Jacobs Engineering Group Inc., appellee.
ConAgra Foods, Inc., appellant.
Actions: Parties: Standing. Whether a party
who commences an action has standing and is therefore the
real party in interest presents a jurisdictional issue.
Judgments: Jurisdiction: Appeal and Error.
When a jurisdictional question does not involve a factual
dispute, determination of a jurisdictional issue is a matter
of law which requires an appellate court to reach a
conclusion independent from the trial court's; however,
when a determination rests on factual findings, a trial
court's decision on the issue will be upheld unless the
factual findings concerning jurisdiction are clearly
Directed Verdict: Appeal and Error. In
reviewing a trial court's ruling on a motion for directed
verdict, an appellate court must treat the motion as an
admission of the truth of all competent evidence submitted on
behalf of the party against whom the motion is directed; such
being the case, the party against whom the motion is directed
is entitled to have every controverted fact resolved in its
favor and to have the benefit of every inference which can
reasonably be deduced from the evidence.
Directed Verdict: Evidence. A directed
verdict is proper at the close of all the evidence only when
reasonable minds cannot differ and can draw but one
conclusion from the evidence, that is, when an issue should
be decided as a matter of law.
Judgments: Appeal and Error. An appellate
court reviews a denial of a motion to alter or amend the
judgment for an abuse of discretion.
Motions for New Trial: Appeal and Error. An
appellate court reviews a trial court's ruling on a
motion for a new trial for an abuse of discretion.
Contracts. Contract interpretation presents
a question of law.
Neb. 39] 8. Jury Instructions. Whether the
jury instructions given by a trial court are correct is a
question of law.
Judgments: Appeal and Error. An appellate
court independently reviews questions of law decided by a
Verdicts: Appeal and Error. When reviewing a
jury verdict, the appellate court considers the evidence and
resolves evidentiary conflicts in favor of the successful
Verdicts: Juries: Appeal and Error. A jury
verdict may not be set aside unless clearly wrong, and it is
sufficient if there is competent evidence presented to the
jury upon which it could find for the successful party.
Actions: Parties: Standing. The focus of the
real party in interest inquiry is whether the party has
standing to sue due to some real interest in the cause of
action, or a legal or equitable right, title, or interest in
the subject matter of controversy.
Standing: Jurisdiction: Parties. Standing
refers to whether a party had, at the commencement of the
litigation, a personal stake in the outcome of the litigation
that would warrant a court's or tribunal's exercising
its jurisdiction and remedial powers on the party's
Actions: Parties: Jurisdiction: Standing.
The question of whether a party who commences an action has
standing and is therefore the real party in interest is
jurisdictional. Because the requirement of standing is
fundamental to a court's exercise of jurisdiction, either
a litigant or a court can raise the question of standing at
Standing. The stage of the litigation in
which a party claims that its opponent lacks standing affects
how a court should dispose of the claim.
Standing: Pleadings: Pretrial Procedure. In
resolving a facial challenge, a court will review the
pleadings to determine whether there are sufficient
allegations to establish the plaintiff's standing.
Motions to Dismiss: Jurisdiction: Pleadings: Appeal
and Error. An appellate court reviews a trial
court's decision on a motion to dismiss for lack of
subject matter jurisdiction based on a facial attack on the
pleadings de novo.
18. ___: ___: ___: ___. Where the trial court's decision
on a motion to dismiss for lack of subject matter
jurisdiction is based on a factual challenge, the court's
factual findings are reviewed under the clearly erroneous
Insurance: Contracts: Words and Phrases. An
indemnity contract is a chose in action because it confers a
right to bring a legal action to recover a sum of money from
or out of the contract.
Liability: Damages. Indemnification is
available when one party is compelled to pay money which in
justice another ought to pay or has agreed to pay.
Neb. 40] 21. Pleadings: Evidence:
Words and Phrases. A judicial admission is a formal
act done in the course of judicial proceedings which is a
substitute for evidence, thereby waiving or dispensing with
the production of evidence by conceding for the purpose of
litigation that the proposition of fact alleged by the
opponent is true.
Jurisdiction. While parties cannot confer
subject matter jurisdiction upon a judicial tribunal by
either acquiescence or consent, nor may subject matter
jurisdiction created by waiver, estoppel, consent, or conduct
of the parties, such does not prevent a party from
conclusively admitting the truth of an underlying fact
required to establish subject matter jurisdiction by judicial
Pretrial Procedure: Pleadings. A general
denial is not effective where an answer contains specific
admissions of facts alleged.
