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DMK Biodiesel, LLC, a Nebraska limited li

company, and Lanoha RVBF, LLC,

limited liability company, appellants,

John McCoy et al., appellee

___ N.W.2d ___

Filed March 6, 2015. No. S-14-150.

1. Summary Judgment: Appeal and Error. An appellate court will affirm a lower 

court’s grant of summary judgment if the pleadings and admitted evidence show 

that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to 

judgment as a matter of law.

2. ____: ____. In reviewing a summary judgment, the court views the evidence in 

the light most favorable to the party against whom the judgment was granted 

and gives such party the benefit of all reasonable inferences deducible from 

the evidence.

3. Statutes: Appeal and Error. Statutory interpretation presents a question of law.

When reviewing questions of law, an appellate court resolves the questions independently of the conclusions reached by the trial court.

4. Securities Regulation. The Securities Act of Nebraska should be liberally construed to afford the greatest possible protection to the public.

5. Statutes: Appeal and Error. Absent a statutory indication to the contrary, an 

appellate court gives words in a statute their ordinary meaning.

6. ____: ____. An appellate court will not read into a statute a meaning that is 

not there.

7. Securities Regulation. Reliance is not an element of an investor’s claim against 

the seller of a security under Neb. Rev. Stat. § 8-1118(1) (Reissue 2012).

8. ____. A buyer’s sophistication is irrelevant to a claim under Neb. Rev. Stat. 

§ 8-1118(1) (Reissue 2012).

Appeal from the District Court for Buffalo County: Joh

P. Icenogle, Judge. Reversed and remanded for furth

proceedings.

David A. Domina and Megan N. Mikolajczyk, of Domina 

Law Group, P.C., L.L.O., for appellants.

Daniel L. Lindstrom and Nicholas R. Norton, of Jacobsen, 

Orr, Lindstrom & Holbrook, P.C., L.L.O., for appellees John 

McCoy et al.

L. Steven Grasz, Mark D. Hill, and Michael Schmidt, 

of Husch Blackwell, L.L.P., for appellee Renewable Fuels 

Technology, LLC.
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Heavican, C.J., Connolly, Stephan, McCormack, MillerLerman, a

Stephan, 

DMK Biodiesel, LLC (DMK), and Lanoha RVBF, LLC 

(Lanoha), filed suit against John McCoy; John Hanson; Phil 

High; Jason Anderson (collectively the individual defendants); 

and Renewable Fuels Technology, LLC (Renewable), alleging the fraudulent sale of securities, in violation of Neb. Rev. 

Stat. § 8-1118(1) (Reissue 2012). This is the second appeal. In 

the first appeal, we reversed the district court’s order granting a motion to dismiss because the court considered matters outside the pleadings without conducting an evidentiary 

hearing.1 On remand, Renewable and the individual defendants filed motions for summary judgment, which the district 

court sustained after conducting an evidentiary hearing. DMK 

and Lanoha now appeal. We reverse, and remand for further proceedings.

I. BACKGROUND

Republican Valley Biofuels, LLC (RVBF), issued a confidential private placement memorandum (PPM) with an effective 

date of May 7, 2007, seeking investors in a biodiesel production facility. RVBF was promoted by the individual defendants, 

and Renewable was the manager of RVBF. The PPM provided 

that the securities being offered were “speculative and involve 

a high degree of risk.” It included a summary of the offering 

describing RVBF and the biodiesel facility RVBF proposed to 

build, as well as a description of “[r]isk factors” involved in 

the investment. The PPM provided that “[n]o person has been 

authorized to make any representation or warranty, or give any 

information, with respect to RVBF or the units offered hereby 

except for the information contained herein.” The PPM also 

stated that

[a]lthough we believe that our plans and objectives 

reflected in or suggested by such forward-looking statements are reasonable, we may not achieve such plans 

1 DMK Biodiesel v. McCoy, 285 Neb. 974, 830 N.W.2d 490 (2013).
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288 290 NEBRASKA REPORTS

or objectives. Actual results may differ from projected 

results. We will not update forward-looking statements 

even though we may undergo changes in the future.

