Case Title: Heese Produce Co. v. Lueders

Citation: 233 Neb. 12, 443 N.W.2d 278

Docket Number: 

State: nebraska

Court: Nebraska Supreme Court

Date: 1989-07-28T00:00:00Z

Document:
443 N.W.2d 278 (1989) 233 Neb. 12 HEESE PRODUCE COMPANY, Appellant, v. Robert LUEDERS, Appellee. HEESE PRODUCE COMPANY, Appellant, v. David LUEDERS, Appellee. Nos. 87-978, 87-979. Supreme Court of Nebraska. July 28, 1989. *279 Daniel A. Smith of Stanek & Smith, Lyons, for appellant. *280 Charles W. Balsiger of Jewell, Gatz, Collins, Dreier, Fitzgerald & Balsiger, Norfolk, for appellees. BOSLAUGH, CAPORALE, and GRANT, JJ., and SPRAGUE and MULLEN, District Judges. GRANT, Justice. These are consolidated appeals from the district court for Thurston County. Plaintiff-appellant, Heese Produce Company (Heese), filed these actions in the Thurston County Court to collect accounts allegedly due from defendants-appellees, Robert Lueders (case No. 87-978) and David Lueders (case No. 87-979). Defendants each filed a cross-petition, alleging breach of express and implied warranty, negligence, and product liability in an amount exceeding the jurisdictional limit of the county court. The cases were certified to the district court pursuant to Neb.Rev.Stat. § 24-302.01 (Reissue 1985) and were set for trial on April 14, 1987. The district court was informed of a settlement, and the cases were continued. On April 20, 1987, defendants each filed a "Motion to Confirm Settlement and Enter Judgment Thereon." After an evidentiary hearing on September 2, 1987, the district court sustained defendants' motions and dismissed Heese's petitions and defendants' cross-petitions, with prejudice. Heese timely appealed to this court, contending the district court erred as a matter of law in finding the parties had entered into an enforceable compromise and settlement agreement and, therefore, in sustaining defendants' motions to confirm settlement and enter judgment thereon. We affirm. The record shows that these actions were filed by Heese in the Thurston County Court on November 19, 1984, to collect an account allegedly due from Robert Lueders in the amount of $3,202.28 and an account allegedly due from David Lueders in the amount of $4,878.20. The petitions further alleged that the defendants each purchased, on account, chemical and fertilizer products from Heese and that to secure the indebtedness Heese filed "Notices of Fertilizer Lien on Crops" with the county clerks of Thurston, Cuming, and Wayne Counties. On March 28, 1985, with the permission of the county court, both defendants filed cross-petitions alleging breach of express and implied warranty, negligence, and product liability in connection with certain herbicides sold to them by Heese. In the cross-petitions, Robert Lueders sought $22,346.80 and David Lueders sought $21,847.92 from Heese "for loss of income due to the decreased yields on [Lueders'] various tracts of real estate, and for incidental and consequential damages." Since the cross-petitions exceeded the jurisdictional limit of the county court, the cases were certified to district court. On February 26, 1987, defendants filed motions to set the two actions separately for jury trial. On March 12, 1987, the district court set the cases for trial on April 14. The court was informed of a settlement by letter dated March 30,1987. Each defendant's "Motion to Confirm Settlement and Enter Judgment Thereon" was filed on April 20. A hearing on the motions was held September 2, 1987. Defendants were represented by Charles Balsiger, and Heese was represented by Stuart Mills and Eric Kruger. Kruger told the court that he also appeared "by a special appearance only" on behalf of Tri-State Insurance Company (Tri-State), Heese's insurance carrier. There was no ruling on this special appearance. Correspondence regarding the attempted settlement of these matters was admitted in evidence at the September 2 hearing, without objection. Balsiger's March 6, 1987, letter to Kruger and Mills proposed that Heese "dismiss the respective petitions with prejudice and deliver a release of the alleged lien as to each case. In consideration for that action the defendants will dismiss their respective causes of action with prejudice." Balsiger's notes regarding a telephone call from Mills on March 12 indicate that Mills offered "to settle with Lueders jointly for $5000." That is, Heese *281 would settle its claims against both defendants for a payment of $5,000. Kruger's March 19, 1987, letter to Balsiger and Mills pertaining to defendants' cross-petitions states: Balsiger and Mills continued settlement negotiations. By letter dated March 25, 1987, Balsiger rejected Mills' March 12 "counterproposal to settle [Heese's claims] in the amount of $5,000," and "submit[ted] a counteroffer to settle for the sum of $2,500.00 payable to Heese Produce forthwith for and in consideration of a dismissal of all claims by both parties against the other, costs taxed to the parties as respectively incurred. Also we would require a release of your crop liens." Balsiger's notes of March 28, 1987, reflect two telephone conversations with Mills. During