Actions: Parties: Intent. The primary
purpose of the real party in interest requirement is to
protect the defendant from the risk of multiple litigation.
Insurance: Damages. Under the collateral
source rule, the fact that the party seeking recovery has
been wholly or partially indemnified for a loss by insurance
or otherwise cannot be set up by the wrongdoer in mitigation
Circumstantial Evidence: Proof.
Circumstantial evidence is not inherently less probative than
direct evidence, and a fact proved by circumstantial evidence
is nonetheless a proven fact.
Evidence: Proof. A finder of fact may draw
reasonable inferences from the facts and circumstances
Contracts: Words and Phrases. An indemnity
agreement is a contract to be construed according to the
principles generally applied in construction or
interpretation of other contracts.
Contracts. A contract must receive a
reasonable construction and must be construed as a whole, and
if possible, effect must be given to every part of the
Workers' Compensation: Liability:
Contracts. When an employer, liable to an employee
under the Nebraska Workers' Compensation Act, agrees to
indemnify a third party for a loss sustained as the result of
the third party's payment to the indemnitor's
employee, the employer's exclusion from liability
accorded by the act does not preclude the third party's
action to enforce the indemnity agreement with the
Jury Instructions: Pleadings: Evidence. A
litigant is entitled to have the jury instructed upon only
those theories of the case which are presented by the
pleadings and which are supported by competent evidence.
Jury Instructions: Appeal and Error. If the
instructions given, which are taken as a whole, correctly
state the law, are not misleading, and [301 Neb. 41]
adequately cover the issues submissible to a jury, there is
no prejudicial error concerning the instructions and
necessitating a reversal.
Verdicts: Appeal and Error. Where a party
has sustained the burden and expense of trial and has
succeeded in securing a verdict on the facts in issue, that
party has the right to keep the benefit of the verdict unless
there is prejudicial error in the proceedings by which it was
Negligence. A party is only answerable for
the natural, probable, reasonable, and proximate consequences
of his acts; and where some new efficient cause intervenes,
not set in motion by him, and not connected with but
independent of his acts and not flowing therefrom, and not
reasonably in the nature of things to be contemplated or
foreseen by him, and produced the injury, it is the dominant
___. Because the extent of foreseeable risk depends on the
specific facts of the case, courts should leave such
determinations to the trier of fact unless no reasonable
person could differ on the matter.
Verdicts: Appeal and Error. A civil verdict
will not be set aside where evidence is in conflict or where
reasonable minds may reach different conclusions or
inferences, as it is within the jury's province to decide
issues of fact.
Negligence: Liability. Where separate and
independent acts of negligence by different persons combine
to produce a single injury, each participant is liable for
the damage, although one of them alone could not have caused
Damages: Appeal and Error. The amount of
damages to be awarded is a determination solely for the fact
finder, and the fact finder's decision will not be
disturbed on appeal if it is supported by the evidence and
bears a reasonable relationship to the elements of the
Verdicts: Remittitur. Where a verdict is
excessive, but not so much as to indicate passion or
prejudice on the part of the jury, the error may be corrected
by remittitur, if the excess can be estimated with reasonable
Remittitur: Appeal and Error. An appellate
court should order remittitur only when the award is contrary
to all reason.
from the District Court for Douglas County: Gary B. Randall,
Christopher Landau, PC, of Kirkland & Ellis, L.L.P.,
William F. Hargens and Lauren R. Goodman, of McGrath, North,
Mullin & Kratz, P.C., L.L.O., and on brief, Jeremy M.
Feigenbaum, for appellant.
Neb. 42] Stephen B. Kinnaird and Sarah G. Besnoff, of Paul
Hastings. L.L.P., Gilbert S. Keteltas, Robert G. Abrams, and
Thomas E. Hogan, of Baker Hostetler, L.L.P., and Shawn D.
Renner and Andre R. Barry, of Cline, Williams, Wright,
Johnson & Oldfather, L.L.P, for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Kelch, and
case arises out of an explosion at a ConAgra Foods, Inc.
(ConAgra), plant in Garner, North Carolina, which killed 3
ConAgra employees and injured more than 60 others. When
dozens of employees sued Jacobs Engineering Group Inc.
