Opinion ID: 1572732
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Heading Rank: 5

Heading: strasheim's motion for summary judgment

Text: The district court held that Vowers & Sons' acceptance of benefits under its settlement with Newell barred its claim against Strasheim as a matter of law under the doctrine of election of remedies. In general, election of remedies may be applied to require a party to choose between inconsistent remedies for redress of a single injury. It originated as a means to prevent double recovery and to limit potential harassment of defendants. Porter v. Smith, 240 Neb. 928, 486 N.W.2d 846 (1992). We have characterized the doctrine as a somewhat vague notion lying somewhere between the areas occupied by the doctrines of equitable estoppel and res judicata. Bryant Heating v. United States Nat. Bank, 216 Neb. 107, 112, 342 N.W.2d 191, 194-95 (1983). It is considered a harsh rule which should not be applied in an oppressive manner. Id. Election of remedies may be employed to require a party to choose between inconsistent remedies asserted in the same action. Southwest Trinity Constr. v. St. Paul Fire & Marine, 243 Neb. 55, 497 N.W.2d 366 (1993). The doctrine has also been applied to prevent a plaintiff who has been unsuccessful in suing a defendant on one theory from bringing a second action against the defendant on an inconsistent theory of recovery. State ex rel. Schaub v. City of Scottsbluff, 169 Neb. 525, 100 N.W.2d 202 (1960); James v. Hogan, 154 Neb. 306, 47 N.W.2d 847 (1951); Turner v. Grimes, 75 Neb. 412, 106 N.W. 465 (1906). Election of remedies can be applied to bar a claim only if there are two coexisting remedies which are so inconsistent that a party cannot logically choose one without renouncing the other. Bryant Heating v. United States Nat. Bank, supra ; Asher v. Coca Cola Bottling Co., 172 Neb. 855, 112 N.W.2d 252 (1961); State v. Bank of Commerce, 61 Neb. 22, 84 N.W. 406 (1900). For example, we stated in Tobin v. Flynn & Larsen Implement Co., 220 Neb. 259, 260-61, 369 N.W.2d 96, 98 (1985): [A] party cannot proceed on a theory of recovery which is premised upon the existence of a contract and at the same time proceed alternatively on a theory which is premised on the lack of a contract. Consequently, one who has been induced to enter into an agreement by virtue of a material misrepresentation, that is to say, by virtue of fraud, may either affirm the agreement and sue for damages or disaffirm the agreement and sue to be reinstated to his or her position as it existed before entry into the contract. [Citation omitted.] This is so because one remedy, damages, depends upon the existence of a contract, and the other, rescission, depends upon the concept that because of the fraud no contract came into existence. (Emphasis supplied.) See, also, James v. Hogan, supra ; Rasmussen v. Hungerford Potato Growers' Ass'n, 111 Neb. 58, 195 N.W. 469 (1923). We agree that the remedy which Vowers & Sons seeks in this action is inconsistent with that which it asserted against Newell. Here, Vowers & Sons alleged that Strasheim breached a contract to purchase real estate, and prayed for loss of bargain damages, general damages, and consequential damages. In its action against Newell, Vowers & Sons sought to recover the same elements of damage based upon allegations that Newell's negligence in preparing the purported contract rendered it unenforceable. Vowers & Sons' claim against Strasheim is based upon an alleged breach of an enforceable contract, whereas its professional negligence claim against Newell depended upon proof that the same contract was unenforceable. Thus, the two remedies are inconsistent because Vowers & Sons could not logically prove one without disproving the other. However, Vowers & Sons argues that the doctrine of election of remedies is inapplicable in this case because its claims were made against different parties. Our law on this point is unclear. For instance, in 1902, without explicitly deciding whether the election of remedies doctrine applies when claims are made against different parties, this court held that a plaintiff was barred from asserting a remedy against a defendant when the plaintiff had prosecuted an action to judgment against a different defendant, requesting a different remedy. Jones v. First Nat. Bank of Lincoln, 3 Neb. (Unoff.) 73, 90 N.W. 912 (1902). However, in Carson v. Greeley, 107 Neb. 609, 187 N.W. 47 (1922), we held that no binding election had occurred for various reasons, including the fact that the two lawsuits were brought against different parties. Without referring to Carson or Jones, we stated in Henley v. Live Stock Nat. Bank, 127 Neb. 857, 863, 257 N.W. 244, 247 (1934), that the doctrine of election of remedies may be applicable as well where the remedies are against different persons as where they are against the same person. Our decisions since Henley have not addressed this issue but have applied election of remedies only where inconsistent claims were made against the same party. Farmers State Bank v. Germer, 231 Neb. 572, 437 N.W.2d 463 (1989); State ex rel. Schaub v. City of Scottsbluff, 169 Neb. 525, 100 N.W.2d 202 (1960); James v. Hogan, 154 Neb. 306, 47 N.W.2d 847 (1951). Since a primary purpose of election of remedies is to protect defendants from multiple claims for redress of the same injury, we find merit in the argument that the doctrine is inapplicable to claims against different parties. Therefore, we hold that the doctrine of election of remedies is applicable only where inconsistent remedies are asserted against the same party or persons in privity with such a party. Language to the contrary in Henley v. Live Stock Nat. Bank, supra , and Jones v. First Nat. Bank of Lincoln, supra , is specifically disapproved. Inconsistent claims against different parties may be barred by the doctrine of judicial estoppel, which we adopted in Melcher v. Bank of Madison, 248 Neb. 793, 539 N.W.2d 837 (1995). There, we stated: The doctrine of judicial estoppel holds that one who has successfully and unequivocally asserted a position in a prior proceeding is estopped from asserting an inconsistent position