Facilities Cost Mgmt. Group v. Otoe Cty. Sch. Dist.
906 N.W.2d 1
Neb.2018Background
- FCMG contracted with Otoe County School Dist. (Nebraska City Public Schools) in 2007 to provide architect, owner-rep, and project management services for a multi‑year construction program; dispute arose over fees under § 11.2 of the contract.
- On initial trial a jury awarded FCMG ≈ $1.9M; this Court reversed and remanded because the trial court had instructed § 11.2 was unambiguous.
- On retrial the central issues were (1) how to calculate fees under ambiguous § 11.2 (conversion to a “Lump Sum” and proportionate increases for scope changes) and (2) the School District’s affirmative defenses (fraudulent inducement and material misrepresentation regarding a guaranteed maximum price and fees).
- Experts: School District’s architect Mabrey offered proportional‑percentage calculations; FCMG’s forensic accountant Kirchner was permitted to explain how FCMG actually invoiced but excluded from opining on legal contract interpretation; FCMG’s architect Purdy was excluded from offering new contract‑interpretation opinions after discovery nondisclosure.
- During deliberations the jury sent two questions; the court answered them without notifying counsel and referred jurors back to instructions; after >6 hours deliberation a 10‑of‑12 jury returned a general verdict for the School District.
- FCMG moved for JNOV or a new trial (and offered juror affidavits claiming confusion); motions were denied. This appeal followed and the Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admission/instruction on School District affirmative defenses | Admission/instruction prejudiced FCMG and was improper | Instructions limited defenses to consideration only if FCMG proved breach; evidence admissible | Harmless; general verdict presumed jury found no breach, so affirmative‑defense rulings caused no prejudice |
| Court responses to jury questions without notifying counsel | Failure to follow § 25‑1116 prejudiced jury and confused jurors about awarding damages | Any procedural defect caused no prejudice; jury was referred to instructions | No reversible error; absent prejudice failure to notify counsel is not reversible; general verdict shows no prejudice |
| Exclusion/limitation of experts (Purdy and Kirchner) | Excluding testimony on contract interpretation unfairly prejudiced FCMG | Purdy’s scope was not supplemented per discovery rules; Kirchner not qualified to opine on legal meaning | No abuse of discretion: sanction for failure to supplement/disclose was appropriate; forensic accountant not qualified to give legal‑interpretation opinions |
| Prejudgment interest and posttrial motions (JNOV/new trial) | Trial court erred excluding prejudgment interest and denying JNOV/new trial because evidence showed FCMG was owed additional fees | General verdict resolves all issues for defendant; no prejudicial error in evidentiary rulings; JNOV/new trial standards not met | Affirmed: exclusion of interest not prejudicial given general verdict; JNOV/new trial properly denied (reasonable minds could differ; no abuse of discretion) |
Key Cases Cited
- Facilities Cost Mgmt. Group v. Otoe Cty. Sch. Dist., 291 Neb. 642, 868 N.W.2d 67 (Neb. 2015) (prior appeal finding § 11.2 was ambiguous and remanding for new trial)
- Heckman v. Burlington N. Santa Fe Ry. Co., 286 Neb. 453, 837 N.W.2d 532 (Neb. 2013) (general propositions on jury verdicts and issues)
- Norquay v. Union Pacific R.R., 225 Neb. 527, 407 N.W.2d 146 (Neb. 1987) (trial court may exclude expert testimony for failure to supplement discovery; sanctions framework)
- In re Estate of Clinger, 292 Neb. 237, 872 N.W.2d 37 (Neb. 2015) (admission/exclusion of evidence reversible only if it prejudices a substantial right)
- Maiz v. Virani, 253 F.3d 641 (11th Cir. 2001) (expert may rely on contractual provisions for calculations but should not render legal interpretation of ambiguous contract)