(Jacobs), Jacobs sought contractual indemnification from
ConAgra, but ConAgra declined, and Jacobs defended against
and settled the claims.
sued ConAgra for indemnification in the district court for
Douglas County. Following a 4-week trial, the jury awarded
Jacobs the full amount of the settlement payments, $108.9
million, and the court entered judgment on the verdict. We
a food manufacturer, contracted with Jacobs, an engineering
firm, in 2007 to provide engineering services. Jacobs'
work under the contract was limited to work requested and
approved by ConAgra in work orders. Section 10 of the
parties' engineering agreement contained mutual
indemnification provisions which provided that each party
indemnify the other for "claims, losses, costs,
penalties, damages and/ or expenses" to the extent
caused by the indemnifying party's negligence or the
negligence of others under that party's control. Section
10 provided the following relevant indemnification
[301 Neb. 43] 10.1 [Jacobs] shall indemnify . . . ConAgra . .
. against each and every claim, loss, cost, penalty, damage,
or expense . . . suffered or incurred by any third parties,
employees of ConAgra and employees of [Jacobs], [Jacobs']
obligations hereunder shall be limited to the extent caused
by the negligent acts, errors or omissions of [Jacobs], or
anyone directly or indirectly employed by [Jacobs] or for
whose acts [Jacobs] is otherwise liable. . . .
10.2 [Jacobs'] liability, however arising by reason of
the performance of the services, is specifically limited as
provided herein and ConAgra will indemnify and release
[Jacobs] against all other claims, losses, costs, penalties,
damages and/or expenses to the extent caused by the
negligence of ConAgra and/or others under its control[.]
2008, ConAgra planned to update the Garner plant's water
heating system. ConAgra rejected Jacobs' proposal for the
project as too expensive, but retained Jacobs to provide
limited management and engineering support. Jacobs designated
an onsite project manager, Donald Pottner, to assist with the
Energy Systems Analysts and ConAgra's Safety Policies
hired Energy Systems Analysts (ESA), a high-efficiency water
heater contractor, to design and install a 5-million Btu
gas-fired water heater. ConAgra had previously engaged ESA to
supply gas heat systems to plants in Iowa, Ohio,
Pennsylvania, and Tennessee, and ConAgra had not experienced
any safety issues with ESA.
contractually imposed safety requirements on ESA's work
on the project. The contract required ESA to "abide by
safety . . . rules at all times while on company
property." ConAgra personnel were required to bring
"[a]pparent violations" of the "Contractor
Work Rules" "or unacceptable industry work
practices ... to the attention of the contractor's
representative for prompt correction."
Neb. 44] The contractor work rules required "practices
differing from [ConAgra] policy ... to be reviewed by
[ConAgra] before the implementation." The work rules
placed responsibility for correction of "unacceptable
conditions" on the '"controlling employer,'
that is, the one in the best position to correct the
situation or ensure its correction." ConAgra's
management was required to report "[a]ny safety
discrepancy observed ... to the appropriate Contractor
representative for immediate correction" and to suspend
work "immediately" in the case of danger until
"safety concern(s) have been corrected, to the
satisfaction of the Company."
contractor work rules made ConAgra responsible for ensuring
that ESA prepared a "Safe Plan of Action" (SPA) for
its commissioning of the water heater to identify risks and
outline each step of the process in order to complete the
work safely. ConAgra also had a "Fire Prevention
Plan" which required "special care and
handling" requirements for flammable gases that
"pose a risk of catastrophic explosion if ignited."
The fire prevention plan applied to all ConAgra facilities
and set "procedures for controlling the hazards,"
required identification of "potential ignition
sources," and only permitted the use or handling of
natural gas "where vapors are prevented from reaching
Garner Plant Water Heater Project
employee, Timothy Yost, was the engineering manager and
supervisor at the Garner plant. ConAgra designated Yost as
the individual responsible for the safety of all plant
employees during the commissioning of the water heater. Yost
was responsible for ensuring that ESA's plans complied
with ConAgra standards and the contractor work rules.
ConAgra's utility maintenance supervisor, John Puff, led
the Garner plant's utilities department and was
responsible for its natural gas facilities.
staff testified about the amount of control ConAgra exercised
over the installation of the water heater. ESA's [301
Neb. 45] corporate designee testified that ConAgra had the
final say on the project and controlled the schedule. He
stated that Yost and Puff "were the decision-makers when
it came to anything, even . . . when we were on site. If
there was something that they didn't like, we'd
obviously have to change it." He admitted that ConAgra
did not provide directions of how the gas delivery system
should be assembled.
