Wilson v. Misko
| Decision Date | 19 November 1993 |
| Docket Number | No. S-91-396,S-91-396 |
| Citation | 508 N.W.2d 238,244 Neb. 526 |
| Parties | Jay R. WILSON and Gregory G. Jensen, Doing Business as WJ Enterprises, Appellants, v. William MISKO, Appellee. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Pleadings: Appeal and Error. In its review, an appellate court disposes of an appeal on the basis of the theory presented by the pleadings on which the case was tried.
2. Contracts: Rescission. Rescission entails the annulling, abrogation, or unmaking of a contract and the placing of the parties to it in status quo.
3. Appeal and Error. As to questions of law, an appellate court has an obligation to reach an independent, correct conclusion irrespective of the determination made by the trial court.
4. Directed Verdict: Appeal and Error. In reviewing the action of a trial court, an appellate court must treat a motion for directed verdict as an admission of the truth of all competent evidence submitted on behalf of the party against whom the motion is directed. Such being the case, the party against whom the motion is directed is entitled to have every controverted fact resolved in its favor and to have the benefit of every inference which can reasonably be deduced from the evidence.
5. Directed Verdict. In order to sustain a motion for directed verdict or for judgment notwithstanding the verdict, the court resolves the controversy as a matter of law and may do so only when the facts are such that reasonable minds can draw but one conclusion.
6. Witnesses: Testimony: Juries. The credibility of witnesses and the weight to be given their testimony are solely for the consideration of the jury.
7. Securities Regulation: Liability. Liability under the Securities Act of Nebraska, Neb.Rev.Stat. § 8-1101 et seq. (Reissue 1991 & Cum.Supp.1992), extends only to a person who successfully solicits purchase of securities, motivated at least in part by desire to serve his or her own financial interests or those of the securities owner.
8. Jury Instructions: Appeal and Error. An inadvertent grammatical error in an instruction is harmless error if it is clear from the instruction itself and the other instructions given that the jury was not misled.
9. Jury Instructions: Appeal and Error. An instruction that misstates the issues or defenses and has a tendency to mislead the jury is erroneous.
10. Statutes. Effect must be given, if possible, to all the several parts of a statute; no sentence, clause, or word should be rejected as meaningless or superfluous if it can be avoided.
11. Jury Instructions. The proper method of presenting a case to a jury in its instructions is by a clear and concise statement by the trial court of the issues which find support in the evidence.
12. Jury Instructions: Appeal and Error. It is the duty of the trial court to instruct on the proper law of the case, and failure to do so constitutes prejudicial error.
13. Fraud. The elements of fraud by concealment are (1) that the defendant concealed or suppressed a material fact; (2) that the defendant had knowledge of this material fact; (3) that this material fact was not within the reasonably diligent attention, observation, and judgment of the plaintiff; (4) that the defendant suppressed or concealed this fact with the intention that the plaintiff be misled; (5) that the plaintiff was reasonably so misled; and (6) that the plaintiff suffered damage as a result.
14. Jury Instructions: Proof: Appeal and Error. To establish reversible error from a court's refusal to give a requested instruction, an appellant has the burden of showing that (1) the tendered instruction is a correct statement of the law, (2) the tendered instruction is warranted by the evidence, and (3) the appellant was prejudiced by the court's refusal to give the tendered instruction.
15. Jury Instructions. Whether requested to do so or not, the trial court has the duty of instructing the jury on issues presented by the pleadings and the evidence.
16. Pretrial Procedure: Appeal and Error. Permission to have additional time in which to answer requests for admission is addressed to the discretion of the trial court, and absent an abuse of discretion will not be reversed.
17. Trial: Self-Incrimination. Where
a defendant in a civil case refuses to testify on the ground that the evidence may incriminate him, the trier of fact may draw an adverse inference from his refusal.
18. Pretrial Procedure: Self-Incrimination: Trial: Jury Instructions. Where a party served with requests for admissions refuses to respond, relying on the constitutional privilege, the offering party may introduce the requested admissions in evidence, and the court must instruct the jury that it could, but did not have to, draw adverse inferences from the responding party's refusal to answer.
