HEARST-ARGYLE PROPERTIES

HEARST-ARGYLE PROPERTIES, INC., ET AL., APPELLANTS, v.
ENTREX COMMUNICATION SERVICES, INC., ET AL., APPELLEES.
HEARST-ARGYLE PROPERTIES, INC., AND THE HEARST CORPORATION,
APPELLANTS, V. ENTREX COMMUNICATION SERVICES, INC., ET AL.,
   APPELLEES.

Nos. S-09-048, S-09-104.

   SUPREME COURT OF NEBRASKA

279 Neb. 468; 2010 Neb. LEXIS 26

February 19, 2010, Filed

PRIOR HISTORY:
   Appeals from the District Court for Douglas County: THOMAS A. OTEPKA, Judge.

DISPOSITION:    APPEAL IN NO. S-09-048 DISMISSED. JUDGMENT IN NO. S-09-104
AFFIRMED.

HEADNOTES

   1. Jurisdiction: Appeal and Error. A jurisdictional question which does not
involve a factual dispute is determined by an appellate court as a matter of
law.

   2. Contracts: Public Policy. The meaning of a contract is a question of law,
as is the determination of whether a contract violates public policy.

   3. Appeal and Error. An appellate court resolves questions of law
independently of the determination reached by the court below.

   4. Contracts. 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.

   5. Contracts. A contract is viewed as a whole in order to construe it.

   6. Contracts. Whatever the construction of a particular clause of a contract,
standing alone, may be, it must be read in connection with other clauses.

   7. Courts: Contracts: Public Policy. The power of courts to invalidate
contracts for being in contravention of public policy is a very delicate and
undefined power which should be exercised only in cases free from doubt.

   8. Contracts: Public Policy. A contractual provision should not be declared
void as contrary to public policy unless it is clearly and unmistakably
repugnant to the public interest.

COUNSEL: J. Joseph McQuillan, of Walentine, O'Toole, McQuillan & Gordon, and
Jeffrey R. Learned, of Denenberg Tuffley, P.L.L.C., for appellants.

William R. Johnson and Craig F. Martin, of Lamson, Dugan & Murray, L.L.P., for
appellee Entrex Communication Services, Inc.

Thomas A. Grennan and Francie C. Riedmann, of Gross & Welch, P.C., L.L.O., for
appellee Communication Structures & Services, Inc.

Dean Suing, of Katskee, Henatch & Suing, for appellee Dudutis Erection &
Maintenance, Inc.

JUDGES: HEAVICAN, C.J., WRIGHT, CONNOLLY, GERRARD, MCCORMACK, and MILLER-LERMAN,
JJ. STEPHAN, J., not participating.

OPINION BY: GERRARD

OPINION

   GERRARD, J.

   The issues presented in this appeal arise out of a construction contract
requiring that the property owner maintain insurance "without optional
deductibles" and providing that if the insurance had deductibles, the property
owner would "pay costs not covered because of such deductibles." We must
determine whether those provisions insulate the construction contractor from
liability and whether public policy permits them to be enforced if the
contractor was grossly negligent. We find that the provisions at issue protect
the contractor, and we affirm the district court's ruling to that effect.

   BACKGROUND

   This case began with the July 2003 collapse of a television antenna tower in
Omaha, Nebraska. The defendants in this case, Entrex Communication Services,
Inc.; Communication Structures & Services, Inc.; and Dudutis Erection &
Maintenance, Inc. (collectively the defendants), had either contracted or
subcontracted to remove the analog antenna on the tower and replace it with a
digital antenna. The owners of the tower, Hearst-Argyle Properties, Inc., and
The Hearst Corporation (collectively Hearst), allege that the defendants'
negligence caused the tower to collapse, causing over $ 6 million in damages to
Hearst's property.

