United States District Court, D. Nebraska
MEMORANDUM AND ORDER
M. Gerrard United States District Judge
matter is before the Court on the motion for default judgment
(filing 48) filed by the plaintiff, KM Ag Services,
Inc. The Court will hold the plaintiff's motion in
abeyance pending the submission of additional evidence.
plaintiff's operative complaint alleges four theories of
recovery arising out of the defendants' alleged failure
to properly repair an air seeder. Filing 34. Specifically,
the plaintiff alleges that it has a John Deere air seeder,
and was contacted by an employee of defendant ASI Ag
Services, Inc., who offered to assess the air seeder to see
if ASI could retrofit it. Filing 34 at 2. The plaintiff and
ASI agreed that the plaintiff would pay ASI $27, 711.00 to
retrofit the air seeder, and ASI guaranteed that its parts
would operate for 5 years or 30, 000 acres. Filing 34 at 2.
But, the plaintiff alleges, ASI's parts and workmanship
were deficient. Filing 34 at 2. So, the plaintiff alleges,
ASI breached the contract. Filing 34 at 2. And, the plaintiff
alleges, ASI breached "the implied duty to perform the
work or services skillfully, carefully, diligently, and in a
workmanlike manner." Filing 34 at 2. The plaintiff
further alleges that ASI was negligent in its work. Filing 34
at 2. And finally, the plaintiff alleges that defendants
Dennis DeNio and Adam Burkhardsmeier, owners and/or officers
of ASI, were negligent in failing to properly train their
employees and sending unqualified employees to do the work.
Filing 34 at 1, 3. The plaintiff seeks damages for the money
it paid to ASI, the cost of repairing the air seeder, and
lost profits from the loss of use of the air seeder.
default judgment is entered, facts alleged in the complaint-
except as to damages-may not be later contested. Marshall
v. Baggett, 616 F.3d 849, 852 (8th Cir. 2010);
Murray v. Lene, 595 F.3d 868, 871 (8th Cir. 2010).
It remains for the Court to consider whether the unchallenged
facts constitute a legitimate cause of action, since a party
in default does not admit mere conclusions of law.
Id. Therefore, it is incumbent upon the Court to
ensure that the unchallenged facts constitute a legitimate
cause of action before entering final judgment.
Marshall, 616 F.3d at 852-53. And then, even though
the allegations of the plaintiff's complaint are
admitted, see id., it is still necessary for the
Court to determine the plaintiff's damages based upon the
evidence. See, Fed. R. Civ. P. 55(b)(2)(B);
Brown v. Kenron Aluminum & Glass Corp., 477 F.2d
526, 531 (8th Cir. 1973).
task for the Court is, first, to consider the allegations of
the complaint to ensure that the plaintiff has stated a
legitimate cause of action with respect to each of its claims
for relief. Then, the Court must consider whether the
plaintiff's damages can be determined based on the
evidence that has been presented in support of its motion.
Nebraska law,  in order to recover in an action for
breach of contract, the plaintiff must plead and prove the
existence of a promise, its breach, damage, and compliance
with any conditions precedent that activate the
defendant's duty. Henriksen v. Gleason, 643
N.W.2d 652, 658 (Neb. 2002). The plaintiff's allegations,
as set forth above, clearly set forth the terms of the
parties' agreement, and a breach of that agreement by
failing to perform the required task. See Id. The
plaintiff alleges compliance with the only condition
precedent in the agreement: payment of the agreed-upon sum.
And the plaintiff alleges it was damaged. The plaintiff's
complaint states a claim for breach of contract.
plaintiff's second theory of recovery appears to be that
ASI breached an implied warranty of workmanlike performance.
But any such warranty is an implied term of the contract.
See Thurston v. Nelson, 842 N.W.2d 631, 644 (Neb.
Ct. App. 2014); see also Pioneer Enterprises, Inc. v.
Edens, 345 N.W.2d 16, 18 (Neb. 1984). This claim is
coextensive with the breach of contract claim, and need not
be considered separately.
plaintiff's third theory of recovery is negligent
performance of the agreement. But the economic loss doctrine
precludes tort remedies where the damages caused were limited
to economic losses and where the duty which was allegedly
breached arose solely from the contractual relationship
between the parties. Lesiak, 808 N.W.2d at 81. The
plaintiff, therefore, cannot recover under a negligence
theory for the amount it paid to ASI, or the profits it lost
as a result of losing use of the air seeder.
harder question is the cost of "repairing" the air
seeder: damage to "other property"-that is,
property other than the property that was sold pursuant to
the contract-is not "economic loss." Id.
at 83. And it is difficult to tell from the pleadings and
evidence to what extent the repairs to the air seeder
involved the goods that were sold by ASI, as opposed to
damage done to the air seeder itself. But, again, such
damages are coextensive with the plaintiff's breach of
contract claim. So, the Court need not resolve this issue.
the plaintiff's remaining claim is another negligence
claim, this time against DeNio and Burkhardsmeier. It is
important to resolve this claim because it is the only one
directed at DeNio and Burkhardsmeier, as opposed to ASI. And
the Court finds that the plaintiff has failed to state a
plaintiff's claim is not merely a tort claim, sounding in
law: it seeks to pierce ASI's corporate veil. The acts of
"negligence" the plaintiff alleges are that DeNio
and Burkhardsmeier failed to train their employees, and had
unqualified employees performing the agreement-in other
words, that they negligently performed their duties as
officers or owners of ASI. And generally, a corporation is
viewed as a complete and separate entity from its
shareholders and officers, who are ...