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FOUNDATION ONE BANK v. SVOBODA

Cite as 303 Neb. 624

Foundation One Bank, a banking cor

appellant, v. Jason Svoboda, an individ

et al., appellees, and Lehr, I

intervenor-appelle

___ N.W.2d ___

Filed July 12, 2019. No. S-18-784.

1. Judgments: Pleadings. A motion for judgment on the pleadings is properly granted when it appears from the pleadings that only questions of 

law are presented.

2. Jury Instructions: Proof: Appeal and Error. To establish reversible 

error from a court’s failure to give a requested jury instruction, an appellant has the burden to show that (1) the tendered instruction is a correct 

statement of the law, (2) the tendered instruction was warranted by the 

evidence, and (3) the appellant was prejudiced by the court’s failure to 

give the requested instruction.

3. Jury Instructions: Appeal and Error. Where jury instructions are 

claimed deficient on appeal and such issue was not raised at trial, an 

appellate court reviews for plain error.

4. Appeal and Error: Words and Phrases. Plain error exists where there 

is an error, plainly evident from the record but not complained of at 

trial, which prejudicially affects a substantial right of a litigant and is of 

such a nature that to leave it uncorrected would cause a miscarriage of 

justice or result in damage to the integrity, reputation, and fairness of the 

judicial process.

5. Directed Verdict: Appeal and Error. A directed verdict is proper at the 

close of all the evidence only when reasonable minds cannot differ and 

can draw but one conclusion from the evidence, that is, when an issue 

should be decided as a matter of law.

6. Rules of the Supreme Court: Pleadings: Moot Question. A denial 

of a motion for judgment on the pleadings under Neb. Ct. R. Pldg. 

§ 6-1112(c) is generally moot on appeal after the case has been tried on 

the merits.

Nebraska Supreme Court Online Library

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

07/25/2019 01:06 AM CDT
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FOUNDATION ONE BANK v. SVOBODA

Cite as 303 Neb. 624

7. Fraud: Proof. A proper fraudulent misrepresentation claim requires a 

party to prove that (1) a representation was made; (2) the representation 

was false; (3) when made, the representation was known to be false or 

made recklessly without knowledge of its truth and as a positive assertion; (4) the representation was made with the intention that the plaintiff 

should rely on it; (5) the plaintiff did so rely on it; and (6) the plaintiff 

suffered damage as a result.

8. Directed Verdict. In a motion for directed verdict, the moving party 

admits the truth of all well-pleaded facts, together with all reasonable 

inferences to be drawn therefrom.

9. Replevin: Damages. In a replevin case, when a defendant or intervenor is found to have ownership and right of possession of property, the 

replevin statutes necessarily place the issue of damages at issue.

Appeal from the District Court for Platte County: Robert R

Steinke, Judge. Affirme

Aaron F. Smeall and Jacob A. Acers, of Smith, Slusky, 

Pohren & Rogers, L.L.P., for appellant.

Brian J. Brislen, Eric W. Tiritilli, and Karson S. Kampfe, of 

Lamson, Dugan & Murray, L.L.P., for intervenor-appellee.

No appearance for appellees.

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

Papik, and Freudenberg, J

Miller-Lerman,

I. NATURE OF CASE

The plaintiff, Foundation One Bank (Foundation One), 

appeals from the judgment entered by the district court 

for Platte County upon the verdict of the jury in favor of 

defendant-intervenor, Lehr, Inc. Foundation One sought 

replevin of two motor vehicles pledged by Jason Svoboda 

as collateral to secure payment of a loan. Lehr intervened in 

the case and sought possession of the motor vehicles. The 

jury determined that Lehr was entitled to possession of two 

disputed motor vehicles, and because Foundation One had 
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FOUNDATION ONE BANK v. SVOBODA

Cite as 303 Neb. 624

sold one of the vehicles for $95,000, the jury awarded Lehr 

$95,000. Foundation One claims that the district court erred 

in several respects in connection with its jury instructions 

and when it denied Foundation One’s motions for judgment 

on the pleadings and for a directed verdict. We affirm and, 

in so doing, reiterate that in a replevin case, a defendant or 

intervenor’s general denial and assertion of ownership necessarily place the questions of possession, ownership, and damages before the jury under Neb. Rev. Stat. § 25-1093 et seq. 

(Reissue 2016).

