IN THE NEBRASKA COURT OF APPEALS

MEMORANDUM OPINION AND JUDGMENT ON APPEAL

(Memorandum Web Opinion)

NAUTILUS INS. CO. V. CHERAN INVESTMENTS

NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION

AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).

NAUTILUS INSURANCE COMPANY, APPELLEE,

V.

CHERAN INVESTMENTS, L.L.C., ET AL., APPELLEES, AND BLASINI, INC., AND RICHARD BRUNO,

INDIVIDUALLY AND DOING BUSINESS AS BRUNO INVESTMENTS, APPELLANTS.

Filed May 17, 2016. No. A-15-447.

Appeal from the District Court for Douglas County: JOSEPH S. TROIA, Judge. Affirmed.

Aaron F. Smeall, of Smith, Gardner & Slusky, L.L.P., for appellants.

Craig A. Knickrehm and Jonathan M. Brown, of Walentine, O’Toole, McQuillan & 

Gordon, L.L.P., for appellee Pinnacle Bank.

MOORE, Chief Judge, and IRWIN and BISHOP, Judges.

MOORE, Chief Judge.

INTRODUCTION

Blasini, Inc. and Richard Bruno, doing business as Bruno Investments, appeal from an 

order of the district court for Douglas County granting summary judgment in favor of Pinnacle 

Bank. The primary issue on appeal is which party is entitled to insurance proceeds for the 

destruction of personal property on premises damaged by fire. The district court, in its grant of 

summary judgment, found that Pinnacle Bank is the proper recipient of the proceeds. For the 

reasons stated below, we affirm.

BACKGROUND

This is the second appearance of this case before our court. We previously reversed a grant 

of summary judgment in favor of Pinnacle Bank, and we remanded the case for further 

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proceedings. See, Nautilus Ins. Co. v. Cheran Invs. LLC, No. A-13-022, 2014 WL 292809 (Neb. 

Ct. App. January 28, 2014) (Nautilus I). The following background is taken, in part, from our 

previous opinion, and in part, from the record in this appeal.

On November 12, 2008, Cheran Investments, L.L.C. leased real property located in Omaha 

to Blasini for the purpose of operating a bar. The rental agreement was for a term of 5 years and 

provided that Blasini was to pay monthly rent to Cheran commencing February 1, 2009. We note 

that Bruno and Blasini were referred to interchangeably by the parties and the district court 

throughout the proceedings in this case, although we previously determined that the relationship 

between the two was not clear from the record. Nautilus I.

Blasini entered into a purchase agreement, dated the same day as the rental agreement, with 

Dr. Nirmal Raj and his wife, doing business as Chola, Inc., to purchase the “business assets” of 

the bar owned by the couple. Dr. Raj is the managing member of Cheran.

The purchase agreement specified the business assets being sold to Blasini and attached a 

handwritten ledger listing the business assets and their values, totaling $150,000. The terms of the 

agreement called for Blasini to pay $50,000 in the first year and the remaining $100,000 over the 

subsequent 24 months. Raj stated in an affidavit that Blasini and/or Bruno failed to pay the 

purchase price of $150,000.

On December 8, 2010, Cheran executed a promissory note to Pinnacle Bank in the original 

principal amount of $379,229.23. The promissory note was signed by Raj and his wife, as 

“members” of Cheran. The promissory note was secured by a deed of trust conveying Cheran’s 

interest in the real property to Pinnacle as collateral and by a security agreement granting Pinnacle 

a security interest in “all goods now or in the future affixed or attached to real estate” at the 

property. The deed of trust and security agreement were both signed by Raj and his wife as 

“members” of Cheran and the security agreement was also signed by Raj and his wife individually.

On March 28, 2011, a fire damaged the building and personal property at the bar. 

Subsequent to the fire, on April 11, Cheran provided additional security to Pinnacle to secure the 

December 8, 2010 promissory note, granting Pinnacle a security interest in all of Cheran’s business 

assets, including equipment, inventory, accounts and other rights to payments, furniture and 

fixtures, deposit accounts, investment property, instruments, and chattel. This security agreement 

was signed by Raj and his wife as “members” of Cheran.

