Court Opinion

ID: 4561911
Source: CourtListenerOpinion
Date Created: 2020-09-01 14:07:48.28814+00
Date Added: 2024-06-11T08:46:20.133092
License: Public Domain

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09/01/2020 09:07 AM CDT

                                                        - 785 -
                             Nebraska Court of Appeals Advance Sheets
                                  28 Nebraska Appellate Reports
                                        SPRING CREEK HOME v. SHURIGAR
                                              Cite as 28 Neb. Ct. App. 785

                          Spring Creek Home, LLC, a Nebraska limited
                              liability company, appellee, v. Rhoda
                                       Shurigar, appellant.
                                                    ___ N.W.2d ___

                                        Filed September 1, 2020.   No. A-19-584.

                 1. Contracts: Judgments: Appeal and Error. The meaning of a contract
                    is a question of law, in connection with which an appellate court has an
                    obligation to reach its conclusions independently of the determinations
                    made by the court below.
                 2. Contracts: Public Policy: Judgments: Appeal and Error. The deter-
                    mination of whether a contract violates public policy presents a question
                    of law, and an appellate court independently reviews questions of law
                    decided by a lower court.
                 3. Damages: Appeal and Error. The amount of damages to be awarded is
                    a determination solely for the fact finder, and its action in this respect
                    will not be disturbed on appeal if it is supported by evidence and bears
                    a reasonable relationship to elements of damages proved.
                 4. Contracts. In interpreting a contract, a court must first determine, as a
                    matter of law, whether the contract is ambiguous.
                 5. Contracts: Words and Phrases. A contract is ambiguous when a word,
                    phrase, or provision in the contract has, or is susceptible of, at least two
                    reasonable but conflicting interpretations or meanings. A contract writ-
                    ten in clear and unambiguous language is not subject to interpretation or
                    construction and must be enforced according to its terms.
                 6. Contracts. Contracts are to be construed according to the sense and
                    meaning of the terms which the parties have used, and if they are clear
                    and unambiguous, their terms are to be taken and understood in their
                    plain, ordinary, and popular sense.
                 7. ____. When the terms of the contract are clear, a court may not resort
                    to rules of construction, and the terms are to be accorded their plain and
                    ordinary meaning as the ordinary or reasonable person would under-
                    stand them.
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          Nebraska Court of Appeals Advance Sheets
               28 Nebraska Appellate Reports
                   SPRING CREEK HOME v. SHURIGAR
                         Cite as 28 Neb. Ct. App. 785

 8. ____. A contract must receive a reasonable construction, and a court
    must construe it as a whole and, if possible, give effect to every part of
    the contract.
 9. ____. Whatever the construction of a particular clause of a contract,
    standing alone, may be, it must be read in connection with other clauses.
10. ____. When there is a question about the meaning of a contract’s lan-
    guage, the contract will be construed against the party preparing it.
11. Contracts: Intent. A court should avoid interpreting contract provisions
    in a manner that leads to unreasonable or absurd results that are obvi-
    ously inconsistent with the parties’ intent.

  Appeal from the District Court for Webster County: Stephen
R. Illingworth, Judge. Reversed and remanded for further
proceedings.
   Richard Calkins, of Calkins Law Office, for appellant.
   Gregory D. Barton, of Barton Law, P.C., L.L.O., for appellee.
  Moore, Chief Judge, and Riedmann and Arterburn,
Judges.
   Arterburn, Judge.
                         INTRODUCTION
   Rhoda Shurigar appeals from an order of the district court
for Webster County that found her personally liable to Spring
Creek Home, LLC, for unpaid care expenses incurred by a man
for whom she served as a court-appointed guardian. She argues
on appeal that the court erred in its interpretation of the con-
tract, that its decision contravenes public policy, and that dam-
ages were not sufficiently proved. For the reasons that follow,
we reverse the order of the district court and remand the cause
for further proceedings.
                       BACKGROUND
   On October 2, 2017, Spring Creek Home filed a com-
plaint alleging that Shurigar had breached a “Resident Service
Agreement” (Agreement) she had signed on her ward’s behalf
and was therefore personally responsible for the unpaid
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
                SPRING CREEK HOME v. SHURIGAR
                      Cite as 28 Neb. Ct. App. 785

