Opinion ID: 1985924
Heading Depth: 1
Heading Rank: 20

Heading: Individual Liability of Kerns and Promissory Estoppel

Text: With respect to these three projects, the applicable portion of the district court's order provides: As for the Thornberry, Ashberry and Sussex projects, [FAL] satisfied its burden of proving (1) enforceable verbal contracts between the architect and Thornberry Apartments, Inc. and Thornberry Apartments, Ltd; Ashberry Apartments, Inc. and Ashberry Place Apartments, Ltd; and Sussex Place Apartments, Inc. and Sussex Place Apartments, Ltd., (b) the architect render[ed] services as called for in said contracts (c) and which were terminated through no fault of the architect but through fault of said Defendants, and (d) said Defendants owe [FAL] for professional fees, reimbursable expenses and termination expenses. Notwithstanding, the evidence is also more than sufficient to satisfy [FAL]'s burden on its promissory estoppel and quantum meruit causes of action against said Defendants. The district court thereafter entered judgment on these projects against the above entities. As noted above, the Court of Appeals vacated the judgment against Thornberry Apartments, Ltd.; Ashberry Apartments, Ltd.; and Sussex Place Apartments, Ltd., based upon its finding that their special appearance should have been sustained. The Court of Appeals interpreted the order as finding Kerns personally liable on these projects. The order, however, makes no mention of Kerns individually, and judgment was entered solely against the ownership entities. We therefore construe the holding of the district court as finding that Kerns was not personally liable on these projects. In its cross-appeal to the Court of Appeals, FAL argued that the district court erred in not finding Kerns personally liable on these projects on the theories of oral contract, promissory estoppel, or quantum meruit. Because of its erroneous interpretation of the district court's order, the Court of Appeals did not reach this assignment. Upon granting further review which results in the reversal of a decision of the Nebraska Court of Appeals, this court may consider, as it deems appropriate, some or all of the assignments of error the Court of Appeals did not reach. Lange v. Crouse Cartage Co., 253 Neb. 718, 572 N.W.2d 351 (1998). We now address the merits of the assignment. The district court found that Kerns was liable on the theory of oral contract to pay a $5,000 retainer on the Greely, Wingpoint, and Kennamare projects. The finding that the evidence establishes an oral contract is supported by the record. Kerns does not take issue with the existence of this contractual liability, and FAL does not contest its scope on further review. The record reflects that during their breakfast meetings, Anderzhon and Kerns discussed all of the projects, including the Greely, Wingpoint, and Kennamare projects, as well as the Thornberry, Ashberry, and Sussex Place projects, as a single undertaking. The record thus establishes that Kerns entered into an oral contract to pay the first $5,000 in fees on each project, payable before any ownership entities were formed or written contracts were signed, but that the parties agreed that other fees would be the responsibility of the ownership entities only. Because the evidence reveals that Kerns promised to pay the initial $5,000 on all of the projects, it was clearly erroneous for the district court not to find Kerns obligated by oral contract for the $5,000 initial payment on the Thornberry, Ashberry, and Sussex Place projects, just as the court found him liable for that amount on the Greely, Wingpoint, and Kennamare projects. We note, however, that the record reflects that $11,600 was paid on the Thornberry project, an amount in excess of Kerns' $5,000 contractual liability. We therefore hold that the district court clearly erred in not finding Kerns to be personally liable for breach of oral contract for the $5,000 initial retainer on the Ashberry and Sussex Place projects. To the extent that FAL argues that Kerns is liable for all of the damages on the Thornberry, Ashberry, and Sussex Place projects on the theory of promissory estoppel or quantum meruit, such argument is without merit. Neither promissory estoppel nor quantum meruit is a viable theory when an enforceable contract exists between the parties and the contract governs the damages at issue. See Ruiz v. A.B. Chance Co., 234 F.3d 654 (Fed.Cir. 2000). Moreover, because the architect and Kerns agreed that Kerns' liability was to be $5,000 on each project, there is no evidence to support any reasonable reliance on the part of the architect which would support recovery in excess of that amount. Kerns' individual liability to FAL on these projects was limited to the $5,000 initial retainer.