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Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

GOES v. VOGLER

Cite as 304 Neb. 848

Tanner Goes, doing business as Goes Construction, 

appellee, v. Eric Vogler and Destini Vogler, 

husband and wife, appellants.

Franklin Drywall, Inc., a Nebraska corporation, 

appellee, v. Eric Vogler and Destini Vogler, 

husband and wife, appellants, and 

FBM Lincoln et al., appellees.

___ N.W.2d ___

Filed January 17, 2020. Nos. S-18-1201, S-18-1203.

1. Mechanics’ Liens: Foreclosure: Equity. An action to foreclose a construction lien is one grounded in equity.

2. Equity: Appeal and Error. In an appeal of an equity action, an appellate court tries factual questions de novo on the record and reaches 

a conclusion independent of the findings of the trial court, provided, 

where credible evidence is in conflict on a material issue of fact, the 

appellate court considers and may give weight to the fact that the trial 

judge heard and observed the witnesses and accepted one version of the 

facts rather than another.

3. Breach of Contract: Damages. A suit for damages arising from breach 

of a contract presents an action at law.

4. Contracts. A cost-plus contract as generally understood is one where 

the total cost to the contractor represents the whole payment to be made 

to him or her, plus a stated percentage of profit.

5. Contracts: Mechanics’ Liens. Under cost-plus contracts, the amount 

owing the builder should be computed on the basis of the amount 

actually spent for labor, materials, and supplies which go into and 

become a part of the finished structure, including the amounts paid to 

subcontractors.

6. ____: ____. In any cost-plus contract, there is an implicit understanding between the parties that the cost must be reasonable and proper. 

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

01/31/2020 01:06 AM CST
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Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

GOES v. VOGLER

Cite as 304 Neb. 848

Contractors do not have a fiduciary duty under a cost-plus contract as a 

matter of law, other than those obligations already required by law and 

the contract.

Appeal from the District Court for Cass County: Michael 

A. Smith, Judge. Affirmed.

Damien J. Wright and Natalie M. Hein, of Welch Law Firm, 

P.C., for appellants.

James B. Luers, of Cada, Cada, Hoffman & Jewson, for 

appellee Tanner Goes.

Troy J. Bird, of Hoppe Law Firm, L.L.C., for appellee 

Franklin Drywall, Inc.

Timothy W. Nelsen, of Fankhouser, Nelsen, Werts, Ziskey 

& Merwin, P.C., L.L.O., for appellee Shelton Brothers 

Construction, LLC.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, 

Papik, and Freudenberg, JJ.

Miller-Lerman, J.

NATURE OF CASE

The appellants, Eric Vogler and Destini Vogler, contracted 

with Shelton Brothers Construction, LLC (Shelton), for the 

construction of a residential home. Shelton and two of its subcontractors, Tanner Goes, doing business as Goes Construction 

(Goes), and Franklin Drywall, Inc. (Franklin), subsequently 

filed construction liens and brought contract suits claiming 

unpaid balances for construction services rendered. Following 

trial on the consolidated cases, the district court determined 

that the construction contract between the Voglers and Shelton 

was a cost-plus agreement, that defects in workmanship were 

punch list items and not a breach by Shelton, and that the 

Voglers committed the first material breach of contract and 

owed damages to the contractor and subcontractors. The 
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Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

GOES v. VOGLER

Cite as 304 Neb. 848

Voglers appeal, and we ordered the appeals, S-18-1201 and 

S-18-1203, consolidated for appeal. On appeal, the Voglers 

claim, inter alia, that the contract was a fixed-price contract breached by Shelton and that, alternatively, even under 

a cost-plus contract, Shelton breached a fiduciary duty to 

provide a full accounting for its bills to the Voglers when it 

requested draw payments. We affirm with respect to all parties 

and claims.

FACTS

After the Voglers’ home was destroyed by fire, they hired 

Shelton to construct a new home in Nehawka, Nebraska, on 

the existing foundation. They hired Shelton as their general 

contractor. After months of negotiating and discussion, the parties entered into a contract in October 2015, memorialized by 

exhibits 2, 37, and 47 in the record (the contract). Although 

paragraph 4 of exhibit 47 states that it is a “cost plus contract” 

with specific fees for overhead, warranty, and profit to Shelton, 

elsewhere the contract states that “[t]he agreed upon price is 

$282,000.00.” The contract called for an initial payment of 

$28,000, with progress payments made as monthly draws. 