In August 2007, DMK and Lanoha entered into separate 

subscription agreements and became minority investors in 

RVBF. In the agreements, each acknowledged the investments 

involved a high degree of risk. They further acknowledged 

they had sufficient knowledge and experience in financial 

and business matters to be able to evaluate “the merits and 

risks involved” in the investments. Each agreement states: 

“Subscriber has relied solely upon the information furnished in 

the [PPM] and Subscriber has not relied on any oral or written 

representation or statement, except as contained in the [PPM], 

in making this investment.”

In 2009, DMK and Lanoha brought an action against 

Renewable and the individual defendants in the district court 

for Buffalo County. In their operative complaint, they alleged 

that Renewable and the individual defendants, acting in concert as members and the manager of RVBF, made false oral 

representations and omissions in connection with RVBF and 

the proposed biodiesel facility which induced their investment. DMK and Lanoha asserted these actions violated the 

Securities Act of Nebraska (the Act)2 and violated fiduciary 

duties owed by the members and manager of RVBF. DMK and 

Lanoha further sought an accounting at law.

Renewable and the individual defendants filed motions to 

dismiss, which the district court sustained. DMK and Lanoha 

appealed, and we reversed.3

After the district court entered a judgment on the appeal 

mandate, Renewable and the individual defendants filed 

motions for summary judgment asserting they were not liable 

to DMK and Lanoha as a matter of law. The district court held 

an evidentiary hearing, after which it sustained the motions 

and dismissed the action. The court assumed for purposes of 

2 See Neb. Rev. Stat. § 8-1101 et seq. (Reissue 2012 & Cum. Supp. 2014).

3 See DMK Biodiesel, supra note 1.
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its ruling that Renewable and the individual defendants “made 

the oral representations alleged by [DMK and Lanoha] during 

the period of time that [DMK and Lanoha] were contemplating their investment.” The court framed the issue as whether 

the “cause of action for security fraud [based on] misrepresentations made to investors is viable given the contents of 

the [PPM] and subscription agreements in which [DMK and 

Lanoha] acknowledge[d] that their investments were made 

without consideration of any representation not contained in 

the [PPM] or Subscription Agreements.” The court reasoned 

that DMK and Lanoha were sophisticated investors and that 

given the contents of the PPM and subscription agreements, 

they could not have relied upon any oral representations as a 

matter of law. The court concluded:

[W]hen the sophisticated investor executes a subscription document stating that the “Subscriber has relied 

solely upon the information furnished in the [PPM] and 

Subscriber has not relied on any oral or written representation or statement, except as contained in the [PPM], in 

making this investment” the investor should be held to 

that statement.

DMK and Lanoha filed a timely appeal.

II. ASSIGNMENTS OF ERROR

DMK and Lanoha assign, restated and consolidated, that the 

district court erred when it (1) concluded that there were no 

genuine issues of material fact; (2) concluded that Renewable 

and the individual defendants were entitled to summary judgment as a matter of law; (3) failed to find that § 8-1118(5) 

invalidates provisions of the subscription agreements; and (4) 

failed to recognize that § 8-1118 is applicable to all situations 

in which a false or misleading statement is made, regardless of 

the level of sophistication of the investors.

