarded by the trial court, the Court noted there is no precise formula for determining lost profits, and the only requirement in Nebraska is that the calculation be supported by some financial data which would permit an estimate of the actual loss to be made with reasonable certitude and exactness. They concluded that the record is sufficient to support the method of calculating damages utilized by the district court.

Did the district court err in granting summary judgment in favor of Pearson on Aon’s claim that Pearson breached his fiduciary duty as an officer of Aon and in dismissing that claim? Aon contended that Pearson breached fiduciary duties of good faith and loyalty because he failed to alert Aon to an Aon coworker’s (Cathy Dorenbach) plans to leave her employment with Aon and solicit some of its customers on behalf of Midlands. In Aon’s second amended petition, it alleged that Pearson planned both his and Dorenbach’s departure from Aon “in such a manner so as to solicit and divert customers of [Aon] prior to their termination from employment.” The record is clear that these alleged breaches could not have occurred any earlier than June 2001, as that is the date that Pearson and Dorenbach first discussed leaving their positions at Aon. The district court did not disclose its reasons for granting Pearson’s motion for summary judgment on this issue.

The Court said that the alleged breaches of Pearson’s fiduciary duty all occurred after March 2001. Thus, assuming that he owed fiduciary duties to Aon at the time he exercised managerial discretion, the issue before us is whether his fiduciary obligation continued when his managerial duties ceased. Restated, the question is, Was Pearson a fiduciary when he retained the title of a corporate officer but no longer exercised discretionary management authority?

While there is little legal authority on this issue the Court was persuaded by decisions from other jurisdictions holding that the existence of a fiduciary duty of an officer in a closely held corporation “depends on the ability to exercise the status which creates it.” Although Aon is not a closely held corporation, the Court found that this rule is applicable to the facts of the instant case. Pearson exercised low-level, local management authority in a large corporation. This authority was taken away from him in March 2001, and at that point, he was simply one of hundreds of Aon vice presidents. At the time of Pearson’s alleged breach, he had no involvement in the management and operation of the corporation beyond his own production and the Court concluded that Pearson owed no fiduciary duty to Aon at the time the alleged breach of the duty occurred. Thus, the Court ruled that the district court properly granted summary judgment in his favor on this claim.

Did the district court err in directing a verdict in favor of Midlands on Aon’s claim that Midlands tortiously interfered with its contract with Pearson? The Court said that the key issue is whether the district court erred in determining that there was no evidence to support a finding that Midlands’ hiring and continued employment of Pearson with such knowledge constituted an “unjustified intentional act of interference.”

In this case, the Court said it is clear that Pearson contacted Midlands about employment and that Midlands neither solicited nor recruited Pearson. Pearson informed Midlands of the non-solicitation agreement, but at the same time, he told Midlands that his attorney had given him an opinion that the agreement was unenforceable. It is undisputed that Midlands did not expect or require Pearson to solicit customers he had served while employed by Aon and that he likely could have met the Midlands’ production expectations without doing so. From this record, the most that could be said was that Midlands hired an experienced individual who sought employment and relied in good faith upon his representation that, according to his attorney, his nonsolicitation agreement with a prior employer was unenforceable.\

Based upon its review of the record, the Court concluded that the district court did not err in determining that Aon presented no evidence to support a reasonable inference that Midlands intentionally and unjustifiably interfered with its contractual relationship with Pearson.

Conclusion: For the reasons discussed, the Court affirmed the judgment of dismissal in case No. S-06-1256. In case No. S-07-034, we affirm the award of damages in favor of Aon and affirm the partial summary judgment in favor of Pearson. AFFIRMED.

Damages, Proof

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Aon Consulting v. Midlands Fin. Benefits, 275 Neb. 642 (2008)

Supreme Court Headnotes

Summary Judgment.

Judgments:

1. Appeal and Error. In a bench trial of a law action, the trial court’s factual findings have the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong.

Damages:

Directed Verdict:

Restrictive Covenants:

Contracts.

1. Generally, sufficient consideration for an agreement will be found if there is some benefit to one of the parties or a detriment to the other.