II. STATEMENT OF FACTS

In 2016, Svoboda sought a commercial loan from Foundation 

One for his struggling automobile business. Svoboda had been 

in the automobile business before, operating as RPM Motors, 

Inc., an entity which had become an inactive Nebraska corporation. Svoboda claimed he needed a loan to consolidate 

debt from that business. On March 25, 2016, Svoboda and 

Foundation One executed a promissory note and commercial security agreement for a $200,000 loan. Svoboda offered 

various motor vehicles as collateral to secure the loan, and 

purported to grant Foundation One a security interest in that 

property, including a 2005 Mack CV 713 Truck (2005 Mack) 

and a 2014 Mack GU 800 Conventional Cab (2014 Mack). The 

present dispute between the parties concerns only the 2005 

Mack and the 2014 Mack.

Svoboda provided Foundation One with a manufacturer’s 

certificate of origin (MCO) for the 2005 Mack and a certificate of title for the 2014 Mack. The MCO for the 2005 Mack 

showed the original transfer from Dallas Mack Sales, L.P., to 

Lehr on February 24, 2005, followed by an undated transfer 

from RPM Motors to “RPM Motors/Jason Svoboda.” Notably, 

the MCO contained a gap; the assignments on the MCO did not 

include a transfer from Lehr to RPM Motors. The title for the 

2014 Mack indicated it had been purchased by Svoboda from 

RPM Motors on December 30, 2013.
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Cite as 303 Neb. 624

In an attempt to protect its priority to a lien on the vehicles, 

and as part of the $200,000 loan between Foundation One and 

Svoboda individually, Foundation One paid off other liens on 

the disputed motor vehicles totaling $85,141.40.

Svoboda soon defaulted on the promissory note. After 

receiving numerous reports of fraudulent behavior, the 

Nebraska Motor Vehicle Industry Licensing Board closed 

RPM Motors in March 20l6. Svoboda was ultimately convicted of title fraud for obtaining a second MCO on a vehicle 

and pledging both MCO’s to separate banks as collateral to 

secure loans.

Foundation One filed a replevin action in the district court 

for Platte County to recover the collateral pledged as security for the loan to Svoboda. Lehr was not named among the 

defendants. The district court determined that Foundation One 

was entitled to possession of the property and entered an order 

of delivery.

At this point, Lehr moved to intervene, alleging that “at all 

relevant times herein, . . . Lehr . . . was the owner of record 

and in possession of: 2014 Mack and 2005 Mack.” Lehr further alleged that Svoboda had fraudulently claimed title on the 

vehicles when he pledged them to Foundation One as collateral 

for the loan.

The district court permitted Lehr to intervene and partially 

granted its motion to reconsider the order of replevin. The 

district court vacated its order with regard to the 2005 Mack, 

but overruled Lehr’s motion with regard to the 2014 Mack and 

other collateral. Foundation One replevied the 2014 Mack and 

sold it for $95,000.

Prior to trial, Foundation One filed a motion for judgment on the pleadings against all defendants. With regard 

to Lehr, Foundation One generally argued that Lehr could 

not obtain relief on its complaint in intervention, because 

within the body of the pleading, Lehr sought declaratory 

relief and the 2014 Mack had already been sold. The district 

court granted judgment on the pleadings regarding the original 
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defendants and denied the motion with regard to Lehr’s complaint in intervention.

A jury trial was held in May 2018. Evidence submitted at 

trial showed that Lehr is a corporation owned by the Lehr 

family and operates a feeding and livestock business in Platte 

County. With respect to the 2005 Mack, on February 24, 

2005, Lehr purchased the 2005 Mack from Dallas Mack Sales. 

Dallas Mack Sales transferred title to the 2005 Mack to Lehr 

through an MCO, and Lehr obtained a title to the 2005 Mack. 

This title was dated before the sale and issuance date of the 

Foundation One “title” it received from Svoboda. With respect 

to the 2014 Mack, on June 12, 2013, Lehr purchased the 2014 

Mack from RPM Motors, the auto business formerly owned 

by Svoboda and for which Lance Lehr (Lance) was working 

at the time as a salesperson. Lehr received a title to the 2014 

Mack showing RPM Motors as the seller and Lehr as the 

purchaser. Lance and his father testified that they never gave 

Svoboda the title to the 2014 Mack after they received it and 

did not give Svoboda any rights or interest in either the 2005 

Mack or the 2014 Mack.

Lance testified that the 2005 Mack and the 2014 Mack 

remained in Lehr’s possession on its premises and were used 

by the family at the feedlot every day. In particular, to feed 

their cattle, Lehr attached auger mixing containers, known as 

boxes, to the trucks’ chassis.

At the close of evidence, Lehr and Foundation One each 

moved for a directed verdict. The court overruled both motions. 