III. STANDARD OF REVIEW

[1] An appellate court will affirm a lower court’s grant of 

summary judgment if the pleadings and admitted evidence 

show that there is no genuine issue as to any material facts 
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or as to the ultimate inferences that may be drawn from those 

facts and that the moving party is entitled to judgment as a 

matter of law.4

[2] In reviewing a summary judgment, the court views the 

evidence in the light most favorable to the party against whom 

the judgment was granted and gives such party the benefit of 

all reasonable inferences deducible from the evidence.5

[3] Statutory interpretation presents a question of law.6

When reviewing questions of law, an appellate court resolves 

the questions independently of the conclusions reached by the 

trial court.7

IV. ANALYSIS

1. § 8-1118(1) Cla

[4] DMK and Lanoha claim Renewable and the individual defendants violated § 8-1118(1) by selling a security 

by means of any untrue statement of material fact. Section 

8-1118(1) is part of the Act which is modeled after the 1956 

Uniform Securities Act.8 The Act should be liberally construed to afford the greatest possible protection to the public.9

The purpose of the Act is to protect the public from fraud 

and to benefit purchasers as opposed to sellers.10 According 

to § 8-1118:

4 Young v. Govier & Milone, 286 Neb. 224, 835 N.W.2d 684 (2013); Selma 

Development v. Great Western Bank, 285 Neb. 37, 825 N.W.2d 215 

(2013).

5 Dresser v. Union Pacific RR. Co., 282 Neb. 537, 809 N.W.2d 713 (2011); 

Radiology Servs. v. Hall, 279 Neb. 553, 780 N.W.2d 17 (2010).

6 Spady v. Spady, 284 Neb. 885, 824 N.W.2d 366 (2012); Village of Hallam 

v. L.G. Barcus & Sons, 281 Neb. 516, 798 N.W.2d 109 (2011).

7 Village of Hallam, supra note 6; Shepherd v. Chambers, 281 Neb. 57, 794 

N.W.2d 678 (2011).

8 See Hooper v. Freedom Fin. Group, 280 Neb. 111, 784 N.W.2d 437 

(2010). See, also, Knoell v. Huff, 224 Neb. 90, 395 N.W.2d 749 (1986) 

(Grant, J., dissenting; Boslaugh and Hastings, JJ., join).

9 Hooper, supra note 8; Labenz v. Labenz, 198 Neb. 548, 253 N.W.2d 855 

(1977).

10 Loewenstein v. Midwestern Inv. Co., 181 Neb. 547, 149 N.W.2d 512 

(1967).
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(1) Any person who offers or sells a security in violation of section 8-1104 or offers or sells a security by 

means of any untrue statement of a material fact or any 

omission to state a material fact necessary in order to 

make the statements made in the light of the circumstances under which they are made not misleading, the 

buyer not knowing of the untruth or omission, and who 

does not sustain the burden of proof that he or she did 

not know and in the exercise of reasonable care could not 

have known of the untruth or omission, shall be liable to 

the person buying the security from him or her, who may 

sue either at law or in equity . . . .

We have few cases construing or applying this statute. In 

the most recent of these, Hooper v. Freedom Fin. Group,

11 we 

affirmed a judgment determining that directors and a holding 

company of a broker-dealer which sold securities by means of 

untrue statements of material fact were liable to investors. In 

our opinion, we noted that the evidence established the stock 

in question was sold by means of untrue statements and that 

the purchasers “were unsophisticated investors who relied 

upon” the seller’s assurances that the stock was as described in 

a sales pamphlet, notwithstanding the pamphlet’s inconsistencies with the offering memorandum.12 However, we were not 

called upon in that case to determine whether reliance upon 

the alleged misrepresentation was an element of an investor’s 

claim under § 8-1118(1) or whether the investor’s degree of 

sophistication was relevant to the claim. Nor have we considered whether exculpatory statements contained in a PPM 

or a subscription agreement operate as a bar to a claim under 

§ 8-1118(1). Those issues are before us here.