Nautilus Insurance Company provided commercial property insurance covering the 

building and the personal property. On July 8, 2011, Nautilus filed an amended complaint in 

interpleader with the district court against Cheran, Pinnacle, Blasini, Bruno, and another defendant 

who is not involved in this appeal, all of whom claimed an interest in the insurance proceeds 

payable as a result of fire damage to the bar. Nautilus was allowed to deposit the insurance 

proceeds with the court and was dismissed from the action. The proceeds for the damage to the 

building were determined to be owed to Pinnacle and are not at issue here. The remaining proceeds 

for the damage to the personal property are $96,774.10.

Blasini claimed entitlement to the personal property damage proceeds, because it was the 

owner of the damaged personal property and was also the named insured under the policy with 

Nautilus. Bruno, doing business as Bruno Investments, also claimed ownership of the personal 

property. However, Raj claimed he owned the personal property because Blasini and/or Bruno had 

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failed to pay the purchase price to him under the purchase agreement to buy the business’ assets. 

Pinnacle claimed entitlement to the insurance proceeds under the security agreements securing its 

loan to Cheran.

On December 10, 2012, the district court granted summary judgment in favor of Pinnacle, 

finding it was entitled to the insurance proceeds for damage to the business’ personal property, 

and awarded it $96,774.10. The district court concluded that “due to Blasini and Bruno’s failure 

to consummate the purchase agreement” with Cheran, Cheran was the owner of the personal 

property damaged by the fire. Because Cheran acknowledged Pinnacle’s security interest in 

Cheran’s personal property, and per Cheran’s consent, the district court awarded $96,774.10 in 

personal property insurance proceeds to Pinnacle. Blasini and Bruno appealed this order, claiming 

that the district court erred in granting Pinnacle’s summary judgment motion on the basis that they 

failed to consummate the purchase agreement.

On January 28, 2014, this court filed its memorandum opinion. First, we addressed the 

primary issue on appeal, the legal effect of the purchase agreement entered into between Raj and 

Blasini. We found that under Neb. U.C.C. § 2-401, “title” to the personal property passed to Blasini 

at the time of contracting and therefore, irrespective of whether Blasini paid the purchase price to 

Raj, Blasini became the owner of the property in the purchase agreement. Thus, we found that the 

trial court erred in concluding that Raj was the owner of the personal property on the basis that the 

purchase agreement was not consummated and accordingly, he could not have granted Pinnacle a 

security interest in such property. Nautilus I.

However, we went on to find that the April 11, 2011 security agreement between Raj and 

Pinnacle included as security all rights Raj had to present or future payments “including, but not 

limited to, payment for property or services sold, leased, [or] rented . . . . This includes any rights 

and interests . . . which [Raj] may have by law or agreement against any Account Debtor or obligor 

. . . .” Accordingly, we determined that “to the extent Dr. Raj was entitled to payments from Blasini 

on the contract, Pinnacle, under the terms of the security agreement, had the authority to enforce 

obligations owed under the contract.” We noted that in Pinnacle’s cross-claim against all the 

defendants, it asserted that because of its perfected security interest in any and all sums owed by 

Blasini to Raj, Pinnacle should receive the insurance proceeds. Nautilus I.

Because the district court did not make specific findings regarding a breach of contract or 

what, if any, payments were made by Blasini and/or Bruno to Raj, we concluded that we could not 

decide the matter on the record before us and we remanded for further proceedings. We further 

stated:

To the extent the evidence establishes that Blasini and/or Bruno are obligated to [Raj] for 

amounts due under the purchase agreement for the personal property at issue as [Raj] and 

Pinnacle claim, the trial court could direct that the insurance proceeds be paid over to 

Pinnacle due to its security interest in such proceeds and [Raj’s] agreement that such 

proceeds be paid over to Pinnacle to be applied to his loan.