   Hearst and its insurers sued the defendants on that basis. Although their
claims were initially filed together, Hearst's claims were eventually separated,
under a different trial docket number, from the insurers' claims. The district
court granted the defendants' motion for summary judgment against the insurers,
concluding that a waiver of subrogation clause in the contract between Hearst
and the defendants barred recovery for insured damages. On appeal, we affirmed
that conclusion. 1

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -1   See
Lexington Ins. Co. v. Entrex Comm. Servs., 275 Neb. 702, 749 N.W.2d 124 (2008).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   Hearst continued to press its claim for $ 250,000 in alleged damages that had
not been covered by insurance, because of its insurance policy deductible. The
defendants moved for summary judgment, arguing that subparagraphs 11.4.1 and
11.4.1.3 of the parties' contract barred recovery for the deductible amount.
Subparagraph 11.4.1 required Hearst to

      purchase and maintain . . . property insurance written on a
   builder's risk "all-risk" or equivalent policy form in the amount of
   the initial Contract Sum, plus value of subsequent Contract
   modifications and cost of materials supplied or installed by others,
   comprising total value for the entire Project at the site on a
   replacement cost basis without optional deductibles.

(Emphasis supplied.) And subparagraph 11.4.1.3 added, "If the property insurance
requires deductibles, [Hearst] shall pay costs not covered because of such
deductibles."

   The district court agreed with the defendants' argument that the contract did
not permit Hearst to recover its deductible and granted the defendants' motion
for summary judgment.

   ASSIGNMENTS OF ERROR

   Hearst assigns that the district court erred in concluding that (1)
subparagraphs 11.4.1 and 11.4.1.3 bar Hearst's claims for its deductible and (2)
Hearst's gross negligence claims are barred by subparagraph 11.4.1.3.

   STANDARD OF REVIEW

   [1-3] A jurisdictional question which does not involve a factual dispute is
determined by an appellate court as a matter of law. 2 The meaning of a contract
is also a question of law, as is the determination of whether a contract
violates public policy. 3 An appellate court resolves questions of law
independently of the determination reached by the court below. 4

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -2   Connelly
v. City of Omaha, 278 Neb. 311, 769 N.W.2d 394 (2009).
3   See Lexington Ins. Co., supra note 1.
4   Tolliver v. Visiting Nurse Ass'n., 278 Neb. 532, 771 N.W.2d 908 (2009).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   ANALYSIS

   APPELLATE JURISDICTION

   We first note a jurisdictional issue presented by a clerical error on
Hearst's notice of appeal. As noted above, Hearst's claims and the claims of its
insurers were separated in the trial court into two separate trial docket
numbers. The district court entered summary judgment against Hearst on December
12, 2008. But Hearst's first notice of appeal in this case, filed January 9,
2009, was mistakenly filed under the docket number for the insurers' claims, not
Hearst's. And by the time Hearst recognized its error and filed an amended
notice of appeal, on January 26, more than 30 days had elapsed from the district
court's final judgment. 5 The question, then, is whether either notice was
sufficient to perfect Hearst's appeal.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -5   See Neb.
Rev. Stat. § 25-1912(1) (Reissue 2008).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   We conclude that the untimely January 26, 2009, notice of appeal was not
effective to confer appellate jurisdiction. The January 26 notice of appeal was
not filed within 30 days after the entry of the judgment from which Hearst
sought to appeal. 6 But Hearst's January 9, 2009, notice of appeal was filed
within 30 days of the judgment, albeit under the wrong trial docket number.
Section 25-1912 does not expressly require a notice of appeal to display a trial
court docket number, or be filed in a particular trial court docket; instead, it
requires only a "notice of intention" to prosecute an appeal from a judgment,
decree, or final order of the district court. And other courts have found, under
comparable circumstances, that a notice of appeal filed under the wrong docket
number is not fatal to appellate jurisdiction. 7

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -6   See id.
7   See, Scherer v. Kelley, 584 F.2d 170 (7th Cir. 1978); Johnson v. Ragsdale,
158 S.W.3d 426 (Tenn. App. 2004); Seneca Ins. Co. v. Daniel, 93 Fed. Appx. 872
(6th Cir. 2004). See, also, U.S. v. Grant, 256 F.3d 1146 (11th Cir. 2001);
Arequipeno v. Hall, No. 9625, 2000 Mass. App. Div. 97, 2000 WL 420622 (Mass.
App. Div. Apr. 12, 2000).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   Hearst's defective January 9, 2009, notice of appeal effectively served as a
"notice of intention" to prosecute an appeal within the meaning of § 25-1912(1).
It displayed the wrong trial docket number, but correctly and specifically
identified the parties and the December 12, 2008, order being appealed from. The
defendants do not argue that they were confused or misled by the notice of
appeal; in fact, the record affirmatively demonstrates that they were not. And
Hearst has presented this court with a consolidated record that contains the
December 12 order and the evidence upon which the district court's order was
based. 8 Under these circumstances, we conclude that § 25-1912(1) was
substantially complied with and that we have jurisdiction to consider Hearst's
appeal.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -8   See
Holste v. Burlington Northern R.R. Co., 256 Neb. 713, 592 N.W.2d 894 (1999).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   We are left with two appellate docket numbers. But a docket number is not
synonymous with an appeal. Docket numbers are a function of this court's
internal administration, and regard-less of how they have been enumerated, it is
clear that there is only one appeal here: Hearst's appeal from the December 12,
2008, summary judgment order. Because it will simplify matters for the trial
court if our mandate on appeal corresponds to the trial docket number in which
the December 12 order was entered, we accept Hearst's suggestion that we dismiss
case No. S-09-048 as moot, and we enter our judgment in this appeal in case No.
S-09-104.

