Justia Commercial Law Opinion Summaries

McKinnis Roofing and Sheet Metal and homeowner Jeffrey Hicks entered into two contracts. The first contract related to Hicks' roof, and the second contract related to copper awnings on Hicks' residence. McKinnis filed a complaint in the district court alleging that Hicks breached both contracts after Hicks refused McKinnis' demand for advance payment. After trial, he district court determined that Hicks had breached both contracts, awarding McKinnis damages in the amount of $4,419 with regard to the roofing contract and $789 with regard to the awning contract. McKinnis appealed, arguing that the district court erred in calculating the amount of damages to which it was entitled. Hicks cross-appealed and claimed that the district court erred when it determined that he breached the contracts. The Supreme Court reversed, holding that based on the facts and contract language, Hicks did not breach either contract.

Chicago Lumber recorded a construction lien on JoAnn Selvera's home and sued to foreclose the lien. Selvera brought a counterclaim under Neb. Rev. Stat. 52-157, which provides a remedy against claimants who, in bad faith, file liens, overstate liens, or refuse to release liens. Chicago Lumber eventually withdrew its foreclosure action and released its lien, but Selvera maintained her suit. The district court granted summary judgment to Selvera, concluding that (1) because Selvera had not received a copy of Chicago Lumber's lien within ten days of its recording, the lien was invalid; and (2) Chicago Lumber's failure to dismiss its action and to release the lien before it received Selvera's documents clarifying that she had paid her debt in full constituted bad faith. The court awarded Selvera $10,000 in attorney fees. On appeal, the Supreme Court reversed, holding that because Chicago Lumber had a reasonable belief that its lien was valid, at least before it received Selvera's clarifying documents, Chicago Lumber did not act in bad faith. The Court concluded that after Chicago Lumber received the clarifying documents, questions of fact existed whether Chicago Lumber was acting in bad faith. Remanded.

May Construction Company appealed from a circuit court order declaring a lien on real property, owned by Town Creek Construction & Development, subordinate to a mortgage filed by Chambers Bank and unenforceable against a lien bond issued by Ohio Casualty Insurance Company. For reversal, May argued that the circuit court erred in (1) interpreting the materialmen's lien statute, (2) ruling that construction commenced after the execution of Chambers's mortgage, and (3) finding that May could not recover against the lien bond. Town Creek cross-appealed, arguing that the circuit court erred in ruling that May was entitled to a lien in the amount of $353,000. The Supreme Court reversed and remanded the direct appeal, holding that the circuit court erred in ruling that construction had not commenced prior to the recording of Chambers's lien because the ruling was based on the intent of the parties contrary to that plain language of the materialmen's lien statute. The Court then affirmed the cross-appeal, finding that the circuit court did not err in calculating the amount Town Creek owed May.

In 2000, Dick Anderson Construction (DAC) entered into a contract with Monroe Construction to do construction work on Paws Up Ranch, which was owned by Monroe Property. When each phase of the construction was completed, Monroe Construction sold that phase to Monroe Property. When DAC was not paid for the last $800,000 of its billings, it filed a construction lien to secure its claim. In 2001, DAC sued Monroe Property to foreclose the lien. On remand to the district court, Monroe Property argued since it was not a party to the construction contract with DAC, it was not a contracting owner against whom the lien could be foreclosed under the construction lien statutes. The district court granted Monroe Property's motion for summary judgment, and DAC appealed. The Supreme Court reversed, holding the facts of the case demonstrated that Monroe Construction was the actual agent of Monroe Property for the purpose of engaging DAC to complete construction work on the ranch. Therefore, under the statutes, Monroe Property, acting through its agent Monroe Construction, was a contracting owner with regard to the construction contract with DAC.