deNourie & Yost Homes v. Frost
893 N.W.2d 669
Neb.2017Background
- In 2007 deNourie & Yost Homes, LLC (D&Y) entered a Project Completion Agreement with Joe and Amy Frost to finish construction of their home for $325,630; D&Y completed work but the Frosts defaulted and later lost the house to foreclosure and bankruptcy.
- D&Y sued the Frosts and Security State Bank (doing business as Dundee Bank) alleging breach of contract, fraud/concealment, civil conspiracy, and estoppel claims; earlier summary judgment dismissed fraud and conspiracy claims.
- At the start of a bench trial the Frosts orally confessed judgment on D&Y’s breach-of-contract claim for $245,000; the district court entered judgment for that amount and dismissed the Frosts; the court later granted summary judgment to the bank and dismissed D&Y’s remaining claims.
- On first appeal (Frost I) the Nebraska Supreme Court reversed summary judgment on D&Y’s fraud and civil-conspiracy claims and remanded for further proceedings; it did not give specific directions about the form of proceedings on remand.
- After remand D&Y filed a fifth amended complaint adding factual allegations and increased damages; the district court then granted summary judgment dismissing D&Y’s fraud and conspiracy claims based on election of remedies and judicial estoppel and issued an order nunc pro tunc that dismissed all claims against all defendants.
- D&Y appealed; the Nebraska Supreme Court reviewed whether the district court erred in applying law-of-the-case, election of remedies, and judicial estoppel doctrines, and whether judgment for the bank was properly entered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the law-of-the-case doctrine barred the district court from entering summary judgment after remand | Frost I implicitly required a trial on fraud and conspiracy, so summary judgment post-remand was barred | Remand was general; trial court could decide appropriate proceedings including summary judgment | Court: remand was general; law-of-the-case did not preclude summary judgment proceedings post-remand |
| Whether election of remedies barred D&Y’s fraud and conspiracy claims after confession of judgment on breach | Confession of judgment did not elect remedies to preclude fraud claims; D&Y affirmed the contract and sought damages for both breach and fraud | Confession/judgment on contract amounted to election; cannot seek inconsistent remedies premised on contract existence and nonexistence | Court: election of remedies did not apply—D&Y consistently relied on existence of a contract and pursued damages, and fraud and breach were not inconsistent here |
| Whether judicial estoppel barred D&Y’s fraud/conspiracy claims given prior judgment on the contract claim | D&Y’s positions were consistent—fraud claims assumed a contract existed and sought damages; thus no inconsistent advocacy | D&Y previously prevailed on breach judgment, then switched position to claim contract was void due to fraud, so estoppel applies | Court: judicial estoppel did not apply—D&Y did not take inconsistent positions and the court abused discretion in applying estoppel |
| Whether the bank was entitled to summary judgment or final dismissal | D&Y argued the bank never moved for summary judgment and dismissal of bank claims was improper without proper motion or evidence | Bank and Frosts argued dismissal was proper following the court’s rulings and order nunc pro tunc | Court: record does not support proper summary judgment in favor of bank on conspiracy; judgment for bank reversed and remanded for further proceedings |
Key Cases Cited
- deNourie & Yost Homes v. Frost, 289 Neb. 136, 854 N.W.2d 298 (Neb. 2014) (prior Nebraska Supreme Court opinion reversing summary judgment on fraud and conspiracy and remanding)
- Weitz Co. v. Hands, 294 Neb. 215, 882 N.W.2d 659 (Neb. 2016) (an affirmative defense must be specifically pleaded)
- Cleaver-Brooks, Inc. v. Twin City Fire Ins. Co., 291 Neb. 278, 865 N.W.2d 105 (Neb. 2015) (standards for appellate review of judicial estoppel application)
- Bauermeister Deaver Ecol. v. Waste Mgmt. Co., 290 Neb. 899, 863 N.W.2d 131 (Neb. 2015) (law-of-the-case and waiver principles on remand)
- Tobin v. Flynn & Larsen Implement Co., 220 Neb. 259, 369 N.W.2d 96 (Neb. 1985) (discussion that fraud-induced contract may be affirmed and damages pursued)