Fred Beekman (Beekman) appeals from the order of the Gage County District Court granting the motion of Roc Beekman (Roc) and Ross Stepan (collectively the Appellees) to dismiss Beekman's complaint alleging breach of contract, unjust enrichment, conversion, and fraudulent misrepresentation and deceit in connection with an alleged oral contract for the sale of quarried rock. For the reasons set forth herein, we reverse that portion of the order which provides the district court lacked subject matter jurisdiction and that portion of the order which finds that Beekman's amended complaint failed to state a claim for which relief could be granted in his breach of contract claim. We affirm the remaining findings in the order. The matter is remanded for further proceedings.
II. STATEMENT OF FACTS
In August 2016, Beekman sold his quarry business, Barnston Quarry LLC, to the Appellees' business, Rush Creek Construction, Inc. (Rush Creek). According to Beekman, the contract for the sale of his quarry business did not include the quarried rock; instead, he contends that the quarried rock was negotiated separately and that the parties, in their individual capacities, entered into an oral agreement in which the Appellees agreed to sell the quarried rock, keep track of the sales, and pay Beekman after the quarried rock was sold. After no payments for the quarried rock were forthcoming, Beekman made several demands for payment. After the Appellees refused to pay for the quarried rock, in September 2020, Beekman filed a complaint against the individual Appellees, alleging breach of contract, unjust enrichment, conversion, and fraudulent misrepresentation and deceit.
Beekman's complaint alleged that he sold his quarry business and certain equipment located on the premises to the Appellees' business, Rush Creek. The complaint further alleged that the sale "included certain equipment and quarried rock that was located at various locations on the premises. The sale of the quarr[ied] rock was separately negotiated on that same date between [Beekman] and [the Appellees] as individuals." Beekman alleged that he deliberately entered into the oral contract for the sale of the quarried rock between individuals because he was "well aware of the fact that a business enterprise such as an LLC, or a corporation, is liable for its obligations only to the extent of its assets" and he "specifically dealt with [the Appellees] individually so that he had an opportunity to recover the value of the [quarried] rock." The complaint further alleged that the Appellees paid the amount owed on the contract except for the quarried rock, which Beekman valued at $64,500; that the Appellees agreed to pay for the rock but wanted to measure the piles of quarried rock to determine how much rock
The Appellees filed a motion to dismiss on the bases that Beekman failed to state a claim for which relief could be granted, that Beekman failed to join a necessary party, that the claim was not brought by the real party in interest, that Beekman's claims violated the statute of frauds, and that the claims were barred by the 4-year statute of limitations. At the hearing on the motion to dismiss, the Appellees offered as an exhibit Roc's affidavit, which the court accepted over Beekman's objection. Roc's affidavit asserted that all payments for the equipment listed on the offer to purchase were made via check by Rush Creek; that no other written documents were attached to that offer letter or otherwise made a part of the agreement to purchase Barnston Quarry's equipment; and that Rush Creek never agreed to purchase rock from Barnston Quarry or from Beekman, nor did Roc agree to it in his individual capacity. The affidavit included, as an attachment, the written offer by Rush Creek to purchase certain assets from Barnston Quarry. The letter was addressed to Barnston Quarry, to the attention of Beekman, and included an offer to purchase specific assets from Barnston Quarry and a plan for two installment payments for the purchase of those assets. The quarried rock was not listed on the offer to purchase. The offer was signed by Roc on behalf of Rush Creek.
In response, Beekman offered his complaint into evidence. Beekman argued that the parties entered into a separate oral agreement for the quarried rock and/or an implied contract, that a performance exception applied to the statute of frauds because the goods were received and accepted, that the claim could not be dismissed under the statute of limitations because the date the rock was sold by the Appellees was unknown and the date controlled when the trial clock began to run, that all the elements of fraud were stated within the complaint, and that the separate contract was made between the individuals and not the businesses. Thereafter, the district court granted the Appellees' motion to dismiss Beekman's complaint with prejudice. The court found:
The court based its finding on "the undisputed evidence in the record," consisting of Roc's affidavit, but also noted that the court "would render the same finding under a facial attack without considering [Roc's affidavit]."
III. ASSIGNMENTS OF ERROR
Beekman assigns as error, restated and renumbered, that the district court erred in (1) receiving Roc's affidavit without providing notice that the court converted the motion to dismiss into a motion for summary judgment and failing to draw all reasonable inferences in favor of the non-moving party in the motion, (2) finding that Beekman was not the real party in interest, (3) determining that Beekman failed to state a claim for a separate contract of the sale of quarried rock and therefore was barred by the statute of frauds, (4) finding that his complaint did not plead fraud with particularity, and (5) finding that his claims were barred by the 4-year statute of limitations.
IV. STANDARD OF REVIEW
Under the rules for notice pleading, Nebraska appellate courts review matters that were dismissed for lack of subject matter jurisdiction de novo, except for factual findings. See Bohaboj v. Rausch, 272 Neb. 394, 721 N.W.2d 655 (2006).
