J.L. Healy Construction Co. v. State

463 N.W.2d 813, 236 Neb. 759, 1990 Neb. LEXIS 371
CourtNebraska Supreme Court
DecidedDecember 14, 1990
DocketNo. 88-659
StatusPublished
Cited by12 cases

This text of 463 N.W.2d 813 (J.L. Healy Construction Co. v. State) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
J.L. Healy Construction Co. v. State, 463 N.W.2d 813, 236 Neb. 759, 1990 Neb. LEXIS 371 (Neb. 1990).

Opinion

Grant, J.

J.L. Healy Construction Company (hereinafter Healy), a South Dakota corporation, filed a petition in the district court for Sheridan County, Nebraska, against the State of Nebraska’s Department of Roads (hereinafter DOR), seeking judgment in the amount of $725,719.28. The damages prayed for were based on Healy’s allegations that DOR had breached its “duties to Healy” by “negligently failing to perform and administer with care, skill, reasonable expediency and faithfulness” a “contract” between Healy and Sheridan County and “agency agreements” between Sheridan County and DOR. Before the Sheridan County-Healy contract, the county had entered into an agreement with DOR that DOR, as the county’s agent, would “supervise... all construction work” in connection with the contract. Healy appeals from a judgment of the Sheridan County District Court finding that DOR was negligent only in failing to timely test certain samples and that such negligence [760]*760resulted in damages of $4,000, but that DOR generally did not negligently violate any other duties it owed to Healy.

The record shows that Healy filed a claim with the State Claims Board, alleging that DOR was negligent as set out above. The claims board denied Healy’s claim. Healy then filed this action. During a 5-day trial, Healy adduced evidence regarding 19 specific ways in which it felt DOR negligently breached contractual duties owed to Healy. Central to these claims is Healy’s assertion that the supervisory personnel of DOR who worked on the project were inexperienced and incompetent. Healy argues that this incompetence was apparent through actions such as requiring grossly excessive mixing of asphaltic oil in the roadbed and requiring frequent halting of construction until samples could be taken and test results received from a laboratory in Lincoln.

The parties requested specific findings of fact. The trial court made 53 such findings. Several of those findings supported allegations made by Healy. The court held, however, that in general DOR was not negligent. As stated above, the trial court rendered judgment for $4,000 in favor of Healy, based upon one 8-day delay in receiving results of test samples from a Lincoln lab, and denied any other damages. Healy appeals from that judgment, contending primarily that the specific findings of fact are inconsistent with the court’s conclusions of law and that Healy is entitled to a substantially larger amount of damages.

Healy brought this action on a tort theory of “negligent breach of contract.” Relying upon language in Lincoln Grain v. Coopers & Lybrand, 216 Neb. 433, 345 N.W.2d 300 (1984), Healy pled in its petition that DOR had breached its duties to Healy by “negligently failing to perform and administer with care, skill, reasonable expediency and faithfulness the contract and agency agreements . . . .” Healy contends that a negligent failure to observe any of the contractual conditions is a tort as well as a breach of contract.

Lincoln Grain was an action by the plaintiff company against its auditing firm for failure of the firm to perform its contractual auditing duties, as set out in an “engagement letter,” for an audit “in accordance with generally accepted [761]*761auditing standards.” Id. at 434, 345 N.W.2d at 303. The action was between two private corporations. In Lincoln Grain, supra, we set out general rules for determining the line between tort actions and breach of contract actions. We also stated that “to the extent there is a choice ... the parties elected to try this case as if it were one in tort. Ordinarily, as we do in this case, we will dispose of a case on appeal on the theory on which it was presented in the lower court.” (Citations omitted.) Id. at 438, 345 N.W.2d at 305.

This case differs from Lincoln Grain in at least two respects: (1) Healy has sued a department of the State of Nebraska, and, thus, this action is not one between private corporations, and (2) in this case, while Healy elected to try the case as if it were one in tort, DOR did not so elect and indeed objected to such a treatment throughout the case until this appeal.

With regard to the first difference, the basis for an action against the State must rest on the State’s waiver of its immunity from suit. That waiver is conditional and set out in statutory provisions establishing procedures that must be followed to give a court jurisdiction of an action against the State. If Healy’s action was a tort action, Neb. Rev. Stat. § 81-8,212 (Reissue 1987) requires that a claim be filed with the State Claims Board, and Neb. Rev. Stat. § 81-8,214 (Reissue 1987) provides that an action on such claim is to be heard by the district court of the county where the alleged tort occurred. On the other hand, if Healy’s action was a breach of contract action, Neb. Rev. Stat. § 81-1170 (Reissue 1987) requires that a claim be filed with the Director of Administrative Services. An action on such a claim is to be heard “in the district court of the county wherein the capital is situated . . . .” Neb. Rev. Stat. § 25-21,206 (Reissue 1989). In waiving its governmental immunity from suit, the State of Nebraska set out the foregoing procedures which must be followed. The subject matter jurisdiction of the district court is decided by a correct determination of whether the claim is a tort or contract action. See L.J. Vontz Constr. Co. v. State, 230 Neb. 377, 432 N.W.2d 7 (1988).

We note that procedural changes have been made in the pertinent Nebraska statutes since the inception of this case, but [762]*762those changes do not affect the decision in this case. See Neb. Rev. Stat. §§ 81-8,302 etseq. (Cum. Supp. 1990).

With regard to the second difference, there was no agreement between the parties as to the theory on which the case was to be tried. As stated above, Healy contended that the action was one in tort. DOR alleged in its answer and contended in its opening argument in the trial court that the case properly belonged in contract. At the conclusion of Healy’s case in the trial court, DOR made a motion to dismiss “based primarily on the jurisdiction of the Court which, in fact, the evidence has proved that this is a contract claim for the action.” The motion was denied. DOR does not present this jurisdictional contention in this court, probably because of a pragmatic conclusion by DOR that it is satisfied with the disposition of the claim as determined by the trial court.

This court has a duty to determine issues of jurisdiction which are apparent from the record. We have said:

“Whether a question is raised by the parties concerning jurisdiction of the lower court or tribunal, it is not only within the power but the duty of an appellate court to determine whether such appellate court has jurisdiction over the subject matter.” Glup v. City of Omaha,

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Bluebook (online)
463 N.W.2d 813, 236 Neb. 759, 1990 Neb. LEXIS 371, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jl-healy-construction-co-v-state-neb-1990.