Nathan v. McDermott

Summary

The Nebraska Supreme Court affirmed summary judgment for the sellers of a business and dismissal of claims against their agents. The court held that the purchase agreement's indemnification notice provision was unambiguous, that the buyers' misrepresentation claims arose from the same facts as their contract claims, and that the buyers could not prevail on recoupment. The court also affirmed promissory-note judgments for the sellers and the denial of attorney fees.

Holdings

1. The term "aware" in the purchase agreement was unambiguous and meant being informed, apprised, conscious, or cognizant of the claim, rather than possessing complete knowledge of every supporting fact. The Nathans were aware of their claims no later than October 9, 2015, and their December 15 indemnification demand was untimely under the 45-day notice provision.
2. The Nathans could not maintain independent misrepresentation claims because those claims arose from the same factual allegations and representations underlying their breach-of-contract claims. The tort allegations were surplusage.
3. The Nathans' recoupment defense was timely as a defensive matter and arose from the same transaction as the promissory-note counterclaims, but they failed to prove the underlying misrepresentation claim because they could not establish justifiable reliance or ordinary prudence.
4. The Nathans failed to state claims for breach of fiduciary duty or misrepresentation against RBA and Nielsen. Their complaint admitted that RBA and Nielsen acted as the sellers' agents, did not plausibly allege a fiduciary relationship with the Nathans or conduct outside the agency relationship, and was subject to contractual nonreliance provisions.
5. The district court did not abuse its discretion in denying attorney fees and sanctions because the Nathans' interpretation of "aware" was incorrect but made in good faith and was not frivolous or undertaken in bad faith.

Questions Presented

1. Whether the purchase agreement's 45-day indemnification-notice provision was unambiguous and barred the Nathans' breach-of-contract claims because they were aware of their claims more than 45 days before giving notice.
2. Whether the Nathans' misrepresentation claims against McDermott and Hoy were independent tort claims or merely contract claims based on the same operative facts.
3. Whether the Nathans established recoupment as an affirmative defense to the sellers' promissory-note counterclaims.
4. Whether the Nathans stated claims for breach of fiduciary duty or misrepresentation against RBA and Nielsen despite the complaint's allegations that they acted as the sellers' agents and the purchase agreement's nonreliance provisions.
5. Whether the district court abused its discretion by denying sanctions and attorney fees.

Disposition

affirmed