Under the contract, Shelton would be able to request a monthly 

draw, subject to approval by the Voglers, “as needed to pay for 

materials and services.” The payments were to be made within 

10 days of the request.

Shelton and its subcontractors began work in October 2015, 

and as work progressed, various changes were made to the 

arrangement contemplated by the contract and the scope of 

work. One arrangement change was the fact that the Voglers 

and Shelton mutually waived the requirement of written change 

orders. One scope of work change was that framing for walls 

was adjusted and the foundation extended by 2 feet—resulting 

in modifications to the roof trusses and other features. Some of 

the changes caused spinoff delays and difficulties scheduling 

subcontractors. The Voglers became concerned with the lack of 

progress and communication by Shelton.
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304 Nebraska Reports

GOES v. VOGLER

Cite as 304 Neb. 848

The Voglers made the initial downpayment and the first two 

requested draws. Shelton requested a third draw on February 

18, 2016, in the amount of $48,972.54. Alleging shoddy 

workmanship, a fear that Shelton would not finish the project, and a lack of accounting, the Voglers made only a partial payment on one of the draws requested by Shelton. The 

district court found that only $19,875.40 was paid on the 

third draw and that the payments were “as late as March 

13, 2016.”

The Voglers contend that when making its draw requests, 

Shelton attached some, but not all, of the invoices from subcontractors and suppliers, and the Voglers expressed concern 

as to how their money was being spent. In February 2016, 

Eric Vogler emailed Shelton requesting an accounting for the 

initial $28,000 downpayment. Shelton did not provide itemizations or documentation of expenses to the Voglers’ satisfaction. 

The Voglers’ payments did not equal the draw requests, and 

Shelton terminated the contract. The Voglers hired another 

contractor to finish the home, and Shelton, Franklin, and Goes 

all filed construction liens with varying technical success. The 

three moved to foreclose upon the liens and asserted contract 

claims. Two consolidated cases encompassing all parties and 

claims proceeded to trial.

In orders filed on November 26, 2018, the district court 

found that the Voglers withheld payment because of their 

concerns about the quality of the work, that the project would 

not be completed for the price stated in the contract, and 

that the work would not be completed on time. The district 

court stated that “[t]he justification for the Voglers’ failure to 

make timely payments hinges on their assertions that the parties had a fixed-price contract and that the contract required 

written change orders.” The district court concluded that the 

contract was not ambiguous and that it was for a cost-plus 

contract price, not a fixed cost contract price. Although the 

parties did not sign written change orders regarding changes 

to the project, the district court found that the parties’ mutual 
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Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

GOES v. VOGLER

Cite as 304 Neb. 848

conduct amounted to a waiver of the provisions in the contract 

requiring written change orders. The court determined that 

any deficiencies in the quality of the work were punch list 

items, which would have been cured in the ordinary course 

of completion of the work, and therefore were not a breach 

of contract by Shelton. Accordingly, the district court found 

that the Voglers’ suspension of payment constituted a breach 

of contract.

Although FBM Lincoln was served, it did not enter an 

appearance or assert an interest in the real estate, and the district court found any interest of FBM Lincoln in the real estate 

would not be recognized.

In case No. S-18-1201, the district court entered judgment 

against the Voglers in the amount of $64,603.42, wherein Goes 

was awarded $26,678 and Shelton received the remainder. In 

the consolidated case, case No. S-18-1203, the trial court found 

that Franklin’s lien was tardy and unenforceable pursuant to 

Neb. Rev. Stat. § 52-140 (Reissue 2010); however, the district 

court repeated its award against the Voglers and in favor of 

Shelton, but allocated $15,000 of Shelton’s award to Franklin 

based on Franklin’s successful breach of contract claim against 

Shelton. The Voglers appeal.

