Wells Fargo Alarm Services, a division of Baker Protective Services, Inc.,
appellee and cross-appellant, v. Nox-Crete Chemicals, Inc., appellant and
SUPREME COURT OF NEBRASKA--229 Neb. 43; 424 N.W.2d 885; 1988 Neb. LEXIS 225
June 24, 1988, Filed
PRIOR HISTORY:Appeal from the District Court for Douglas County: Paul J.
PROCEDURAL POSTURE: Appellant customer challenged a decision of the District
Court for Douglas County (Nebraska), which found that appellee provider was
entitled to damages for the customer's breach of contract and for conversion
of the provider's fire and burglar alarm systems. The provider
cross-appealed, claiming that the trial court erred in determining the date
of the breach and conversion for purposes of computing prejudgment interest.
OVERVIEW: The parties entered into two agreements for fire and burglar alarm
protection. After receiving notice of an impending rate increase, the
customer notified the provider that it was terminating the agreements. The
provider attempted to remove its equipment, but the customer refused to
allow it to do so. The provider then filed suit to recover damages for the
customer's breach of the agreements and for the return of the equipment or
damages for conversion. The trial court entered judgment for the provider
and the court affirmed. It found that the customer did not comply with the
contract provisions in notifying the provider of its intent to terminate
and, as no effective notice was given, the provider could have expected the
agreements to continue. In addition, by failing to allow the provider to
remove its equipment, any possible mitigation was frustrated. The court also
found that the trial court properly determined the date of the breach and
conversion for computing prejudgment interest because the actual breach did
not occur on the date the customer refused to permit removal of the
property, but at the end of the term covered by the customer's prepayments.
OUTCOME: The court affirmed the decision of the trial court, which granted
judgment to the provider in its suit to recover damages for the customer's
breach of contract and conversion of the provider's equipment and awarded
prejudgment interest from the end of the term covered by the customer's
COUNSEL: Tamra L. Wilson, of Erickson & Sederstrom, P.C., for appellant.
Robert L. Lepp and Michael S. Mostek, of McGill, Koley, Parsonage &
Lanphier, P.C., for appellee.
JUDGES: Boslaugh, White, Caporale, and Grant, JJ., and Norton, D.J.
OPINION: [*43] [**887] This appeal arises out of an action to recover
damages for breach of contract and conversion of property tried to the
Douglas County District Court without a jury. The district court found in
favor of the plaintiff and awarded judgment, together with prejudgment
interest from and after September [*44] 30, 1983. We affirm.
The facts disclose that the defendant, Nox-Crete Chemicals, Inc.,
hereinafter referred to as Nox-Crete, contracted with the plaintiff, Wells
Fargo Alarm Services, a division of Baker Protective Services, Inc.,
hereinafter Wells Fargo, for fire and burglar alarm protection services
under two separate [***3] written agreements dated January 7 and January
20, 1981. Each agreement was for a term of 5 years and required the payment
of a prescribed sum annually, payable in advance, for the services to be
provided by Wells Fargo. Each agreement also provided that Wells Fargo
shall have the right to increase or decrease the annual service charge
provided above at any time . . . after the expiration of one year . . . upon
giving Subscriber written notice 60 days in advance of the effective date of
such increase or decrease. If Subscriber is unwilling to pay such increased
charge, Subscriber may terminate the then unexpired term of this Agreement
by notifying Wells Fargo in writing 30 days prior to the otherwise effective
date of the increase . . . .
On October 29, 1982, Wells Fargo forwarded notice to its customers of an
impending rate increase for services to be performed in 1983, effective
January 1, 1983. By letter dated April 7, 1983, Nox-Crete notified Wells
Fargo that it was terminating the agreements because of the recent price
increase. On April 12, 1983, Wells Fargo acknowledged receipt of the notice
and stated that it would hold Nox-Crete liable for all sums due under the
[***4] unexpired terms of the agreements.