   INSURANCE PROVISIONS OF CONTRACT

   As noted above, subparagraph 11.4.1 of the parties' contract required Hearst
to purchase and maintain builder's "all-risk" insurance "without optional
deductibles." Subparagraph 11.4.1.2 required Hearst to notify Entrex
Communication Services (hereinafter Entrex) if it did not intend to purchase the
required insurance "with all of the coverages in the amount described above,"
permitting Entrex to obtain such insurance and charge the cost to Hearst. But
instead, Hearst obtained insurance with a $ 250,000 deductible. And subparagraph
11.4.1.3 provides that if Hearst obtained property insurance with deductibles,
Hearst "shall pay costs not covered because of such deductibles."

   Nonetheless, Hearst argues that the contract does not preclude it from
seeking indemnification for the deductible from the defendants. Hearst first
points to subparagraph 11.4.7 of the contract, the "Waivers of Subrogation"
provision, under which Hearst and Entrex "waive all rights against . . . each
other and any of their subcontractors, sub-subcontractors, agents and employees,
each of the other . . . for damages caused by fire or other causes of loss to
the extent covered by property insurance obtained pursuant to this Paragraph
11.4." (Emphasis supplied.) Hearst argues that because subparagraph 11.4.7
operates only as a waiver of liability "to the extent covered by property
insurance," the recovery of any amount not covered by insurance--i.e., the
deductible--is not waived by this provision. With that much, we agree.
Subparagraph 11.4.7 does not preclude Hearst from recovering the deductible
amount.

   [4-6] But subparagraph 11.4.1.3 does require Hearst to pay the costs not
covered because of the deductible. Hearst argues that it is simply required to
pay the costs not covered by the deductible, but that it can still seek
indemnification for those costs. Hearst's construction of subparagraph 11.4.1.3,
however, makes little sense when read in the context of the entire contract. 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 And a
contract is viewed as a whole in order to construe it. 10 Whatever the
construction of a particular clause of a contract, standing alone, may be, it
must be read in connection with other clauses. 11

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -9   Lexington
Ins. Co., supra note 1.
10   Keller v. Bones, 260 Neb. 202, 615 N.W.2d 883 (2000).
11   Poulton v. State Farm Fire & Cas. Cos., 267 Neb. 569, 675 N.W.2d 665 (2004)
.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   Here, subparagraph 11.4.1 required Hearst to obtain property insurance
without optional deductibles. Subparagraph 11.4.1.2 required Hearst to notify
Entrex in writing if Hearst did not purchase insurance meeting that requirement,
and provided that if Hearst chose not to do so, it would bear any resulting
costs if Entrex was damaged. The only construction of subparagraph 11.4.1.3
consistent with the preceding provisions is that if Hearst neither obtained the
required no-deductible insurance nor informed Entrex of that fact, Hearst would
bear any resulting costs. To conclude otherwise would leave Entrex with no way
to enforce its rights under paragraph 11.4.

   Hearst also argues, briefly, that it was required only to obtain insurance
without "optional deductibles" and that there is no proof in this case that the
deductible was "optional." But subparagraph 11.4.1.3 more plainly states that
"[i]f the property insurance requires deductibles, [Hearst] shall pay costs not
covered because of such deductibles." We reject Hearst's argument that the
deductible in this case does not fall within the scope of subparagraph 11.4.1.3.

