Court Opinion

ID: 4561895
Source: CourtListenerOpinion
Date Created: 2020-09-01 13:06:54.765455+00
Date Added: 2024-06-11T11:51:47.800080
License: Public Domain

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
09/01/2020 08:06 AM CDT

                                                        - 797 -
                             Nebraska Court of Appeals Advance Sheets
                                  28 Nebraska Appellate Reports
                           FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                                        Cite as 28 Neb. Ct. App. 797

                        Freedom Specialty Contracting, Inc., appellee,
                              v. Nichol Flats, LLC, appellant.
                                                    ___ N.W.2d ___

                                        Filed September 1, 2020.   No. A-19-646.

                 1. Mechanics’ Liens: Foreclosure: Equity. An action to foreclose a con-
                    struction lien is one grounded in equity.
                 2. Equity: Appeal and Error. In an appeal of an equity action, an appel-
                    late court tries factual questions de novo on the record and reaches
                    a conclusion independent of the findings of the trial court, provided,
                    where credible evidence is in conflict on a material issue of fact, the
                    appellate court considers and may give weight to the fact that the trial
                    judge heard and observed the witnesses and accepted one version of the
                    facts rather than another.
                 3. Breach of Contract: Damages. A suit for damages arising from breach
                    of a contract presents an action at law.
                 4. Judgments: Appeal and Error. In a bench trial of a law action, the trial
                    court’s factual findings have the effect of a jury verdict and will not be
                    disturbed on appeal unless clearly wrong.
                 5. Contracts. Contract clauses requiring that any modifications to the con-
                    tract be made in writing are valid and enforceable in Nebraska.
                 6. Contracts: Substantial Performance. Substantial performance is
                    shown when all the essential elements necessary for the full accomplish-
                    ment of the purposes of the contract have been performed with such an
                    approximation to complete performance that the owner obtains substan-
                    tially what is called for by the contract.
                 7. Mechanics’ Liens. Neb. Rev. Stat. § 52-136(1)(a) (Reissue 2010)
                    speaks clearly as to the right to a construction lien only with respect to
                    services performed or materials furnished, not with respect to services
                    intended to be performed or materials intended to be furnished.

                 Appeal from the District Court for Douglas County: J.
               Michael Coffey, Judge. Affirmed as modified.
                              - 798 -
        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

  Megan S. Wright and Austin L. McKillip, of Cline, Williams,
Wright, Johnson & Oldfather, L.L.P., for appellant.
  Patrick T. Vint and Todd W. Weidemann, of Woods &
Aitken, L.L.P., for appellee.
  Moore, Chief Judge, and Pirtle and Arterburn, Judges.
  Pirtle, Judge.
                      INTRODUCTION
   Nichol Flats, LLC, appeals from a judgment of the dis-
trict court for Douglas County in favor of Freedom Specialty
Contracting, Inc. (Freedom), in the amount of $196,851.78.
Freedom brought suit against Nichol Flats for foreclosure on
a construction lien and for breach of contract. Nichol Flats
brought a counterclaim for breach of contract and indemnifica-
tion. After a bench trial, the district court found that Nichol
Flats wrongfully terminated Freedom under the contract and
that Freedom was entitled to foreclosure on its lien. The district
court dismissed Freedom’s contract claim and Nichol Flats’
counterclaim with prejudice. For the foregoing reasons, we
affirm as modified.
                       BACKGROUND
   In August 2015, Nichol Flats and Freedom entered into a
contract whereby Freedom would provide framing and drywall-
ing services during the construction of a five-story apartment
complex on North 16th Street in Omaha, Nebraska. Exhibit B
of the contract provided the following baseline schedule for the
completion of Freedom’s services:
     Floor       Duration       Start Date      Finish Date
    Level 1      15 Days        11/3/2015       11/23/2015
    Level 2      35 Days       11/10/2015       12/28/2015
    Level 3      35 Days        12/9/2015        1/26/2016
    Level 4      35 Days         1/8/2016        2/25/2016
    Level 5      35 Days         2/8/2016        3/25/2016
Due to delay by other subcontractors, and the need for cer-
tain work to be completed prior to framing and drywalling,
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

the parties agreed Freedom was incapable of adhering to the
dates provided in the baseline schedule.
   At some point in August 2016, prior to completion of the
framing and drywalling, Freedom ceased performing work
under the contract. The parties dispute the reason Freedom’s
work was terminated.
   On October 27, 2016, Freedom filed suit for foreclosure on its
construction lien in the amount of $262,469.04 and for breach
of contract. On July 10, 2017, Nichol Flats filed an amended
answer and counterclaim denying the allegations contained in
Freedom’s complaint and alleging that Freedom breached the
contract and owed indemnification costs to Nichol Flats. A
bench trial took place on May 13 through 16, 2019.
   At trial, Freedom called John Jantzon, its project manager,
as a witness. Jantzon testified that the construction manager,
Tackett Company (Tackett), communicated with him regarding
when the drywall work could commence. Under the contract,
Freedom was to complete drywall for four floors of apart-
ment units, and the metal framing on the first floor commer-
cial space.
   Jantzon testified that if other “trades” or inspections are
delayed, it sets back Freedom’s schedule because drywall work
cannot be completed. Jantzon testified that exhibit B of the
contract, the original baseline schedule, was the only schedule
provided by Tackett and the only one he reviewed. No change
order or construction change directive regarding Freedom’s
schedule was ever provided to Jantzon.
   Jantzon testified that Freedom began its work after a May
19, 2016, lunch meeting that took place with representatives
from Freedom, Tackett, and the Nichol Flats ownership. He
acknowledged that some metal framing on the first floor was
done previously in October 2015. Jantzon testified that there
had been no discussion about amending Freedom’s schedule
prior to the meeting.
   Jantzon denied that Tackett had notified Freedom that it
could begin its work on May 15, 2016. He testified that the fifth
floor was not ready at that time. Jantzon denied having ever
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