charges incurred. Attached to the complaint was a copy of the
Agreement, which was signed by Shurigar. It named Timothy
Tierney as the “Resident” and Shurigar as the “Responsible
Party.” Also attached to the complaint were a monthly serv­
ices statement and other documents demonstrating the amount
of damages claimed. Shurigar filed an answer on November
6, 2017.
   Shurigar filed a motion to dismiss on March 2, 2018.
Meanwhile, Spring Creek Home filed a motion for summary
judgment and notice of hearing on March 21. On May 7, a
hearing on Spring Creek Home’s motion for summary judg-
ment was held, but Shurigar failed to appear. In its order, the
court stated that Shurigar had reasonable advance notice of the
hearing. The court found that the evidence was undisputed that
the Agreement named Shurigar a “‘responsible party’” and
that she was personally liable for any breach of the Agreement.
The court found that there was no genuine issue of material
fact as to Shurigar’s failure to pay Spring Creek Home charges
of $9,923.97 and entered a judgment of that amount in Spring
Creek Home’s favor.
   On May 17, 2018, Shurigar filed a motion to set aside
default judgment and application for new trial and an affidavit
in support thereof. She stated that proper notice was not given
to her for the May 7 hearing. The court determined that even
though Spring Creek Home appeared to have sent notice by
first-class mail as claimed, there was a question as to whether
Shurigar actually received the notice. Moreover, after review-
ing the parties’ briefs and affidavits, the court determined that
Shurigar may have a meritorious defense and that the inter-
ests of justice demanded that the case be heard on its merits.
Accordingly, on October 4, the court sustained Shurigar’s
motion to set aside the summary judgment and motion for a
new trial.
   The court held a trial on March 27, 2019. A copy of the
Agreement was admitted into evidence as exhibit 4. At the top
of page 1, the Agreement identifies the parties:
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
                SPRING CREEK HOME v. SHURIGAR
                      Cite as 28 Neb. Ct. App. 785

                   Spring Creek Home, LLC
                  Resident Service Agreement
    This agreement is between:       Date: May 20, 2015
    Spring Creek Home, LLC
    602 Michigan Ave.
    Inavale, NE 68952                Resident
			                                  Timothy Tierney
    Casey Snell, Administrator       Rhoda Shurigar
    Facility Representative          Responsible Party
    Hereafter known as the           Hereafter known as the
		 “Facility”		 “Resident”
Later on page 1, under “General Provisions,” it states:
         A. The Agreement between the Facility and the
     Resident shall consist of this Resident Service Agreement
     . . . and any other documents signed by the Facility and
     the Resident or the Responsible Party.
         B. This Agreement is binding on the Facility, the
     Resident, and the Resident’s heirs, personal representa-
     tives, and the like.
On page 2, under the heading “Financial Agreement,” the
Agreement states, “C. The Responsible Party shall pay all
charges that have been incurred by the Resident that are not
included in the monthly rental.” We will enumerate other perti-
nent provisions of the Agreement as needed in our analysis of
the case.
   Michaelle Strickland, the chief executive officer of Spring
Creek Home, testified that she had drafted the Agreement.
She described Spring Creek Home as a residential facility that
provided services for people who were diagnosed with severe
chronic mental illnesses. She said that most residents were
“dual eligible” for government benefits, meaning they received
both Medicaid and Medicare benefits. Like those of many
residents, Tierney’s benefits had been paid directly to Spring
Creek Home since he became a resident in May 2015—accord-
ing to Shurigar. Strickland testified that Tierney had also been
receiving benefits under the State’s “Aid to Aged, Blind and
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
                SPRING CREEK HOME v. SHURIGAR
                      Cite as 28 Neb. Ct. App. 785

Disabled” (AABD) program, but that those benefits terminated
in January 2017.
   Casey Snell, who began as the administrator at Spring Creek
Home in 2012, testified that she personalized their template
agreement for Tierney. She signed page 8 of the Agreement
as “Facility Representative.” Snell discussed Tierney’s past-
due account and testified that she often worked with residents
whose accounts fell behind because it took time for them
to recover funds in conjunction with State agencies. As an
example, she testified that Spring Creek Home had received a
$3,000 payment in a single month, which was much more than
usual, because it was for past-due benefits owed to Tierney
under the AABD program.
   Shurigar testified that she worked as a professional legal
guardian and conservator as appointed by the courts. She
was appointed Tierney’s temporary guardian on May 4, 2015,
and appointed his full and permanent guardian on September
14. However, she was never appointed Tierney’s conservator.
Tierney had been found to be mentally incapacitated due to
his mental health and substance abuse issues. Shurigar testified
that she intentionally chose Spring Creek Home for Tierney
because of its isolation and lack of nearby bars or liquor
stores. Additionally, he was known to flee the places he lived.
Shurigar called the decision to move Tierney into Spring Creek
Home “absolutely strategic” as it made it easier to control his
behavior and remove “temptations” from him.
   Shurigar said that Spring Creek Home housed many other
residents for whom she served as their guardian. She therefore
had an existing relationship with Snell and testified that, if
Snell was busy or out of town, Snell sometimes got paperwork
to her after a resident had already moved into Spring Creek
Home. Shurigar testified that she did not remember whether
Snell and she signed the Agreement before or after Tierney had
actually moved into Spring Creek Home but said that it was
close in time.
   When Shurigar became Tierney’s guardian, he was not
receiving benefits under the State’s AABD program, but she
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
                SPRING CREEK HOME v. SHURIGAR
                      Cite as 28 Neb. Ct. App. 785