ASSIGNMENTS OF ERROR

On appeal, the Voglers assert, restated, that the district court 

erred when it (1) characterized the contract as a cost-plus contract, (2) found that the Voglers committed the first material 

breach of the contract with Shelton, and (3) awarded damages 

to Shelton, Franklin, and Goes.

STANDARDS OF REVIEW

[1,2] An action to foreclose a construction lien is one 

grounded in equity. Robison v. Madsen, 246 Neb. 22, 516 

N.W.2d 594 (1994). In an appeal of an equity action, an appellate court tries factual questions de novo on the record and 

reaches a conclusion independent of the findings of the trial 
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304 Nebraska Reports

GOES v. VOGLER

Cite as 304 Neb. 848

court, provided, where credible evidence is in conflict on a 

material issue of fact, the appellate court considers and may 

give weight to the fact that the trial judge heard and observed 

the witnesses and accepted one version of the facts rather than 

another. Id.

[3] A suit for damages arising from breach of a contract 

presents an action at law. Bloedorn Lumber Co. v. Nielson, 300 

Neb. 722, 915 N.W.2d 786 (2018).

ANALYSIS

The district court and parties have treated this case essentially as one arising from breach of contract. And although 

the record shows construction liens were filed, we believe the 

appropriate framework is predominantly a contract action and 

review the matter accordingly. See Tilt-Up Concrete v. State 

City/Federal, 261 Neb. 64, 621 N.W.2d 502 (2001). With 

respect to breach, the central issue is whether the Voglers 

breached the contract first by failing to make draw payments 

to Shelton or whether Shelton breached the contract first 

under various theories advanced by the Voglers. Based on the 

language of the contract and the evidence at trial, we affirm 

the orders of the district court which found that the Voglers 

breached the contract, dismissed the Voglers’ cross-claims, 

and entered money judgments in favor of Shelton, Franklin, 

and Goes.

On appeal, the Voglers contend that the district court erred 

when it concluded that the agreement was a cost-plus contract rather than a fixed-price contract. They argue, in the 

alternative, that even assuming the agreement was a cost-plus 

contract, Shelton breached its duty to provide information 

to the Voglers regarding the project cost and budget. They 

also argue that they are a “[p]rotected party” under Neb. 

Rev. Stat. § 52-129 (Reissue 2010) and that Shelton, and by 

extension Franklin, can only recover the difference between 

the prime contract price and the amount the Voglers had 

already paid.
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Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

GOES v. VOGLER

Cite as 304 Neb. 848

The Parties Executed a 

Cost-Plus Contract.

The Voglers’ first claim on appeal is that the district court 

erred when it characterized the contract as a cost-plus contract. Referring to language in paragraph 4 of the contract, 

which stated that “[t]he agreed upon price is $282,000.00,” 

the Volgers maintain that the parties intended that the price 

of the house was fixed and limited to $282,000. We conclude 

the district court did not err when it concluded that the agreement was a cost-plus contract, and we reject this assignment 

of error.

The contract language provided in significant part as follows:

4. The agreed upon price is $282,000.00 to be paid 

in monthly draws as needed to pay for materials and 

services provided during the building process. The first 

monthly draw shall be $28,000.00 and is due and payable upon signing of this contract. Additional draws to 

be applied on an as needed basis per month for services 

rendered and the balance of the contract will be 10% 

of the contract price at completion. All payments to be 

rendered from owner’s bank to Nebraska Title Company 

which will in turn distribute money to vendors/contractors 

as allocated in draw submitted. This contract is to be 

executed as a cost plus contract where all costs for the 

project will be presented to the homeowners and the 

builder’s fees will be completed at 2% for warranty, 5% 

for overhead and 3% for profit or 10% of the total cost of 

all work performed.

(Emphasis supplied.)

[4,5] We have stated that a “cost-plus contract as generally understood is one where the total cost to the contractor represents the whole payment to be made to him, plus 

a stated percentage of profit.” Grothe v. Erickson, 157 Neb. 

248, 251, 59 N.W.2d 368, 370 (1953). We have explained 

that under cost-plus contracts, the amount owing the builder 

should be computed on the basis of the amount actually spent 
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304 Nebraska Reports

GOES v. VOGLER

Cite as 304 Neb. 848

for labor, materials, and supplies which go into and become 

a part of the finished structure, including the amounts paid to 

subcontractors. Robison v. Madsen, 246 Neb. 22, 516 N.W.2d 

594 (1994).

