Lindsay Internat. Sales & Serv. v. Wegener
301 Neb. 1
| Neb. | 2018Background
- Wegener and Pribil (Nebraska farmers) signed personal guaranties in Dec. 2012 guaranteeing IJS Irrigation, LLC’s indebtedness to Lindsay for irrigation pivots ordered for Ko’ol Agricola (a Mexican farming venture).
- Lindsay invoiced IJS for 16 pivots; invoices referenced Ko’ol Ag but identified IJS as the buyer. Some bills of lading suggested a few pivots were delivered to other entities.
- When IJS defaulted, Lindsay sued Wegener and Pribil on their guaranties for $1,019,795.38. Defendants pleaded affirmative defenses including impairment of collateral, failure of consideration, UDTPA, fraud/misrepresentation, and others.
- At trial the court admitted Wegener’s and Pribil’s financial statements over relevance objections. After defendants rested, the court granted Lindsay a directed verdict on impairment of collateral, failure of consideration, and the UDTPA defenses; it submitted fraud/misrepresentation and material misrepresentation to the jury.
- The jury returned a unanimous verdict for Lindsay for the full amount. Defendants’ motion for new trial was denied. Defendants appealed.
Issues
| Issue | Plaintiff's Argument (Lindsay) | Defendant's Argument (Wegener & Pribil) | Held |
|---|---|---|---|
| Whether impairment-of-collateral defense precludes guaranty enforcement | No collateral secured the obligation; defense inapplicable | Lindsay impaired collateral or rights of subrogation, releasing guarantors | Defense requires underlying security interest; no evidence of collateral → directed verdict for Lindsay affirmed |
| Whether failure-of-consideration defense precludes liability | Guaranty was supported by consideration (credit extended to IJS); jury instructed to limit recovery to IJS indebtedness | Lindsay failed to deliver pivots to IJS (or to Ko’ol Ag), so consideration failed | Jury rejected claims that IJS did not receive pivots; embedding the issue in damages made any directed verdict harmless error → affirmed |
| Whether § 87-303.07 (UDTPA) protects guarantors induced by deceptive practices | Statute does not apply to guarantors; it protects buyers/lessees only | Guarantors were induced to sign guaranties by deceptive trade practices and may avoid enforcement | Statutory text and principle expressio unius exclude guarantors; defendants did not show buyer was deceived → directed verdict for Lindsay affirmed |
| Admissibility of defendants’ financial statements | Relevant because Lindsay relied on them in extending credit; probative of sophistication and inducement | Financial condition (net worth) irrelevant and unduly prejudicial | Net worth had at least minimal probative value on inducement/sophistication; admission not an abuse of discretion → affirmed |
| Denial of new trial | N/A | Trial errors (directed verdicts, financial evidence) warranted new trial | No abuse of discretion; no reversible error found → denial affirmed |
Key Cases Cited
- Custom Leasing, Inc. v. Carlson Stapler & Shippers Supply, Inc., 195 Neb. 292 (discusses guarantor discharge where creditor impairs collateral)
- Builders Supply Co. v. Czerwinski, 275 Neb. 622 (refers to impairment-of-collateral doctrine)
- Myers v. Bank of Niobrara, 215 Neb. 29 (noting guarantor discharge if secured party impairs collateral)
- National Bank of Commerce Trust & Savings Assn. v. Katleman, 201 Neb. 165 (security-interest impairment cases relied on by defendants)
- Mutual of Omaha Bank v. Murante, 285 Neb. 747 (discusses defenses personal to principal debtor and limits on guarantor defenses)
- Smith v. Colorado Organ Recovery Sys., 269 Neb. 578 (harmless-error analysis where jury findings render prior rulings immaterial)