Dietzel Enters. v. J. A. Wever Constr.

• Decision Date: 16 September 2022
• Docket Number: S-21-106
• Citation: 312 Neb. 426
• Parties: Dietzel Enterprises, Inc., appellant, v. J. A. Wever Construction, L.L.C., appellee.
• Court: Nebraska Supreme Court

312 Neb. 426

Dietzel Enterprises, Inc., appellant, v. J. A. Wever Construction, L.L.C., appellee.

No. S-21-106

Supreme Court of Nebraska

September 16, 2022

1. Breach of Contract: Damages. A suit for damages arising from a breach of contract presents an action at law.

2. Judgments: Appeal and Error. In a bench trial of a law action, a trial court's factual findings have the effect of a jury verdict and will not be set aside on appeal unless clearly wrong.

3. ___: ___ . After a bench trial of a law action, an appellate court does not reweigh evidence, but considers the evidence in the light most favorable to the successful party and resolves evidentiary conflicts in favor of the successful party.

4. Damages: Appeal and Error. The amount of damages to be awarded is a determination solely for the fact finder, and its action in this respect will not be disturbed on appeal if it is supported by evidence and bears a reasonable relationship to the elements of the damages proved.

5. Fraud. In determining whether an individual reasonably relied on a misrepresentation, courts consider the totality of the circumstances, including the nature of the transaction; the form and materiality of the representation the relationship of the parties; the respective intelligence experience, age, and mental and physical condition of the parties; and their respective knowledge and means of knowledge.

6. Negligence: Fraud. In both negligent and fraudulent misrepresentation cases, whether the plaintiff exercised ordinary prudence is relevant to whether the plaintiff justifiably relied on the misrepresentation when the means of discovering the truth was in the plaintiff's hands.

7. Contracts. In order for the implied covenant of good faith and fair dealing to apply, there must be in existence a legally enforceable contractual agreement.

8. Contracts: Parties. The implied covenant of good faith and fair dealing exists in every contract and requires that none of the parties do anything which will injure the right of another party to receive the benefit of the contract.

9. ___: ___ . The nature and extent of an implied covenant of good faith and fair dealing are measured in a particular contract by the justifiable expectations of the parties. Where one party acts arbitrarily, capriciously, or unreasonably, that conduct exceeds the justifiable expectations of the second party.

10. Contracts. The question of a party's good faith in the performance of a contract is a question of fact.

11. Breach of Contract: Words and Phrases. A material breach is a failure to do something that is so fundamental to a contract that the failure to perform that obligation defeats the essential purpose of the contract or makes it impossible for the other party to perform under the contract.

12. Breach of Contract. A material breach will excuse the nonbreaching party from its performance of the contract.

13. ___ . Whether or not a breach is material and important is a question of degree which must be answered by weighing the consequences of the breach in light of the actual custom of persons in the performance of contracts similar to the one involved in the specific case.

14. Damages: Evidence. Evidence of damages must be sufficient to enable the trier of fact to estimate actual damages with a reasonable degree of certainty and exactness.

15. Damages: Evidence: Proof. Proof of damages to a mathematical certainty is not required; however, a plaintiff's burden of offering evidence sufficient to prove damages cannot be sustained by evidence which is speculative and conjectural.

16. Breach of Contract: 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.

17. Damages: Proof. A claim for lost profits must be supported by some financial data which permit an estimate of the actual loss to be made with reasonable certitude and exactness.

Appeal from the District Court for Douglas County: James M Masteller, Judge. Affirmed in part, and in part reversed and remanded with directions.

Patrick T. Vint and Todd W. Weidemann, of Woods & Aitken, L.L.P., for appellant.

Zachary W. Lutz-Priefert and Frederick D. Stehlik, of Gross. Welch, Marks & Clare, for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

Papik J.