(a) Reliance

[5,6] To determine whether reliance is an element of a 

claim under § 8-1118(1), we begin by examining the language of the statute, utilizing familiar principles of statutory 

construction. Absent a statutory indication to the contrary, an 

11 Hooper, supra note 8.

12 Id. at 122, 784 N.W.2d at 446.
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appellate court gives words in a statute their ordinary meaning.13 An appellate court will not read into a statute a meaning 

that is not there.14 The Legislature has provided an additional 

tool to determine the meaning of the Act by directing that 

it “shall be construed as to effectuate its general purpose to 

make uniform the law of those states which enact it and to 

coordinate the interpretation and administration of the [A]ct 

with the related federal regulation.”15

As noted, the Act is modeled after the 1956 Uniform 

Securities Act.16 Section 8-1118(1) is patterned after § 410(a) 

of the 1956 Uniform Securities Act,17 which in turn “is almost 

identical with § 12(2) of the Securities Act of 1933, 15 U.S.C. 

§ 77l[(a)](2).”18

The Act imposes liability upon one who (1) “offers or sells 

a security,” (2) “by means of any untrue statement of a material fact or any omission to state a material fact necessary in 

order to make the statements made in the light of the circumstances under which they are made not misleading,” and where 

the buyer is (3) “not knowing of the untruth or omission.”19 It 

permits the seller to avoid liability by sustaining “the burden of 

proof that he or she did not know and in the exercise of reasonable care could not have known of the untruth or omission.”20

13 Fisher v. PayFlex Systems USA, 285 Neb. 808, 829 N.W.2d 703 (2013); 

Mutual of Omaha Bank v. Murante, 285 Neb. 747, 829 N.W.2d 676 

(2013).

14 Kerford Limestone Co. v. Nebraska Dept. of Rev., 287 Neb. 653, 844 

N.W.2d 276 (2014); SourceGas Distrib. v. City of Hastings, 287 Neb. 595, 

844 N.W.2d 256 (2014).

15 § 8-1122.

16 See Hooper, supra note 8. See, also, Seth E. Lipner et al., Securities 

Arbitration Desk Reference, 2014-2015 ed. § 16.1 (Securities Law 

Handbook Series 2014).

17 Unif. Securities Act § 410(a) (1956), 7C U.L.A. app. I (2006).

18 Id., comment, cl. (2), 7C U.L.A. at 889. See, also, 12A Joseph C. Long & 

Philip B. Feigin, Blue Sky Law § 9:2 (2014).

19 § 8-1118(1).

20 Id.
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Thus, the statute contains no explicit requirement that an 

investor must prove reliance upon an alleged misrepresentation 

or omission by the seller in order to recover. The question is 

whether the phrase “by means of” implicitly requires a showing that the investor relied upon the seller’s misrepresentation 

or omission of material fact.

Various courts have held that similar language in § 12(2) 

of the Securities Act of 1933 does not implicitly require an 

element of reliance. In Sanders v. John Nuveen & Co., Inc.,

21

the Seventh Circuit stated that “[a]lthough the ‘by means of’ 

language . . . requires some causal connection between the 

misleading representation or omission and plaintiff’s purchase 

. . . [i]t is well settled that § 12(2) imposes liability without 

regard to whether the buyer relied on the misrepresentation or 

omission.” Other federal courts have likewise held that reliance upon misrepresentations or omissions is not an element 

of a claim under § 12(2) of the Securities Act of 1933.22 In 

this regard, a claim under this section of the Securities Act of 

1933 differs from a claim under rule 10b-5 of the Securities 

and Exchange Commission’s regulations,23 derived from § 78j 

of the Securities Exchange Act of 1934,24 which rule also 

addresses securities fraud but has been held to include an 

element of reliance by the investor upon the alleged fraudulent statement.25

Most courts construing state laws derived from § 410(a) of 

the 1956 Uniform Securities Act have similarly concluded that 

an investor does not need to prove reliance upon an untrue 

21 Sanders v. John Nuveen & Co., Inc., 619 F.2d 1222, 1225 (7th Cir. 1980).

22 See, e.g., MidAmerica Federal S & L v. Shearson/American Exp., 886 F.2d 

1249 (10th Cir. 1989); Gilbert v. Nixon, 429 F.2d 348 (10th Cir. 1970); 

Johns Hopkins University v. Hutton, 422 F.2d 1124 (4th Cir. 1970); In re 

Phar-Mor, Inc. Litigation, 848 F. Supp. 46 (W.D. Pa. 1993).