said that she filed an application on his behalf as soon as he
was placed at Spring Creek Home. He was approved, and
Shurigar said that she reapplied for the benefits annually,
which renewals were due on June 1 each year. Shurigar said
that she was unaware that the State had terminated Tierney’s
benefits under the AABD program until Snell emailed her. She
did reapply for AABD benefits after being informed by Snell
of their termination. She subsequently decided to become the
payee for Tierney’s benefits and pay the provider. She decided
to seek a new placement for Tierney after becoming concerned
that Tierney was being billed for items for which he was not
supposed to be billed.
   Shurigar testified that she never signed a guaranty to be
financially responsible for Tierney. She said that she would not
have signed the Agreement if she thought Spring Creek Home
were going to hold her personally responsible for Tierney’s
debts, and she said that under the Agreement, she did not
believe she was financially responsible for Tierney. Shurigar
testified that she provided her legal guardianship papers to
Spring Creek Home before she signed the Agreement and that
she signed the Agreement as Tierney’s legal guardian.
   The court entered judgment on May 23, 2019. The court
recited portions of the Agreement and found that its plain
terms were not ambiguous: “It is clear that . . . Shurigar is
lumped into the category of a resident at the beginning of the
contract.” The court found that Shurigar, as a professional
guardian, ought to have read the Agreement but clearly had not
because it unambiguously made her liable for nonpayment. The
court further found that the contract was not contrary to law
or public policy because it bound only Shurigar and did not
require guardians in all cases to be personally responsible for
the debts of their wards. Accordingly, the court entered judg-
ment on behalf of Spring Creek Home and against Shurigar in
the amount of $11,836.13.
   Shurigar appeals from the district court’s judgment.
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
                 SPRING CREEK HOME v. SHURIGAR
                       Cite as 28 Neb. Ct. App. 785

                  ASSIGNMENTS OF ERROR
   Shurigar assigns, consolidated and restated, that the district
court erred in its interpretation of the parties’ Agreement, in
its determination that the Agreement was not against public
policy, and in its calculation of the amount of damages.
                   STANDARD OF REVIEW
   [1] The meaning of a contract is a question of law, in con-
nection with which an appellate court has an obligation to
reach its conclusions independently of the determinations made
by the court below. Meyer Natural Foods v. Greater Omaha
Packing Co., 302 Neb. 509, 925 N.W.2d 39 (2019).
   [2] The determination of whether a contract violates pub-
lic policy presents a question of law, and an appellate court
independently reviews questions of law decided by a lower
court. Mays v. Midnite Dreams, 300 Neb. 485, 915 N.W.2d
71 (2018).
   [3] The amount of damages to be awarded is a determina-
tion solely for the fact finder, and its action in this respect will
not be disturbed on appeal if it is supported by evidence and
bears a reasonable relationship to elements of damages proved.
U.S. Pipeline v. Northern Natural Gas Co., 303 Neb. 444, 930
N.W.2d 460 (2019).
                           ANALYSIS
   [4,5] In interpreting a contract, a court must first determine,
as a matter of law, whether the contract is ambiguous. City of
Sidney v. Municipal Energy Agency of Neb., 301 Neb. 147, 917
N.W.2d 826 (2018). A contract is ambiguous when a word,
phrase, or provision in the contract has, or is susceptible of,
at least two reasonable but conflicting interpretations or mean-
ings. Id. A contract written in clear and unambiguous language
is not subject to interpretation or construction and must be
enforced according to its terms. Id.
   [6,7] Contracts are to be construed according to the sense
and meaning of the terms which the parties have used, and if
they are clear and unambiguous, their terms are to be taken
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
                SPRING CREEK HOME v. SHURIGAR
                      Cite as 28 Neb. Ct. App. 785