agreed to a 15-day-per-floor schedule, which was ­referenced in
an email from Tackett’s project manager, Trent Gumm.
   Jantzon testified that errors by other contractors on the proj-
ect caused Freedom to perform additional work outside the
scope of its contract. A change order request for $14,842 to
add soffits outside of Freedom’s scope of work was refused by
Nichol Flats. Another change order for $4,210 related to cor-
ridor soffits was refused. Change order requests for $2,291 and
$1,107 were approved by Nichol Flats.
   On August 11, 2016, Kirt Trivedi, a co-owner of Nichol
Flats, sent Freedom an email stating, “This email is to provide
Freedom the required seven day notice to meet the contractual
schedule. This must be met or otherwise we will have to exer-
cise other options.” Jantzon testified that he had not previously
received any notice from Nichol Flats, or Tackett, alleging that
Freedom was behind schedule. He testified that there were
ongoing issues with other contractors’ work that prevented
Freedom from completing the drywall on certain floors.
   On August 16, 2016, Freedom received an email from
Trivedi with a list of tasks to complete in order to avoid
“supplement[ation].” Supplementation, in this context, refers
to Nichol Flats’ contractual right to outsource a portion of
Freedom’s scope of work upon default or delay by Freedom
in breach of the contract. The purpose of supplementation
is to complete work that has delayed the project’s schedule.
Jantzon testified that Trivedi’s list encompassed essentially
the remainder of Freedom’s scope of work on the project. He
testified that a supplementation crew arrived on August 17,
but he denied instructing Freedom’s workers to stop working
on the project. The supplementation crew was an independent
drywalling company hired to work alongside Freedom to meet
the project’s schedule.
   Jantzon testified that despite supplementation, Freedom’s
president, Randy Tufly, instructed him to keep the Freedom
crew on the jobsite. On August 18, 2016, Jantzon received a
telephone call from Tufly indicating that Freedom was likely
to get “thrown off the job” that day and that Jantzon should
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

gather Freedom’s equipment. Jantzon went to the jobsite that
afternoon and found a “sizeable crew” there in addition to
Freedom’s workers.
   Jantzon did not return to the jobsite on August 19, 2016.
Daniel Hermida, Freedom’s jobsite foreman, told Jantzon that
he was told if Freedom’s workers entered the jobsite, they
would be arrested. Freedom did not perform any work on the
Nichol Flats project after August 18.
   On cross-examination, Jantzon admitted that he did not pro-
vide a written schedule to Tackett in response to Gumm’s May
24, 2016, email requesting a “written plan from [Freedom] as
assurance that we will be completing the floors in 15 days as
per our original scheduled dates.” Jantzon acknowledged that
neither Trivedi nor Deepak Gangahar, the co-owners of Nichol
Flats, told him that Freedom was terminated on August 18, but
Ryan Greenfield from Tackett called and told him that Freedom
had been terminated.
   Hermida testified that his duties as foreman included
coordin­ating workers and ensuring the project was on sched-
ule. Hermida testified that he did not have contact with Trivedi
or Gangahar until August 18, 2016, Freedom’s last day on the
Nichol Flats jobsite. He denied any ongoing issues with staff-
ing the project or meeting deadlines, and he indicated that no
concerns were ever raised to him by Freedom, Tackett, or the
Nichol Flats ownership.
   Hermida testified that he was approached by Trivedi on
August 18, 2016, and was told that Freedom was being sup-
plemented. Hermida testified that Trivedi then asked, “‘How
fast can you get your things and your men off the job?’”
Hermida said he ignored the question and walked away to call
Freedom’s office and spoke with Jantzon, who told Hermida
to continue working. Hermida denied Trivedi’s claim that
Hermida “refused to work side by side with the supplementa-
tion team and instructed his team to remove tools and the entire
team.” Hermida indicated that he refused to give the supple-
menting contractor his personal blueprints and told him to keep
his crew from using Freedom’s equipment.
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