Breach of Contract:

Trial:

2. Expert Witnesses: Appeal and Error. The admission of expert testimony is ordinarily within the trial court’s discretion, and its ruling will be upheld absent an abuse of discretion.

Expert Witnesses.

Corporations.

Torts:

Date Filed and Case No.: May 9, 2008. Nos. S-06-1256, S-07-034.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may9/s06-1256.pdf

Court Appealed From: District Court for Douglas County: J. Michael Coffey, Judge.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Stephan, J.

Guarantee, Interpretation

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This guarantee case was before the district court on cross-motions for summary judgment. Plaintiff offered the Guarantee and other evidence, and defendant offered evidence designed to establish defenses that would relieve or reduce her obligations under the Guarantee. The district court granted defendant’s motion for summary judgment, denied plaintiff’ motion for summary judgment, and dismissed the complaint. The Nebraska Supreme Court concluded that plaintiff had established its entitlement to judgment and that defendant did not establish her defenses.

Builders Supply Co. v. Czerwinski, 275 Neb. 622 (2008)

Supreme Court Headnotes

Summary Judgment.

1. Summary judgment is proper when the pleadings and evidence admitted at the hearing disclose no genuine issue as to any material fact or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law. ••• The primary purpose of a summary judgment procedure is to pierce the allegations made in the pleadings and show conclusively that the controlling facts are other than as pled and thus resolve, without the expense and delay of trial, those cases where there exists no genuine issue as to any material fact or as to the ultimate inferences to be drawn therefrom, and where the moving party is entitled to judgment as a matter of law.

2. Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in a light most favorable to the party against whom the judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence. ••• When cross-motions for summary judgment have been ruled uponby the district court, the appellate court may determine the controversy that is the subject of those motions or may make an order specifying the facts that appear without substantial controversy and direct such further proceedings as it deems just.

3. Proof. A party moving for summary judgment must make a prima facie case by producing enough evidence to demonstrate that the movant is entitled to judgment if the evidence were uncontroverted at trial. ••• Once the moving party makes a prima facie case, the burden to produce evidence showing the existence of a material issue of fact that prevents judgment as a matter of law shifts to the party opposing the motion.

Contracts:

1. Guaranty: A guaranty is interpreted using the same general rules as are used for other contracts. ••• Any ambiguity in a guaranty should arise in the first instance from the guaranty itself, and neither a court nor the parties will be permitted to create an ambiguity when none exists. ••• A guaranty is an independent contract that imposes responsibilities different from those imposed in an agreement to which it is collateral.

a. Words and Phrases. A guaranty is a contract and is a collateral undertaking by one or more persons to answer for the payment of a debt or the performance of some contract or duty in case of the default of another person who is liable for such payment or performance in the first instance.

b. Debtors and Creditors: Notice: Words and Phrases. An absolute guaranty is a contract by which the guarantor has promised that if the debtor does not perform his or her obligation or obligations, the guarantor will perform some act for the benefit of the creditor. An absolute guaranty of payment is enforceable at any time without demand and notice of default.

c. Subrogation: Waiver: Estoppel. The general rule is that a surety or guarantor is entitled to be subrogated to the benefit of all the security and means of payment under the creditor’s control and, therefore, in the absence of assent, waiver, or estoppel, the guarantor is generally released by an act of the creditor which deprives the guarantor of such right.

d. Waiver. The defense that a guarantor is discharged by a creditor’s impairment of collateral can be waived by an express provision in the guaranty agreement or by the guarantor’s conduct.

2. Judgments: Appeal and Error. The meaning of a contract is a question of law, in connection with which an appellate court has an obligation to reach its conclusions independently of the determinations made by the court below.

3. Words and Phrases. Ambiguity exists in an instrument when a word, phrase, or provision in the instrument has, or is susceptible of, at least two reasonable but conflicting interpretations or meanings.

Date Filed and Case No.: May 9, 2008. No. S-06-1138.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may9/s06-1138.pdf

Court Appealed From: District Court for Douglas County: Gerald E. Moran, Judge.

Attorneys for the Appeal: Steven J. Riekes for Builders Supply Co., Inc., appellant. Stephen H. Nelsen, James M. Bausch, and Tessa P. Hermanson for Barbara J. Czerwinski, appellee.