and understood in their plain, ordinary, and popular sense. See
Gage County v. Employers Mut. Cas. Co., 304 Neb. 926, 937
N.W.2d 863 (2020). When the terms of the contract are clear, a
court may not resort to rules of construction, and the terms are
to be accorded their plain and ordinary meaning as the ordinary
or reasonable person would understand them. Id.
   [8-11] A contract must receive a reasonable construction,
and a court must construe it as a whole and, if possible, give
effect to every part of the contract. Labenz v. Labenz, 291
Neb. 455, 866 N.W.2d 88 (2015). Whatever the construction
of a particular clause of a contract, standing alone, may be, it
must be read in connection with other clauses. Id. When there
is a question about the meaning of a contract’s language, the
contract will be construed against the party preparing it. Id. A
court should avoid interpreting contract provisions in a manner
that leads to unreasonable or absurd results that are obviously
inconsistent with the parties’ intent. St. John v. Gering Public
Schools, 302 Neb. 269, 923 N.W.2d 68 (2019).
   The parties acknowledge that Spring Creek Home is due
some amount that was incurred through Tierney’s residency,
but they disagree regarding who bears contractual responsibil-
ity for the payment of that debt. Shurigar contends that the dis-
trict court erred in determining that the contract was unambig­
uous, and she argues in her brief that, based on the admission
of parol evidence, she is not liable for Tierney’s debts under
a correct interpretation of the contract. Spring Creek Home
argues and the district court agreed that the Agreement is
unambiguous and that its plain terms make Shurigar personally
liable for the outstanding debt. We conclude that the Agreement
is unambiguous but that, under its plain terms, Shurigar is not
personally responsible for the debt related to Tierney.
   In support of its arguments, Spring Creek Home first high-
lights the top of page 1 of the Agreement, which identifies
the parties. It argues that Tierney and Shurigar are defined,
jointly, as “Resident.” While we believe the Agreement’s plain
terms axiomatically define only Tierney as resident, we are
mindful that, if any question exists as to the meaning of the
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
                SPRING CREEK HOME v. SHURIGAR
                      Cite as 28 Neb. Ct. App. 785

contract’s language, we are to construe it against the drafter,
which here is Spring Creek Home.
   Before proceeding with our analysis, we note several other
portions of the Agreement we find pertinent to resolution of
the issue before us. On page 2, under the heading “Termination
of Agreement,” seven reasons for termination are enumerated,
including, “5. Resident develops a medical or other problem
which requires complex nursing care or which is not stable or
predictable, if the services cannot be provided by an appropri-
ately licensed agency or private duty staff.”
   On page 5, under the heading “Resident Responsibilities,”
the Agreement states, “8. . . . Responsible Party is defined
as the Resident, the Resident’s designee, someone holding
a healthcare power of attorney for the Resident, or is the
Guardian or Conservator for the Resident.” Also on page 5,
under the heading “Facility Responsibilities,” the Agreement
enumerates 12 responsibilities that the facility agrees to per-
form, including, “12. Record the Resident’s weight at least on
a quarterly basis.”
   On page 6 of the Agreement, under the heading “Admission
and Discharge Policies,” it states:
          2. No Resident may be admitted without a Resident
      evaluation and the Resident must agree to a physician’s
      physical evaluation, examination within the first 30 days
      of admission. The Resident must also agree to other
      reevaluations as necessary in the opinion of the attending
      physician, Facility staff, or the Administrator.
          3. A Resident whose condition is medically complex,
      unstable, or unpredictable may be admitted to or may
      remain in the facility only if the Resident or Responsible
      Party assumes responsibility for arranging for the
      Resident’s care through an appropriately Licensed agency
      or appropriately licensed personnel.
Later on page 6, under the heading “Medication Administration,”
a box was marked to indicate that the Resident “will not
administer his/her own medications” unless a competency test
is first administered by a licensed professional.
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
                SPRING CREEK HOME v. SHURIGAR
                      Cite as 28 Neb. Ct. App. 785