   When Hermida arrived to the jobsite on August 19, 2016,
Trivedi told him that Freedom was no longer allowed on
the jobsite and that he owned everything inside, including
Freedom’s equipment. Hermida testified at length regarding the
work Freedom had completed as of August 18, the last day it
was on the jobsite, including the installing and finishing of the
drywall on the third, fourth, and fifth floors.
   Richard Ridpath, Freedom’s commercial operations man-
ager, testified that Jantzon reported to him on the Nichol Flats
project. Ridpath testified that he scheduled a meeting with
Trivedi for August 16, 2016, which he thought was to discuss
Freedom’s work on certain touchups. Ridpath testified that
when he introduced himself, Trivedi screamed, “‘Get off my
floor. Get out of my building.’” Ridpath walked through the
units on the third and fourth floors on his way out, and he said
he believed the drywall was ready to be primed.
   Sarah Tufly, Freedom’s vice president of general operations,
testified that she oversees human resources, initial contract
review, and certain financial work for the company. Sarah testi-
fied that Freedom bills according to the estimated percentage
of work completed on each project section on the applicable
billing date. Under the contract, Freedom was required to
submit its billing statements to Tackett by the 20th of each
month. The billing would reflect the projected percentage of
work completed for the entire month. Exhibit 40, an “Aging
Detail by Job,” reflects $210,599.11 plus $53,469.25 in retain-
age still owed to Freedom by Nichol Flats, according to
Freedom’s billing.
   Sarah testified that invoices for $168,153.30 on July 20,
2016, and $42,445.81 on August 19 were submitted, but they
had not been paid by the time of trial. Sarah testified that
Freedom was over budget on the Nichol Flats project, largely
due to the initial delays. Exhibit 40 also reflected an estima-
tion that Freedom had completed 89 percent of the project
when it stopped work. She explained that the report reflected
a higher percent billed than percent of “actual completion”
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

due to verbal change orders that had not been formalized in
writing and incorporated into the total contract price.
   Sarah testified that Freedom’s “monthly billing work-
sheet” was used to determine Freedom’s claimed damages of
$262,469.04 within its construction lien. That number was
reached by taking a total contract price of $570,294 (includ-
ing unofficial change orders) and subtracting the $270,623.96
already paid to Freedom and Freedom’s estimate that $37,201
worth of work was left to complete under the contract at the
date of termination.
   On cross-examination, Sarah acknowledged that at times,
Freedom would bill slightly more than its actual completion
percentage to cover its costs.
   Randy, Freedom’s president, testified that he is the only
person at Freedom with the authority to terminate a contract
or make the decision to walk off a job. He testified that he
considered pulling Freedom off the Nichol Flats project due to
delayed payments in April and May.
   Randy testified that at the May 19, 2016, meeting, he
discussed accelerating the project schedule, including both
labor and payment, but denied agreeing to a 15-day-per-floor
schedule. He described such a schedule as “pretty much impos-
sible.” Randy testified that up until the date of termination,
he believed Freedom was performing satisfactorily and timely
under the contract.
   Randy testified that despite his belief that Freedom had been
terminated on August 18, 2016, he sent Trivedi emails on the
evening of August 18, as well as on August 26, maintaining
that Freedom was “ready, willing, and able to complete the
work” on the project. Nevertheless, Trivedi did not indicate
that Freedom would be permitted to return to the job. Randy
testified that he worked with Jim Tufly, Freedom’s director of
commerical operations, as well as Jantzon to approximate the
amount of work Freedom had completed in order to determine
an exact lien amount.
   On cross-examination, Randy testified that he received an
email from Gumm on May 20, 2016, reflecting the requested
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

“15 days/floor schedule,” but he did not respond to express his
disagreement with that schedule. He denied ever receiving a
change order request to reflect a 15-day-per-floor schedule.
   Randy testified that the only notice that Freedom was behind
schedule would have come in emails sent by Trivedi, but he
denied that Freedom ever fell behind schedule. On August 18,
2016, Freedom removed its equipment from the jobsite and Jim
sent an email notice to Trivedi that Freedom would require a
“newly negotiated contract” if it were to return to the site.
   Randy acknowledged that Freedom overbilled $40,340 com-
pared to the actual work completed at the time its work
stopped, without accounting for change orders. Exhibit 133
included information related to Freedom’s estimation of the
value of its construction lien. Exhibit 148 reflected Freedom’s
estimation that it had completed 96.26 percent of the contract
work at the time its work was stopped.
   At the conclusion of Randy’s testimony, Freedom rested. At
that point, Nichol Flats moved for a directed verdict, which the
court overruled.
   Nichol Flats called Mike Tackett, the president of Tackett,
as its first witness. Tackett served as the construction manager
of the Nichol Flats project, managing the contracts, schedules,
and vendors in that role. Mike testified that due to delay by
the project’s plumber, the subcontractors on the Nichol Flats
project were not held to the original completion dates, but were
still held to the durations within the original contracts.
   On May 5, 2016, Greenfield with Tackett emailed Freedom,
indicating that the fifth floor of the Nichol Flats project was
ready for installation of drywall. Mike testified that based off
of Greenfield’s description, 90 percent of the drywall work
could have been completed on the fifth floor at that time.
Mike testified that the May 19 meeting was called due to
delays in the drywall work and to discuss the expectation that
each floor would be completed within a 3-week period, or 15
working days. He testified that “Freedom stated that [it] would
handle the 15 days” and that he did not believe such timeline
would be “impossible.” Mike denied that bimonthly payments
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

