RM Campbell Indus. v. Midwest Renewable Energy
886 N.W.2d 240
Neb.2016Background
- Campbell performed work under a November 2006 $2,411,431.02 subcontract with KL Process to supply goods and services for phase 2 of Midwest’s ethanol plant expansion; invoices were ultimately sent to and paid (or acknowledged) by Midwest to capture tax incentives (L.B. 775).
- KL Process ceased work and later went bankrupt; Campbell sued KL Process (now in bankruptcy) and Midwest for breach of contract seeking about $158,010.98; a jury awarded Campbell $154,510.98.
- Midwest argued preclusion based on Campbell’s failure to appear in a Lincoln County lien foreclosure (Avid) and that Campbell, a foreign corporation without a Nebraska certificate, could not sue in Nebraska; the district court rejected both defenses.
- Midwest additionally contested (a) that KL Process lacked actual or apparent authority to bind Midwest, (b) that Campbell failed to substantially perform, (c) proximate causation of damages, and (d) that the U.C.C. rather than common law should apply to damages and contract characterization.
- The district court submitted agency (actual and apparent) and U.C.C.-based damages instructions to the jury; the Supreme Court reviewed sufficiency of the evidence and correctness of instructions and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preclusion (res judicata / collateral estoppel) | Campbell: Avid lien foreclosure did not decide its contract claim; it didn’t participate in that action. | Midwest: Dismissal of Campbell’s lien in Avid foreclosure precludes this suit. | Trial court and Supreme Court: No preclusion — Campbell did not appear in prior suit so issues were not decided on the merits. |
| Certificate of authority to sue | Campbell: Transaction was interstate commerce; statute’s bar does not apply. | Midwest: Campbell, a foreign corp. without Nebraska certificate, cannot maintain suit. | Held: Campbell need not have a Nebraska certificate because transaction was interstate commerce. |
| Agency (actual / apparent) | Campbell: KL Process acted as Midwest’s agent; Midwest paid invoices and acknowledged debt. | Midwest: Contract provisions barred KL Process from binding Midwest; KL Process lacked authority. | Held: Sufficient evidence for jury to find actual or apparent agency; instructions proper. |
| Contract characterization / damages (U.C.C. vs common law; substantial performance) | Campbell: Contract predominantly for sale of goods; U.C.C. applies; damages measured by contract price and amounts owed. | Midwest: Contract is services; common-law measures (quantum meruit) and substantial performance instructions required. | Held: Contract predominantly for goods; U.C.C. controls; substantial-benefit/part-performance allowed recovery; damages instructions correct. |
Key Cases Cited
- Tilt-Up Concrete v. Star City/Federal, 261 Neb. 64 (Neb. 2001) (construction lien foreclosure does not necessarily bar separate breach-of-contract claim)
- Allenberg Cotton Co. v. Pittman, 419 U.S. 20 (U.S. 1974) (state restrictions on foreign corporations suing may violate Commerce Clause when transaction is interstate)
- Koricic v. Beverly Enterprises-Neb., 278 Neb. 713 (Neb. 2009) (principles on agency, actual and implied authority)
- VRT, Inc. v. Dutton-Lainson Co., 247 Neb. 845 (Neb. 1995) (substantial performance doctrine)
- StoreVisions v. Omaha Tribe of Neb., 281 Neb. 238 (Neb. 2011) (apparent authority principles)