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Houser v. American Paving Asphalt, Inc.

Supreme Court of Nebraska

February 16, 2018

TOM HOUSER, APPELLANT AND CROSS-APPELLEE.
v.
AMERICAN PAVING ASPHALT, INC., APPELLEE AND CROSS-APPELLANT.

          1. Courts: Appeal and Error. The district court and higher appellate courts generally review appeals from the county court for error appearing on the record.

         2. Judgments: Appeal and Error. When reviewing a judgment for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.

         3. Appeal and Error: Words and Phrases. Plain error exists where there is an error, plainly evident from the record but not complained of at trial, which prejudicially affects a substantial right of a litigant and is of such a nature that to leave it uncorrected would cause a miscarriage of justice or result in damage to the integrity, reputation, and fairness of the judicial process.

         4. Courts. The district court has certain inherent powers by virtue of being a court.

         5. __. Nebraska courts, through their inherent judicial power, have the authority to do all things reasonably necessary for the proper administration of justice.

         6. Courts: Judgments: Jurisdiction: Appeal and Error. An intermediate appellate court may timely modify its opinion, which is consistent with the generally recognized common-law rule that an appellate court has the inherent power to reconsider an order or a ruling until divested of jurisdiction.

         7. Courts: Appeal and Error. In cases where no statement of errors was filed, but the record showed that the district court considered an issue that was also assigned to a higher appellate court, the Supreme Court or the Court of Appeals may consider that issue. [299 Neb. 2]

          8. Courts: Time: Appeal and Error. The district court has discretion to extend the time for filing a statement of errors.

         9. __:__: __. On appeal from the county court, a district court's ruling on a motion to extend the time for filing a statement of errors will be reviewed for an abuse of discretion.

         Appeal from the District Court for Douglas County, Leigh Ann Retelsdorf, Judge, on appeal thereto from the County Court for Douglas County, Marcena M. Hendrix, Judge. Judgment of District Court affirmed in part, and in part reversed and remanded with directions.

          David J. Koukol, Sharon A. Hansen, and Michael W. Milone, of Koukol & Johnson, L.L.C., for appellant.

          James B. McVay, of Tiedeman, Lynch, Kampfe, McVay & Respeliers, for appellee.

          Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, Kelch, and Funke, JJ.

          Per Curiam.

         I. NATURE OF CASE

         A homeowner brought a breach of contract action against the company that laid his asphalt driveway, after the driveway prematurely began to deteriorate. The county court entered judgment in favor of the homeowner, but on appeal, the district court significantly reduced the award. The parties dispute whether review of the county court's verdict is limited to plain error, because the asphalt company failed to timely file its statement of errors to the district court. The parties also dispute whether there was sufficient evidence that it was reasonable and necessary for the homeowner to contract for a stopgap repair of patchwork replacement of broken sections and, subsequently, for a 2-inch overlay of the entire driveway. Finally, the asphalt company contests attorney fees awarded to the homeowner in relation to the company's late production of documents that were the subject of an order to compel in county court.

          [299 Neb. 3] II. BACKGROUND

         In 2008, Tom Houser entered into a written contract with American Paving Asphalt, Inc. (American Paving), to convert his 1, 440-foot limestone driveway into an asphalt driveway. Houser had negotiated the contract with Mark Hall, the co-owner of American Paving. Hall had proposed a 3-inch asphalt overlay on top of the existing limestone, at a cost of $16, 000.

         According to Houser, after signing the contract with American Paving for a 3-inch overlay, he discussed with Hall concerns about the lack of traction during the winter on the steepest part of the driveway. According to Houser, Hall proposed traction indentations in about 300 feet of the driveway that would be made by raking through the asphalt. According to Houser, Hall proposed that they lay an extra 2 inches of asphalt depth where the traction strips would be placed.

         There was no written contract regarding the traction strips, but it is undisputed that American Paving charged $1, 500 for the added work. In addition, there was evidence that Hall had recommended to Houser that he seal-coat the driveway.

         Several months after the installation of the asphalt overlay, Houser paid Hall an additional $1, 500 to seal-coat the driveway and repair some cracks that had already occurred. The invoice for the repair and seal coat stated that American Paving "[w]ill fill any cracks that surface from sealcoating job at no cost to homeowner." In total, Houser paid American Paving $19, 000 for the asphalt driveway.

         More cracks continued to occur in the asphalt driveway. By 2010, larger chunks of the driveway began to break apart and cracks of various sizes were visible on the majority of the driveway. American Paving stopped responding to Houser's requests for repairs, and Houser sued American Paving in county court for breach of contract.

         1. Evidence of Breach

         Houser presented the expert testimony of Douglas Dreessen, a registered professional civil engineer, who opined that the [299 Neb. 4] driveway was defective and did not substantially conform to the contract. Dreessen explained that there are two important elements to asphaltic cement paving. First, the subgrade must be compacted. Second, the thickness of the pavement must be adequate to support the type of traffic anticipated. With regard to thickness, Dreessen also testified that it is important for the pavement to be uniform so that there are not weak areas that will tend to give out.

         Dreessen testified that absent instruction to the contrary, his goal as a professional engineer is to design asphalt driveways with a 20-year design life. Over American Paving's parol evidence objection, Houser also testified at trial that Hall told him the driveway would last at least 20 years. At trial, Hall denied making such a guarantee or that it was an industry standard.

         Dreessen visually inspected the driveway in 2013. He observed numerous "alligatored" areas where failure was occurring. Given that the driveway was only 5 years old at the time of the inspection, this was considered a "premature failure" of the driveway. A report prepared by Dreessen's civil engineering firm noted significant weathering, oxidization, raveling, and wearing away of the surface.