Nautilus I.

Following remand, Blasini and Bruno, collectively, and Pinnacle filed motions for 

summary judgment. At the hearing, the court received two affidavits from a vice president of 

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Pinnacle and an affidavit of Raj into evidence. The Pinnacle vice president states that Pinnacle has 

a perfected security interest in any and all sums due and owing from Blasini to Cheran or Chola, 

for or on account of the sale of personal property and equipment by Cheran or Chola to Blasini.

Raj states that Blasini and/or Bruno have not paid the $150,000 purchase price. Raj’s affidavit also 

states that Pinnacle has a security interest in the contract rights under the purchase agreement and 

that Raj consents to an order directing payment of the insurance proceeds to Pinnacle to be applied 

to Raj’s secured loan. Blasini and/or Bruno did not offer any evidence to rebut the affidavit of Raj 

or to show that they have paid Raj any sum of money.

On April 21, 2015, the district court entered its order sustaining Pinnacle’s motion for 

summary judgment and denying the motion of Blasini and Bruno. After quoting language from 

Nautilus I, the district court found that Blasini and Bruno are indebted to Raj and this debt is 

subject to Pinnacle’s security agreement. The court found that Pinnacle is entitled to the 

$96,774.10 in insurance proceeds plus interest for damage to the business’ personal property.

Blasini and Bruno subsequently perfected this appeal.

ASSIGNMENTS OF ERROR

Blasini and Bruno assign, combined and restated, that the district court erred when it (1) 

found that they owed a financial obligation to Raj, (2) awarded the insurance proceeds to Pinnacle 

on the basis of this obligation, (3) awarded the proceeds without a finding as to the obligation 

owed, and (4) failed to find that they were entitled to judgment as a matter of law on the basis of 

Pinnacle having no claim to the proceeds.

STANDARD OF REVIEW

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. State Farm Fire & Casualty Company v. Dantzler, 289 Neb. 1, 852 

N.W.2d 918 (2014). See, also, Potter v. Board of Regents of the University of Nebraska, 287 Neb. 

732, 844 N.W.2d 741 (2014); Gonzalez v. Union Pac. R.R. Co., 292 Neb. 281, 872 N.W.2d 579 

(2015) (on a motion for summary judgment, the question is not how factual issues are to be decided 

but whether any real issue of material fact exists). In reviewing a summary judgment, an appellate 

court views the evidence in the light most favorable to the party against whom the judgment was 

granted and gives that party the benefit of all reasonable inferences deducible from the evidence. 

Rent-A-Roofer v. Farm Bureau Prop. & Cas. Ins. Co., 291 Neb. 786, 869 N.W.2d 99 (2015).

ANALYSIS

Both parties argue that the “law-of-the-case doctrine” favors their position on appeal. 

Under the law-of-the-case doctrine, an appellate court’s holdings on questions presented to it in 

reviewing the trial court’s proceedings become the law of the case; those holdings conclusively 

settle, for that litigation, all matters ruled upon, either expressly or by necessary implication. 

Money v. Tyrrell Flowers, 275 Neb. 602, 748 N.W.2d 49 (2008). See, also, New Tek Mfg. v. 

Beehner, 275 Neb. 951, 751 N.W.2d 135 (2008) (when an appellate court remands a case to an 

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inferior tribunal, law-of-the-case doctrine prevents that court from taking action inconsistent with 

judgment of the appellate court); County of Sarpy v. City of Gretna, 276 Neb. 520, 755 N.W.2d 

376 (2008) (law-of-the-case doctrine applies with greatest force when an appellate court remands 

a case to an inferior tribunal).

DISTRICT COURT’S APPLICATION OF PRIOR OPINION

On appeal, Bruno argues that the issue of whether Blasini and/or Bruno owed money to 

Raj for the purchase of the personal property was not before this court in the first appeal and thus, 

the law-of-the-case doctrine does not apply in connection with the district court’s decision on 

review in the instant appeal. Bruno asserts that Pinnacle only had a security interest in the assets 

of Cheran and not the assets of Raj and thus, it was error to direct the proceeds be paid to Pinnacle.