J. A. Wever Construction, L.L.C. (Wever), contracted with Dietzel Enterprises, Inc. (Dietzel), to perform excavation work for the construction of a transmission line. While Wever and Dietzel do not agree on who is to blame, all agree that the project did not go well. Dietzel eventually abandoned the project before its work was done. Unsurprisingly, litigation followed. Dietzel filed a lawsuit asserting various claims against Wever, and Wever asserted a breach of contract counterclaim against Dietzel. Following a bench trial, the district court found that Dietzel was the first party to materially breach the contract and awarded Wever damages. From this judgment, Dietzel appeals, arguing that the district court erred in its rejection of some of its claims, in its finding that Dietzel was not entitled to suspend its performance on the project, and in its damages award. We find that the evidence in the record did not support the entirety of the damages award to Wever but that the district court did not otherwise err. Accordingly, we affirm in part, and in part reverse and remand with directions.

I. BACKGROUND

The setting for this case is the construction site for a transmission line in Maryland owned by Baltimore Gas & Electric (BG&E). MasTec North America, Inc. (MasTec), was the project's general contractor. Wever and Dietzel, two Nebraska companies, worked as subcontractors on the project. MasTec subcontracted with Wever to lay certain concrete foundations for the line, and Wever subcontracted with Dietzel to excavate the holes where the foundations would be laid.

The parties experienced difficulties from the start. Work was to begin on the project in April 2015, but Dietzel was unable to arrive at the jobsite at the time directed by MasTec. To avoid a delay, the parties agreed that Wever would rent equipment and begin the excavation process until Dietzel could arrive.

After Dietzel arrived, more problems arose. Dietzel had difficulty performing the excavations, and the project began to fall behind schedule. Wever's witnesses at trial generally blamed Dietzel employees' allegedly poor excavation strategy as the cause of the problems and delays. Dietzel's witnesses blamed the jobsite conditions, including the presence of allegedly "undrillable" rock. Dietzel contended that before it submitted its bid, Wever led it to believe that no such rock would be present.

Dietzel later became concerned that it was not being paid for the time and materials it was expending on the project. Of particular concern was whether it would receive payment for change orders it submitted to Wever for the excavation of hard rock it contended was not covered by the contract. Under the contract, however, Wever was not obligated to make payments to Dietzel unless and until it received payment from MasTec, and there was evidence that MasTec was slow to pay bills submitted by Wever.

This all came to a head in the fall of 2015. At that time, Dietzel requested assurance from Wever that Wever was seeking payment of its change orders from MasTec and that Dietzel would be paid for those change orders. Approximately 2 weeks later, Dietzel abandoned the project.

Dietzel later filed this lawsuit alleging claims of breach of contract, unjust enrichment, negligent misrepresentation, and breach of the implied covenant of good faith and fair dealing. Wever filed a breach of contract counterclaim.

Following a bench trial, the district court issued a written order. The district court found that Dietzel committed the first material breach of the contract when it abandoned the project, and it awarded Wever $2,758,250.47 in damages for that breach. It found in favor of Wever on Dietzel's claims of negligent misrepresentation and breach of the implied covenant of good faith and fair dealing, but found that Wever had been unjustly enriched in the amount of $328,507, because it received a payment from MasTec for Dietzel's work but had not passed that payment on to Dietzel. After offsetting the amounts, the district court determined Wever was entitled to judgment in the amount of $2,429,743.47. Dietzel appealed, and we moved this case to our docket on our own motion.

Additional relevant background is provided in the analysis section below.

II. ASSIGNMENTS OF ERROR

Dietzel assigns, renumbered and restated, that the district court erred (1) by finding that Wever was not liable for negligent misrepresentation, (2) by finding that Wever was not liable for a breach of the implied covenant of good faith and fair dealing, (3) by finding that Dietzel did not have the right to stop performance of the contract on the grounds that Wever failed to provide adequate assurances of payment, (4) by finding that Wever's failure to make a timely payment was not a material breach of contract, and (5) in its calculation of damages.

III. STANDARD OF REVIEW

A suit for damages arising from a breach of contract presents an action at law. Goes v. Vogler, 304 Neb. 848, 937 N.W.2d 190 (2020).

In a bench trial of a law action, a trial court's factual findings have the effect of a jury verdict and will not be set aside on appeal unless clearly wrong. McGill Restoration v. Lion Place Condo. Assn., 309 Neb. 202 959 N.W.2d 251 (2021). After a bench trial of a law action, an appellate...