         Dreessen had his staff conduct tests to determine the pavement thickness and compaction. They bored into six different areas throughout the length of the driveway where it appeared to be thickest and not yet cracked or broken. The samples demonstrated a thickness ranging from PA to 2Vi inches, with an average measurement of 2 inches. Based on the results of the tests conducted, Dreessen opined that the cracking and distress of the asphalt driveway occurred because the asphalt was too thin and was placed on an inadequate base due to nonuniform and subgrade compaction.

         Dreessen opined that Houser's driveway was not constructed in substantial compliance with the specifications of the contract. In his work, Dreessen regularly supervised contractors to ensure that their work was in substantial compliance with the [299 Neb. 5] specifications and plans. In his experience, contract specifications for asphalt depth referred to the depth after it was rolled and compacted. He stated that the depth of the asphalt would never be measured before it was compacted, because "[w]hen we specify for an asphalt project, we need to be able to go back and verify what is on the plans . . . ." Further, Dreessen stated that the work did not comply with the specifications in the contract that it be graded and compacted to maximum strength.

         2. Evidence of Damages

         Houser testified that for a couple of years after American Paving stopped making repairs, Houser sealed the cracks himself as they continuously appeared. Then, in 2012, Houser hired Asphalt Maintenance, Inc., to replace several large sections that had begun to break apart into larger chunks. Houser paid Asphalt Maintenance $5, 110 for replacing the severely damaged sections of the driveway, plus $550 for sealing various cracks in the remaining lengths of the driveway. Houser had obtained more than one bid and chose Asphalt Maintenance because it had presented the lowest bid.

         But Houser considered Asphalt Maintenance's work only a "stopgap measure before the winter of 2012." Houser was attempting only to address the areas of the driveway that were the most damaged and might come up in more large pieces when he used a snowplow. Over American Paving's objection, Houser testified that he thought that the repairs by Asphalt Maintenance were necessary.

         After the 2012 repairs, the driveway continued to deteriorate. The 2013 report by Dreessen's firm noted that the oxidation and raveling observed at the time of the report would combine to allow for additional pathways for water and air to continue the weathering process and extend the cracking during freeze-thaw cycles. Houser also testified that with various repaired patches, the driveway "looked terrible" overall, with a variegated light-and-dark pattern.

          [299 Neb. 6] As a solution to this continuing deterioration and the patchwork appearance due to previous repairs, Houser chose to have a 2-inch asphalt overlay placed on the entire length of the driveway. Houser generally indicated, over objection, that he had reached the 2-inch overlay solution after consultation with others. And Houser testified, over objection, that without adding a 2-inch overlay, he would have continued to have to pay to replace additional sections.

         The asphalt company Houser contracted with charged $26, 189.09 for the 2-inch overlay. Again, Houser had obtained more than one bid and chose the contractor who presented the lowest bid. Even with the 2-inch overlay, Houser anticipated additional cracking and costs associated with repairs in the future.

         On cross-examination, Houser admitted that certain areas of the driveway, approximately 150 to 200 feet, were still in relatively good condition and not "defective." However, he believed that most of the driveway was unacceptable and he did not "feel like taking a roller coaster ride going up my driveway where its two inches higher and not."

         At the time of trial, it had been about VA years since the overlay had been installed. Houser testified that there had been a noticeable change in the amount of deterioration. He said: "[It l]ooks like a nice, smooth asphalt driveway. It has a small handful of cracks in it in a couple of areas where apparently the deterioration underneath is continuing, but otherwise the driveway has held up very well."

         Houser testified that he anticipated having to seal-coat the driveway. Houser explained that he had paid to seal-coat the original asphalt driveway per American Paving's instructions. Over American Paving's hearsay, relevance, and discovery objections, Houser testified that he had recently entered into a contract to seal the driveway at a cost of $3, 250.

         Houser submitted evidence of the cost of Dreessen's inspection, testing, and analysis, which was $1, 705. He also submitted evidence of the cost of Dreessen's time testifying as an expert [299 Neb. 7] witness, $2, 886.10. Houser entered into evidence the costs of deposing an American Paving employee and Hall, $371.50 and $421.25, respectively, in preparation for trial. Houser sought court costs in the amount of $69. Houser asked for a total of $40, 551.94 in damages. The court ordered the parties to submit briefs after trial. American Paving did not submit a brief.

         3. Verdict, Attorney Fees, and Sanctions

         American Paving moved to disqualify the trial judge and for a mistrial on the ground that the judge had allegedly engaged in activities on her cell phone during trial. The court overruled American Paving's motion.

         American Paving later filed a second motion to disqualify and for a mistrial, asserting the same conduct of the trial judge engaging with her cell phone during trial. But the second motion further alleged that Hall had filed a complaint with the Nebraska Commission on Judicial Qualifications, which complaint was under investigation. The court overruled the motion.

         On June 17, 2015, the county court entered judgment in favor of Houser in the amount of $40, 551.94. In its order, the court set a hearing for Houser's oral motion for attorney fees. After the judgment, Houser submitted an affidavit supporting costs and fees incurred with respect to the discovery delays, motion for sanctions, and the motions to disqualify. On September 22, the court ordered $1, 514 in sanctions and attorney fees to be paid to Houser. On October 22, the court overruled American Paving's motion for new trial.

         4. Appeal to District Court American Paving filed a notice of appeal to the district court on November 10, 2015.[1] On that same date, it filed its ...


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