An appellate court reviews the district court's denial of a motion to amend under Neb. Ct. R. Pldg. § 6-1115(a) for an abuse of discretion. However, we review de novo any underlying legal conclusion that the proposed amendments would be futile. Chaney v. Evnen, 307 Neb. 512, 949 N.W.2d 761 (2020).
Before determining the merits of Beekman's assignments of error, we must first determine whether this court has jurisdiction. It is the power and duty of an appellate court to determine whether it has jurisdiction over the matter before it, irrespective of whether the issue is raised by the parties. J.S. v. Grand Island Public Schools, supra.
The district court's order reflects two separate bases upon which it found that it lacked subject matter jurisdiction over Beekman's claim. First, the court found
1. REAL PARTY IN INTEREST
In his complaint, Beekman asserted that he sold his quarry business to the Appellees, which sale included certain equipment and quarried rock. However, Beekman alleged that "the quarr[ied] rock was separately negotiated on that same date between [Beekman] and [the Appellees] as individuals." Beekman went on to claim that the Appellees' failure to pay for the quarried rock that they took possession of, and subsequently sold, amounted to a breach of contract. As to that pleading, the district court found that the Appellees' Neb. Ct. R. Pldg. § 6-1112(b)(1) motion asserted a "factual challenge" to the court's jurisdiction. Because the district court deemed the Appellees' jurisdictional challenge a factual one, it stated "`[i]n a factual challenge, the court may consider and weigh evidence outside of the pleadings to answer the jurisdictional question,'" quoting Washington v. Conley, 273 Neb. 908, 734 N.W.2d 306 (2007). The district court then went on to consider, over Beekman's objection, an affidavit offered by Roc and received by the court in connection with its subject matter jurisdiction analysis. The court concluded that on the basis of Roc's affidavit, Beekman was not the real party in interest and the district court lacked subject matter jurisdiction. In the alternative, the court found:
The district court then found that the offer letter produced by Roc in his affidavit was embraced by the pleadings and could be considered by the court. When read together with the pleadings, the court concluded that Beekman failed to allege sufficient facts to establish he was the real party in interest and that all necessary and indispensable parties had not been joined.
In order to review this assigned error, we must first identify the standard by which both the district court and this court can review a jurisdictional challenge raised by a § 6-1112(b)(1) motion. In Jacobs Engr. Group v. ConAgra Foods, 301 Neb. 38, 54-55, 917 N.W.2d 435, 451-52 (2018), the Nebraska Supreme Court analyzed that very issue and provided as follows:
In this case, the Appellees brought a § 6-1112(b)(1) challenge at the pleading stage. See Moats v. Republican Party of Neb., 281 Neb. 411, 796 N.W.2d 584 (2011) (Miller-Lerman, J., concurring) (complaint and motion to dismiss referenced as at early pleading stage). We need not decide whether the Appellees were limited to a facial challenge at this stage of the proceedings because, as we set forth below, under either a facial challenge or a factual challenge, we find that the district court had subject matter jurisdiction over Beekman's claims.
In its findings, the district court concluded Beekman's complaint failed a facial challenge governing Beekman's standing to bring his claims. In considering that facial challenge, the court considered both the allegations in the complaint and the offer letter attached to Roc's affidavit which the court concluded was embraced by the pleadings and could be considered by the court, citing Nadeem v. State, 298 Neb. 329, 904 N.W.2d 244 (2017). Assuming, without deciding, that the offer letter was embraced by the pleadings and could be considered in connection with this facial challenge, we now perform a de novo review of Beekman's pleading and the offer letter. In performing a de novo review to determine whether the allegations are sufficient to establish Beekman's standing, we take the allegations as true and resolve all reasonable inferences in Beekman's favor. See Jacobs Engr. Group v. ConAgra Foods, 301 Neb. 38, 917 N.W.2d 435 (2018) (in resolving facial challenge, court will review pleadings to determine whether there are sufficient allegations to establish plaintiff's standing; in doing so, court will accept allegations of complaint as true and draw all reasonable inferences in favor of nonmoving party).
Nebraska is a notice pleading jurisdiction. Vasquez v. Chi Properties, 302 Neb. 742, 925 N.W.2d 304 (2019). Civil actions are controlled by a liberal pleading regime; a party is only required to set forth a short and plain statement of the claim showing that the pleader is entitled to relief and is not required to plead legal theories or cite appropriate statutes so long as the pleading gives fair notice of the claims asserted. Id. Further, at the pleading stage, the standard for determining the sufficiency of a complaint to allege standing is fairly liberal. Jacobs Engr. Group v. ConAgra Foods, supra.
Liberally construing Beekman's complaint, we find that Beekman sufficiently alleged that although the businesses entered into a contract for the purchase of equipment, the individuals named in the lawsuit separately and orally contracted with Beekman to sell and purchase quarried rock which was not part of the business contract. Beekman also alleges
At oral argument, the Appellees urged that notwithstanding the Nebraska Supreme Court's holding in Jacobs Engr. Group. v. ConAgra Foods, supra, they retained the right to make a § 6-1112(b)(1) factual challenge at the pleadings stage of this lawsuit. The Appellees urge that when applying a factual challenge and the different burdens of proof associated therewith, the district court did not err in finding that Beekman lacked standing to bring his claim. We disagree. Assuming, without deciding, that the Appellees could bring a factual challenge at the pleading stage, we are mindful of the Eighth Circuit Court of Appeals' statement in Osborn v. U.S., 918 F.2d 724 (8th Cir. 1990). In discussing the standard of review in connection with Fed. R. Civ. P. 12(b)(1) challenges, the Eighth Circuit held:
Osborn v. U.S., 918 F.2d at 730.
