Metropolitan Utilities Dist. of Omaha v. Fidelity and Deposit Co. of Maryland

• Decision Date: 19 April 1978
• Docket Number: No. 41384,41384
• Citation: 264 N.W.2d 854,200 Neb. 635
• Parties: METROPOLITAN UTILITIES DISTRICT OF OMAHA, a Municipal Corporation, Appellant, v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a corporation, Appellee.
• Court: Nebraska Supreme Court

Page 854

264 N.W.2d 854

200 Neb. 635

METROPOLITAN UTILITIES DISTRICT OF OMAHA, a Municipal Corporation, Appellant, v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a corporation, Appellee.

No. 41384.

Supreme Court of Nebraska.

April 19, 1978.

Syllabus by the Court

1. It is only when there is uncertainty, indefiniteness, or ambiguity in a contract that it is open to construction.

2. In a contract upon a form prepared and regularly used by one of the parties, disputed provisions of doubtful or ambiguous meaning should be construed against the party preparing such document. Any ambiguity or doubt as to its meaning must be resolved against the party preparing the contract.

3. If an obligee in a guaranty draws it in a form requiring explanation, the guarantor is a favorite of the law in the interpretation of the ambiguous provision.

4. A guarantor is entitled to stand upon the letter of his contract. His guaranty is not to be extended by a strained construction of the language used.

C. S. Brubaker, W. L. Strong, Merlin E. Remmenga, Omaha, for appellant.

John P. Ford and Larry R. Forman, of Schmid, Ford, Mooney, Frederick & Caporale, Omaha, for appellee.

Heard before WHITE, C. J., SPENCER, BOSLAUGH, McCOWN, BRODKEY and WHITE, JJ., and KUNS, Retired District Judge.

C. THOMAS WHITE, Justice.

This is an appeal from the grant of a summary judgment in favor of the defendant in an action by plaintiff Metropolitan Utilities District against defendant Fidelity and Deposit Company of Maryland on a written guaranty. Plaintiff appeals. We affirm.

In January 1972, Damark Properties, Inc., entered into a contract with the plaintiff Metropolitan Utilities District of Omaha. The contract provided that the district would install a number of gas mains in Eldorado, a subdivision owned by Damark which is located at approximately 144th Street and West Dodge Road, Omaha, Nebraska. The estimated cost of this work was $26,768. Damark agreed "to construct and equip, as hereinafter set forth, within three years from the completion of the installation of said gas mains, the following:

"1. Properties abutting said distribution main that will provide gas-burning appliances with a total annual gas revenue of $13,384.00 within three years from the completion of the main. This total revenue must be guaranteed and secured by surety bond, deposit in escrow, or cash deposit, as hereinafter provided." A corporate surety bond furnished by the defendant was deposited in the total sum as provided by the contract of $26,768.

The agreement goes on to provide: "If the Applicant complies with the terms of this agreement, and produces the required revenue at the end of the three-year period, the District will release the bond or deposit in escrow or refund the cash deposit, as the case may be.

"For the purpose of determining compliance herewith, the amount of revenue produced shall be computed at the end of the three-year period and credit given as follows:

"1. $125.00 for each single-family residence equipped and connected as provided herein.

"2. The annualized revenue derived from each commercial building. Commercial buildings shall include apartments, offices, retail shops, and similar commercial structures."

The parties agree that 71 single-family residences were connected to the gas mains within the 3-year period. No commercial structures were connected.

Actual revenue generated by the 71 single-family residences in the year immediately prior to the expiration of the 3-year period was well in excess of the $13,384. The defendant, therefore, contended that it had fulfilled the terms of the agreement and the District Court sustained its motion for summary judgment. The plaintiff, however, contends that the amount which determines compliance is governed by the last-quoted paragraph which allows a $125 credit for each single-family residence. The number of houses, 71, times the $125 figure equals $8,875, which is well below the $13,384 figure. Plaintiff contends the defendant owes it $9,018. This figure is arrived at through the language of another clause of the contract: "In the event Applicant fails to produce the required revenue in accordance with this agreement, the District shall be entitled to an amount equal to the estimated cost ($26,768.00) of the gas mains, less twice the annual revenues produced at the end of the three years from the completion of the mains." The difference between the cost of the mains ($26,768) and double the annual revenue as computed by the plaintiff ($8,875 X 2) is $9,018.

The plaintiff first assigns as error the granting of defendant's motion for summary judgment, since the hearing thereon was admittedly not held until after the expiration of 10 days as provided in section 25-1332, R.R.S.1943. The plaintiff had originally filed its motion for summary judgment on March 1, 1977, and the same was set for hearing on March 14, 1977. The defendant, appellee herein, filed its motion for summary judgment on March 11, 1977, and called its motion up for hearing on March 14, 1977.

Without deciding the point whether upon the motion of one party to an action for summary judgment, such judgment may be granted to the opposing party, it is sufficient to say that the plaintiff cannot be heard to raise its objection to the hearing on the defendant's motion for summary judgment in this court. The circumstance with regard to defendant's objection on the plaintiff's objection went as follows: "Mr. Remmenga: With regard to Exhibit 8, I have one other objection. It was not offered or served upon me prior to today as required by Chapter 25, Article 1332, the Nebraska statutes. * * * Incidentally, also for the record, I would object to the hearing on the defendant's motion for summary judgment for the reason...