   We conclude that the district court correctly read the parties' contract to
require Hearst to bear the risk associated with its insurance deductible. We
find no merit to Hearst's first assignment of error.

   LIABILITY FOR GROSS NEGLIGENCE

   Hearst argues that if subparagraph 11.4.1.3 operates to protect the
defendants from liability for the deductible amount, it is against public policy
and void to the extent that it operates to shield the defendants from liability
for gross negligence. 12 Resolving Hearst's argument requires a close
examination of two particular decisions of this court: New Light Co. v. Wells
Fargo Alarm Servs. 13 and Lexington Ins. Co. v. Entrex Comm. Servs. 14

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -12   See
Bamford v. Bamford, Inc., ante p. 259,     N.W.2d    , 279 Neb. 259 (2010).
13   New Light Co. v. Wells Fargo Alarm Servs., 247 Neb. 57, 525 N.W.2d 25
(1994).
14   Lexington Ins. Co., supra note 1.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   In New Light Co., the plaintiff contracted with the defendant for the
defendant to install and maintain a fire alarm system. The operative contract
contained an exculpatory clause stating that the defendant would not be liable
for any loss or damage, irrespective of origin, to persons or property whether
directly or indirectly caused by performance or nonperformance of any obligation
imposed by the agreement or "'by negligent acts or omissions of [the defendant],
its agents or employees.'" 15 The issue before this court was whether the
exculpatory clause released the defendant from liability for gross negligence or
willful and wanton misconduct.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -15   New
Light Co., supra note 13, 247 Neb. at 59, 525 N.W.2d at 27.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   We held that public policy prohibited such an exclusion. We explained that
whether a particular exculpatory clause in a contractual agreement violates
public policy depends upon the facts and circumstances of the agreement and the
parties involved and that "[t]he greater the threat to the general safety of the
community, the greater the restriction on the party's freedom to contractually
limit the party's liability." 16 "Common sense tells us that the greater the
risk to human life and property, the stronger the argument in favor of voiding
attempts by a party to insulate itself from damages caused by that party's gross
negligence or willful and wanton misconduct." 17

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -16   Id. at
63, 525 N.W.2d at 30.
17   Id. at 64, 525 N.W.2d at 30.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   Under the circumstances of that case, we reasoned that

      when we balance the parties' right to contract against the
   protection of the public, we find a sufficiently compelling reason to
   prevent [the defendant] from insulating itself by contractual
   agreement from damages caused by its own gross negligence or willful
   and wanton misconduct. Such an agreement would have a tendency to be
   injurious to the public. This limitation on the freedom to contract is
   imposed by law because of the potential risks to human life and
   property and is, therefore, independent of the agreement of the
   parties. 18

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -18   Id.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   But in Lexington Ins. Co., the predecessor to this case, we concluded that
New Light Co. did not extend to the waiver of subrogation provision contained in
subparagraph 11.4.7 of the contract, even though that provision was effective
against claims for gross negligence. 19 We recognized that "[a]dmittedly,
language in New Light Co. can be read as suggesting that our policy concern was
protecting the public by providing incentive for parties to refrain from grossly
negligent conduct." 20 We declined, however, to extend our discussion in New
Light Co.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -19   See
Lexington Ins. Co., supra note 1.
20   Id. at 710, 749 N.W.2d at 130.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   We explained that the danger with exculpatory clauses is that a party injured
by another's gross negligence will be unable to recover its losses. 21 But such
a danger is not present in cases involving waivers of subrogation, because the
waiver applies only to losses covered by insurance, so there is no risk that an
injured party will be left uncompensated. And we noted that waivers of
subrogation served other important policy interests not met by pure exculpatory
clauses, because they encouraged parties to anticipate risks and to procure
insurance covering those risks, thereby avoiding future litigation, and
facilitating and preserving economic relations and activity. 22

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -21   Id.
22   Lexington Ins. Co., supra note 1.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   We also noted that in the particular context of a construction contract, a
waiver of subrogation avoids disruption and disputes among the parties to the
project, eliminating the need for lawsuits and protecting the contracting
parties from loss by bringing all property damage under the all-risk builder's
property insurance. 23 We recognized "the important policy goal that waivers of
subrogation serve in avoiding disruption of construction projects and reducing
litigation among parties to complicated construction contracts" and explained
that refusing to enforce waivers of subrogation against gross negligence claims
"would undermine this underlying policy by encouraging costly litigation to
contest whether a party's conduct was grossly negligent." 24 Therefore, we held
that public policy favored enforcement of waivers of subrogation even against
gross negligence claims. 25