23 17 C.F.R. § 240.10b-5 (2014).

24 See 15 U.S.C. § 78a et seq. (2012).

25 See, Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 552 

U.S. 148, 128 S. Ct. 761, 169 L. Ed. 2d 627 (2008); Ross v. Bank South, 

N.A., 885 F.2d 723 (11th Cir. 1989).
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statement or omission of material fact in order to recover.26

In reaching this conclusion, the Utah Supreme Court noted 

that its holding was “in accord with a significant majority of 

other courts’ interpretations of statutes which, like [the Utah 

Uniform Securities Act], were modeled after section 410(a)(2) 

of the Uniform Securities Act or section 605(a) of the Uniform 

Revised Securities Act.”27 The draftsmen’s commentary to 

§ 410(a) of the 1956 Uniform Securities Act is consistent with 

these cases. According to the commentary, “[t]he ‘by means of’ 

clause . . . is not intended as a requirement that the buyer prove 

reliance on the untrue statement or the omission.”28

A few courts have reached contrary conclusions, holding 

that reliance is an element of an investor’s claim under state 

blue sky laws. For example, a Washington appellate court 

has construed Washington’s antifraud statute to require reliance as an element of an investor’s claim.29 But unlike the 

Nebraska statute, the Washington statute was patterned after 

26 See, Dunn v. Borta, 369 F.3d 421 (4th Cir. 2004) (construing Virginia 

Securities Act); Carothers v. Rice, 633 F.2d 7 (6th Cir. 1980) (construing 

Kentucky’s Blue Sky Law); Alton Box Bd. Co. v. Goldman, Sachs Co., 560 

F.2d 916 (8th Cir. 1977) (construing Missouri Securities Law); Forrestal 

Village, Inc. v. Graham, 551 F.2d 411 (D.C. Cir. 1977) (construing 

District of Columbia Securities Act), abrogated on other grounds, Lampf 

v. Gilbertson, 501 U.S. 350, 111 S. Ct. 2773, 115 L. Ed. 2d 321 (1991); 

Adams v. Hyannis Harborview, Inc., 838 F. Supp. 676 (D. Mass. 1993) 

(construing Massachusetts Blue Sky Law); Comeau v. Rupp, 810 F. Supp. 

1127 (D. Kan. 1992) (construing Kansas Securities Act); Green v. Green, 

293 S.W.3d 493 (Tenn. 2009); Marram v. Kobrick Offshore Fund, Ltd., 

442 Mass. 43, 809 N.E.2d 1017 (2004); Connecticut Nat. Bank v. Giacomi

et al., 242 Conn. 17, 699 A.2d 101 (1997); Gohler v. Wood, 919 P.2d 561 

(Utah 1996); Esser Distributing Co. v. Steidl, 149 Wis. 2d 64, 437 N.W.2d 

884 (1989); Everts v. Holtmann, 64 Or. App. 145, 667 P.2d 1028 (1983); 

Arnold v. Dirrim, 398 N.E.2d 426 (Ind. App. 1979); Bradley v. Hullander, 

272 S.C. 6, 249 S.E.2d 486 (1978). See, also, David O. Blood, There 

Should Be No Reliance in the “Blue Sky,” 1998 BYU L. Rev. 177 (1998); 

12A Long & Feigin, supra note 18, § 9:117.13.

27 Gohler, supra note 26, 919 P.2d at 566.

28 Louis Loss, Commentary on the Uniform Securities Act 148 (1976) 

(emphasis in original).