No evidence was submitted thereafter.

Both Foundation One and Lehr submitted proposed jury 

instructions, but only one of Foundation One’s requested 

instructions is relevant to this appeal. Foundation One 

requested an instruction that Lehr had the burden of proof to 

show Svoboda committed fraud against Lehr by pledging the 

vehicles. However, Lehr’s position throughout the case has 

been that Svoboda committed fraud only against Foundation 
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One. The court rejected all of the proposed jury instructions 

and used its own instructions.

The jury determined that Lehr was entitled to possession of 

the two disputed motor vehicles and was entitled to damages in 

the amount of $95,000 as a result of Foundation One’s sale of 

the 2014 Mack. The district court entered judgment according 

to the verdict.

Foundation One appeals.

III. ASSIGNMENTS OF ERROR

On appeal, Foundation One claims, restated, that the district 

court erred when it rejected its proposed instruction regarding fraud, failed to instruct the jury on various issues, and 

failed to grant its motions for judgment on the pleadings and 

for a directed verdict. With regard to the jury instructions, 

Foundation One contends, inter alia, that the jury should have 

received information on (1) the weight given to a certificate of 

title or MCO, (2) when a party may receive an offset for damages for a special benefit conferred, (3) the burden of proof for 

an affirmative defense of fraud, and (4) which party must suffer the loss between two innocent victims of fraud.

IV. STANDARDS OF REVIEW

[1] A motion for judgment on the pleadings is properly 

granted when it appears from the pleadings that only questions 

of law are presented. Denali Real Estate v. Denali Custom 

Builders, 302 Neb. 984, 926 N.W.2d 610 (2019).

[2] To establish reversible error from a court’s failure to 

give a requested jury instruction, an appellant has the burden 

to show that (1) the tendered instruction is a correct statement 

of the law, (2) the tendered instruction was warranted by the 

evidence, and (3) the appellant was prejudiced by the court’s 

failure to give the requested instruction. Armstrong v. Clarkson 

College, 297 Neb. 595, 901 N.W.2d 1 (2017).

[3,4] Where jury instructions are claimed deficient on 

appeal and such issue was not raised at trial, an appellate 
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court reviews for plain error. See Kuhnel v. BNSF Railway 

Co., 287 Neb. 541, 844 N.W.2d 251 (2014). Plain error exists 

where there is an error, plainly evident from the record but not 

complained of at trial, which prejudicially affects a substantial right of a litigant and is of such a nature that to leave it 

uncorrected would cause a miscarriage of justice or result in 

damage to the integrity, reputation, and fairness of the judicial 

process. Id.

[5] A directed verdict is proper at the close of all the evidence only when reasonable minds cannot differ and can draw 

but one conclusion from the evidence, that is, when an issue 

should be decided as a matter of law. Denali Real Estate v. 

Denali Custom Builders, supra.

Appellate courts independently decide questions of law. Id.

V. ANALYSIS

As explained below, we find no merit to Foundation One’s 

assignments of error regarding denial of its pretrial motion 

for judgment on the pleadings, its four claims regarding jury 

instructions, and denial of its motion for a directed verdict.

1. Motion For Judgm

on the Pleadi

[6] Foundation One claims that the district court erred when 

it denied its pretrial motion for judgment on the pleadings 

with respect to Lehr. A denial of a motion for judgment on 

the pleadings under Neb. Ct. R. Pldg. § 6-1112(c) is generally 

moot on appeal after the case has been tried on the merits. See 

Denali Real Estate v. Denali Custom Builders, supra. That 

principle applies here, and this assignment of error is without merit.

The thrust of Foundation One’s argument seems to be 

that Lehr’s mention of declaratory relief in its “Complaint 

in Intervention” precluded the relief of possession and damages. As we discuss below in our analysis of the denial of the 

directed verdict, the issues of possession and damages were 
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integral to the resolution of the case after Lehr intervened. See 

School District v. Shoemaker, 5 Neb. 36 (1876).

2. Jury Instruct

(a) Proposed Jury Instruction on 

“Affirmative Defense of Fraud”

Foundation One claims that the district court erred when 

it rejected its proposed jury instruction to the effect that Lehr 

had the burden of proof to establish that Svoboda committed a 

fraud on Foundation One. In this case, Lehr had no such burden and, even if it did, Foundation One’s proposed instruction 

was an incorrect statement of the law.

As stated above, to establish reversible error from a court’s 

failure to give a requested jury instruction, an appellant has the 

burden to show that (1) the tendered instruction is a correct 

statement of the law, (2) the tendered instruction was warranted 

by the evidence, and (3) the appellant was prejudiced by the 

court’s failure to give the requested instruction. Armstrong v. 