The agreements between the parties also provided that upon termination,
Wells Fargo was authorized to remove all components of the systems. On May
17, 1983, when Wells Fargo attempted to remove such equipment, Nox-Crete
refused to allow it to do so. Thereafter, Wells Fargo filed suit, setting
forth four causes of action, the first and third thereof being for damages
for breach of the agreements, and the second and fourth for the return of or
damages for the conversion of the personal property of Wells Fargo, together
with prejudgment interest from and after May 17, 1983. Nox-Crete answered
and cross-claimed for a setoff of fees prepaid to Wells Fargo.
[*45] Following trial the district court found that Wells Fargo was
entitled to the benefit of each agreement; that Nox-Crete had terminated the
agreements outside of the timeframe provided and had converted the personal
property of Wells Fargo to its own use; and that Wells Fargo should recover
damages for each breach and each conversion, together with prejudgment
interest from and after September 30, 1983. Defendant's counterclaim for
setoff was dismissed. This appeal followed.
The defendant [***5] sets forth seven assignments of error by the trial
court, which can be more concisely stated as follows: (1) The trial court
erred in denying the defendant's motion to dismiss made for the reason that
the plaintiff had failed to bear its burden of proof of breach and certainty
of [**888] damages; (2) the judgment of the trial court is contrary to the
law and the evidence; (3) the damages awarded by the trial court for the
breach of the agreements are excessive, are not supported by the evidence,
and are not based upon reasonably certain proof of damages actually
sustained; (4) the trial court erred in dismissing defendant's counterclaim
and setoff; (5) the trial court erred in awarding prejudgment interest on
all of the plaintiff's causes of action; and (6) the trial court erred in
excluding defendant's testimony that the service contracts would have been
terminated upon the next price increase for services under the contract.
Plaintiff cross-appealed, assigning as error the following issues: (1) The
trial court erred in finding the date of conversion to be September 30,
1983; (2) the trial court erred in failing to award interest on plaintiff's
conversion claims from and after May 17, 1983; [***6] and (3) the trial
court's failure to award interest from and after May 17, 1983, is contrary
to the law and the evidence.
In reviewing an action at law tried without a jury, it is not the role of
the Supreme Court to resolve conflicts in or reweigh the evidence. Rather,
the court presumes that the trial judge resolved any controverted facts in
favor of the successful party. This court will also consider the evidence
and the permissible inferences therefrom most favorably to the successful
party. Moreover, in such actions the findings and conclusions of the trial
judge have the effect of a jury verdict and will not be set [*46] aside
unless clearly wrong. Osmond State Bank v. Uecker Grain, 227 Neb. 636, 419
N.W.2d 518 (1988). See, also, Kubista v. Jordan, 228 Neb. 244, 422 N.W.2d 78
In a contract case the proper measure of damages is an amount which will
compensate the injured person for loss which fulfillment of the contract
would have prevented or breach of it has entailed. See, Stansbery v.
Schroeder, 226 Neb. 492, 412 N.W.2d 447 (1987); May v. Marijo Corp., 207
Neb. 422, 299 N.W.2d 433 (1980); [***7] Restatement of Contracts § 329
Damages need not be proved with mathematical certainty, but the evidence
must be sufficient to enable the trier of fact to estimate with a reasonable
degree of certainty and exactness the actual damages. Peterson v. North
American Plant Breeders, 218 Neb. 258, 354 N.W.2d 625 (1984).
Where the amount of a loss, the subject of litigation, cannot be computed
without opinion or discretion, the claim is unliquidated, and prejudgment
interest is not recoverable. Peterson v. North American Plant Breeders,
The trial court's ruling considering the acceptance or rejection of evidence
will not be reversed unless there is shown to be an abuse of discretion.
Tank v. Peterson, 219 Neb. 438, 363 N.W.2d 530 (1985).