were a condition that was agreed to for Freedom to meet the
15-day schedule.
   Mike testified he never received notice that Freedom was
being delayed due to incomplete inspections or that it was
unable to “get the project stocked.” Mike testified that a project
schedule was continuously maintained throughout the project
and that Greenfield and Gumm maintained and discussed the
schedule with the subcontractors.
   Mike testified that Freedom was supplemented on August
18, 2016, but Tackett did not terminate Freedom. He testified
that no one at Tackett had the authority to do so. He also did
not witness anyone from the Nichol Flats ownership order
Freedom to discontinue its work on the project. Mike testi-
fied that at the time of supplementation, Freedom had only
completed approximately 65 percent of its work under the
contract.
   Mike testified that Tackett prepared an assessment of liqui-
dated damages on the project, which was introduced as exhibit
137, and reflected a 35-day contractual duration rather than
the 15-day agreement he had previously testified was made.
Exhibit 137 reflected an amount of $31,000 in liquidated dam-
ages assessed against Freedom.
   On cross-examination, Mike testified that as construction
manager, it was Tackett’s responsibility to schedule and coordi-
nate the work of various contractors on the project. It was also
Tackett’s responsibility to facilitate communication between
contractors and the ownership and to review the contractors’
applications for payment and change orders.
   Mike agreed that under the original schedule, Freedom was
allotted approximately 4 weeks between floors. He further
agreed that the contract time for Freedom’s work was to be
measured from the date of commencement of its work. Mike
testified that Freedom was originally scheduled to commence
work on November 10, 2015, but work was delayed until May
9, 2016. Mike testified that the 15-day-per-floor schedule
reduced the time between each floor “to about two weeks.”
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

   Johnathon Seffron, a construction representative with
Anant Construction (Anant), an entity owned by Trivedi and
Gangahar, testified that he helps manage construction proj-
ects on behalf of the property owners. Seffron attended the
May 19, 2016, meeting with representatives from Freedom,
Tackett, and Anant. He understood the project to be behind
schedule on that date, specifically related to Freedom’s scope
of work. Seffron testified that Freedom indicated that it needed
3 weeks to complete each floor on the project. He testified
that an agreement was made that Freedom would finish the
drywall, from start to finish, on each floor within 15 work-
ing days.
   Seffron testified that as of August 16, 2016, all the neces-
sary inspections were complete on the third, fourth, and fifth
floors. Seffron did not recall any existing issues on August 16
that would have interfered with Freedom’s ability to complete
its work throughout the duration of the project.
   Mike Heidesch, an independent construction representative
for Anant, testified that he was on the Nichol Flats jobsite
every day during the project. Heidesch prepared exhibit 27, a
daily field report, which reflects the number of Freedom work-
ers (and its subcontractors) he counted on August 17, 2016.
Exhibit 27 also reflects Heidesch’s observations that Freedom
was still in the process of hanging drywall on the third, fourth,
and fifth floors on that date.
   Exhibit 128 was introduced and includes photographs that
Heidesch took on August 18, 2016, documenting the state of
work Freedom completed on the project. Heidesch testified to
various work that was incomplete as shown in the pictures.
Heidesch testified that work left to be completed by Freedom
included “drywall that needed to be hung, hollow metal
frames, drywall finish and ceiling grid.” Heidesch estimated
that Freedom had completed 60 percent of its scope of work
by August 18, when it stopped working on the project.
   Trivedi, a co-owner of both Anant and Nichol Flats, testi-
fied that Nichol Flats is a mixed-use facility with 68 apart-
ment units and a floor for commercial use. Trivedi acted as the
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

“owner’s representative” under the terms of the contract with
Freedom. Trivedi testified that a 15-day-per-floor schedule was
agreed upon at the May 19, 2016, meeting. In his experience,
this timeline was not unreasonable for these types of projects
with proper staffing.
   Trivedi testified that Nichol Flats consistently had issues
getting lender approval of payment applications for the dry-
wall work. These issues stemmed from the fact that the bank’s
inspector believed the drywall work was being overbilled.
   Exhibit 108 is a change order request for Freedom to dry-
wall the kitchen soffits that was denied by Nichol Flats. Trivedi
testified that Freedom did not frame the soffits and only dry-
walled some, which he believed was part of their original
scope of work. Under the contract, all change orders were to be
signed by the ownership to be approved.
   Exhibit 112 is a change order request for Freedom to frame
corridor soffits that was denied by Nichol Flats. Trivedi testi-
fied that the change order was denied because that work was
included under Freedom’s contractual obligation.
   Exhibits 113 and 114 are change order requests that were
signed and approved by Nichol Flats and included in Nichol
Flats’ damages calculation.
   Trivedi testified that on August 11, 2016, he emailed
Freedom representatives to give them notice to get back on
schedule within 7 days or Nichol Flats would “exercise other
options” and supplement Freedom’s work. Trivedi testified
that other trades on the project were being held up because of
Freedom’s delays. Trivedi denied ever ordering Freedom off
the project.
   Trivedi testified that when Freedom was supplemented on
August 18, 2016, Hermida made a telephone call and returned
and told Trivedi that “we don’t work with supplementing
crews.” He testified that Freedom workers then began to pack
their equipment and load up their trucks. Trivedi denied firing
Freedom or telling its crew to pack up their equipment. He
testified that as of August 18, Freedom was “55 to 60 percent”
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       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

