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Ralston Investment Group, Inc. v. Wenck

Court of Appeals of Nebraska

September 17, 2019

Ralston Investment Group, Inc., a Nebraska corporation, et al., appellants,
v.
David Wenck, appellee. Investor Amount Guaranteed on S1.4M Note Amount Guaranteed on Line of Credit Total Amount Guaranteed Shareholder Amount Paid to ANB

         1. Trial: Witnesses. In a bench trial of an action at law, the trial court is the sole judge of the credibility of the witnesses and the weight to be given their testimony.

         2. Judgments: Appeal and Error. In reviewing a judgment awarded in a bench trial of a law action, an appellate court does not reweigh evidence, but considers the evidence in the light most favorable to the successful party and resolves evidentiary conflicts in favor of the successful party, who is entitled to every reasonable inference deducible from the evidence.

         3. __:__. In a bench trial of a law action, the trial court's factual findings have the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong.

         4. __:__. An appellate court independently reviews questions of law decided by a lower court.

         5. Contracts: Parties: Intent. A contract is not formed if the parties contemplate that something remains to be done to establish contractual arrangements or if elements are left for future arrangement.

         6. Contracts. It is a fundamental rule that in order to be binding, an agreement must be definite and certain as to the terms and requirements.

         7. Guaranty: Promissory Notes: Contribution. A guarantor of a promissory note who has made payment may seek contribution from a coguarantor for that party's proportionate share of the obligation.

         8. Tort-feasors: Liability: Contribution: Compromise and Settlement. A tort-feasor who enters into a settlement with a claimant is not entitled to recover contribution from another tort-feasor whose liability for the injury or wrongful death is not extinguished by the settlement.

         9. __:__:__:__. In order to recover on a claim for contribution among joint tort-feasors, the following elements must be shown: [27 Neb.App. 575] (1) There must be a common liability among the party seeking contribution and the parties from whom contribution is sought; (2) the party seeking contribution must have paid more than its pro rata share of the common liability; (3) the party seeking contribution must have extinguished the liability of the parties from whom contribution is sought; and (4) if such liability was extinguished by settlement, the amount paid in settlement must be reasonable.

          Appeal from the District Court for Douglas County: Gregory M. Schatz, Judge.

          Benjamin M. Belmont, Sean D. Cuddigan, Wm. Oliver Jenkins, and Jake Houlihan, Senior Certified Law Student, of Brodkey, Cuddigan, Peebles, Belmont & Line, L.L.P., for appellants.

          Travis W. Tettenborn and Mark A. Grimes, of Cline, Williams, Wright, Johnson & Oldfather, L.L.P., for appellee.

          Riedmann, Arterburn, and Welch, Judges.

          WELCH, JUDGE.

         INTRODUCTION

         Ralston Investment Group, Inc. (RIG), and three of its shareholders, James Linhart, Alan Bennett, and Kevin Hitzemann, sued shareholder David Wenck for breach of contract after he failed to contribute capital to RIG and for contribution to reimburse them for allegedly paying more than their proportional share of guaranteed debt to American National Bank (ANB). The court found for Wenck on both counts, and RIG, Linhart, Bennett, and Hitzemann (collectively Appellants) appeal.

         STATEMENT OF FACTS

         In January 2004, Linhart, Bennett, Hitzemann, Steve Strong, and Wenck formed RIG, a Nebraska corporation, to build and operate a gas station and convenience store. Linhart, Bennett, Strong, Hitzemann, and Wenck contributed capital to RIG and received stock ownership interests in the following amounts and proportions:

         [27 Neb.App. 576]

Investor

Contribution

Ownership Interest

Linhart

$120, 000

30%

Bennett

$120, 000

30%

Strong

$ 80, 000

20%

Hitzemann

$ 40, 000

10%

Wenck

$ 40, 000

10%

         The shareholders did not execute bylaws or a shareholder agreement.

         After the construction of the gas station and convenience store was completed in early 2005, RIG borrowed $1, 421, 610 from ANB to provide operating cash for the business. RIG also obtained a $50, 000 line of credit from ANB. The parties testified that each shareholder guaranteed the operating loan and line of credit at the rate of 125 percent of their ownership interest percentage in RIG, which equates to the amounts shown in the table below. These amounts were reflected in the written guaranty agreements received into evidence with the exception of those of Strong, whose written guaranties were not offered nor received into evidence, and Wenck's line of credit guaranty, which the parties testified could not be located:

Investor
Amount
Guaranteed on S1.4M Note
Amount Guaranteed on Line of Credit
Total Amount Guaranteed

Linhart

$533, 103.75

$18, 750

$551, 853.75

Bennett

$533, 103.75

$18, 750

$551, 853.75

Strong

$355, 402.50

$12, 500

$367, 902.50

Hitzemann

$177, 701.25

$ 6, 250

$183, 951.25

Wenck

$177, 701.25

$ 6, 250

$183, 951.25

         The written guaranty agreements specifically indicated that the respective shareholders unconditionally guaranteed to pay the indebtedness incurred by RIG owing to ANB up to the stated sum listed above, but do not reference a pro rata rate or basis upon which the guaranteed sums were determined.

         In 2006, RIG experienced cash shortfalls. Linhart, Bennett, and Hitzemann testified that, in order to address RIG's cash [27 Neb.App. 577] needs, in 2006, the parties met and orally agreed that when RIG needed additional cash, the parties would be obligated to contribute necessary cash to RIG in proportion to their ownership interests in RIG. In contrast, Wenck testified that the parties' oral agreement was to address RIG's capital needs on an ongoing basis, but that he never agreed to make ongoing, obligatory cash contributions to RIG in connection with all future requests for capital calls, or "cash calls." Instead, Wenck testified that, on a case-by-case basis, if RIG needed cash, he would attempt to contribute cash in proportion to his ownership interest if he could, but that he never agreed to be permanently obligated on all future cash ...


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