the earlierconversation, Mills counteroffered to settle Heese's claims against defendants for $3,000. After advising Robert Lueders of the $3,000 counteroffer, Balsiger telephoned Mills. Balsiger's notes of this conversation indicate that Balsiger "offered to settle at $2800 he accepted, we are to draw the paperwork." Balsiger's March 30, 1987, confirming letter to Mills and Kruger stated as follows: Enclosed with the March 30 letter were a check from Robert Lueders payable to "Heese Produce & Stuart Mills" in the amount of $2,800, drafts of the documents required to dismiss both cases with prejudice, and draft releases of the fertilizer liens. Also enclosed with the March 30 letter was a copy of Balsiger's March 30, 1987, letter to the court advising that the cases had been settled. On April 3, however, Kruger wrote to Balsiger enclosing new drafts of the dismissal documents, a release, and "Tri-State's claim draft in the amount of $5,000.00 which is payable to both of your clients, yourself, and to Heese Produce." The form of release enclosed with Kruger's April 3 letter provided that in consideration of the sum of $5,000, David and Robert Lueders would "forever release, acquit and discharge" Heese from any claims arising out of damage to the Luederses' real property. In other words, the release drafted by Kruger contemplated that the defendants would dismiss their cross-petitions for a settlement of $5,000. Each defendant's "Motion to Confirm Settlement and Enter Judgment Thereon" was filed on April 20, 1987. In these documents, the defendants alleged that Mills orally accepted their offer "to settle at $2,800.00, payable to [Heese] with mutual dismissals with prejudice and releases of claimed fertilizer liens, each party to pay their respective costs, counsel for the defendants to prepare settlement documents." The motions further alleged that defendants' counsel confirmed the settlement by letter and commenced performance *282 of the settlement by tendering settlement documents and "settlement payment proceeds" of $2,800 to Mills. The motions also alleged: At the September 2 hearing, the trial court also took judicial notice of an "Application" filed by Mills on August 17. The application sought orders compelling Tri-State to pay into the court the sum of $5,000 and compelling defendants to pay into court the total sum of $2,800, "which sums then should be paid to [Heese] in compromise and settlement of these cases." The application alleged: We note that Tri-State was never a party to this action. On September 15, 1987, the district court entered orders finding that "the parties reached a settlement whereby the defendants... would pay to the plaintiff the sum of $2,800.00, that the plaintiff would dismiss the petition with prejudice, and the defendants would dismiss their respective cross-petitions with prejudice and the plaintiff would deliver certain crop releases to the defendants." The court also found that defendants had partially performed the settlement and that the settlement should be approved and the parties ordered to perform the same. The court also ordered that the petitions and cross-petitions be dismissed with prejudice pursuant to district court rule 16. That rule provides: A settlement agreement is subject to the general principles of contract law. Fleming Co. of Nebraska v. Michals, 230 Neb. 753, 433 N.W.2d 505 (1988); Omaha Nat. Bank v. Mullenax, 211 Neb. 830, 320 N.W.2d 755 (1982). In a bench trial of an action at law, the factual findings by the trial court have the effect of a jury verdict and will not be set aside unless they are clearly wrong. Fleming Co. of Nebraska v. Michals, supra. In support of its assignments of error, Heese appears to argue that the correspondence *283 offered as evidence of the oral settlement agreement reached by Mills and Balsiger was inadmissible under Neb.Rev.Stat. § 7-107(2) (Reissue 1987), which provides: See, also, Simmons v. Murray, 189 Neb. 695, 204 N.W.2d 800 (1973) (Newton, J., dissenting), overruled, Omaha Nat. Bank v. Mullenax, supra. We note that no objections were made by any of the parties to any of the evidence admitted during the September 2 hearing. In Anderson v. Walsh, 109 Neb. 759, 763, 192 N.W. 328, 329 (1923), this court held that the former version of § 7-107(2) "[did] not make an oral contract invalid, but only relate[d] to the character of evidence by which it may be established." The Anderson court further stated at 763, 192 N.W. at 329-30: Since no objection was made to any of the evidence offered during the hearing, Heese's argument is without merit. Heese further contends the oral settlement agreement was unenforceable under Omaha Nat. Bank v. Mullenax, supra, 211 Neb. at 836, 320 N.W.2d at 758, a quiet title action, where we held: In connection with this argument, Heese contends the oral settlement agreement was in violation of the statute of frauds, Neb.Rev.Stat. § 36-202(2) (Reissue 1988), which provides: "In the following cases every agreement shall be void, unless such agreement, or some note or memorandum thereof, be in writing, and subscribed by the party to be charged