Clarkson College, supra.

Foundation One’s proposed instruction stated, inter alia, that 

Lehr has the burden of proving, by the greater weight of the 

evidence, each and all of the following:

1. That Svododa made the claimed representation [to 

Foundation One];

2. That the representation was false;

3. That the representation was made fraudulently;

4. That when Svoboda made the representation, he 

intended it would be relied upon;

5. That this representation substantially contributed to 

[Foundation One’s] decision to enter into the Promissory 

Note and Security Agreement.

[7] This suggested instruction omits several elements necessary to the assertion of a fraudulent misrepresentation claim. A 

proper fraudulent misrepresentation claim requires a party to 

prove that (1) a representation was made; (2) the representation was false; (3) when made, the representation was known 
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to be false or made recklessly without knowledge of its truth 

and as a positive assertion; (4) the representation was made 

with the intention that the plaintiff should rely on it; (5) the 

plaintiff did so rely on it; and (6) the plaintiff suffered damage as a result. See Cullinane v. Beverly Enters. - Neb., 300 

Neb. 210, 912 N.W.2d 774 (2018). With respect to element (5) 

above, the reliance by the plaintiff on the representation must 

be justifiable. InterCall, Inc. v. Egenera, Inc., 284 Neb. 801, 

824 N.W.2d 12 (2012). Foundation One’s proposed instruction 

omitted the elements of reasonable reliance by and damages to 

the plaintiff and was not a correct statement of the law.

Even if the claims alleged in the complaint in intervention 

or the evidence admitted at trial could have supported a fraudulent misrepresentation instruction in this case, Foundation 

One’s proffered instruction is not a correct statement of the 

law. Accordingly, the district court properly rejected the fraud 

instruction proposed by Foundation One.

(b) Other Jury Instructions

Foundation One next claims that the district court erred by 

failing to instruct the jury (1) that possession of a title is prima 

facie evidence of ownership, (2) that the jury could consider 

Foundation One’s payments on the vehicles’ liens when it 

calculated damages, or (3) on the law regarding fraud perpetuated against two innocent parties. None of these instructions 

were requested by Foundation One. Because Foundation One 

raises issues regarding these instructions for the first time on 

appeal, we review for plain error. See Kuhnel v. BNSF Railway 

Co., 287 Neb. 541, 844 N.W.2d 251 (2014). We do not find 

plain error.

With regard to the instruction pertaining to the effect of the 

MCO and title to the vehicles, the evidence was undisputed 

that neither Svoboda nor Foundation One had possession of the 

2005 Mack or the 2014 Mack. Under Neb. Rev. Stat. § 60-140 

(Cum. Supp. 2008), in the absence of physical possession of 

the vehicles, Foundation One did not gain an interest or right to 
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Cite as 303 Neb. 624

the vehicles through the MCO and title it offered at trial. The 

relevant portion of § 60-140(1) provides:

[No] person acquiring a vehicle from the owner thereof 

. . . shall acquire any right, title, claim, or interest in or 

to such vehicle until the acquiring person has had delivered to him or her physical possession of such vehicle 

and (a) a certificate of title or a duly executed manufacturer’s or importer’s certificate with such assignments as 

are necessary to show title in the purchaser . . . .

According to the evidence, on its face, the MCO for the 2005 

Mack showed a break in the chain of ownership between Lehr 

and Svoboda and did not show clear title in Foundation One. 

For the several reasons recited above, an instruction on the 

effect of entitlement by virtue of a title was not warranted by 

the evidence.

With regard to Foundation One’s assignment of error 

regarding calculation of damages, we find no prejudice. The 

jury was provided all the evidence it needed to calculate 

damages if it was so inclined. The jury received evidence 

of the 2014 Mack’s purchase price, replacement value, and 

sale value; the value of the box; and the liens paid on both 

vehicles as part of the terms of the loan to Svoboda. The 

jury ultimately made special findings with regard to damages and “how much money it will take to compensate Lehr 

for the conversion of the 2014 Mack.” Because the jury had 

all the evidence related to the financial consequences related 

to the vehicle, Foundation One was not prejudiced by purported omission of further instructions on the calculation 

of damages.

With respect to Foundation One’s assertion that the district 

court should have instructed the jury about the law when fraud 

is perpetrated against two innocent parties, this instruction is 

not warranted by the evidence. Although Lehr asserted that 

Foundation One was defrauded, Lehr did not allege nor was 

there evidence that Lehr was also a victim of fraud. Thus, the 

proposed instruction would not have been appropriate.
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We find no plain error in the district court’s purported 

failure to give the jury instructions first proposed on appeal, 

because they were not supported by the evidence or did not 

prejudice any party.