Justices: Heavican, C.J., Connolly, Gerrard, Stephan and Miller-Lerman, J.J.

Not Participating: Wright and McCormack, JJ.

Authored By: Miller-LermaN, J.

Summary: Appellant Builders Supply Co., Inc. (Builders), filed a complaint in the district court for Douglas County in which it alleged that appellee Barbara J. Czerwinski owed it $1,448,607.04 plus prejudgment and postjudgment interest and costs under a guaranty agreement (Guarantee) executed by Czerwinski and her late husband, John C. Czerwinski, Jr. (Jack). The Guarantee secured sums owed to Builders by Benchmark Homes, Inc. (Benchmark), under a separate credit agreement (Agreement). Jack and Czerwinski were officers in Benchmark, a company that was in the business of constructing homes. Czerwinski denied certain of Builders’ allegations. Czerwinski’s answer effectively gave notice of two defenses. First, Czerwinski claimed that as a result of Builders’ release of certain collateral securing the Guarantee, her liability under the Guarantee had been completely discharged. Second, Czerwinski claimed that, if liable, her liability under the Guarantee was limited to $525,000.

Builders and Czerwinski filed cross-motions for summary judgment. Following an evidentiary hearing, the district court entered a judgment order in which it sustained Czerwinski’s motion, overruled Builders’ motion, and dismissed the case. Builders appealed and the Nebraska Supreme Court rendered the opinion.

Did the district court err in sustaining Czerwinski’s motion for summary judgment? The record here reflects that Builders offered into evidence copies of the Guarantee and other documents, including evidence of the amount of the debt owed by Benchmark to Builders. By its terms, the Guarantee was absolute and unconditional. It did not limit the amount guaranteed and did not expire after a period of time. It did not contain restrictions relating to the release of the collateral and did not require notice of release. As alleged in its complaint, Builders demonstrated its entitlement to judgment based on the Guarantee and the amount owed by Czerwinski to which it was entitled.

The burden then shifted to Czerwinski to show that Builders was not entitled to judgment as a matter of law. Czerwinski offered evidence by which she sought to establish defenses such that her obligation under the Guarantee was not enforceable or, if enforceable, was for an amount less than the debt of $1,427,714.97 that had been established by the evidence. Although the district court found merit in the defenses, the Court concluded as a matter of law that Czerwinski failed to establish her defenses and that therefore, the district court erred in entering judgment in favor of Czerwinski and against Builders and in dismissing Builders’ complaint. Given the ultimate inferences from the evidence, the Court ruled that Builders was entitled to judgment.

Did the district court err in determining Czerwinski was never liable for more than $525,000 under the guarantee? Integral to the Court’s resolution of this appeal was a determination of the amount of debt to which Czerwinski was exposed under the Guarantee. On appeal, Builders claimed that the district court erred when it determined that Czerwinski “was never obligated for more than $525,000.00 under the Guarantee.” The Court agreed with Builders that the district court erred in this determination.

Builders pointed out provisions in the Guarantee provided that the Czerwinski’s “absolutely and unconditionally guarantee[d]” prompt repayment of all the amounts advanced by Builders to Benchmark and if Benchmark defaulted in the payment of such indebtedness, Czerwinski would pay to Builders the amount then due.

Czerwinski claimed that notwithstanding the “absolute[] and unconditional []” language contained in the Guarantee, she does not owe money to Builders in general and that in particular, she does not owe the full amount that Builders advanced to Benchmark. Czerwinski asserted that the Agreement, the Guarantee, and the deeds of trust were made as part of one transaction and should be construed together for purposes of interpretation.

The Court concluded as a matter of law that the Guarantee is unambiguous and that its meaning, determined by the language of the Guarantee itself, contains no limits on Czerwinski’s liability to Builders. The district court erred as a matter of law in limiting Czerwinski’s potential liability under the Guarantee at $525,000.

Did the district court err as a matter of law when it concluded that Czerwinski was released from liability under the Guarantee and sustained Czerwinski’ s motion for Summary Judgment? The Court next considered the correctness Czerwinski’s defense based on the court’s determination that Czerwinski was released from liability under the Guarantee as a result of Builders’ release of its deed of trust on the office building.