29 Guarino v. Interactive Objects, Inc., 122 Wash. App. 95, 86 P.3d 1175 

(2004).
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the Securities Exchange Act of 1934, and the court applied 

reliance principles drawn from that act and the related regulation commonly known as rule 10b-5. A Georgia appellate court 

reached the same result in interpreting a state statute patterned 

after the Securities Exchange Act of 1934.30

[7] Based upon the plain language of § 8-1118(1), its relationship to § 410(a)(2) of the 1956 Uniform Securities Act, and 

§ 12(2) of the Securities Act of 1933, and the weight of case 

law interpreting similar state statutes, we hold that reliance is 

not an element of an investor’s claim against the seller of a 

security under § 8-1118(1).

(b) Sophistication of Investor

It is undisputed that DMK and Lanoha were sophisticated 

investors at the time of their investment in RVBF. DMK and 

Lanoha contend that for purposes of establishing liability 

under § 8-1118(1), their level of sophistication does not matter. However, the district court found this fact to be of significance, reasoning that while there may be a rationale for allowing redress to an unsophisticated investor who relies upon oral 

representations which are contrary to a written prospectus, “in 

a situation in which a sophisticated investor has been fully 

advised of the risks of the potential investment and then hears 

‘contrary’ statements about the issue of the risk one would 

[expect] he would fully investigate and require documentation 

as to the inconsistencies.” While there is logic to this reasoning, the plain language of § 8-1118(1) does not differentiate 

between sophisticated and unsophisticated investors or impose 

a duty of investigation or inquiry upon any potential investor 

confronted with inconsistencies between written and oral representations by the seller of the security.

The only phrase in the statute dealing with the investor’s 

knowledge at the time of the alleged misrepresentation is “the 

buyer not knowing of the untruth or omission.”31 Courts construing similar language in § 12(2) of the Securities Act of 

1933 and state statutes derived from § 410(a)(2) of the 1956 

30 Keogler v. Krasnoff, 268 Ga. App. 250, 601 S.E.2d 788 (2004).

31 § 8-1118(1).
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Uniform Securities Act have held that it bars recovery only 

when an investor has “actual knowledge that a representation is 

false or knows that existing information has been withheld.”32

Courts have held that constructive knowledge is not a bar to a 

claim under § 12(2) and similar state laws33 and that the statutory language does not impose a duty on any investor to investigate or verify statements made by the seller of a security.34

Rejecting an argument that investors had an affirmative duty 

to discover the truth of misrepresentations and omissions with 

regard to an investment, an Indiana appellate court construing 

a statute similar to § 8-1118(1) reasoned:

[I]f the legislature had intended to impose a duty of investigation upon the buyer, it would have expressly included 

such in the working of the statute. The proscriptions of 

[the Indiana statute], however, embrace a fundamental 

purpose of substituting a policy of full disclosure for that 

of caveat emptor. That policy would not be served by 

imposing a duty of investigation upon the buyer.35

[8] We agree with this reasoning and with the conclusion 

of other courts and commentators that a buyer’s sophistication 

is irrelevant to a claim under § 12(2) of the Securities Act of 

1933 and similar state statutes.36 As one court put it, “Section 

12(2) [of the Securities Act of 1933] does not establish a 

graduated scale of duty depending upon the sophistication and 

32 Wright v. National Warranty Co., 953 F.2d 256, 262 (6th Cir. 1992). See, 

also, MidAmerica Federal S & L, supra note 22; Sanders, supra note 21; 

In re Olympia Brewing Co. Securities Litigation, 612 F. Supp. 1367 (N.D. 

Ill. 1985); Marram, supra note 26; 12A Long & Feigin, supra note 18, 

§ 9:31.

33 Dunn, supra note 26; MidAmerica Federal S & L, supra note 22; Marram, 

supra note 26; 12A Long & Feigin, supra note 18, § 9:130.

34 Dunn, supra note 26; MidAmerica Federal S & L, supra note 22; In re 

Olympia Brewing Co. Securities Litigation, supra note 32; Marram, supra

note 26. See, also, Bradley, supra note 26; 12A Long & Feigin, supra note 

18, § 9:32.