3. Motion for Directed 

Finally, Foundation One contends that the district court 

erred when it overruled its motion for a directed verdict, 

because it claims the complaint in intervention sought a declaration of the rights of the parties but did not seek appropriate 

relief. The factual basis for Foundation One’s position was 

the fact that the 2014 Mack had already been replevied and 

sold by Foundation One. Foundation One thus claims a mere 

declaration of rights would be meaningless relief. Foundation 

One misconstrues the “Complaint in Intervention” and the 

law of replevin. It was not error to overrule the motion for a 

directed verdict.

[8] As stated above, a directed verdict is proper at the 

close of all the evidence only when reasonable minds cannot 

differ and can draw but one conclusion from the evidence, 

that is, when an issue should be decided as a matter of law. 

Denali Real Estate v. Denali Custom Builders, 302 Neb. 984, 

926 N.W.2d 610 (2019). In a motion for directed verdict, 

the moving party admits the truth of all well-pleaded facts, 

together with all reasonable inferences to be drawn therefrom. See id.

Taken together, the pleadings properly placed possession 

and ownership of the 2005 Mack and the 2014 Mack, along 

with damages for the sale of the 2014 Mack, before the jury. 

Under our replevin statutes, § 25-1093 et seq., a plaintiff may 

initially obtain delivery of claimed property, but a defendant 

who succeeds at trial will obtain the return of his or her property and damages. See § 25-10,103. Further, in a situation like 

the one presented here, where the property is no longer in the 

possession of the plaintiff, § 25-10,104(1) provides that the 

judgment “shall be for a return of the property or the value 
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thereof in case a return cannot be had, or the value of the 

possession of the same, and for damages for withholding said 

property and costs of suit.”

[9] We have long held that in a replevin case, when a 

defendant or intervenor is found to have ownership and right of 

possession of property, the replevin statutes necessarily place 

the issue of damages at issue. In School District v. Shoemaker, 

5 Neb. 36 (1876), we considered a case where a defendant in 

a replevin action had not specifically prayed for damages. We 

noted that under an earlier version of the replevin statute, the 

law places before the jury both the questions of who possesses 

the property and what are the just and proper damages for the 

defendant. Id. We held that it remained the law that a general 

denial by a party in a replevin action is sufficient to require 

the fact finder to consider damages upon finding that a party 

is entitled to the possession of property. Id. The principle logically applies to a party appearing by intervention. Regarding 

the issues before the jury in School District v. Shoemaker, we 

summarized the law and stated:

[The] law is mandatory, and therefore the jury are “bound 

to inquire into the right of property, and the right of possession of the defendant, and if they shall find him entitled to either, they shall assess such damages as are right 

and proper.” Under the statute both these questions are 

in issue and are subjects of inquiry by the jury, whether 

the defendant pleads a general denial, or new matter as a 

defense, or a demand for damages.

5 Neb. at 38. See § 25-10,103.

The factual allegations in Lehr’s complaint in intervention 

mandated that the jury consider both possession and damages 

once Lehr asserted ownership of the property in this replevin 

action. See § 25-10,103. Resolving every controverted fact in 

Lehr’s favor and giving it the benefit of every inference, reasonable minds could conclude Lehr was entitled to ownership 

and possession of the 2005 Mack and the 2014 Mack. Such 

findings would be sufficient to entitle Lehr to relief, including 
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damages, plus “the value of [its] possession,” since the 2014 

Mack could not be returned. See § 25-10,104(1). The district 

court did not err when it overruled Foundation One’s motion 

for a directed verdict in its favor.

VI. CONCLUSION

Following a jury trial, judgment was entered in favor of 

Lehr. Foundation One’s pretrial motion for judgment on the 

pleadings is moot under the circumstances. Foundation One’s 

proposed instruction regarding fraud was not a correct statement of the law, and Foundation One was not prejudiced by 

the district court’s rejection of the instruction. With regard 

to jury instructions suggested for the first time on appeal, we 

find no plain error. Finally, because of the nature of a replevin 

action, under § 25-1093 et seq., the jury in this case necessarily 

decided issues of possession of the contested vehicles and, on 

finding in favor of Lehr, damages. The district court did not err 

as a matter of law when it overruled Foundation One’s motion 

for a directed verdict in its favor. Accordingly, we affirm the 

judgment of the district court.

Affirm