Summit Restoration, Inc. v. Keller

• Decision Date: 08 December 2020
• Docket Number: No. A-19-1111.,A-19-1111.
• Citation: 953 N.W.2d 816,29 Neb. App. 243
• Parties: SUMMIT RESTORATION, INC., appellant and cross-appellee, v. Larry G. KELLER et al., appellees and cross-appellants.
• Court: Nebraska Court of Appeals

29 Neb.App. 243

953 N.W.2d 816

SUMMIT RESTORATION, INC., appellant and cross-appellee,

v.Larry G. KELLER et al., appellees and cross-appellants.

No. A-19-1111.

Court of Appeals of Nebraska.

Filed December 8, 2020.

Eric R. Chandler and Cory J. Rooney, of Law Office of Eric R. Chandler, P.C., L.L.O., Omaha, for appellant.

Adam R. Feeney and Brian J. Brislen, of Lamson, Dugan & Murray, L.L.P., Omaha, for appelleeLarry G. Keller.

Jeffrey A. Nix, of Pansing, Hogan, Ernst & Bachman, L.L.P., for appelleesAspen Contracting, Inc., et al.

Pirtle, Chief Judge, and Moore and Riedmann, Judges.

Riedmann, Judge.

INTRODUCTION

Summit Restoration, Inc.(Summit), appeals the order of the district court for Sarpy County which reduced the amount of a jury's damages award in Summit's favor.Larry G. Keller, Patrick M. Nussbeck, and Aspen Contracting, Inc., doing business as ASI Contracting, Inc.(Aspen), cross-appeal the denial of various posttrial motions.As explained below, we affirm as modified.

BACKGROUND

Summit is a Colorado corporation with a headquarters in Sarpy County, Nebraska.It does business as a general contractor, including storm restoration work and roofing work.Aspen is a Kansas corporation doing business in Sarpy County and is a competitor of Summit, also doing work as a general contractor and performing roofing work.Nussbeck is the president and chief executive officer of Aspen.Keller began working for Summit in June 2013, and in June 2014, he left Summit to begin working for Aspen.

In February 2015, Summit filed a complaint against Keller, Nussbeck, Aspen, and another former Summit employee who was later dismissed as a defendant.An amended complaint was filed, and the causes of action alleged in the amended complaint that are relevant to this appeal include tortious interference with a business expectancy, civil conspiracy, and breach of fiduciary duty and duty of loyalty.

A jury trial was held over the course of several days in May 2019.The evidence revealed that Aaron Kantor, president of Summit, started the company in 2009.In June 2013, Kantor hired Keller as chief operating officer, but according to Kantor, shortly thereafter, Keller's title was changed to chief executive officer.There is a dispute among the parties as to whether Keller was actually the chief executive officer of Summit, but it was uncontroverted that he ran the day-to-day operations of Summit, with testimony that he"ran the business."Keller was paid an annual salary of $120,000.Despite all of this, Keller never had a written employment contract with Summit, nor did he sign a confidentiality agreement, noncompetition agreement, or nonsolicitation agreement.

The Omaha, Nebraska, area experienced a major hailstorm on June 3, 2014.Keller and Summit's sales representatives made contact with homeowners who had suffered damage from the storm in an effort to obtain business for Summit.Keller explained that his practice while he was with Summit was to knock on doors and meet with the homeowner, do an inspection of the property, and then create an estimate report.He would try to meet the insurance adjuster, if possible, and then he would get a scope of work from the insurance company and compare it with his estimate.Once he knew what work was going to be done, he would talk to the homeowner and discuss what he or she wanted and then draft a contingency agreement.The purpose of doing an estimate prior to having a homeowner sign a contingency agreement with Summit was to gain the homeowner's confidence and build a relationship.

During this time, Keller began communicating with Nussbeck at Aspen.On June 13, 2014, Keller sent Nussbeck an email, informing him that Summit had "over [$]500,000 sold over the last week and seven inspections to do with five others to work up."Keller indicated that Summit had the potential for $5 to $8 million in sales that year.On June 16, Nussbeck responded to Keller with information detailing how general managers are compensated at Aspen because, according to Nussbeck, hiring Keller as a general manager "sounded like a good opportunity."Keller interpreted the June 16 email as a job offer and replied on June 20, asking if the offer was still "on the table."Keller met with Nussbeck on June 21 and finalized the details of his employment with Aspen by June 22.At the same time, several sales representatives who had been working with Summit also left and went to work with Aspen.

