Dietzel Enters. v. J. A. Wever Constr.
979 N.W.2d 517
Neb.2022Background
- Wever (general contractor's subcontractor) hired Dietzel to excavate foundation holes for a transmission-line project; parties exchanged an email and a geotechnical report before Dietzel bid $722,000 to perform the work.
- Dezort (for Wever) described the subsurface as primarily schist in an initial email, but the geotechnical report—sent soon after—noted auger refusals and "very hard materials" (including quartz and other rock types).
- Dietzel encountered very hard granite/quartz, submitted change orders for rock excavation (totaling $328,507), and repeatedly sought assurance that Wever was pursuing payment from the prime contractor (MasTec). The subcontract had a "paid-when-paid" clause (Wever pays Dietzel only after MasTec pays Wever).
- Dietzel stopped work on October 5, 2015, claiming Wever failed to provide adequate assurances and had materially breached by late payment; Wever sued on a breach-of-contract counterclaim.
- The district court held Dietzel committed the first material breach (abandoning the job), awarded Wever damages (~$2.76M), offset unjust-enrichment ($328,507), and entered judgment for $2,429,743.47; Dietzel appealed.
- The Nebraska Supreme Court affirmed the liability rulings but found parts of Wever’s damages unsupported, reduced the recoverable damages to $1,742,904.03, and directed entry of judgment (after offset) for $1,414,397.03.
Issues
| Issue | Dietzel's Argument | Wever's Argument | Held |
|---|---|---|---|
| Negligent misrepresentation: Did Dietzel justifiably rely on Dezort’s email that described the rock as schist? | Dietzel: Dezort’s positive statement that rock was schist justified reliance and no further inquiry was required. | Wever: Dietzel had the geotechnical report (best source) and industry experience; reliance on the terse email was not justified. | Court: Affirmed district court — no justifiable reliance; geotechnical report and experience defeated negligent misrep claim. |
| Breach of implied covenant of good faith and fair dealing (failure to disclose Wever’s discovery of hard rock) | Dietzel: Wever knew of hard rock and unfairly withheld that info, breaching the covenant. | Wever: Dietzel could not reasonably expect disclosure given the geotech data and bidding process. | Court: No breach; Dietzel had no justifiable expectation to be told beyond available geotech data. |
| Right to suspend performance / adequate assurances under Restatement §251 (or similar) | Dietzel: Reasonable grounds existed to demand assurances; lack of adequate assurance permitted suspension/abandonment. | Wever: Evidence showed Wever submitted and pursued change orders with MasTec; Dietzel lacked reasonable grounds to believe Wever would not perform. | Court: No reasonable grounds for Dietzel to demand assurance or treat silence as repudiation; Dietzel could not lawfully suspend/abandon. |
| Material breach for late payment (Wever received payment Sept. 22 but did not pay Dietzel by Sept. 29) | Dietzel: Any delayed payment to contractor is material; Wever’s late payment excused Dietzel’s performance. | Wever: The payment was only a few days late, a small amount relative to the contract, and did not defeat the contract’s purpose. | Court: Timely-payment breach was not material under the circumstances; affirmed finding Dietzel committed the first material breach. |
| Damages: Were Wever’s claimed damages supported with reasonable certainty? | Dietzel: Many claimed items were incurred before Dietzel’s abandonment or were speculative (e.g., lost-segment revenue). | Wever: Submitted expense testimony and spreadsheet; sought recovery for equipment, labor, and lost segment revenue. | Court: Reduced award — sustained many expense items (operators, admin, SR-80, drills, equipment, mud, etc.) but rejected speculative items and expenses incurred before abandonment; remanded to enter judgment for $1,742,904.03 (net $1,414,397.03 after offset). |
Key Cases Cited
- Goes v. Vogler, 304 Neb. 848 (suit for damages from breach of contract is an action at law)
- McGill Restoration v. Lion Place Condo. Assn., 309 Neb. 202 (bench-trial findings have jury-verdict effect; appellate review defers to fact finder)
- Funk v. Lincoln-Lancaster Cty. Crime Stoppers, 294 Neb. 715 (damages awards not disturbed if supported by evidence and reasonably related to proven elements)
- Lucky 7 v. THT Realty, 278 Neb. 997 (justifiable reliance principles for negligent/fraudulent misrepresentation)
- Nathan v. McDermott, 306 Neb. 216 (totality-of-the-circumstances test for justifiable reliance; prudence matters when plaintiff could discover truth)
- Acklie v. Greater Omaha Packing Co., 306 Neb. 108 (implied covenant of good faith and fair dealing requires an enforceable contract)
- Siouxland Ethanol v. Sebade Bros., 290 Neb. 230 (material-breach analysis considers consequences and customary performance practices)
- McKinnis Roofing v. Hicks, 282 Neb. 34 (discusses Restatement §251 and related contract doctrines)
- Pan v. IOC Realty Specialist, 301 Neb. 256 (plaintiff bears burden to plead and prove damages with reasonable certainty)
- World Radio Labs. v. Coopers & Lybrand, 251 Neb. 261 (lost-profits claims require financial data to estimate loss with reasonable certainty)
- Aon Consulting v. Midlands Fin. Benefits, 275 Neb. 642 (standards for recovering lost profits)
- Pribil v. Koinzan, 266 Neb. 222 (appellate review standard for damages sufficiency)