19. Venue: Appeal and Error. Where the record does not show an abuse of discretion, a ruling on a motion to transfer venue will not be disturbed on appeal.
20. Judges: Words and Phrases: Appeal and Error. A judicial abuse of discretion exists when a judge, within the effective limits of authorized judicial power, elects to act or refrain from action, but the selected option results in a decision which is untenable and unfairly deprives a litigant of a substantial right or a just result in matters submitted for disposition through a judicial system.
J. Scott Searl and William G. Dittrick, of Baird, Holm, McEachen, Pedersen, Hamann & Strasheim, Omaha, for appellants.
Patrick T. O'Brien, of Bauer, Galter, O'Brien & Allan, Lincoln, for appellee.
The plaintiffs appeal from a jury verdict in favor of the defendant in this action to recover damages for misrepresentation, securities violations, and fraud and deceit. The action was originally filed in the district court for Douglas County, but upon a request for change of venue, the case was tried in the district court for Valley County.
The plaintiffs' assignments of error combine to assert that the district court erred (1) in failing to rule that defendant, as a matter of law, was a seller or offeror of unregistered securities who is liable to the plaintiffs under Neb.Rev.Stat. § 8-1118(1) (Reissue 1991); (2) in failing to instruct the jury that the defendant could be found liable under § 8-1118(1) if the jury determined the defendant was an offeror of an unregistered security, in failing to instruct the jury on fraudulent concealment, and in giving its instruction defining "seller" rather than giving the plaintiffs' proposed instruction defining "seller"; (3) in failing to grant the plaintiffs' motions for directed verdict, for order to set aside verdict, for new trial, and for reconsideration of motion for directed verdict; (4) in failing to (a) grant plaintiffs' motion for summary judgment by deeming admitted plaintiffs' requests for admissions, (b) receive defendant's admissions of the plaintiffs' requests for admissions into evidence, and (c) instruct the jury as to facts established by reason of defendant's failure to timely respond to plaintiffs' requests for admissions; and (5) in granting the defendant's motion for change of venue.
The plaintiffs assert that the standard of review with regard to the trial court's legal rulings, the requested jury instructions, the motion for summary judgment, the motion for directed verdict, and the jury verdict on the rescission under § 8-1118(1) of the Securities Act of Nebraska should be de novo on the record. Section 8-1118(1) provides in pertinent part:
Any person who offers or sells a security in violation of section 8-1104 or offers or sells a security by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made in the light of the circumstances under which they are made not misleading, the buyer not knowing of the untruth or omission, and who does not sustain the burden of proof that he did not know and in the exercise of reasonable care could not have known of the untruth or omission, shall be liable to the person buying the security from him, who may sue either at law or in equity to recover the consideration paid for the security, together with interest at six percent per annum from the date of payment, costs, and reasonable attorneys' fees, less the amount of any income received on the security, upon the tender of the security, or for damages if he no longer owns the security.
(Emphasis supplied.)
The plaintiffs note that there is apparently no case law in Nebraska addressing the issue of whether a suit under § 8-1118(1) is an action at law or in equity, but argue that a "reasonable and logical interpretation" of the statute is that a suit to recover consideration paid for a security is a claim for rescission and therefore, in equity. Brief for appellants at 3 n. 1. While the plaintiffs assert that their claim was for rescission, their third amended petition, as well as two previously filed petitions, prayed for damages rather than equitable relief.
In its review, an appellate court disposes of an appeal on the basis of the theory presented by the pleadings on which the case was tried. Sikyta v. Arrow Stage Lines, 238 Neb. 289, 470 N.W.2d 724 (1991); Union Pacific RR. Co. v. Kaiser Ag. Chem. Co., 229 Neb. 160, 425 N.W.2d 872 (1988).
The plaintiffs owned the security at the time of trial, and they then tendered the security to the defendant in accordance with § 8-1118(1). Rescission entails "[a]nnulling, abrogation or unmaking of contract and the placing of the parties to it in status quo." Black's Law Dictionary 1174 (5th ed. 1979). Although one of the issues at trial was whether the defendant was a seller of the security, the defendant did not have title to the security prior to the plaintiffs' purchase, and consideration for the security was made payable to Paradox Energy Program, not to the...
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