complete with its work. On August 25, without Freedom hav-
ing returned to the jobsite, Trivedi emailed Freedom to give a
7-day notice that he was terminating the contract.
   Trivedi testified that the cost to complete Freedom’s scope
of work was $318,370.49. Prior to the termination of the con-
tract, Freedom had been paid $270,623.96 for its completed
work. The contract, including the two signed change orders,
was approximately $551,000, leaving a balance of $262,000.
Trivedi testified that Nichol Flats sought to recover the differ-
ence between its costs incurred to complete Freedom’s work
and the remaining contract balance it would have paid Freedom.
Trivedi testified that Nichol Flats incurred additional dam-
ages beyond the cost to complete Freedom’s work, including
accrued interest, loss of rent, and a higher interest rate on its
funding due to refinancing. He testified that the lien Freedom
filed reflects 96-percent completion by Freedom, which was
“[n]ot even close” to what was actually completed.
   On redirect examination, Trivedi testified that Freedom
never proposed, nor requested, a new contract to work under
if it were to return to the jobsite. Trivedi disputed the conten-
tion that Freedom completed 98 percent of material installation
and 90 percent of total labor on the date of termination. He
also disputed that Gangahar ordered Freedom to discontinue
work. Trivedi testified that supplementation is difficult, costly,
and used as a “last resort” and that he would not have supple-
mented Freedom had it actually been 90 to 98 percent complete
as represented by Freedom.
   Gangahar testified that he and Trivedi are business partners
and have worked on a variety of projects together. He testified
that after the initial delay, he met with Tackett in May 2016,
reviewed the construction schedule, and determined that the
drywall was the next trade to be performed. He indicated that
despite the site being ready for drywall, “hardly anything was
happening.” Gangahar testified that at the May 19 meeting, he
requested that Freedom explain the delay in work and provide
a schedule for when its work would be complete. He testified
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       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

that Randy stated that Freedom needed 3 weeks per floor to do
the drywall work.
   Gangahar testified that he was present at the Nichol Flats
site when Trivedi called a meeting and informed the crews
working on the project that Freedom was being supplemented.
Gangahar denied that he or Trivedi ever told Hermida that
Freedom should discontinue its work on the project. Gangahar
testified that the decision to supplement was considered over
the course of days or weeks and was eventually made because
Freedom was “[w]ay behind” schedule.
   Gangahar opined that Freedom was near 60 or 65 percent
complete with its scope of work on the day it was supple-
mented. Gangahar testified that Nichol Flats lost “hundreds of
thousands of dollars” due to its inability to open and lease to
student tenants in the fall.
   On cross-examination, Gangahar testified that Freedom was
notified on May 5, 2016, that the fifth floor at Nichol Flats was
ready for drywall. He testified that Tackett was in continual
communication regarding the status of the project and when
Freedom would be able to begin work.
   On redirect examination, Gangahar testified that he did
not suggest allowing Freedom to resume work on the project
because it would have required negotiating a new contract, he
and Trivedi had already experienced issues with Freedom, and
it would further delay the project.
   After the conclusion of Gangahar’s testimony, Nichol Flats
rested. Nichol Flats renewed its motion for directed verdict,
which the district court overruled. The district court then took
the matter under advisement.
   On June 20, 2019, the district court entered an order find-
ing that the original contract durations governed Freedom’s
schedule on the project and that Freedom had complied with
the contract. The district court also found that Nichol Flats
wrongfully terminated Freedom in breach of the contract
and that Freedom was entitled to $196,851.78 in damages—
an amount reflecting its finding that Freedom completed 75
percent of the drywall work upon termination, as well as
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       FREEDOM SPECIALTY CONTRACTING v. NICHOL FLATS
                    Cite as 28 Neb. Ct. App. 797