In reviewing the evidence of this case it becomes apparent that the
agreements of January 1981 were preceded by two other agreements between the
parties for the same services. The latter agreements commenced in September
of 1976. All four agreements were received in evidence. Pursuant to all of
the agreements, Nox-Crete had made payments to [***8] Wells Fargo for
services to be provided, the last of which was made in full in October of
1982 for the period from October 1, 1982, through September 30, 1983. It
takes little effort to compute the amount of time from the date of the end
of the prepayments to the end of the agreements. The evidence would show
without dispute the amount of annual charges. Applying this annual charge to
the unpaid term involves only a mathematical calculation. It is also equally
apparent that Nox-Crete attempted to terminate the agreements and refused to
surrender the property upon demand. While there was some conflicting
evidence over the [*47] reason for the late notice to terminate, [**889]
the fact remains that Nox-Crete did not comply with the provisions of the
1981 agreements in notifying Wells Fargo of its intent to terminate. No
effective notice having been given, it could be inferred that but for the
actions of Nox-Crete, Wells Fargo could have expected the agreements and
their benefits to continue for the remainder of the terms thereof.
In considering the amount of damages in breach of contract cases, the trier
of fact, in applying the general rule on damages, must also bear in mind
that [***9] generally speaking the losses sustained by reason of the
breach or the gains prevented are both actual and consequential damages. Of
necessity this requires consideration of the concepts of mitigation on the
part of the nondefaulting party and savings realized through the breach.
Nox-Crete attempted to show that Wells Fargo would realize savings through
termination of the agreements, but the fact of the matter is that the
evidence does not support this conclusion. Moreover, there was no way for
Wells Fargo to mitigate short of retrieving its property and disposing of it
through other channels. The refusal of Nox-Crete to permit Wells Fargo to
remove this equipment frustrated any possible mitigation. There is no merit
in the first three assignments of error.
With respect to defendant's counterclaim and setoff, it is noted that
Nox-Crete was in effect given credit for the prepayments made to September
30, 1983. Therefore, a dismissal of that setoff was proper, and the fourth
assignment of error has no merit.
Prejudgment interest is proper if the amount of the loss can be computed
without opinion or discretion. One cannot seriously question the fact that
the remaining unpaid term [***10] of the agreements could be computed
without speculation or that the property converted had a value which was
readily discernible. Therefore, the fifth assignment of error has no merit.
The offer by Nox-Crete of testimony that the agreements would have been
terminated upon the next price increase for service under the agreements,
set forth as assignment of error No. 6, likewise has no merit. Such evidence
is speculative and [*48] not founded upon facts in evidence.
Having disposed of the defendant's assignments of error, we move to the
assignments set forth by the plaintiff in its cross-appeal. Basically, all
of these assignments could be generally stated as follows: that the evidence
disclosed that the breach and conversion occurred on May 17, 1983; that the
trial court determined the actual date of breach and conversion to be
September 30, 1983; that the law provides that prejudgment interest shall
run from the date of the loss if the loss is readily determinable; and that
the failure of the trial court to award interest from May 17, 1983, was in
This case was tried June 12 and 13, 1986. Following the last prepayments
made by Nox-Crete in 1982, no further payments were [***11] made, nor was
the property of Wells Fargo returned to it. While the evidence may show that
on May 17, 1983, Nox-Crete refused to permit Wells Fargo to remove its
personal property and evidenced an intent to terminate the agreements, the
actual breach could not have occurred until September 30, 1983, the end of
the term covered by the prepayments made by Nox-Crete. Presumably, Nox-Crete
had the right to the use of Wells Fargo's equipment until that time. To have
granted prejudgment interest from May 17 would have in effect afforded to
Wells Fargo in this case recovery of excessive interest and would have
constituted error on the part of the trial court. Plaintiff's assignments of
error have no merit.
The trial court's findings and judgment were correct and are affirmed.
Wells Fargo Alarm Services, a division of Baker Protective Services, Inc., appellee and cross-appellant, v. Nox-Crete Chemicals, Inc., appellant and cross-appellee
Wells Fargo Alarm Services, a division of Baker Protective Services, Inc.,