On appeal, Builders claimed that the district court erred when it concluded that by releasing the collateral, Builders deprived Czerwinski of her right of subrogation, and Czerwinski was released from any liability under the Guarantee as a matter of law. The Court said that the ultimate inference from the facts established Builders’ allegations and failed to establish Czerwinski’s impairment of collateral defense. Although Builders released the deed of trust on the office building as collateral in 1991, the release did not violate an obligation under the Guarantee, and based on the evidence, Czerwinski was estopped from succeeding on a claim of impairment of collateral. By Czerwinski’s use of the office building as collateral to secure other indebtedness starting in 1999, Czerwinski was not deprived by Builders of preventing the loss protected by the Guarantee. Accordingly, giving Builders (as the party against whom Czerwinski’s summary judgment was entered) the benefit of all reasonable inferences deducible from the evidence the Court conclude the district court erred as a matter of law when it granted Czerwinski’s motion for summary judgment. They therefore reversed that portion of the district court’s order.

Conclusion: In this appeal, following proceedings on cross-motions for summary judgment, the Nebraska Supreme Court concluded that Builders established its entitlement to judgment and that Czerwinski did not establish her defenses and was not entitled to summary judgment. The Court therefore reversed the district court’s order that sustained Czerwinski’s motion for summary judgment and overruled Builders’ motion for summary judgment and remanded the cause with directions that judgment be entered in favor of Builders in the amount of $1,427,714.97 plus prejudgment and post-judgment interest and costs. REVERSED AND REMANDED WITH DIRECTIONS.

Guarantee, Waiver, Creditor's Impairment of Capital

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Builders Supply Co. v. Czerwinski, 275 Neb. 622 (2008)

Supreme Court Headnotes

Summary Judgment.

Contracts:

d. Waiver. The defense that a guarantor is discharged by a creditor’s impairment of collateral can be waived by an express provision in the guaranty agreement or by the guarantor’s conduct.

Date Filed and Case No.: May 9, 2008. No. S-06-1138.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may9/s06-1138.pdf

Court Appealed From: District Court for Douglas County: Gerald E. Moran, Judge.

Attorneys for the Appeal: Steven J. Riekes for Builders Supply Co., Inc., appellant. Stephen H. Nelsen, James M. Bausch, and Tessa P. Hermanson for Barbara J. Czerwinski, appellee.

Justices: Heavican, C.J., Connolly, Gerrard, Stephan and Miller-Lerman, J.J.

Not Participating: Wright and McCormack, JJ.

Authored By: Miller-LermaN, J.

Guarantee, Words and Phrases

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This action to recover proceeds from a guarantor where a series of notes had been issued to a debtor boils, down to the guarantee agreement and at what stage his guarantee ended.

First Nat. Bank of Unadilla v. Betts, 275 Neb. 665 (2008)

Supreme Court Headnotes

Courts:

1. Appeal and Error. The district court and higher appellate courts generally review appeals from the county court for error appearing on the record. ••• When a district court reverses a county court’s judgment and enters findings, a higher appellate court still reviews the county court’s judgment for errors appearing on the record.

Judgments:

1. Appeal and Error. When reviewing a judgment for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable. ••• In instances when an appellate court is required to review cases for error appearing on the record, questions of law are nonetheless reviewed de novo on the record.

Contracts:

1. Guaranty: A guaranty, as any other contract, must be interpreted by reference to the entire document, with meaning and effect given to every part of the guaranty whenever possible.

a. Debtors and Creditors: Words and Phrases. A guaranty is a contract by which the guarantor promises to make payment if the principal debtor defaults.

b. Appeal and Error. To determine the obligations of a guarantor, an appellate court relies on general principles of contract and guaranty law.

c. Intent. Because a guaranty is a contract, it must be understood in light of the parties' intentions and the circumstances under which the guaranty was given.

d. Liability. The liability of a guarantor is not to be enlarged beyond the strict terms of the contract.