35 Kelsey v. Nagy, 410 N.E.2d 1333, 1336 (Ind. App. 1980).

36 See, Wright, supra note 32; Marram, supra note 26; 12A Long & Feigin, 

supra note 18, § 9:31.
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access to information of the customer.”37 The same is true of 

§ 8-1118(1).

(c) Exculpatory Provisions

The district court also concluded that DMK and Lanoha 

should be held to the affirmation in their subscription agreements that they had not relied on any oral or written representation or statement except those contained in the PPM. DMK 

and Lanoha argue that this was error, because § 8-1118(5) 

provides that “[a]ny condition, stipulation, or provision binding 

any person acquiring any security or receiving any investment 

advice to waive compliance with any provision of the act or 

any rule or order under the act shall be void.” But Renewable 

and the individual defendants contend the district court’s ruling was correct, relying on a federal case holding that “in the 

law of securities a written disclosure trumps an inconsistent 

oral statement.”38

The provision of the PPM upon which Renewable and 

the individual defendants, as well as and the district court, 

relied is sometimes referred to as an “integration clause.” The 

Supreme Judicial Court of Massachusetts considered whether 

an integration clause in a subscription agreement barred an 

action under a Massachusetts statute similar to § 8-1118(1) 

based upon alleged oral misrepresentations and omissions by 

the seller of a security. Reasoning that reliance and sophistication of the buyer are not elements of the statutory claim, the 

court concluded that “the existence of contradictory written 

statements, in an integration clause or otherwise, does not 

provide a defense to the charge of preinvestment materially 

misleading oral statements.”39 The court determined that a section of the Massachusetts statute which prohibited any party 

from waiving compliance with its provisions further supported 

its conclusion that the integration clause did not bar the statutory claim.

37 Sanders, supra note 21, 619 F.2d at 1229.

38 Acme Propane, Inc. v. Tenexco, Inc., 844 F.2d 1317, 1322 (7th Cir. 1988).

39 Marram, supra note 26, 442 Mass. at 55, 809 N.E. at 1028.
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In MidAmerica Federal S & L v. Shearson/American Exp.,

40

the 10th Circuit Court of Appeals held that a securities dealer 

could be held liable to an investor under an Oklahoma statute 

similar to § 8-1118(1) for oral misrepresentations by one of 

its brokers, even though correct information was furnished in 

prospectuses later sent to the investor. The court distinguished 

the holding in Acme Propane, Inc. v. Tenexco, Inc.,

41 that a 

written disclosure trumps an inconsistent oral statement, upon 

which Renewable and the individual defendants rely, noting 

that the court in that case was dealing with a liability claim 

under rule 10b-5, whereas §12(2) of the Securities Act of 

1933, upon which the Oklahoma statute was based, “dictates a 

different outcome.”42 The court in MidAmerica Federal S & L

reasoned that unlike liability claims under rule 10b-5, § 12(2) 

“has no requirement of justifiable reliance on the part of a 

purchaser” and that the “purchaser’s investment sophistication 

is immaterial.”43 The court cited with approval a commentator’s observation that “‘it is a firmly entrenched principle of 

§ 12(2) that the “[a]vailability elsewhere of truthful information cannot excuse untruths or misleading omissions” by 

the seller.’”44

Because we have concluded that reliance is not an element 

of a claim under § 8-1118(1) and the sophistication of the 

investor is irrelevant to such claim, we conclude that the district court erred in determining that the integration clauses in 

the subscription agreements executed by DMK and Lanoha bar 

their claims under § 8-1118(1).