3, 2009, ESA provided its written plan for commissioning the
water heater, which Yost and Puff reviewed and found
acceptable. On June 4, Pottner left the plant on a planned
medical leave and was not expected to return, and he
ultimately was not present during the commissioning of the
water heater. ConAgra confirmed its personnel would supervise
the commissioning and that Jacobs' services were not
was responsible for determining the procedure to connect the
new equipment to the plant's gas supply referred to as
the "line-break" procedure. The written procedure
required opening valves to purge gaslines at both the boiler
and the hot water tank. The purpose of the purge was to
remove any remaining mixture of air and natural gas in the
line prior to firing the hot water heater. ConAgra identified
explosion as a risk and specified completion of the
line-break procedure as the method to control that risk.
4, 2009, as part of the line-break procedure, Puff instructed
the crew to purge the line to the boiler with a hose leading
outside, but he failed to provide the instruction to purge
the line to the hot water tank. Puff stated that "[w]e
just didn't get to it." Yost admitted the line to
the hot water tank should have been purged before startup to
prevent an explosive mixture.
5, 2009, at the direction of Yost, a ConAgra senior safety
specialist inspected the pumproom where the new water heater
was located. The report documented "[e]xposed
wires" as possible ignition source hazards.
Poppe, an ESA employee, was assigned to commission the water
heater. On June 9, 2009, Poppe arrived at the [301 Neb. 46]
Garner plant and met with Yost to discuss the commission
plan. Poppe's commissioning plan did not include purging
air from the lines, and Puff did not provide the line-break
procedure to Poppe. Yost and Puff did not train Poppe in
ConAgra's contractor work rules or ensure that Poppe was
certified as trained. In addition, no SPA was prepared for
the project. ConAgra admitted that had an SPA been
implemented, the explosion may have been prevented.
policy and practice included supervising the work of
contractors, and the utilities department did not allow
contractors to work on utilities unsupervised. Puff assigned
a ConAgra employee, Ethner "Buddy" Roberson, to
supervise Poppe during commissioning. Roberson worked with
Poppe throughout the morning and, with Puff's knowledge,
brought unrated temporary lighting into the room. Roberson
had not reviewed the fire prevention plan, was not aware that
combustibles should not be released into a room with ignition
sources, and did not know whether the lighting he strung in
the pump-room was safe for a flammable atmosphere.
Poppe began the commission process, he had difficulty
lighting the water heater. Over the next 3½ hours,
Poppe repeatedly cracked the valve on the 3/8
-inch pilotline and placed a gas meter in front of the line
as he released small streams of gas into the room. Poppe said
he was '"bleeding the line.'" He attempted
to light the water heater 32 times.
ConAgra employees, including management, witnessed Poppe
release gas into the room and were concerned about the
presence of gas. A ConAgra utilities department employee
smelled "[t]oo much gas" in the room and felt he
was "in danger." He reported Poppe's unusual
actions to Puff, who reported them to Yost.
and later Puff, went into the room and smelled gas. Puff
admitted he did not tell Poppe that the line had not been
purged, even after Puff realized Poppe was struggling to
light the heater.
was trained to purge lines outside; he had purged one of the
lines outside on June 4, 2009. Puff "started smelling a
lot [301 Neb. 47] of gas" and thought "pure
gas" was coming through the line. Puff was concerned
that Poppe was not using the correct meter to measure the
presence of gas or was using the meter improperly. A ConAgra
witness admitted that under the contractor work rules, if the
gas meter malfunctioned, then the commission should have been
was evidence that Puff could have ordered an evacuation, but
failed to do so. As the only designated plant emergency
coordinator working that day, Puff controlled the decision to
evacuate. An emergency evacuation plan stated that evacuation
may be necessary in the face of "[i]mmediate or
potential fire hazards" and could be completed within 3
interrupted the commission process so that he and Poppe could
walk outside to allow Poppe to calibrate the gas meter in
fresh air. Puff then left the plant to pick up supplies for
another project. Puff left Poppe with Roberson even though
Puff testified that he did not believe Roberson was qualified
to supervise clearing air from a gasline. Roberson thought
something was wrong and went to the roof to try to locate an
alternate purge point.
returned to the pumproom and released gas by opening the cap
on the 2-inch gas pipe. The room flooded with gas in less
than 60 seconds. Puff admitted he '"should have
stayed around a lot longer'" and had given the
contractor '"more credit'" than he should
have. When asked about Poppe's opening the cap on the gas
pipe, Puff testified that if he had stayed, he
"wouldn't have allowed that."
pumproom exploded. Two sections of the plant's roof
collapsed, killing three ConAgra employees and inflicting
serious injuries on others.
