Echo Grp., Inc. v. Tradesmen Int'l, s. S-21-729

• Citation: 312 Neb. 729,980 N.W.2d 869
• Docket Number: s. S-21-729,S-21-730,S-21-770.
• Decision Date: 28 October 2022
• Parties: ECHO GROUP, INC., appellee and cross-appellant, v. TRADESMEN INTERNATIONAL, an Ohio corporation, appellee, and Lund-Ross Constructors, Inc., a Nebraska corporation, intervenor-appellant and cross-appellee. Echo Group, Inc., appellee and cross-appellant, v. The Historic Florentine, LLC, a Nebraska limited liability company, and Midwest Protective Services, Inc., appellees, and Lund-Ross Constructors, Inc., a Nebraska corporation, intervenor-appellant and cross-appellee. Echo Group, Inc., appellee and cross-appellant, v. The Duke of Omaha, LLC, a Georgia limited liability company, Great Western Bank and Midwest Protection Services, Inc., appellees, and Lund-Ross Constructors, Inc., a Nebraska corporation, intervenor-appellant and cross-appellee.
• Court: Supreme Court of Nebraska

312 Neb. 729

980 N.W.2d 869

ECHO GROUP, INC., appellee and cross-appellant,

v.TRADESMEN INTERNATIONAL, an Ohio corporation, appellee,andLund-Ross Constructors, Inc., a Nebraska corporation, intervenor-appellant and cross-appellee.

Echo Group, Inc., appellee and cross-appellant,

v.The Historic Florentine, LLC, a Nebraska limited liability company, and Midwest Protective Services, Inc., appellees,andLund-Ross Constructors, Inc., a Nebraska corporation, intervenor-appellant and cross-appellee.

Echo Group, Inc., appellee and cross-appellant,

v.The Duke of Omaha, LLC, a Georgia limited liability company, Great Western Bank and Midwest Protection Services, Inc., appellees,andLund-Ross Constructors, Inc., a Nebraska corporation, intervenor-appellant and cross-appellee.

Nos. S-21-729

S-21-730

S-21-770.

Supreme Court of Nebraska.

Filed October 28, 2022

David S. Houghton and Justin D. Eichmann, of Houghton, Bradford & Whitted, P.C., L.L.O., Omaha, for appellant.

Cathy S. Trent-Vilim and Craig F. Martin, Omaha, of Lamson, Dugan & Murray, L.L.P., for appellees.

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

Cassel, J.

I. INTRODUCTION

These three cases consolidated for appeal involve foreclosures of construction liens under the Nebraska Construction Lien Act (Act).¹ The appeals present three primary issues: whether equitable considerations make summary judgment improper, whether prejudgment interest is authorized, and whether attorney fees are recoverable.

Because there was no dispute that the supplier complied with the provisions of the Act and equity follows the law, we affirm the entry of summary judgment in each case.

We conclude that the claims were liquidated, and thus, an award of prejudgment interest was authorized. Because the court in two cases erred by not awarding prejudgment interest, we reverse the denial and remand to award such interest in conformity with this opinion.

Finally, we conclude that under the circumstances, there was no statutory authorization for an award of attorney fees. Thus, we reverse in part the judgment in two cases awarding attorney fees.

II. BACKGROUND

1. OVERVIEW

We begin with a broad overview. These appeals arose from three construction-related projects. A general contractor entered into agreements with a subcontractor for performance of electrical work, and the subcontractor obtained electrical materials and equipment from a supplier. When the subcontractor failed to pay the supplier, the supplier filed construction liens. The supplier then sued the property owners to foreclose on the liens. The general contractor posted lien release bonds and intervened. Ultimately, the district court—through a different judge in each of the three cases—entered summary judgment in favor of the supplier. Two judgments overruled requests for prejudgment interest, one overruled a request for attorney fees, and one awarded both prejudgment interest and fees. These appeals followed.

2. PARTIES AND CONTRACTS

With that general understanding, we fill in the details. The general contractor, Lund-Ross Constructors Co. (Lund-Ross), was hired for the three projects involved in these appeals. The projects consisted of renovating common space at a senior living center, revamping an old apartment building into new apartments, and constructing a new apartment project, respectively.

Lund-Ross entered into contracts with Signature Electric, LLC (Signature), doing business as D&J Electric, for the performance of electrical work on the projects. Signature entered into agreements with Echo Group (Echo) to obtain electrical materials and equipment.

Generally, the subcontracts between Lund-Ross and Signature specified that Signature had the responsibility to pay all amounts owed to any suppliers it engaged.

The subcontracts obligated Signature to furnish satisfactory evidence to Lund-Ross, "when and if required," that it did so. To receive monthly progress payments, Signature had to provide Lund-Ross with a completed lien waiver for all prior months’ progress payments.

