Lange Industries, Inc. v. Hallam Grain Co.
| Decision Date | 05 November 1993 |
| Docket Number | No. S-91-548,S-91-548 |
| Citation | 507 N.W.2d 465,244 Neb. 465 |
| Parties | LANGE INDUSTRIES, INC., formerly known as Lange Building and Farm Supply, Inc., Appellee and Cross-Appellant, v. HALLAM GRAIN CO., a Nebraska Corporation, Appellant and Cross-Appellee, and FirsTier Bank Omaha, formerly known as First National Bank of Omaha, a National Banking Association, Appellee. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Mechanics' Liens: Foreclosure: Equity. An action to foreclose a construction lien is one grounded in equity.
2. Equity: Appeal and Error. In an appeal of an equity action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, the appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another.
3. Breach of Contract: Damages. A suit for damages arising from breach of a contract presents an action at law.
4. 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 set aside on appeal unless clearly erroneous.
5. Construction Contracts: Acceptance of Work: Waiver. An express or implied acceptance of work as in compliance with a building contract operates as a waiver of defective performance, but this rule is inapplicable where the acceptance was under protest or induced by fraud, or where the defects were latent and unknown to the owner.
6. Breach of Contract: Damages. When there has been a breach of a contract by one party resulting in a loss to the other, it is the duty of such other party to take all reasonable steps to reduce the amount of his damages.
7. Construction Contracts: Mechanics' Liens. A contractor cannot assert a mechanic's lien upon property where there has been only part performance or lack of substantial performance of the contract.
8. Construction Contracts: Substantial Performance. In a building contract, substantial performance is shown when all the essential elements necessary for the full accomplishment of the purposes of the contract have been performed with such an approximation to complete performance that the owner obtains substantially what is called for by the contract.
9. Construction Contracts: Substantial Performance. To establish substantial performance, any deviations from the contract must be relatively minor and unimportant.
10. Construction Contracts. In building and construction contracts, in the absence of an express agreement to the contrary, the law implies that the building will be erected in a reasonably good and workmanlike manner and will be reasonably fit for the intended purpose.
11. Contracts. When an instrument consists partly of written (or typewritten) and partly of printed form, the former controls the latter, where the two are inconsistent.
12. Breach of Contract: Damages: Evidence. Damages are recoverable for losses caused by breach of contract only to the extent that the evidence affords a sufficient basis of ascertaining their amount in money with reasonable certainty.
13. Breach of Contract: Damages: Proximate Cause: Proof. It is a basic concept that in any damage action for breach of contract the claimant must prove that the breach of contract complained of was the proximate cause of the alleged damages. There must be a causal relationship between the damages asserted and the breach relied upon. Proof which leaves this issue in the realm of speculation and conjecture is insufficient to support a judgment.
14. Actions: Negligence: Proximate Cause: Damages. The elements of a negligence action are duty, breach, proximate cause, and damages.
15. Prejudgment Interest: Mechanics' Liens: Foreclosure: Claims. Prejudgment interest is recoverable upon the foreclosure of a mechanic's lien. However, such interest is only recoverable when the claim is liquidated, that is, when there is no reasonable controversy as to either plaintiff's right to recover or as to the amount of such recovery.
16. Prejudgment Interest: Claims: Evidence. The amount of a claim is liquidated only when the evidence furnishes a basis to compute an exact amount determinable without opinion or discretion inherent in the factfinding process.
17. Constitutional Law: Appeal and Error. An appellate court will not consider a constitutional question unless it has been properly presented to the trial court for disposition.
18. Appeal and Error. To be considered by an appellate court, an error must be assigned and discussed in the brief of the one claiming that prejudicial error has occurred.
Robert B. Creager of Berry, Anderson, Creager & Wittstruck, P.C., Lincoln, for appellant.
Siegfried H. Brauer, III of Ross, Schroeder, Brauer & Romatzke, Kearney and John W. Ballew, Jr. of Baylor, Evnen, Curtiss Grimit & Witt, Lincoln, for appellee Lange Industries.