75 percent of Freedom’s construction lien. The district court
dismissed Freedom’s breach of contract action and Nichol
Flats’ counterclaim for breach of contract and indemnification.
This appeal followed.
                   ASSIGNMENTS OF ERROR
   Nichol Flats assigns that the district court erred in (1) its
determination that Freedom complied with the contract and
was thus entitled to foreclose its construction lien, (2) its
determination that Nichol Flats breached the contract, (3) its
dismissal of Nichol Flats’ breach of contract claim, and, alter-
natively, (4) its calculation of the construction lien amount.
                    STANDARD OF REVIEW
   [1,2] An action to foreclose a construction lien is one
grounded in equity. Lange Indus. v. Hallam Grain Co., 244
Neb. 465, 507 N.W.2d 465 (1993). In an appeal of an equity
action, an appellate court tries factual questions de novo on the
record and reaches a conclusion independent of the findings
of the trial court, provided, where credible evidence is in con-
flict on a material issue of fact, the appellate court considers
and may give weight to the fact that the trial judge heard and
observed the witnesses and accepted one version of the facts
rather than another. Id.
   [3,4] A suit for damages arising from breach of a contract
presents an action at law. Bloedorn Lumber Co. v. Nielson,
300 Neb. 722, 915 N.W.2d 786 (2018). In a bench trial of a
law action, the trial court’s factual findings have the effect of a
jury verdict and will not be disturbed on appeal unless clearly
wrong. Id.
                          ANALYSIS
             Freedom Complied With Contract
   Nichol Flats first argues that the district court erred in its
determination that Freedom complied with the contract and
was entitled to foreclose its construction lien. We agree with
the district court’s finding that Freedom did not breach its
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obligations under the contract. The fundamental issue in this
case is whether Freedom complied with the contract schedule
for the completion of its work. Although both parties agree
that the original contract dates were not adhered to, at no fault
of Freedom, a central issue at trial was whether the written
35-day-per-floor schedule or the alleged oral 15-day-per-floor
schedule controlled Freedom’s obligations.
   [5] First, we agree with the district court that the contract
between Freedom and Nichol Flats required any modifications
to be reduced to writing. Article I of the contract provided,
in part: “The Contract may be amended or modified only
by a written Modification signed by the Owner. No verbal
amendments, waivers, changes, or other modifications of any
kind will be enforceable.” Contract clauses requiring that any
modifications to the contract be made in writing are valid
and enforceable in Nebraska. See, e.g., Lueder Constr. Co. v.
Lincoln Electric Sys., 228 Neb. 707, 424 N.W.2d 126 (1988)
(enforcing clause requiring written change order to amend con-
tract time). Therefore, it is clear to us that the 35-day-per-floor
schedule, as contemplated by the original contract, controlled
Freedom’s contract schedule obligations.
   Nichol Flats directs us to Freedom’s “Location Time Card”
records in arguing that the district court erred in finding that
Freedom “was unable to commence its work until on or about
May 20, 2016.” Nichol Flats argues that the contract plainly
states that the “Contract Time shall be measured from the date
of commencement,” and according to Freedom’s own records,
this date was prior to May 20, 2016. Article 3, § 3.1, of the
contract provides:
      The date of commencement of the Work shall be the date
      of this Agreement unless a different date is stated below
      or provision is made for the date to be fixed in a notice
      to proceed issued by the Owner. (Insert the date of com-
      mencement, if it differs from the date of this Agreement or,
      if applicable, state that the date will be fixed in a notice
      to proceed.)
(Emphasis in original.)
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   As previously mentioned, all parties agree that the dates of
exhibit B were not followed and that the initial delay was no
fault of Freedom. The record before us reveals that no writ-
ten amended schedule was ever agreed to between the parties,
nor was one provided by the construction manager, Tackett.
Therefore, it was incumbent upon the district court to deter-
mine the new “date of commencement” that Freedom’s con-
tract time was to be measured from. Although we acknowledge
that this is an issue that we determine de novo on the record,
our standard of review further provides that “where credible
evidence is in conflict on a material issue of fact, the appel-
late court considers and may give weight to the fact that the
trial judge heard and observed the witnesses and accepted
one version of the facts rather than another.” Lange Indus. v.
Hallam Grain Co., 244 Neb. 465, 467-68, 507 N.W.2d 465,
469 (1993).
   In this case, there was extensive testimony and evidence
introduced at trial disputing the date of commencement.
Although Nichol Flats argues that Freedom’s contract durations
should be measured from the date its workers first stepped foot
on the jobsite, we disagree. Section 3.1 of the contract pro-
vides that either (1) the date of the agreement; (2) an inserted
date (i.e., exhibit B); or (3) a date fixed in a notice to proceed,
determines the date of commencement. After the schedule in
exhibit B became infeasible, the parties did not agree to a new
written schedule as required by the contract. Article I provides:
“The Scope of the Work, Contract Sum, Contract Time, and
other provisions of this Agreement are not subject to informal
modification, whether by email, text message, verbal, etc.
Only a properly executed Change Order, Construction Change
Directive, and/or Modifications shall be recognized as binding
upon the Parties.”
   At trial, representatives from Tackett, as well as Gangahar,
the co-owner of Nichol Flats, testified that Freedom received
“notice” on May 5, 2016, that it could commence work.
Jantzon testified that Freedom was unable to commence work
as of May 15 due to delay by other contractors and incomplete
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inspections. Representatives from both parties testified that a
meeting was held on May 19 between Nichol Flats, Freedom,
and Tackett to “discuss [the] project schedule for drywall and
the job in general.” Based on the record before us, and the