in a subsequent proceeding. [Citations omitted.] The doctrine protects the integrity of the judicial process by preventing a party from taking a position inconsistent with one successfully and unequivocally asserted by the same party in a prior proceeding. [Citation omitted.] It has been said that unlike equitable estoppel, judicial estoppel may be applied even if detrimental reliance or privity does not exist. [Citation omitted.] However, the doctrine is to be applied with caution so as to avoid impinging on the truth-seeking function of the court because the doctrine precludes a contradictory position without examining the truth of either statement. [Citation omitted.] Absent judicial acceptance of the inconsistent position, application of the rule is unwarranted because no risk of inconsistent results exists. Id. at 798, 539 N.W.2d at 842. The applicability of judicial estoppel in this case depends upon whether Vowers & Sons successfully and unequivocally asserted its professional negligence claim against Newell. In Edwards v. Aetna Life Ins. Co., 690 F.2d 595 (6th Cir.1982), a case we relied upon in Melcher in adopting the doctrine of judicial estoppel, the court held that a settlement of a service-connected disability claim against the Veteran's Administration did not constitute a successful assertion of that claim so as to bar a subsequent claim against a private disability insurer whose policy excluded service-connected disabilities. The court reasoned that the requirement that the position be successfully asserted means that the party must have been successful in getting the first court to accept the position, and that in the absence of such acceptance, the doctrine of judicial estoppel did not apply. 690 F.2d at 599. The court noted that judicial acceptance requires not that a party prevail on the merits, but only that the first court has adopted the position urged by the party, either as a preliminary matter or as part of a final disposition. Id. at 599 n. 5. The record in the present case reflects that the action against Newell was dismissed with prejudice after the parties negotiated a settlement. There is no indication of any judicial acceptance of the claim that Newell was negligent as alleged by Vowers & Sons or that the court made any adjudication on the merits of such claim. Cf. Sawyer v. State Surety Co., 251 Neb. 440, 558 N.W.2d 43 (1997). Thus, based upon the record before us, the prosecution and settlement of Vowers & Sons' suit against Newell do not operate as a bar to this action under the doctrine of judicial estoppel. Strasheim contends that even if the district court erred in granting summary judgment on his election of remedies defense, he was entitled to summary judgment on the basis of a title insurance commitment which showed various liens against the property which was the subject of the sale, and his affidavit stating the date when he received the title insurance commitment and his intentions regarding the transaction. We do not consider the content of the affidavit because it is undated, unsworn, and unsigned and therefore does not comply with Neb.Rev. Stat. § 25-1334 (Reissue 1995). While the title insurance commitment showing an effective date of July 1, 1992, reflects significant liens against the property, Vowers' affidavit states that Vowers & Sons was able and ready to convey said property under the purchase agreement. Although it lacks specificity, this statement, when viewed in a light most favorable to Vowers & Sons, is sufficient to establish a genuine issue of material fact which precludes summary judgment in favor of Strasheim. While we hold that Vowers & Sons is not barred as a matter of law from pursuing this action against Strasheim by virtue of its settlement with Newell, we note that the two claims appear to seek redress for the same injury. The measure of the seller's damages for breach of a contract to purchase real estate is the difference between the contract price and the fair market value of the property at the time of the breach. Hahn v. International Management Services, Inc., 207 Neb. 229, 298 N.W.2d 140 (1980). This is also the measure of damages in an action by a property owner against a real estate agent alleging negligence in failing to prepare an enforceable purchase agreement, since the injury consists of the loss of the benefit of the sale which would otherwise have been realized but for the fact that the purchaser was not obligated to complete the purchase. Tetherow v. Wolfe, 223 Neb. 631, 392 N.W.2d 374 (1986). Our determination that this action against Strasheim may proceed does not mean that Vowers & Sons would be entitled to recover damages for the same injury twice. In a breach of contract case, the ultimate objective of a damages award is to put the injured party in the same position he would have occupied if the contract had been performed, that is, to make the injured party whole. Larsen v. First Bank, 245 Neb. 950, 515 N.W.2d 804 (1994); Ed Miller & Sons, Inc. v. Earl, 243 Neb. 708, 502 N.W.2d 444 (1993). As a general rule, a party may not have double recovery for a single injury, or be made more than whole by compensation which exceeds the actual damages sustained. 25 C.J.S. Damages § 3 at 628 (1966). See, e.g., Albee v. Maverick Media, Inc., 239 Neb. 60, 474 N.W.2d 238 (1991) (setoff for amount paid by third party necessary in order to prevent partial double recovery in breach of contract action); E.K. Buck Retail Stores v. Harkert, 157 Neb. 867, 62 N.W.2d 288 (1954) (absent special injury, stockholder not entitled to bring separate action for proportionate share of injury to corporation because subsequent recovery by corporation would result in double recovery for stockholder). Where several claims are asserted against several parties for redress of the same injury, only one satisfaction can be had. Bryant Heating v. United States Nat. Bank, 216 Neb. 107, 342 N.W.2d 191 (1983). Thus, to the extent that Vowers & Sons has received satisfaction from the settlement with Newell for injury and damage alleged in this action, any damages for which Strasheim would be potentially liable must be reduced pro tanto. See id.