   The heading of page 7 is “Spring Creek Home, LLC RSA
Attachment.” Under the heading “Resident Goals,” nine goals
are enumerated, including, for example, “5. Attend [Alcoholics
Anonymous] at least once per month if needed.” Five enu-
merated privileges are listed under the heading “Resident
Privileges if Goals are achieved,” including, “1. Pop on Fridays
and special occasions.” Two signature lines were given on
page 7 of the Agreement: one labeled “Resident Signature” and
the other labeled “Signature of Responsible Party.” Shurigar
signed on the latter. Shurigar also signed page 8 on the line for
“Responsible Party,” not “Resident.”
   It is not a reasonable construction for both Tierney and
Shurigar to be jointly defined as Resident. The face of page 1
of the Agreement clearly identifies Shurigar as “Responsible
Party” while identifying Tierney as “Resident.” Moreover, only
Tierney fits the common definition of the word “resident” as
he, not Shurigar, resided in Spring Creek Home.
   Reading the Agreement as a whole and giving meaning to
each of its parts further demonstrates that the Agreement’s
plain terms unambiguously identifies Tierney, not Shurigar, as
the resident. On page 2, for example, if Shurigar is the resident,
then the Agreement would terminate if Shurigar developed a
medical or other problem which requires complex nursing care.
If Shurigar is the resident, then, according to page 5 of the
Agreement, she would be contractually entitled to be weighed
by Spring Creek Home on a quarterly basis. Additionally, page
6 would require that Shurigar, like Tierney, receive a physi-
cal within 30 days of admission to Spring Creek Home, and
page 6 also would preclude Shurigar from administering her
own medications. Page 7 would obligate Shurigar to attend
Alcoholics Anonymous meetings if necessary and obligate
Spring Creek Home to reward Shurigar with a “[p]op on
Fridays” for her attendance. These examples demonstrate that
the Agreement itself does not contemplate that the responsible
party is the resident.
   Spring Creek Home also argues that “under the plain terms
of the [Agreement], the ‘responsible party’ is the ‘resident’ and
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
                SPRING CREEK HOME v. SHURIGAR
                      Cite as 28 Neb. Ct. App. 785

the resident’s ‘Guardian.’” Brief for appellee at 12 (empha-
sis in original). Specifically, Spring Creek Home’s argument
is based on its reading of language from page 5 of the
Agreement: “Responsible Party is defined as the Resident, the
Resident’s designee, someone holding a healthcare power of
attorney for the Resident, or is the Guardian or Conservator
for the Resident.” Spring Creek Home’s argument fails because
it reads “and” where the Agreement says “or.” By using “or,”
the sentence at issue provides a number of possible definitions,
only one of which may be chosen. Reducing the sentence to
the choice at issue in our circumstances, the plain terms of
the language on page 5 provide that “Responsible Party is
defined as the Resident . . . or is the Guardian.” (Emphasis
supplied.) It is clear from the Agreement that Shurigar was the
responsible party, which was defined as the guardian, while
Tierney was the resident. Additionally, we note that both pages
1 and 5 of the Agreement refer to both the resident and the
responsible party as distinct entities within the same sentence,
indicating that they are not one and the same, but instead are
separate identities.
   The Agreement at issue in this case is unambiguous as it is
not susceptible to two reasonable interpretations or meanings.
Numerous other examples exist in the Agreement wherein the
term resident can only be applied to the actual resident, not
the responsible party. And, as we have pointed out, Shurigar
signed only the lines of the Agreement designated for the
responsible party. Were the resident and responsible party one
and the same, there would be no need for two lines. When the
Agreement is read and construed as a whole document, it is
clear that the term “resident” means Tierney alone. The term
“resident” does not encompass Shurigar. The plain and ordi-
nary meaning of the Agreement, read in its entirety, compels
this result. To read the term “resident” more broadly than refer-
ring to Tierney alone would lead to an unreasonable or absurd
result. Therefore, since Shurigar is not the resident, she can-
not be held personally responsible for charges the agreement
requires the resident to pay.
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        Nebraska Court of Appeals Advance Sheets
             28 Nebraska Appellate Reports
                SPRING CREEK HOME v. SHURIGAR
                      Cite as 28 Neb. Ct. App. 785

   Our inquiry does not end here, however. There are two provi-
sions of the agreement which purport to require the responsible
party to pay certain charges. Both are found under the heading
“Financial Agreement” and are located on page 2. Paragraph
C provides: “The Responsible Party shall pay all charges that
have been incurred by the Resident that are not included in
the monthly rental.” Paragraph E provides: “The Responsible
Party shall agree to pay a penalty charge of $20.00 for each
month the rent is not paid by the 10th of the month due.”
   We state no opinion as to whether these provisions make
the responsible party personally responsible for the enumer-
ated charges. These provisions were not contemplated by the
district court in reaching its conclusion. Therefore, we remand
the cause to the district court for further consideration. First,
the district court must determine whether any of the charges
incurred during Tierney’s residency fall within the description
of paragraphs C or E. If the court determines that charges exist
which fall within either of those descriptions, the court must
determine whether the evidence was sufficient to determine
the dollar amount due. If the evidence was sufficient, the court
must then determine whether the agreement makes Shurigar
personally responsible for the payment.
                        CONCLUSION
   Based on the foregoing, we reverse the judgment of the dis-
trict court. We remand the cause to the district court for further
determination consistent with the directions herein.
                              Reversed and remanded for
                              further proceedings.