First Nat. Bank in Morrill v. Union Ins. Co.

• Decision Date: 30 September 1994
• Docket Number: No. S-93-343,S-93-343
• Citation: 522 N.W.2d 168,246 Neb. 636
• Parties: FIRST NATIONAL BANK IN MORRILL, a National Association, Appellee, v. UNION INSURANCE COMPANY, Appellant.
• Court: Nebraska Supreme Court

Page 168

522 N.W.2d 168

246 Neb. 636

FIRST NATIONAL BANK IN MORRILL, a National Association, Appellee, v.UNION INSURANCE COMPANY, Appellant.

No. S-93-343.

Supreme Court of Nebraska.

Sept. 30, 1994.

Syllabus by the Court

1.Summary Judgment: 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.

2.Summary Judgment.Summary judgment is to be granted only when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there is 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.

3.Motions for Summary Judgment: Affidavits.Affidavits supporting and opposing motions for summary judgment shall be made on personal knowledge.

4.Appeal and Error.An appellate court may elect to consider plain error not assigned.

5.Motions for Summary Judgment: Affidavits.Plain error is error plainly evident from the record and of such a nature that to leave it uncorrected would result in damage to the integrity, reputation, or fairness of the judicial process.

6.Demurrer: Pleadings.When considering a demurrer to a petition, a court must assume the pleaded facts, as opposed to legal conclusions, are true as alleged and must give the petition the benefit of any reasonable inference arising from the facts alleged; however, a court cannot assume the existence of a fact not alleged, make factual findings to aid the pleading, or consider evidence which might be adduced at trial.

7.Motor Vehicles: Bonds: Liens: Liability.The amount which an aggrieved lienholder may recover on a motor vehicle dealer's bond is the balance remaining on the secured loan, not to exceed the statutory limit of the bond.

8.Attorney Fees.Attorney fees and expenses may be recovered only where provided for by statute, or where the uniform course of procedure has been to allow such a recovery.

9.Attorney Fees: Words and Phrases."Frivolous," for the purposes of Neb.Rev.Stat. § 25-824(Reissue 1989), is defined as being a legal position wholly without merit, that is, without rational argument based on law and evidence to support a litigant's position in the lawsuit.

Robert G. Simmons, Jr. of Simmons, Olsen, Ediger & Selzer, P.C., Scottsbluff, for appellant.

Richard A. Douglas of Nichols, Douglas, Kelly, and Meade, P.C., Scottsbluff, for appellee.

HASTINGS, C.J., WHITE, CAPORALE, FAHRNBRUCH, and LANPHIER, JJ., and BOSLAUGH, J., Retired.

FAHRNBRUCH, Justice.

The defendant, Union Insurance Company(Union), appeals a district court order holding Union liable on a statutorily required motor vehicle dealer's bond which it had issued to Kizzier Chevrolet Company of Scottsbluff (Kizzier).

The Scotts Bluff County Court entered summary judgment in favor of the plaintiff, First National Bank in Morrill ^B, and the district court affirmed.

Having found plain error, we reverse the judgment of the district court for Scotts Bluff County and remand the cause for further proceedings consistent with this opinion.

STANDARD OF REVIEW

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.LaBenz Trucking v. Snyder, 246 Neb. 468, 519 N.W.2d 259(1994);Barta v. Kindschuh, 246 Neb. 208, 518 N.W.2d 98(1994).Summary judgment is to be granted only when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there is 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.Id.

In this case, our review will be limited solely to the pleadings because FNB offered into evidence only two affidavits in support of its motion for summary judgment.Both of the affidavits were executed by Gary G. Steele, first vice president of FNB.It was error for the county court to base its decision on those affidavits because there was no showing that the affidavits were made upon Steele's personal knowledge of the facts set forth therein.SeeNeb.Rev.Stat. § 25-1334(Reissue 1989)(requiring that affidavits supporting and opposing motions for summary judgment must be made on personal knowledge).We, therefore, decline to consider the affidavits.

FACTS

Based on the pleadings of the parties and the appendages thereto, the facts of this case are as follows:

On July 6, 1988, Clark and Connie Morrill, husband and wife, gave a promissory note in the amount of $7,200 to FNB.That note provided for the Morrills to make 36 monthly payments of $241.62, beginning August 15, 1988, for a total indebtedness of $8,698.32.FNB took a security interest in the Morrills' 1985 Ford pickup and perfected its security interest as a first lien on the vehicle's certificate of title.