appropriate weight given to the fact that the district court heard
and observed the witnesses, we agree that Freedom’s “date of
commencement” was on or about May 20.
   Based on the May 20, 2016, date of commencement, we
further agree with the district court that Freedom was in com-
pliance with the contract terms, namely its contract schedule
obligations, and was not in breach at the time it was terminated
on August 18. Applying the original contract durations (exclud-
ing weekends and holidays), the “top floor down” approach
taken by Freedom, and the May 20 date of commencement,
Freedom’s schedule would be as follows:
      Floor      Duration       Start Date       Finish Date
    Level 5      35 Days         5/20/2016        7/12/2016
    Level 4      35 Days         6/20/2016         8/9/2016
    Level 3      35 Days         7/19/2016         9/7/2016
    Level 2      35 Days         8/16/2016        10/5/2016
    Level 1      15 Days         8/23/2016        9/14/2016
   Nichol Flats specifically takes issue with the 4-week dura-
tion allocated between floors, arguing that it “does not make
any sense” and that “Freedom did not actually start the floors
four weeks apart.” Brief for appellant at 15. Although Nichol
Flats argues that applying the 4-week gap between floors is
contrary to the contract, it is precisely the contract where
these durations come from. Exhibit B of the original contract
provides 35 working days per floor and 4 weeks (20 work-
ing days) between the start dates of each floor. Because no
amended written schedule was ever agreed to, the original con-
tract durations controlled Freedom’s obligations.
   Based on the new date of commencement, and the appropri-
ate contract durations, Freedom was not in breach on August
18, 2016, when it was terminated. Section 2.4 of the general
conditions of the contract provides in part:
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     If [Freedom] defaults or neglects to carry out the Work
     in accordance with the Contract Documents and fails
     after receipt of written notice from the Owner to cure
     such default or neglect with diligence and promptness,
     the Owner may, without prejudice to other remedies the
     Owner may have, correct such deficiencies.
   No notice of default was provided to Freedom prior to
August 11, 2016. As of August 11, Freedom was required
to have completed work only on the fourth and fifth floors
per the contract durations. In his email notice, Trivedi states
that work on the second and third floors was incomplete and
merely asked whether the fourth floor was complete. Work on
the second and third floors was not yet due to be complete,
and according to Tackett’s calculation of liquidated damages,
Freedom was completed with the fifth floor by July 20 and
the fourth floor by August 1. Therefore, Freedom was not in
breach of the contract schedule on August 18 when it was ter-
minated from the Nichol Flats project.
   Nichol Flats also argues that Freedom breached the contract
by refusing to cooperate with the supplementing contractor.
Nichol Flats directs us to § 6.1 of the contract in support of its
argument, which provides:
        § 6.1.1 The Owner reserves the right to perform con-
     struction or operations related to the Project with the
     Owner’s own forces, which include persons or enti-
     ties under separate contracts not administered by the
     Construction Manager, and to award other contracts in
     connection with other portions of the Project or other
     construction or operations on the site.
        ....
        § 6.1.2 When the Owner performs construction or
     operations with the Owner’s own forces including per-
     sons or entities under separate contracts not administered
     by the Construction Manager, the Owner shall provide
     for coordination of such forces with the Work of the
     Contractor, who shall cooperate with them.
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   Despite Nichol Flats’ characterization of § 6.1 as permit-
ting it to engage its “own forces” to complete any scope of
work on the project, we agree with Freedom that such an
interpretation “would render the contractual procedure for
supplementation, requiring notice of breach and seven days to
cure, moot.” Brief for appellee at 24-25. This requirement is
reflected in § 2.4 of the general conditions of the contract, as
quoted above. Although Trivedi sent an email on August 11,
2016, purporting to provide notice to Freedom that if it did
not “meet the contractual schedule” within 7 days, it would be
supplemented, as discussed above, Freedom was not in breach
of the contract schedule on August 11. Therefore, with no
breach to cure, Nichol Flats’ supplementation of Freedom on
August 18 was improper.
   [6] Nichol Flats also argues that the district court’s find-
ing that Freedom was 75 percent complete with its scope
of work on August 18, 2016, when its work on the project
stopped, demonstrates that Freedom was in breach and did
not substantially perform. The majority of Nichol Flats’ argu-
ment relies on its incorrect interpretation of the controlling
contract schedule. For reasons previously discussed, we reject
this argument. Nichol Flats also argues that the 75-percent-
complete finding itself indicates Freedom did not substantially
perform. “[S]ubstantial performance is shown when all the
essential elements necessary for the full accomplishment of
the purposes of the contract have been performed with such an
approximation to complete performance that the owner obtains
substantially what is called for by the contract.” Lange Indus.
v. Hallam Grain Co., 244 Neb. 465, 474, 507 N.W.2d 465,
473 (1993).
   However, Nichol Flats fails to consider that substantial
performance should be measured against the contract dura-
tions of each floor, not against the contract as a whole, which
the 75-percent-complete finding of the district court meas­
ures. Because we have already determined that Freedom was
not in breach of the contract durations and, therefore, had
substantially performed work on the fourth and fifth floors
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by August 18, 2016, as the contract required, this argument
also fails.
              Nichol Flats Breached Contract
   Nichol Flats next argues that the district court erred in its
determination that Nichol Flats breached the contract and
that Freedom was entitled to recover under the construction
lien. Nichol Flats argues that the decision “ignores relevant