Hallam Grain Co. (Hallam) appeals the entry of a construction lien foreclosure in favor of Lange Industries, Inc. (Lange), based upon the district court's finding that Lange had substantially performed its agreement to build a $510,000 four-bin grain elevator facility for Hallam. The grain company had filed six counterclaims at law.
After taking into account various credits and charges, the district court for Lancaster County found that Hallam owed Lange a net balance of $56,203.25 in its foreclosure action, but reduced that amount by $1,464.30 for repairs and modifications to a dump pit because Lange had not properly designed it. Counterclaims or, in the alternative, setoffs, except one for repairs and modifications of the dump pit, requested by Hallam were dismissed.
In its assignments of error, Hallam claims that the district court erred in (1) improperly allocating the burden of proof on the issue of "substantial performance," (2) finding that Lange had substantially performed the construction contract, (3) finding that Hallam was liable for "site preparation" and for repair and replacement of a conveyor belt, (4) failing to admit Hallam's evidence of damages regarding its counterclaim, (5) failing to award Hallam setoffs for repairs it made to the facility, (6) failing to award Hallam damages for damaged grain, and (7) considering Lange's "manufacturer's warranty defense" and evidence of a design defect in the failed bins.
In its cross-appeal, Lange claims that the trial court erred in denying it prejudgment interest and in awarding Hallam $1,464.30 on its counterclaim for modifications to the dump pit.
We affirm the judgment of the district court for Lancaster County.
An action to foreclose a construction lien is one grounded in equity. Mid-America Maintenance v. Bill Morris Ford, 232 Neb. 920, 442 N.W.2d 869 (1989). In an appeal of an equity action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, the appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another. Mid-America Maintenance, supra; O'Keefe Elevator v. Second Ave. Properties, 216 Neb. 170, 343 N.W.2d 54 (1984).
A suit for damages arising from breach of a contract presents an action at law. Fisbeck v. Scherbarth, Inc., 229 Neb. 453, 428 N.W.2d 141 (1988). 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 set aside on appeal unless clearly erroneous. Broekemeier Ford v. Clatanoff, 240 Neb. 265, 481 N.W.2d 416 (1992); Nebraska Builders Prod. Co. v. Industrial Erectors, 239 Neb. 744, 478 N.W.2d 257 (1992). As pled, Hallam's counterclaims or, in the alternative, requests for setoffs are claims for damages arising from the alleged breach of a contract.
Therefore, this court must review Lange's foreclosure suit de novo and Hallam's counterclaims under the "clearly erroneous" standard.
On June 21, 1986, Hallam entered into a written agreement, consisting of three purchase orders, with Lange for Lange to construct a $510,000 four-bin grain elevator facility for Hallam. A change order, dated October 6, 1986, provided some relatively minor changes at a cost of $4,500.
Lange agreed to provide and erect (1) two Blount/MFS 48-foot-diameter bins and two Blount/MFS 60-foot-diameter bins with aeration fans and temperature cables in each bin, (2) a custom-built dump pit and boot pit with a 7,000-bushels-per-hour (b.p.h.) drag conveyor, (3) a leg support tower with platforms, (4) a swivel loadout spout with support tower, (5) a gravity 7,000-b.p.h. grain cleaner, (6) a Blount/York model 36-70 elevator leg 7,000-b.p.h., (7) 7,000-b.p.h. drag unloading conveyors, and (8) two 7,000-b.p.h. drag conveyors mounted on catwalks. Most of the parts were manufactured by MFS Blount/York (Blount), which company provided "working drawings" to Lange for the construction of the facility. Blount was not a party to the contract or a party to this litigation.
In addition to the list of parts, the purchase orders included typewritten provisions stating that a "clean level site is to be provided by the buyer" and "electrical hook-up beyond the Main disconnect is included." Stricken from each purchase order was a preprinted provision stating, "Concrete, Electrical Wiring, Gas Hook-up, Fill Sand and Level Site to be furnished by the Buyer [Hallam]."
William Lange, president of Lange, testified that he and Melvin Holsing, president of Hallam, verbally agreed that to avoid water draining into the grain...
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