therewith: ... (2) every special promise to answer for the debt, default, or misdoings of another person...." We have held that where the principal object of a party promising to pay the debt of another is to promote his own interests, and not to become a guarantor or surety, and the promise is made on sufficient consideration, it will be valid although not in writing. Branham v. McGinnis, 203 Neb. 664, 280 N.W.2d 47 (1979); VSC, Inc. v. Lilja, 203 Neb. 844, 280 N.W.2d 901 (1979); Fitzgerald v. Morrissey, 14 Neb. 198, 15 N.W. 233 (1883). The consideration to support an oral promise to pay the debt of another must operate to the advantage of the promisor (Robert Lueders) and place him under a pecuniary obligation to the promisee (Heese) independent of the original debt (David Lueders' account), which obligation is to be discharged by the payment of that debt. VSC, Inc. v. Lilja, supra. We determine that even if we characterize this situation as a promise by Robert Lueders to Heese that he would pay the debt of David Lueders, such promise was supported by new consideration and does not fall within the statute of frauds. The record shows that the $2,800 check was tendered by Robert Lueders pursuant to an agreement with Heese to settle both his *284 and David Lueders' accounts for that amount. In return, Heese was to dismiss both petitions with prejudice and release the fertilizer liens filed against both defendants' crops. The record supports a finding that Robert Lueders acted primarily to promote his own interests in settling his own account with Heese and procuring the release of liens filed against his own crops. The settlement agreement, therefore, was not within the statute of frauds. In the alternative, Heese contends the oral settlement agreement was unenforceable under our holding in Omaha Nat. Bank v. Mullenax, 211 Neb. 830, 320 N.W.2d 755 (1982), because the oral agreement violated rule 5 of the Uniform Rules for the District Court of the State of Nebraska, adopted on December 2, 1985, by the Sixth Judicial District. That rule provides: A copy of the uniform rules was admitted in evidence at the September 2 hearing. While noncompliance with rule 5 may render an oral settlement agreement unenforceable, Omaha Nat. Bank v. Mullenax, supra, such should not be the result in this case. In the application prepared by Mills and filed in the district court on August 17, 1987, Heese specifically alleged that Tri-State agreed to pay Heese $5,000 "to avoid further exposure on Defendants' counter claims." Heese then specifically alleged that it and defendants "entered into an oral agreement to compromise and settle these cases. It was agreed that Defendants should pay to Plaintiff the total sum of $2,800.00 in full settlement of both pending cases." The following exchange took place at the close of the September 2 hearing: Upon receipt of Balsiger's March 30, 1987, letter and enclosures, neither Mills nor Kruger informed the district court that a settlement had not been reached. Instead, Heese made application to the court for the $2,800 settlement amount. The record shows that Heese conducted separate negotiations with the defendants on the original petitions and with Tri-State on the cross-petitions. Heese admitted in its application filed in the district court and Mills admitted at the September 2 hearing that Heese had agreed to settle its claims against the defendants for a total of $2,800. In Omaha Nat. Bank v. Mullenax, supra, we recognized that court rules are related to statutes of fraud but also are based upon additional principles of efficient judicial administration. District court rule 27 provides, "Any of the foregoing rules shall be subject to such modification by the court as may be necessary in special instances to meet emergencies or to avoid injustice or great hardship." In appropriate circumstances where no injustice would result, the district court may exercise its inherent power to waive its own rules. *285 See, e.g., Raymond v. Ingram, 47 Wash. App. 781, 737 P.2d 314 (1987). We determine that the rule 5 requirement that "all agreements of counsel or parties to a suit, must be reduced to writing and signed by the parties making the same" was waived by the trial court and that no injustice resulted from this waiver. To have a settlement agreement, there must be a definite offer and an unconditional acceptance. Fleming Co. of Nebraska v. Michals, 230 Neb. 753, 433 N.W.2d 505 (1988). The evidence presented, without objection, at the September 2 hearing supports a finding that the parties reached a settlement agreement whereby defendants would pay to Heese a sum of $2,800, that Heese would dismiss its petitions with prejudice, that defendants would dismiss their cross-petitions with prejudice, and that Heese would deliver certain releases of crop liens to the defendants. Heese's alleged separate negotiations with Tri-State regarding settlement of defendants' claims against Heese do not fall within the scope of this agreement. The findings of the trial court to this effect are not clearly wrong. The judgment of the district court is affirmed. AFFIRMED.