40 MidAmerica Federal S & L, supra note 22.

41 Acme Propane, Inc., supra note 38.

42 MidAmerica Federal S & L, supra note 22, 886 F.2d at 1256.

43 Id.

44 Id. at 1256-57, quoting Martin I. Kaminsky, An Analysis of Securities 

Litigation Under Section 12(2) and How It Compares With Rule 10b-5, 13 

Hous. L. Rev. 231 (1976) (quoting Dale v. Rosenfeld, 229 F.2d 855 (2d 

Cir. 1956)).
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(d) Summary

We conclude that the district court erred in entering summary judgment with respect to the § 8-1118(1) claim of DMK 

and Lanoha. There remain genuine issues of material fact 

concerning whether the alleged misrepresentations and omissions of material fact were made, the nature of such misrepresentations and omissions, and whether DMK and Lanoha had 

actual knowledge of the true facts which they allege to have 

been misrepresented or omitted.

2. Other Issu

(a) Exhibits 12 Through 20

Renewable and the individual defendants argue that exhibits 

12 through 20 were not received in evidence at the summary 

judgment hearing and should not be considered on appeal. The 

exhibits in question were offered by DMK and Lanoha over 

objections which were not ruled on at the hearing or, as far as 

we can tell, subsequent thereto. We have not considered these 

exhibits in our analysis of this appeal.

(b) Motion to Strike

Following oral argument of this appeal, Renewable and the 

individual defendants filed a motion to strike statements made 

by DMK and Lanoha’s counsel during oral argument as not 

supported by the record. Because we have not relied upon such 

statements, we do not consider whether or not they are supported by the record and overrule the motion as moot.

(c) Motion for Attorney Fees

At the same time DMK and Lanoha filed their opening 

brief on appeal, they also filed a motion for attorney fees 

pursuant to that portion of § 8-1118(1) which permits a party 

seeking to impose liability on a seller of securities to “sue 

either at law or in equity to recover the consideration paid for 

the security, together with interest at six per cent per annum 

from the date of payment, costs, and reasonable attorney’s 

fees.” We read the statute to permit an award of attorney fees 

as a part of a judgment on the merits of the liability claim. 
Nebraska Advance She

300 290 NEBRASKA REPORTS

That has not occurred in this case. Although DMK and Lanoha 

have prevailed on this appeal, they have yet to prove and 

obtain a judgment on their liability claim under § 8-1118(1). 

Accordingly, we overrule their motion for attorney fees without prejudice.

V. CONCLUSION

For the foregoing reasons, we reverse the judgment of the 

district court and remand the cause for further proceedings 

consistent with this opinion.

 Reversed and remand

further proceeding

Wright, J., not participating.

Professional Firefighters Association o

Local 385, AFL-CIO CLC, et al., ap

v. City of Omaha, Nebraska, a mun

corporation, appellee

___ N.W.2d ___

Filed March 6, 2015. Nos. S-14-230, S-14-375, S-14-627.

1. Summary Judgment: Appeal and Error. An appellate court will affirm a lower 

court’s grant of summary judgment if the pleadings and admitted evidence show 

that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from the facts and that the moving party is entitled to 

judgment as a matter of law.

2. Statutes: Judgments: Appeal and Error. The meaning and interpretation of a 

statute are questions of law. An appellate court independently reviews questions 

of law decided by a lower court.

3. Commission of Industrial Relations: Final Orders: Contracts. When 

Nebraska’s Commission of Industrial Relations enters a final order setting 

wages, hours, and terms and conditions of employment which are binding on the 

employer, the order is, in every sense, a contract between the parties.

4. Municipal Corporations: Public Officers and Employees: Ordinances. City 

ordinances related to how city employees should be paid are agreements by the 

city to follow the ordinances and pay employees at the relevant rates.

5. Actions: Employer and Employee: Wages: Attorney Fees: Case Disapproved: 

Appeal and Error. To the extent Brockley v. Lozier Corp., 241 Neb. 449, 488 

N.W.2d 556 (1992), authorizes two attorney fee awards under the Nebraska Wage 

Payment and Collection Act to an employee who is unsuccessful at the trial court 

level but successful on appeal, it is disapproved.