Guaranty:

1. Liability. When the meaning of a guaranty is ascertained, or its terms are clearly defined, the liability of the guarantor is controlled absolutely by such meaning and limited to the precise terms.

Date Filed and Case No.: May 9, 2008. No. S-07-023.

Internet Address: http://www.supremecourt.ne.gov/opinions/2008/may/may9/s07-023.pdf

Court Appealed From: District Court for Nemaha County, Daniel E. Bryan, Jr., Judge, on appeal thereto from the County Court for Nemaha County, Curtis L. Maschman, Judge.

Attorneys for the Appeal: David Watermeier for First National Hank of Unadilla, Countryside Bank, appellant. Angelo M. Ligouri for Jack D. Betts, appellee.

Justices: Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack and Miller-Lerman, J.J.

Authored By: Wright, J.

Summary: Brad M. Betts received a loan from The First National Bank of Unadilla, Countryside Bank (Bank) in November 1995 and a that time did not own real estate or have adequate assets to secure the loan. On April 27, 1996, Brad renewed the loan in the amount of $7,668.63, and his father, Jack D. Betts, signed a guaranty for the renewal of the loan. Brad renewed the loan for a second time on July 21, 1998, in the amount of $11,951.71. The loan, referred to as “Note #8026,” indicated that the security for the loan was a 1988 Dodge pickup and a 1988 Ford Mustang. The guaranty Jack signed for Note #8026.

On May 8, 2000, Brad and his wife, Elizabeth R. Betts, took out other loan from the Bank in the amount of $3,900. The loan, referred to as “Note #9200,” was not a renewal and was not guaranteed by Jack. Brad and Elizabeth were employed, and their combined annual income was $52,880. Then on May 15, 2000, Brad and Elizabeth were issued “Note #9224” in the amount of $19,418.26. The note was a renewal of Notes #8026 and #9200 and was secured by a deed of trust in a house in Lincoln, Nebraska. The note included $5,636.74 owed on Note #8026, $6,751.51 of new funds, $3,911.75 owed on Note #9200, and $3,118.26 for credit disability and joint credit life insurance.

On December 17, 2003, the Bank received notification that Brad and Elizabeth’s house in Lincoln was to be offered at a trustee’s sale. After the Bank received no funds from the sale of the house, it sought to collect from Jack based on the guaranty he signed for Note #8026 in 1998. The Bank alleged that Jack owed $11,951.71 plus interest from and after August 8, 2002, the last date the Bank received a payment from Brad. The Bank claimed that Brad and Elizabeth’s failure to make payments constituted a breach of Notes #8026 and #9224 and the personal guaranty. Jack asserted that the obligation under Note #8026 was terminated by Note #9224 and that Note #9224 was based on Brad and Elizabeth’s assets, income, and creditworthiness.

After a trial in the county court, the county court found that the guaranty for Note #8026 was an absolute unconditional continuing guaranty, which continued unless revoked or until full payment was made and all of Brad and Elizabeth’s indebtedness was discharged. The court found that Brad and Elizabeth did not meet the Bank’s standard of creditworthiness when they executed Note #9224. The court held that Jack had not taken any action to revoke the 1998 guaranty and that he was therefore still liable on the guaranty and concluded that the Bank was entitled to judgment on the limit of the guaranty in the principal sum of $11,951.71 plus interest at the rate specified in Note #9224 of 10.5 percent from and after the last payment date of August 8, 2002, for a total of $5,081.61 as of August 25, 2006. Judgment was entered for the Bank in the total sum of $17,033.32 with interest to accrue on the principal until paid in full.

Jack appealed to the district court. The court found that the guaranty signed by Jack was not ambiguous or vague and that it was an absolute and unconditional guaranty to the Bank of the full and prompt payment when due of Note #8026, dated July 21, 1998, and any extensions, renewals, or replacements of it. However, contrary to the county court’s finding, the district court found that the guaranty continued only until there was full payment and discharge of the indebtedness evidenced in Note #8026, its extensions, renewals, or replacements. The district court concluded that under the terms of the guaranty, the indebtedness guaranteed by Jack did not include any obligations entered into between Brad and Elizabeth and the Bank after Brad and Elizabeth met the Bank’s standard of creditworthiness. This standard was based upon Brad and Elizabeth’s own assets and income, which they had achieved by the time #9224 was issued, even though it was a renewal of Note #8026. Finding that the Bank failed to prove that Brad and Elizabeth did not meet the Bank’s standard of creditworthiness and that it was clear error for the county court to so find, the district court concluded that this failure required a finding that the indebtedness created by Note #9224 was not subject to Jack’s guaranty. It reversed the decision of the county court, entered judgment for Jack and against the Bank, and remanded the case to the county court for further proceedings. The Bank appealed and the Nebraska Supreme Court wrote the decision.