We disagree with Blasini and Bruno’s characterization of our prior opinion and we 

conclude that the district court correctly applied the holdings in our first opinion in determining 

the matter on remand.

As set forth in detail above, in Nautilus I, we found that the April 11, 2011 security 

agreement between Pinnacle and Raj included all rights Raj had to present or future payments, that 

to the extent Raj was entitled to payments from Blasini on the contract (purchase agreement), 

Pinnacle, under the terms of the security agreement, had the authority to enforce obligations owed

under the contract, and that on remand, if the evidence shows that Blasini and/or Bruno still owed 

Raj under the purchase agreement for the personal property at issue, the trial court could direct 

that the insurance proceeds be paid to Pinnacle due to its security interest.

Thus, contrary to the assertion of Blasini and Bruno, this court previously determined that 

Pinnacle had a security interest in any sums owed to Raj by Blasini and/or Bruno, and the question 

to be determined on remand was the amount, if any, owed by Blasini and/or Bruno to Raj under 

the purchase agreement to which Pinnacle could be entitled. The district court properly followed 

our opinion and directions by determining whether Blasini and/or Bruno still owed money to Raj 

under the purchase agreement, and then directing the proceeds be paid accordingly. We find no 

error in the district court’s application of the law of the case from Nautilus I.

GRANT OF SUMMARY JUDGMENT TO PINNACLE

We next determine whether the district court erred in granting summary judgment to 

Pinnacle. A party makes a prima facie case that it is entitled to summary judgment by offering 

sufficient evidence that, assuming the evidence went uncontested at trial, would entitle the party 

to a favorable verdict. Marshall v. EyeCare Specialties, P.C. of Lincoln, 291 Neb. 264, 865 N.W.2d 

343 (2015). After the movant for summary judgment makes such a prima facie case, the burden to 

produce evidence showing the existence of a material issue of fact that prevents judgment as a 

matter of law shifts to the party opposing the motion. Id.

Viewing the evidence in a light most favorable to Blasini and Bruno, we conclude that the 

district court properly granted summary judgment in favor of Pinnacle. Pinnacle adduced evidence 

through the affidavit of Raj that Blasini and/or Bruno have not paid the $150,000 purchase price 

for the personal property and that this amount is due and owing to Raj. This evidence was sufficient 

to make a prima facie case that, according to Nautilus I, Pinnacle is entitled to the proceeds as a 

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result of its security interest. The burden then shifted to Blasini and Bruno to rebut this evidence, 

which they did not do.

Lastly, while Bruno argues otherwise, the district court did make a finding as to the amount 

of the obligation owed by Blasini and/or Bruno to Raj. The district court noted the evidence that 

Blasini and Bruno have not paid any portion of the $150,000 and that Blasini and Bruno offered 

no evidence that they have paid Raj any sum of money. Thus, it is clear from the trial court’s order 

that it determined Blasini and/or Bruno owed the entire purchase price of $150,000. The insurance 

proceeds were $96,774.10 for damage to the personal property, which is less than the obligation 

owed to Raj.

The district court correctly granted Pinnacle’s motion for summary judgment and denied 

Blasini and Bruno’s motion for summary judgment. The evidence showed no genuine issue as to 

any material facts; specifically, Blasini and/or Bruno owed the full amount under the purchase 

agreement to Dr. Raj. On this basis, the court correctly applied the law-of-the-case doctrine in 

granting Pinnacle the entire insurance proceeds. Pinnacle was entitled to judgment as a matter of 

law.

Bruno’s assignments of error are without merit.

CONCLUSION

The district court did not err in granting Pinnacle’s motion for summary judgment. Viewing 

the evidence in a light most favorable to Blasini and Bruno, we find no material issue of fact 

regarding the proper distribution of insurance proceeds. We therefore affirm.

AFFIRMED.

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