Gary's Implement Inc. v. Bridgeport Tractor Parts Inc.

Citation799 N.W.2d 249,281 Neb. 281
Decision Date01 April 2011
Docket NumberNo. S–10–122.,S–10–122.
PartiesGARY'S IMPLEMENT, INC., appellant and cross-appellee,v.BRIDGEPORT TRACTOR PARTS, INC., formerly known as Gary's Tractor Parts, Inc., appellee and cross-appellant.
CourtSupreme Court of Nebraska

281 Neb. 281
799 N.W.2d 249

GARY'S IMPLEMENT, INC., appellant and cross-appellee,
BRIDGEPORT TRACTOR PARTS, INC., formerly known as Gary's Tractor Parts, Inc., appellee and cross-appellant.

No. S–10–122.

Supreme Court of Nebraska.

April 1, 2011.

[799 N.W.2d 252]

Syllabus by the Court

[281 Neb. 281] 1. Jury Instructions: Appeal and Error. Whether a jury instruction is correct is a question of law, which an appellate court independently decides.

2. Expert Witnesses: Testimony: Appeal and Error. An appellate court reviews for abuse of discretion a trial court's decision whether to admit or exclude an expert's testimony under the appropriate standards.

3. Judges: Words and Phrases. A judicial abuse of discretion exists when reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition.

4. Restitution. Restitution is not a mere right. It is ex gratia, resting in the exercise of a sound discretion, and the court will not order it where the justice of the case does not call for it.

5. 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.

6. Breach of Contract: Damages. 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.

7. Damages: Proof. While damages need not be proved with mathematical certainty. neither can they be established by evidence which is speculative and conjectural.

8. Jury Instructions: Appeal and Error. Jury instructions do not constitute prejudicial error if, taken as a whole, they correctly state the law, are not misleading, and adequately cover the issues supported by the pleadings and evidence.

9. Jury Instructions. The instructions contained in the Nebraska Jury Instructions are designed to be used when they reflect the law and the pleadings and the evidence call for such an instruction.

10. Contracts: Damages. The measure of damages in an action for the breach of an agreement by the seller not to reenter business in competition with the buyer is usually difficult of exact computation; however, an injured party will not be precluded from recovering because of that fact.

11. Expert Witnesses. Expert testimony should not be received if it appears that the witness is not in possession of such facts as will enable the expert to express a reasonably accurate conclusion, and where the opinion is based on facts shown not to be true, the opinion lacks probative value. The opinion must have a sufficient factual basis so that the opinion is not mere conjecture or guess.

12. Expert Witnesses: Proof: Juries. When an assumption used by an expert is not proved untrue or to be without any basis in fact, whether the stated grounds for the assumption are credible is a jury question.

[281 Neb. 282] 13. Expert Witnesses: Appeal and Error. An appellate court is not a superexpert and will not lay down categorically which factors and principles an expert may or may not consider. Such matters go to the weight and credibility of the opinion itself and not to its admissibility.

14. Restitution. The right of restitution may be enforced by proceedings in the lower court in the same cause, or by an independent action or suit.

15. Restitution. It is the duty of the court to compel restitution upon the reversal

[799 N.W.2d 253]

of a judgment which has been executed; however, restitution is not in all cases a matter of absolute right.

Howard P. Olsen, Jr., Steven W. Olsen, and John F. Simmons, of Simmons Olsen Law Firm, P.C., Scottsbluff, for appellant.David A. Domina, of Domina Law Group, P.C., L.L.O., Omaha, for appellee.HEAVICAN, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER–LERMAN, JJ.McCORMACK, J.

Gary's Implement, Inc., appeals the judgment in favor of Bridgeport Tractor Parts, Inc. (Bridgeport Tractor), in the amount of $1,250,000. Bridgeport Tractor cross-appeals the denial of its motion for restitution. The issues on appeal are whether the district court properly admitted the testimony of a particular expert; whether the court properly instructed the jury on the issue of damages; and whether Bridgeport Tractor is entitled to recover sums allegedly paid in execution of the original judgment, which was subsequently reversed. For the following reasons, we affirm.

