Last Pass Aviation v. Western Co-op Co.
296 Neb. 165
Neb.2017Background
- In 2011 Tony D. Peterson sold Last Pass Aviation to Western Cooperative Company (Westco); the purchase agreement contained a 10-year, four-state covenant not to compete (Nebraska, South Dakota, Wyoming, Colorado).
- In 2014 Last Pass, Tony Peterson, and Lucas Peterson sued for a declaratory judgment that the covenant was overbroad and unenforceable; Westco counterclaimed for injunctive relief and later added breach-of-contract counterclaims for damages and lost goodwill.
- The district court issued a temporary injunction, held a full trial, and on September 28, 2015, ruled the noncompete void as to geographical scope and duration; the court did not rule on Westco’s breach counterclaims or Last Pass’ posttrial motion for fees/damages related to the temporary injunction.
- Westco filed an initial appeal, which the Court of Appeals dismissed for lack of jurisdiction because the district court had not adjudicated all claims and had not entered a final order under Neb. Rev. Stat. § 25-1315.
- After remand, the parties stipulated to dismiss the unresolved counterclaims and Last Pass’ fee/damages motion without prejudice and the district court entered a stipulated order of dismissal without prejudice; Westco appealed that dismissal.
- The Nebraska Supreme Court concluded the dismissal-without-prejudice did not render the September 28 order final and therefore dismissed the appeal for lack of appellate jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the covenant not to compete was reasonable in scope and duration | Last Pass: covenant is overbroad and unenforceable as to geography and 10-year duration | Westco: covenant reasonably protects business interests and should be enforced or reformed | Court ruled the covenant void as greater than reasonably necessary in geographic scope and duration (district court ruling) |
| Whether the trial court’s September 28 order was final and appealable | Last Pass: earlier order adjudicated claims resolved and remaining claims could be dismissed later | Westco: attempted to create appellate jurisdiction by stipulating dismissal without prejudice of remaining claims and appealing | Court held stipulation to dismiss unresolved claims without prejudice did not create a final appealable order; appellate jurisdiction lacking |
| Whether parties can obtain interlocutory review by jointly dismissing remaining claims without prejudice | Last Pass: parties jointly moved to dismiss unresolved claims allowing appellate review of adverse pretrial order | Westco: sought interlocutory review via stipulated dismissal | Court rejected this tactic, citing precedent that voluntary dismissal without prejudice cannot convert an interlocutory order into a final appealable order |
| Whether the appeal should proceed | Westco: appealed district court’s findings and argued evidentiary and reformation errors | Last Pass: opposed jurisdiction and maintained dismissal without prejudice preserved refiling | Court dismissed the appeal for lack of jurisdiction because the appealed order was not final |
Key Cases Cited
- Koch v. Aupperle, 277 Neb. 560 (2009) (authority cited regarding fees/damages after issuance of injunction)
- Malolepszy v. State, 270 Neb. 100 (2005) (final-order rule: judgment must adjudicate all claims or include an express § 25-1315 determination)
- Smith v. Lincoln Meadows Homeowners Assn., 267 Neb. 849 (2004) (party cannot voluntarily dismiss without prejudice to obtain interlocutory appellate review)
- Addy v. Lopez, 295 Neb. 635 (2017) (reaffirmed that joint dismissal without prejudice does not create appellate jurisdiction)
- Holdsworth v. Greenwood Farmers Co-op, 286 Neb. 49 (2013) (jurisdictional questions decided as matters of law)