As noted by the district court, the language of paragraph 4 

of the contract, which we have highlighted above, explicitly 

states that the contract is a “cost plus contract,” and it describes 

the allocation of additional fees for overhead, warranty, and 

profit. Such language is consistent with the general understanding of a cost-plus contract and inconsistent with a fixed-price 

contract. Taking the contract language as a whole, the district 

court did not err when it concluded that the agreement between 

the Voglers and Shelton was a cost-plus contract. We reject this 

assignment of error.

No Special Fiduciary Duty of Builder 

Under Cost-Plus Contract in the 

Absence of Agreement.

The Voglers claim that even assuming the parties were subject to a cost-plus contract, a contractor in a cost-plus contract 

has additional fiduciary duties to a homeowner as a matter of 

law, and that the district court erred by not explicitly discussing 

whether Shelton breached these duties and, consequently, the 

contract. As we noted above, we have stated that the “amount 

owing the builder should be computed on the basis of the 

amount actually spent for labor, materials, and supplies which 

go into and become a part of the finished structure, including 

the amounts paid to subcontractors.” Robison v. Madsen, 246 

Neb. at 27-28, 516 N.W.2d at 598. The Voglers contend that 

given the law just quoted, it necessarily follows that a contractor must provide prompt, detailed accountings of actual costs 

incurred before taking progress payments and, furthermore, 

must inform the homeowner of potential cost overruns. The 

Voglers overstate the obligations of a contractor in general 

and, given the contract, in this case in particular. We reject this 

assignment of error.
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GOES v. VOGLER

Cite as 304 Neb. 848

Although there is case law to suggest that occasionally a 

cost-plus arrangement may place additional burdens upon a 

contractor, this is typically recognized where the contract language provides that “the contractor accepts a ‘relationship of 

trust and confidence established’ between it and the owner.” 2 

Philip L. Bruner & Patrick J. O’Connor, Jr., Bruner & O’Connor 

on Construction Law § 6:81 at 641 (2002). For example, in a 

Maryland appellate case relied on by the Voglers, the contractor accepted a “‘relationship of trust and confidence’” with the 

homeowners and explicitly agreed to further their interests by 

performing “‘the Work . . . in the most . . . economical manner consistent with’” their interests and to “‘keep . . . full and 

detail[ed] accounts.’” Jones v. J.H. Hiser Constr. Co., 60 Md. 

App. 671, 676, 484 A.2d 302, 304 (1984). Given these provisions, the court held that there was a relationship of trust and 

confidence between the parties, i.e., a fiduciary relationship 

grounded in the explicit language of the contract. Jones v. J.H. 

Hiser Constr. Co., supra.

[6] The contract between the Voglers and Shelton does not 

explicitly contain language creating a fiduciary relationship. 

As a general matter, it has been observed and we agree that 

“‘[i]n any cost-plus contract there is an implicit understanding between the parties that the cost must be reasonable and 

proper.’” Forrest Const. Co., LLC v. Laughlin, 337 S.W.3d 

211, 223 (Tenn. App. 2009) (quoting Kerner v. Gilt, 296 So. 

2d 428 (La. App. 1974)). However, other than those already 

required by law and by the parties’ contracts, we decline to 

impose further fiduciary duties on contractors as a matter 

of law.

Here, the cost-plus contract required that “all costs for the 

project will be presented to the homeowners and the builder’s 

fees will be completed at . . . 10% of the total cost of all work 

performed.” Under the contract, Shelton was required to present its actual costs to the Voglers to determine the builder’s 

fee at completion. According to the contract, the progress 

draws were “to be paid in monthly draws as needed to pay 
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304 Nebraska Reports

GOES v. VOGLER

Cite as 304 Neb. 848

for materials and services.” Contrary to the Voglers’ argument, 

we do not read this provision as requiring only retrospective 

payments nor do we read this provision as requiring extensive 

accounting. Compare Forrest Const. Co., LLC v. Laughlin, 337 

S.W.3d at 222 (stating that contract language provided that 

each draw would be submitted with “‘full back-up support 

for all amounts requested’” and contractor “‘shall have full 

responsibility and obligation to keep full and accurate records 

of all costs and expenses to satisfy tax laws and [o]wner’” 

(emphasis omitted)).