1. Procedural Background

This appeal follows the second trial in this matter. The dispute arose from transactions related to the sale of a business by Gary's Implement to Bridgeport Tractor. On July 15, 1998, Gary's Implement entered into a contract to sell its “salvage and used parts business” to Bridgeport Tractor. The contract was accompanied by a noncompetition agreement. The contract [281 Neb. 283] which embodies this sale is made up of the agreement, the promissory note, the noncompetition agreement, and the bill of sale. Pursuant to the agreement, Bridgeport Tractor purchased the equipment, inventory, and all goodwill and other intangible assets of the business. The agreement called for periodic payments by Bridgeport Tractor over a period of 5 years. The noncompetition agreement provided that Gary's Implement was prohibited from engaging in “the agricultural and machinery salvage and used, new or rebuilt agricultural parts business” within 150 miles of Bridgeport, Nebraska, for a period of 5 years. The noncompetition agreement expired on July 15, 2003.

(a) Original Trial

After executing the contract, Bridgeport Tractor became concerned that Gary's Implement was engaging in competitive activity by salvaging and selling used parts, by competing with Bridgeport Tractor for the supply of salvage tractors and machinery, and by trading on the goodwill that Gary's Implement had sold to Bridgeport Tractor. Bridgeport Tractor demanded this activity cease. After determining that Gary's Implement refused to do so, Bridgeport Tractor deemed the noncompetition agreement and the agreement to sell goodwill breached, and chose to stop payments to Gary's Implement. Gary's Implement ultimately sued for the balance due under the contract, and Bridgeport Tractor counterclaimed, seeking damages for breach of the noncompetition agreement. The jury returned a verdict in favor of Gary's Implement, finding that Bridgeport Tractor, not Gary's Implement, had breached the contract. The district court entered judgment in favor of Gary's Implement and against Bridgeport Tractor pursuant to the remaining amounts due under the contract:

[799 N.W.2d 254]

$612,225 on the promissory note and $20,000 on the noncompetition agreement.

Bridgeport Tractor appealed. In Gary's Implement v. Bridgeport Tractor Parts ( Gary's I ),1 we reversed, and remanded for a new trial on Bridgeport Tractor's counterclaim for breach [281 Neb. 284] of the noncompetition agreement. We concluded that the district court committed prejudicial error when it instructed the jury as to the meaning of certain provisions within the agreement, because the agreement was ambiguous and its interpretation was, accordingly, a question of fact. We further determined the promissory note representing the sale of goodwill to Bridgeport Tractor was inextricably intertwined with Gary's Implement's agreement not to compete. Thus, we also reversed the jury's verdict on Gary's Implement's counterclaim, and the issue of damages under the promissory note was again submitted to the jury upon retrial.

(b) Order in Aid of Execution

Prior to our reversal of the original judgment, while the appeal by Bridgeport Tractor was pending, the district court issued an order granting a motion in aid of execution filed by Gary's Implement. The order imposed sanctions against Bridgeport Tractor for bad faith for having filed a chapter 11 bankruptcy case, which the district court concluded was “for the sole and only purpose of frustrating [the] efforts [of Gary's Implement] to collect and enforce its judgment.” The order also directed Bridgeport Tractor to “cease and desist” from making any transfers or sales of personal property from its salvage yard outside the ordinary course of business. After our decision in Gary's I, we considered an appeal from the order granting the motion in aid of execution. In Gary's Implement v. Bridgeport Tractor Parts ( Gary's II ),2 we reversed the order, noting that, generally, an order, judgment, or proceeding dependent on, or ancillary and accessory to, a judgment, order, or decree that is reversed shares its fate and falls with it.

2. Remand
(a) Hearing on Restitution

Upon remand, Bridgeport Tractor filed a motion for restitution in Morrill County District Court on January 17, 2006. In [281 Neb. 285] its motion, Bridgeport Tractor requested Gary's Implement make restitution of sums paid at a trustee's sale, alleging such sums were paid pursuant to the original judgment in favor of Gary's Implement which was subsequently reversed. This motion was based on events which transpired after the initial judgment was entered, but prior to our decisions in Gary's I 3 and Gary's II.4

On July 15, 1998, David Dyke, then president of Bridgeport Tractor, purchased real estate from Gary's Implement. To secure the purchase price, Dyke gave a deed of trust, wherein Gary's Implement was named as the beneficiary/lender. Neither the deed of trust nor the real estate agreements indicate that Dyke was acting on behalf of Bridgeport Tractor. However, the deed of trust recited that the deed was executed for the purpose of securing the “obligations ... payable by Borrower

[799 N.W.2d 255]

to Lender” under a noncompetition agreement and a promissory note of the same date. Bridgeport Tractor...

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