terms of the Contract, whether the termination is considered
one for cause or for convenience.” Brief for appellant at 21.
We disagree.
   Section 14.2 of the contract permitted Nichol Flats to termi-
nate Freedom “for [c]ause.” Section 14.2.1 allows termination
under this provision if Freedom, as relevant here, was “guilty
of material breach of a provision of the Contract Documents.”
We have already determined that Freedom did not commit a
material breach of the contract as of August 18, 2016, when its
work was terminated. Therefore, Nichol Flats was not entitled
to terminate Freedom for cause under § 14.2.
   Nichol Flats also argues that even if it was not permitted
to terminate Freedom for cause, it was permitted to terminate
the contract for “convenience” under § 14.4.1, which provides:
“The Owner may, at any time, terminate the Contract for the
Owner’s convenience and without cause.” Although Nichol
Flats was permitted to terminate Freedom for “convenience”
at any point under the contract, the contract nevertheless pro-
vides that written notice should be given of the termination
and that under § 14.4.3, “the Contractor shall be entitled to
receive payment for Work executed, including reasonable over-
head and profit on the Work executed.” However, as Freedom
argues in its brief, Trivedi made clear his intention was to
terminate Freedom for cause. In his August 18, 2016, email,
Trivedi wrote:
      Nichol Flats LLC will complete the scope with the sup-
      plementation team and will hold Freedom liable for any
      additional costs that may be incurred within their con-
      tractual scope. Since Freedom has refused to continue
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      work, no employee, associate, and/or affiliate of Freedom
      may not [sic] come on to property without my personal
      approval.
   This is precisely the type of remedy provided for under
§ 14.2.2, allowing for termination for cause. There was con-
flicting testimony as to whether Freedom “refused to work” or
whether Trivedi asked Freedom’s jobsite foreman, Hermida,
“‘How fast can you get your things and your men off the
job?’” and later refused to allow Freedom back on the jobsite.
However, the district court found credible the evidence that
Nichol Flats terminated Freedom. Again, we “may give weight
to the fact that the trial judge heard and observed the witnesses
and accepted one version of the facts rather than another.”
Lange Indus. v. Hallam Grain Co., 244 Neb. 465, 467-68, 507
N.W.2d 465, 469 (1993). Because Freedom was not in breach
of the contract on August 18, 2016, when it was terminated by
Nichol Flats, we agree with the district court that Nichol Flats
committed a breach of the contract.
              Dismissal of Nichol Flats’ Breach
                       of Contract Claim
   Nichol Flats next argues that the district court erred in its
dismissal of its breach of contract claim. However, because this
argument is wholly dependent on a finding that Freedom was
in breach of the contract, this argument fails. We have already
determined that Freedom was in compliance with the contract
schedule and did not breach the contract. Therefore, it was not
in error for the district court to dismiss this claim.
             Calculation of Construction Lien
   Nichol Flats’ final assignment of error, presented solely as
an alternative to its previous arguments, is that the district
court erred in its calculation of the construction lien amount.
We agree. Although we affirm the finding of the district court
that Freedom completed 75 percent of the adjusted contract,
including written change orders, we modify its calculation of
the amount of Freedom’s construction lien.
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   [7] Under Neb. Rev. Stat. § 52-136(1)(a) (Reissue 2010),
the appropriate calculation of a construction lien is “for the
unpaid part of [the contractor’s] contract price.” The Nebraska
Supreme Court has reiterated that § 52-136(1)(a) “speak[s]
clearly as to the right to a construction lien only with respect
to services performed or materials furnished, not with respect
to services intended to be performed or materials intended
to be furnished.” Tilt-Up Concrete v. Star City/Federal, 255
Neb. 138, 153, 582 N.W.2d 604, 613 (1998). The district
court made a factual finding, which we affirm, that Freedom
completed 75 percent of its scope of work under the adjusted
contract prior to being terminated. Therefore, the calculation of
Freedom’s construction lien should have reflected 75 percent
of the adjusted contract price (minus amounts already paid),
rather than 75 percent of Freedom’s claimed construction lien
amount. Based on this, we recalculate the amount of Freedom’s
lien as follows:
   First, we determine the total value of the adjusted contract
price by adding the original contract value with any approved
change orders:
       Original Contract Price:             $547,844
       Change Order No. 1:             $2,291 (Approved)
       Change Order No. 2:             $1,107 (Approved)
       Change Order No. 3:               Not Approved
       Change Order No. 4:               Not Approved
       TOTAL ADJUSTED
		 CONTRACT PRICE:                          $551,242
Based on the district court’s factual finding that Freedom
completed 75 percent of its scope of work as of August
18, 2016, when it ceased work on the Nichol Flats project,
which we affirm, we next multiply the adjusted contract price
by 75 percent: Pro Rata Contract Amount: $551,242 × 75%
= $413,431.50. Finally, to determine the amount owed to
Freedom under its construction lien, we must subtract any
payments previously made to Freedom by Nichol Flats, and
the evidence shows this amount to be $270,623.96: Amount
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Owed: $413,431.50 - $270,623.96 = $142,807.54. Based on
our recalculation of the value of Freedom’s construction lien,
we modify the district court’s judgment in favor of Freedom
from $196,851.78 to an amount of $142,807.54. The district
court’s order is otherwise affirmed, as modified.
                        CONCLUSION
   Based on the foregoing reasons, we affirm the district court’s
judgment to foreclose Freedom’s construction lien. However,
we modify the calculation of the lien amount to $142,807.54.
We also affirm the district court’s dismissal of Freedom’s
breach of contract claim and Nichol Flats’ counterclaims for
breach of contract and indemnification.
                                     Affirmed as modified.