3. PROGRESS PAYMENTS

Signature submitted monthly pay applications to Lund-Ross, requesting monthly progress payments for work completed and supplies purchased. Lund-Ross would remit payment to Signature, less an applicable retainage amount. Once Signature received payment, it submitted a partial lien waiver to Lund-Ross, attesting to Signature's payment of all suppliers up to the date of the lien waiver.

According to Lund-Ross’ president, the lien waivers were of "critical importance." He explained that if Signature did not provide lien waivers for the previous month attesting to payment of suppliers, "Lund-Ross would then have known that there was a problem with Signature's payment of suppliers and Lund-Ross could have stopped making payments to Signature and made other arrangements to pay Signature's suppliers ... directly or take other action to protect itself."

4. CONSTRUCTION LIENS AND LAWSUITS

In July 2019, Signature abruptly ceased operations.

The next month, and in accordance with the Act, Echo recorded a construction lien in the office of the Douglas County register of deeds in each case in the amounts of $11,604.46, $32,781.03, and $296,407.73, respectively.

Echo presented demands to Lund-Ross for payment with respect to electrical supplies it furnished to Signature. Having received no payments, Echo filed lawsuits against the property owners to foreclose on the construction liens. The complaints also alleged unjust enrichment. Lund-Ross posted a surety bond in each case and moved to intervene.

After the court allowed Lund-Ross to intervene, Lund-Ross filed an answer setting forth numerous affirmative defenses. Among the affirmative defenses, Lund-Ross identified equitable doctrines of waiver, estoppel, laches, and unclean hands. Lund-Ross stipulated to the dismissal of each property owner. In case No. S-21-729, Lund-Ross stipulated that any judgment would be satisfied "by Lund-Ross or its bond." Similarly, in case No. S-21-770, Lund-Ross stipulated that a final judgment would be satisfied "by Lund[-]Ross and/or its bond."

Echo subsequently moved for summary judgment. As discussed in more detail below, the court sustained the motion in each case.

5. DISTRICT COURT JUDGMENTS

The court entered summary judgment in Echo's favor on the foreclosure of a construction lien claim in each case. Thus, in case No. S-21-729, the court entered judgment in the amount of $11,604.46 against the bond posted by Lund-Ross, together with costs and postjudgment interest. In case No. S-21-730, the court entered judgment against the bond in the amount of "$32,871.03" (transposing the lien amount of $32,781.03), together with costs, attorney fees, and postjudgment interest. In case No. S-21-770, the court entered summary judgment against Lund-Ross in the amount of $296,407.73, plus prejudgment and postjudgment interest, costs, and attorney fees.

The orders further disposed of Echo's claims for unjust enrichment. In case No. S-21-729, the court found that claim should be dismissed with prejudice. In case No. S-21-730, the court sustained Echo's motion to dismiss that claim. And in case No. S-21-770, having determined that summary judgment was appropriate on the lien foreclosure claim, the court found it unnecessary to consider Echo's unjust enrichment claim.

Additional findings by the district court will be set forth as necessary in the analysis.

Lund-Ross filed a timely appeal in each case. The Nebraska Court of Appeals sustained Lund-Ross’ motion to consolidate the appeals, and we subsequently moved them to our docket.²

III. ASSIGNMENTS OF ERROR

Lund-Ross assigns five errors. In all three cases, it alleges that the district court erred in determining that no genuine issue of material fact existed and in granting Echo summary judgment on its claims for construction lien foreclosure.

In two cases—cases Nos. S-21-730 and S-21-770—Lund-Ross alleges that the court erred in granting judgment in an amount greater than the surety bond posted by Lund-Ross.

In case No. S-21-770 only, Lund-Ross alleges that the court erred in (1) entering judgment for the excess amount directly against Lund-Ross, (2) awarding Echo prejudgment interest on its claim for construction lien foreclosure, and (3) awarding Echo attorney fees not actually incurred in pursuit of Echo's claim in the action pending before it.

On cross-appeal, Echo assigns that the court erred in cases Nos. S-21-729 and S-21-730 by denying prejudgment interest. It further assigns that the court erred in case No. S-21-729 by denying attorney fees.

IV. STANDARD OF REVIEW

An appellate court affirms a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from the facts and that the moving party is entitled to judgment as a matter of law.³ 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 that party the benefit of all reasonable inferences deducible from the evidence.⁴

Statutory interpretation presents a question of law which an appellate court reviews independently of the lower court.⁵

These standards are central to our review. We set forth other applicable standards in the analysis.

V. ANALYSIS

1. SUMMARY JUDGMENT

Lund-Ross argues that the district court erred in granting summary judgment in three ways. In all three appeals, Lund-Ross claims that the court erred in entering summary judgment on the construction lien foreclosure claim without "balancing the equities."⁶ In cases Nos. S-21-730 and S-21-770, Lund-Ross alleges the court erred by entering summary judgment in an amount greater than the surety bond it posted to release the real estate from the construction lien. In case No. S-21-770, Lund-Ross claims error with respect to the entry of judgment for the excess amount...