What notes were subject to Jack’s guarantee? Examining the terms of the written guaranty signed by Jack on July 21, 1998, in which Jack guaranteed to the Bank the payment of Note #8026 and any extensions, renewals, or replacements referred to as “indebtedness.” The guaranty provided that the term “indebtedness” shall not include “any obligations entered into between Borrower and Lender after the date” of the guaranty, including any extensions, renewals, or replacements of such obligations “for which Borrower meets the Lender’s standard of creditworthiness based on Borrower’s own assets and income without the addition of a guaranty.”

As framed by the terms of the guaranty, the issue became whether Brad and Elizabeth were creditworthy at the time they signed Note #9224. If Brad and Elizabeth were creditworthy, the Court had to consider whether Note #9224 absolved Jack of any of the liability described in the guaranty.

(1) Creditworthiness: The guaranty provided that the standard of creditworthiness was to be based on Brad’s “own assets and income without the addition of a guaranty.” There was no further definition of creditworthiness. Based on the financial statement prepared by the Bank, Brad and Elizabeth’s net worth exceeded the amount of the new loan. The Court concluded that the county court was clearly wrong in finding that Brad and Elizabeth did not meet the Bank’s standard of creditworthiness. The guaranty limited its creditworthiness requirement to the assets and income of the borrower, and there is no evidence to support the conclusion that Brad was not creditworthy.

On appeal, the Bank argued that its determination of credit-worthiness is a subjective standard which the Bank can employ. However, the Court pointed out that the guaranty itself did not provide that the Bank could subjectively determine a borrower’s credit-worthiness. The guaranty specifically stated that the standard of creditworthiness was based on the borrower’s own assets and income without the addition of a guaranty. Based on this language, Brad and Elizabeth, demonstrated creditworthiness, and no guaranty was be needed.

(2) Jack’s liability: Having determined that Brad and Elizabeth were creditworthy at the time they signed Note #9224, the Court proceeded to consider whether the note released Jack from all liability. When Note #9224 was signed, $5,636.74 remained on Note #8026, which was subject to Jack’s guaranty. The guaranty provided that if Brad entered into subsequent obligations for which he was creditworthy, then such obligations were not included as indebtedness of the guaranty.

The Court concluded that Note #9224 did not relieve Jack of liability for the $5,636.74 which existed under the guaranty at the time Note #9224 was executed. The guaranty also provided that no act except full payment and discharge of all indebtedness shall release Jack’s liability under the guaranty. No new indebtedness was subject to the guaranty, but Note #9224 did not discharge the existing liability. The indebtedness of $5,636.74 has not been paid, and Jack remained liable for this amount plus accrued interest on such principal amount.

Conclusion: The judgment of the district court was affirmed by the Nebraska Supreme Court, in part and in part reversed, and the cause is remanded with directions to enter judgment in favor of the Bank and against Jack in the amount of $5,636.74 plus interest from August 8, 2002. AFFIRMED IN PART, AND IN PART REVERSED AND REMANDED WITH DIRECTIONS

Non Competition Agreement, Enforceability

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Aon Consulting v. Midlands Fin. Benefits, 275 Neb. 642 (2008)

Supreme Court Headnotes

Summary Judgment.

Judgments:

1. Appeal and Error. In a bench trial of a law action, the trial court’s factual findings have the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong.

Damages:

Directed Verdict:

Restrictive Covenants:

Contracts.

1. Generally, sufficient consideration for an agreement will be found if there is some benefit to one of the parties or a detriment to the other.

Breach of Contract: