Hand Cut Steaks Acquisitions v. Lone Star Steakhouse
298 Neb. 705
| Neb. | 2018Background
- Hand Cut Steaks Acquisitions, Inc. (HCS, Arkansas) owned a restaurant property in Omaha leased to Lone Star Steakhouse & Saloon of Nebraska, Inc. (Lone Star) under a 66‑month lease; LSF5 Cactus L.L.C. (Cactus, Delaware/Texas) guaranteed Lone Star’s performance.
- Lone Star ceased operations, stopped paying rent in March 2013, and formally surrendered the premises in May 2013; HCS demanded surrender but stated the lease was not terminated.
- HCS received leasing inquiries and multiple bona fide offers after surrender; HCS also negotiated a sale with an ultimate buyer, executed a letter of intent (LOI) June 13, 2013, but did not close on the sale until April 2014.
- HCS sued Lone Star and Cactus for unpaid rent and related charges; parties tried damages on stipulated facts.
- The district court found HCS had not accepted surrender (treated actions as mitigation), awarded damages only through the LOI date (June 13, 2013), dismissed Cactus for lack of personal jurisdiction, and denied contractual attorney fees.
Issues
| Issue | Plaintiff's Argument (HCS) | Defendant's Argument (Lone Star / Cactus) | Held |
|---|---|---|---|
| Whether HCS accepted Lone Star’s surrender of the lease, terminating it | HCS did not accept surrender; it retook to mitigate and preserve lease | Lone Star: HCS’s retaking and sale show acceptance and termination | Court: No acceptance — HCS’s conduct consistent with mitigation (affirmed) |
| Whether HCS reasonably mitigated damages and when damages stopped accruing | Damages should run until actual sale (April 2014) | Lone Star: HCS unreasonably rejected lease offers and chose a slow sale; damages stopped earlier | Court: Mitigation reasonable through LOI (June 13, 2013) but post‑LOI delay was unreasonable; damages limited to LOI date (affirmed) |
| Whether Nebraska courts have personal jurisdiction over out‑of‑state guarantor Cactus | HCS: guaranty purposefully reached into Nebraska (induced lease of Nebraska property, governed by Nebraska law, Cactus named on insurance) | Cactus: lacks sufficient Nebraska contacts; cannot be haled into Nebraska court | Court: Reversed dismissal — specific jurisdiction exists over Cactus; remanded for proceedings (reversed) |
| Enforceability of contractual attorney‑fees provision in lease | HCS: prevailing‑party attorney fees in lease should be enforced | Lone Star: Nebraska’s historical rule rejects contractual attorney‑fees absent statute | Court: Denied fees — state precedent bars enforcement of private contractual attorney‑fees provisions (affirmed) |
Key Cases Cited
- Klein v. Oakland/Red Oak Holdings, 294 Neb. 535 (Neb. 2016) (bench‑trial review of stipulated facts standard)
- Quality Pork Internat. v. Rupari Food Servs., 267 Neb. 474 (Neb. 2003) (minimum‑contacts test and contract‑based jurisdiction analysis)
- McGee v. International Life Ins. Co., 355 U.S. 220 (U.S. 1957) (contract with substantial connection to forum supports jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (purposeful availment via contract and choice‑of‑law contact)
- World‑Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (U.S. 1980) (minimum contacts and reasonableness factors)
- Daimler AG v. Bauman, 134 S. Ct. 746 (U.S. 2014) (distinction between general and specific jurisdiction)