Explosion Investigation and Litigation
North Carolina Department of Labor conducted an investigation
into the explosion and found multiple violations of North
Carolina code. The department determined that [301 Neb. 48]
ConAgra violated its duty to furnish conditions of employment
"free from recognized hazards that were causing or
likely to cause death or serious physical harm." The
department found multiple life-threatening conditions
occurred in the presence of ConAgra management, including
ConAgra's failure to purge the 3-inch natural gasline
used to supply gas to the vacuum pumproom and allowing the
presence of numerous possible ignition sources while a
natural gasline was being purged in an enclosed room.
contrast, the North Carolina Department of Labor found Jacobs
performed no work that could have contributed to the
accident, did not have knowledge of the hazardous condition,
and did not have a scope of work that would have permitted
knowledge of the hazardous condition. ConAgra "accepted
what the authorities determined" and did not conduct a
67 individuals and ConAgra's property insurers filed
several lawsuits against Jacobs and Pottner; the total
settlement demands exceeded $507 million. Shortly after the
first suit was filed, Jacobs requested contractual indemnity
from ConAgra and ConAgra denied that request and did not
participate in the settlements.
brought by seven ConAgra employees was the only case to go to
trial. That case proceeded to trial in March 2012 before the
Johnston County Civil Superior Court of North Carolina, case
No. 09-CV-2330 (referred to as
"Brockington"). Before trial,
ConAgra's counsel wrote to Jacobs:
Based upon our understanding of the evidence in this case,
and the fact that the plaintiffs' claim for punitive
damages has survived Jacobs' motion for summary judgment,
we believe there is a possibility of a significant jury
verdict against Jacobs. As such, ConAgra requests that Jacobs
take all reasonable steps to settle these claims.
stated that "settlement of plaintiffs' claims by
Jacobs would be without prejudice as to any possible
indemnity claim that Jacobs' [sic] may have as to ConAgra
. . . ."
Neb. 49] During the Brockington trial, Pottner
became ill partway through his testimony, was briefly
hospitalized, and returned home to Wisconsin. The court
initially declared Pottner unavailable, but later found that
Pottner's counsel, who also represented Jacobs,
misrepresented the nature or severity of Pottner's
illness. The court struck the defendants' answers and
confined the jury's deliberations to the issue of
damages. The jury awarded the Brockington plaintiffs
trial court later reinstated Jacobs' answer and granted
Jacobs a new trial. Before the second trial, Jacobs settled
the suit for $20 million. Jacobs then settled the remaining
cases and continued to request indemnification from ConAgra,
which ConAgra declined.
brought this action against ConAgra in January 2014. Jacobs
claimed that it was entitled to the $108.9 million paid to
settle the North Carolina cases. Jacobs requested only $17.7
million for the Brockington settlement, which
represented the amount of the first verdict plus interest
since the time of filing.
to trial, ConAgra filed motions to compel Jacobs to provide
the amounts paid by Jacobs and Jacobs' insurers toward
the settlements. The court overruled ConAgra's various
motions and found ConAgra's arguments were not relevant
to the "two substantive issues in this case," which
it determined were as follows: "(1) whether the
[e]xplosion was caused by the alleged negligence of ConAgra
and/or others under its control in order to trigger the
indemnity provision; and (2) whether the amount of the
settlement payments were objectively reasonable."
the 19-day trial in March 2016, the jury received over 300
exhibits and heard testimony from eight live witnesses and 40
videotaped depositions. The jury returned a special verdict
which (1) found that both ConAgra and ESA were negligent, (2)
apportioned liability of 70 percent to ConAgra and 30 percent
to ESA, and (3) found that ConAgra controlled ESA. The jury
further found that Jacobs was not [301 Neb. 50] negligent,
that Jacobs had settled the North Carolina lawsuits in good
faith, and that the settlement amounts were objectively
reasonable. The district court accepted the jury's
verdict. ConAgra renewed its motion for directed verdict and
moved for judgment notwithstanding the verdict, remittitur,
and a new trial. The court denied the motions, ConAgra timely
appealed, and we sustained ConAgra's request to bypass
review by the Nebraska Court of Appeals.
ASSIGNMENTS OF ERROR
assigns, restated, that the district court erred in failing
to (1) grant ConAgra's motion for directed verdict or
motion for new trial, because Jacobs failed to prove that it
had standing as the real party in interest to assert its
indemnification claim; (2) order a remittitur, because
ConAgra did not waive its workers' compensation immunity;
(3) grant ConAgra's motion for directed verdict or motion
for new trial, because Jacobs did not establish that its
'"losses'" were '"caused by the
negligence of ConAgra and/or others under its control,
'" as required by ...