Keller's compensation at Aspen was 50 percent of the profits of the jobs he sold and 50 percent of the profits of the location that he managed.

The evidence at trial revealed that there were 17 homeowners Summit had contacted after the June 3, 2014, storm who ultimately had Aspen complete their repair work.All 17 of the jobs were insurance claim jobs, and according to Kantor, Summit had client relationships with all 17 homeowners.For these jobs, Summit anticipated earning a profit margin between 30 and 45 percent.Kantor acknowledged that Summit did not have written contingency agreements with all 17 homeowners and that Summit had not prepared estimates for all 17 of them.He explained, however, that even without a signed contingency agreement or estimate with these homeowners, Summit had performed work outside of just knocking on the door and meeting with the homeowner one time.

Keller admitted that after he left Summit and was hired by Aspen, he had additional contact with those 17 homeowners.He also acknowledged that he asked the other Summit representatives who converted to Aspen to talk to the customers with whom they had worked while at Summit.Kantor testified that Summit's database of customers was not a secret; however, it was not public knowledge either.Summit stored its customer files in an online storage system called Dropbox.Keller knew the names and addresses of the homeowners who had been contacted by Summit and that Summit's customer files were stored in Dropbox.Kantor testified that through Dropbox, he was able to "watch Summit jobs becoming Aspen jobs" after Keller left Summit because Keller did not log out of Summit's Dropbox account when he left.An employee of Summit also testified that she observed the movement of Summit's customer files in Keller's Dropbox on her computer after he left Summit and went to Aspen.

Adam Johnson testified as an expert witness for Summit.He testified that he owned a roofing company since 2013 and that approximately 95 percent of his company's work came from residential insurance claims.He testified that in his experience, it would be "[v]ery rare" to have a situation where a customer signed a contingency agreement and then did not end up having that company complete the work.He said that when he has a signed contingency agreement from a customer, he"certainly expect[s]" to do the job.

Johnson also described software that is used for repair estimates.Named "Xactimate," the software is a program utilized by the insurance industry, roofing companies, and contractors to manage and price out property damage claims, and theoretically, it ensures that multiple adjusters provide the same pricing for a loss.Its purpose is to make a uniform system of adjusting and pricing insurance claims.Both Summit and Aspen use Xactimate to complete repair estimates for their customers.

After Summit rested at trial, Keller, Nussbeck, and Aspen moved for a directed verdict as to all claims.The district court denied the motions.All three defendants then rested without presenting any witnesses or evidence.Keller, Nussbeck, and Aspen renewed their motions for directed verdict at the conclusion of all evidence, and the motions were again denied.

After deliberating, the jury found in Summit's favor on the tortious interference claim against "some or all Defendants," in Summit's favor as to breach of fiduciary duty and duty of loyalty against Keller, and in Summit's favor on the civil conspiracy claim against all three defendants.The jury calculated damages in the amount of $396,172.

Keller, Nussbeck, and Aspen filed motions for judgment notwithstanding the verdict(JNOV) and a new trial.The district court denied the motions for JNOV.With regard to the motions for new trial, the court found that the evidence adduced at trial showed that the profit margin for an insurance repair job was a minimum of 30 percent but that there was no evidence as to what factors could be used to calculate a higher profit margin, whether a higher profit could be expected on the 17 jobs at issue here, or to what extent the profit could be greater than 30 percent.The court therefore concluded that the jury engaged in speculation and conjecture in awarding profits above 30 percent.Accordingly, the court determined that the highest possible award for damages with a 30-percent profit margin was $284,911.29, the amount that was shown on a demonstrative exhibit Summit utilized during its closing argument.The district court further reduced the damages award by $13,713.93 because one homeowner declined to repair outbuildings on his property; thus, the court found that the jury engaged in speculation in awarding a loss of profit for work that was not performed.Finally, the damages award was reduced an additional $10,013.11 as a result of a downpayment Summit collected and retained from one of the 17 homeowners.The court's order therefore indicates that it partially granted the motions for new trial and reduced the award of damages to $261,184.25.Summit appeals, and Keller, Nussbeck, and Aspen cross-appeal.

ASSIGNMENTS OF ERROR

On appeal, Summit assigns, restated, that the district court erred in (1) finding that there was insufficient evidence to support a damages calculation using a profit margin greater than 30 percent and (2) determining that evidence of repair by a homeowner as to a specific job was necessary.

On cross-appeal, Keller assigns that the district court erred in (1) denying his motion for JNOV, (2) denying his motion...