On January 19, 1991, the Morrills entered into a purchase contract with Kizzier for a 1988 pickup and traded in their 1985 pickup.Kizzier gave the Morrills a trade allowance of $2,350 for the 1985 pickup, minus the outstanding balance on the FNB note.The purchase contract between Kizzier and the Morrills shows the "balance owed on trade" as $1,880.Kizzier claims that FNB had advised Kizzier that the lien could be released for $1,880.Kizzier remitted a check for that amount to FNB on January 21 and requested that the title to the 1985 pickup and release of the lien be sent to Kizzier.

Kizzier delivered the 1988 pickup to the Morrills, and the Morrills delivered the 1985 pickup to Kizzier.Kizzier began making repairs on the 1985 pickup.The pleadings reflect various values for those repairs, including "several hundred dollars" and "approximately $2,000."

Subsequently, FNB returned the $1,880 check to Kizzier with a letter dated February 4, which letter stated in part: "Please find enclosed a check to payoff [sic]Clark Morrill's pickup loan with us.We are returning it to you as we will not accept this as payment in full."FNB did not state the amount it would accept as payment in full and refused to provide Kizzier with the title to the 1985 pickup.

Kizzier, being unable to obtain title to the 1985 pickup, refused to provide the Morrills with the title to the 1988 pickup.The Morrills at some point returned the 1988 pickup to Kizzier because they could not license the vehicle without the title.However, Kizzier refused to return the 1985 pickup to the Morrills because it had not been reimbursed for the cost of repairs it had made to the 1985 pickup.

On May 13, 1991, FNB filed a lawsuit in the Scotts Bluff County Court against Union, an insurance/bonding company which had issued a motor vehicle dealer's bond to Kizzier pursuant to Neb.Rev.Stat. § 60-1419(Reissue 1993).FNB sought indemnification as a lienholder, alleging that Kizzier had refused a demand that Kizzier release the 1985 pickup to FNB, and that FNB had been damaged by the value of the pickup, i.e., $4,000, plus its expenses in attempting to "obtain possession" of the pickup from Kizzier.

On June 17, the Morrills filed bankruptcy proceedings in the U.S. Bankruptcy Court for the District of Nebraska.On July 24, the county court stayed the proceedings in its court pending resolution of the bankruptcy case.

After filing their bankruptcy proceedings, the Morrills claimed the 1985 pickup as an asset of the bankruptcy estate and demanded that Kizzier turn over the 1985 pickup to them or to the trustee.Kizzier resisted the application for a turnover order and claimed ownership of the vehicle.The bankruptcy court found the Morrills to be the owners of the 1985 pickup and ordered Kizzier "to turn over to the [Morrills] the 1985 vehicle immediately upon receipt of the amount Kizzier claims to have expended for repair for that vehicle."(Emphasis supplied.)The record is silent as to any adjudication by the bankruptcy court of the Morrills' rights vis-a-vis FNB, nor is there any indication that Union was a party to the bankruptcy proceedings.

The stay was lifted and the bankruptcy closed on May 19, 1992.On May 29, FNB filed an amended petition in the Scotts Bluff County Court, and the case proceeded.

On June 10, Union demurred to the amended petition, claiming, inter alia, that FNB's petition did not state facts sufficient to constitute a cause of action.Union's demurrer was overruled on September 24.Union moved for summary judgment on September 25 and filed an answer to the amended petition on September 28.

On October 5, FNB filed a motion for summary judgment.At a hearing on the summary judgment motions of both parties, FNB entered two affidavits into evidence.Union joined in offering a memorandum opinion of the bankruptcy court which was attached to one of the affidavits offered by FNB, and offered no other controverting evidence.On December 18, the county court sustained FNB's summary judgment motion and overruled Union's.The court awarded FNB $5,755.89 plus costs of the action.

Union timely appealed to the district court.That court affirmed the judgment of the county court in all respects.Union then appealed to the Nebraska Court of Appeals.The case was removed from the Court of Appeals to this court pursuant to our authority to regulate the caseloads of the appellate courts of this state.

ASSIGNMENTS OF ERROR

Union has made numerous assignments of error.However, an appellate court may elect to consider plain error not assigned.See, Neb.Rev.Stat. § 25-1919(Cum.Supp.1992);Lindsay Ins. Agency v. Mead, 244 Neb. 645, 508 N.W.2d 820(1993).Plain error is error plainly evident from the record and of such a nature that to leave it...