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -23   Id.
24   Id. at 711, 749 N.W.2d at 131.
25   Id.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   The present case falls someplace in the middle. On the one hand, as in New
Light Co., permitting the enforcement of subparagraph 11.4.1.3 against a claim
of gross negligence leaves Hearst, the injured party, uncompensated for that
amount of its damages. On the other hand, subparagraph 11.4.1.3 serves many of
the same public policy interests as the waiver of subrogation at issue in
Lexington Ins. Co., because it encourages the anticipation of risks and the
procurement of insurance, and brings those risks under the all-risk builder's
property insurance. The property owner is provided an incentive to abide by the
terms of the property insurance provisions.

   Furthermore, subparagraph 11.4.1.3 is no more or less exculpatory of a
grossly negligent defendant than the waiver of subrogation at issue in Lexington
Ins. Co. Both provisions permit a grossly negligent party to shield itself from
liability. The contract permitted Entrex to protect itself from risk by
requiring the purchase of insurance--a decision that, in Lexington Ins. Co., we
held was favored by public policy. And even if shielded from liability, a
contracting party still has an incentive to avoid both negligence and gross
negligence, because performing the contracted-for work negligently could
threaten its right to payment under the contract.

   The present case is distinguishable from Lexington Ins. Co. only insofar as
the damages Hearst sustained were uninsured. But they were uninsured because
Hearst did not obtain the nondeductible insurance that the contract expressly
contemplated. Refusing to enforce subparagraph 11.4.1.3 would leave Hearst in
the peculiar position of benefiting from the degree of the defendants' alleged
negligence, because if the defendants' negligence was gross, as opposed to
ordinary, Hearst would be able to recover damages that by the terms of the
contract should have been covered by Hearst's insurance. And that would
encourage precisely the sort of costly litigation, to determine whether a party
was grossly negligent, that we sought to discourage in Lexington Ins. Co.

   [7,8] On balance, based on the facts and circumstances of the contract and
the parties involved, 26 we conclude that enforcement of subparagraph 11.4.1.3
is not contrary to public policy. The power of courts to invalidate contracts
for being in contravention of public policy is a very delicate and undefined
power which should be exercised only in cases free from doubt. 27 So, a
contractual provision should not be declared void as contrary to public policy
unless it is clearly and unmistakably repugnant to the public interest. 28

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -26   See Ray
Tucker & Sons v. GTE Directories Sales Corp., 253 Neb. 458, 571 N.W.2d 64 (1997)
.
27   Myers v. Nebraska Invest. Council, 272 Neb. 669, 724 N.W.2d 776 (2006);
Jeffrey Lake Dev. v. Central Neb. Pub. Power, 262 Neb. 515, 633 N.W.2d 102
(2001).
28   Ray Tucker & Sons, supra note 26. See, also, State ex rel. Wagner v. United
Nat. Ins. Co., 277 Neb. 308, 761 N.W.2d 916 (2009); Jeffrey Lake Dev., supra
note 27.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

   In this case, as in Lexington Ins. Co., the terms of the contract served to
encourage the anticipation of risks and the procurement of insurance against
those risks. The parties were sophisticated business entities capable of
appreciating those risks. And had the terms of the contract been followed to the
letter, none of the alleged damages would have been uninsured. Given the facts
and circumstances of the contract and the parties involved, we find that
subparagraph 11.4.1.3 is not void as against public policy, and find no merit to
Hearst's final assignment of error.

   CONCLUSION

   We conclude that we have jurisdiction over this appeal by virtue of Hearst's
erroneous but sufficiently effective January 9, 2009, notice of appeal. As a
result, we enter judgment in case No. S-09-104 and dismiss case No. S-09-048 as
moot. We further conclude that the contract required Hearst to bear the costs of
its insurance deductible and that the contract's waiver of liability was not
void as against public policy. We affirm the judgment of the district court.

   APPEAL IN NO. S-09-048 DISMISSED.

   JUDGMENT IN NO. S-09-104 AFFIRMED.

   STEPHAN, J., not participating.