Although it appears the Voglers were deeply dissatisfied 

with their communication with Shelton and did not want to 

pay prospectively for work not yet performed, the record 

does not show that Shelton breached any term of the contract. A managing partner in Shelton testified that after the 

Voglers questioned the initial downpayment, the parties “talked 

through that, and then additional money was paid out” to “get 

everybody started.” Although it would have been helpful to 

all parties and to the court if Shelton had provided periodic 

detailed invoices, it appears from the record that the parties 

had periodic conversations about the costs which, if believed, 

were sufficient for the district court to conclude that Shelton’s 

obligations under the contract had been met when it requested 

draw payments.

Nor does the record show that Shelton breached a duty to 

keep costs reasonable and proper. It is undisputed that the 

Voglers, consistent with a cost-plus contract, elected for several 

changes or upgrades from the initial build plan. Among other 

aesthetic changes, a wall was moved 2 feet back on the back 

of the house, and windows, doors, a fireplace, and angled walls 

were added, increasing the project costs. Although the Voglers 

raised concerns at trial and on appeal that the project costs 

would have been unreasonable and improper, the evidence, if 

believed, was generally consistent with the conclusion that cost 

overruns were explained by the items added by the Voglers 

and the necessity of the situation “as is” and that the overruns 
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GOES v. VOGLER

Cite as 304 Neb. 848

were not a failure by Shelton to keep costs reasonable. At trial, 

a managing partner in Shelton testified that if Shelton had 

been allowed to finish and the Voglers had followed the allowances, Shelton could have brought the contract in at $282,000 

and on time. The district court, having heard the evidence 

and reviewed the documentation in the record, found that the 

Voglers breached their contract with Shelton and awarded 

damages to Shelton and its subcontractors. Where credible 

evidence is in conflict, we consider and may give weight to the 

fact that the trial judge heard and observed the witnesses and 

accepted one version of the facts rather than another. Robison 

v. Madsen, 246 Neb. 22, 516 N.W.2d 594 (1994). We find no 

merit to this assignment of error.

Goes’ Construction Lien.

The court ordered that Goes was to receive $26,678. The 

Voglers claim that the court erred in making an award to 

Goes. The Voglers contend that Goes is not entitled to recover 

the amount sought in its lien because the Voglers are a “[p]rotected party” contracting owner under § 52-129. Pursuant to 

Neb. Rev. Stat. § 52-136 (Reissue 2010), lien liability is 

limited to the difference between the “prime contract price” 

less payments properly made thereon. However, under Neb. 

Rev. Stat. § 52-127(2) (Reissue 2010), the “[c]ontract price” 

is defined, in pertinent part, as “the amount agreed upon by 

the contracting parties for performing services and furnishing 

materials covered by the contract, increased or diminished by 

the price of change orders or extras.” The Voglers’ argument 

and claim that it has already paid the prime contract price is 

not supported by the record, and we reject this assignment 

of error.

Eric Vogler testified that he had paid $203,485 on the contract with Shelton, but the contract provided for $282,000 even 

before the cost of changes and extras were added. The Voglers’ 

payments to other entities as part of their project did not 

reduce their contract liability to Shelton under the contract. The 
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GOES v. VOGLER

Cite as 304 Neb. 848

Voglers remain obligated to Goes and the other parties who 

perfected liens for the unpaid part of their contract, as ordered 

by the district court. See § 52-136.

CONCLUSION

We determine that the district court did not err when it found 

that the contract was a cost-plus contract and that the Voglers 

breached their contract with Shelton when they failed to pay 

draws required under the contract. We conclude that Shelton 

met its obligations under the contract to receive draw payments 

for materials and to pay subcontractors and that Shelton did 

not fail to ensure costs were reasonable and proper under the 

circumstances. Any remaining assignments of error not summarized above have been considered and are without merit. 

The orders and judgments of the district court are affirmed 

with respect to all parties and claims.

Affirmed.