The Fourth Circuit Court of Appeals provided a thorough explanation to the "jurisdictional issue bound up with the merits" exception in Kerns v. U.S., 585 F.3d 187 (4th Cir. 2009). In applying the rationale for the exception, the Fourth Circuit held:
Kerns v. U.S., 585 F.3d at 192-93.
We believe the inextricably intertwined exception applies here. In his complaint, Beekman alleged his business, Barnston Quarry, sold equipment to another business, Rush Creek, but that Beekman separately sold quarried rock to Roc and Stepan individually. In his affidavit, Roc acknowledged Rush Creek's purchase of equipment from Barnston Quarry, but denied that either Rush Creek or he personally purchased the quarried rock. In short, Roc is denying the merits of Beekman's underlying claim in its entirety, not simply claiming that Beekman lacked standing to assert it. Under this scenario, the district court should have denied the § 6-1112(b)(1) jurisdictional challenge and allowed the matter to proceed for future resolution following appropriate discovery.
2. INDISPENSABLE PARTY
But the district court's order went further and also found, in relation to the Appellees' § 6-1112(b)(7) indispensable party challenge, that the businesses pled by Beekman that were subject to a separate agreement as mentioned in the offer letter were indispensable parties to Beekman's claim. As such, the court found that Beekman's failure to include these parties in his lawsuit likewise deprived the court of subject matter jurisdiction over the claim.
Section 6-1112(b)(7) allows a party to raise the objection of the failure to join a necessary or indispensable party. Indispensable parties are parties whose interest is such that a final decree cannot be entered without affecting them, or that termination of controversy in their absence would be inconsistent with equity. Davis v. Moats, 308 Neb. 757, 956 N.W.2d 682 (2021). There is no discretion as to the inclusion of an indispensable party. Id.
Again, we first apply our rules in connection with a facial challenge to the court's lacking subject matter jurisdiction due to the failure to include an indispensable party. Here, Beekman asserted that the sale conducted between the two businesses did not include the sale of quarried rock, which was the subject of a separate contract between Beekman individually and the Appellees individually. Thus, on the face of the complaint, Beekman asserts that only the individuals and not the businesses had an interest in the quarried rock and that, as pled, the trial court could enter a final decree without affecting the businesses' interest. As such, on the face of the complaint, the businesses were not indispensable parties to the lawsuit.
Again, assuming, without deciding, that the Appellees could make a factual challenge at the pleading stage, Roc's affidavit, issued on behalf of Roc personally and on behalf of Rush Creek, stated, "Rush Creek... never agreed to purchase rock from either Barnston Quarry [or] Beekman as a part of this transaction." Taking this admission as true for purposes of an indispensable party challenge, Roc agrees that a trial court could enter a final decree governing the subject of Beekman's claim without affecting the respective business' interest in the quarried rock. Because neither the owners of Barnston Quarry nor
3. FAILURE TO STATE CLAIM
The trial court found that "[a]lternatively, even absent the jurisdictional defects set forth above, the Court finds certain of [Beekman's] claims should be further dismissed for failure to state a claim upon which relief can be granted." The court then went on to hold that in applying a § 6-1112(b)(6) analysis, Beekman's claims should be dismissed because (a) Beekman's claims sounding in contract, unjust enrichment, and fraud violated the statute of frauds; (b) Beekman's claim for fraud failed to plead the claim with particularity; and (c) Beekman's claims sounding in contract, unjust enrichment, conversion, and fraud were brought in violation of the statute of limitations. Beekman assigns error to certain of these findings, and we will address his specific assignments.
To prevail against a motion to dismiss for failure to state a claim, a plaintiff must allege sufficient facts, accepted as true, to state a claim to relief that is plausible on its face. Eadie v. Leise Properties, 300 Neb. 141, 912 N.W.2d 715 (2018).
Nebraska is a notice pleading jurisdiction. Burklund v. Fuehrer, 299 Neb. 949, 911 N.W.2d 843 (2018). Civil actions are controlled by a liberal pleading regime; a party is only required to set forth a short and plain statement of the claim showing that the pleader is entitled to relief and is not required to plead legal theories or cite appropriate statutes so long as the pleading gives fair notice of the claims asserted. Id. The rationale for this liberal notice pleading standard in civil actions is that when a party has a valid claim, he or she should recover on it regardless of a failure to perceive the true basis of the claim at the pleading stage. Id.
In cases in which a plaintiff does not or cannot allege specific facts showing a necessary element, the factual allegations, taken as true, are nonetheless plausible if they suggest the existence of the element and raise a reasonable expectation that discovery will reveal evidence of the element or claim. Chaney v. Evnen, 307 Neb. 512, 949 N.W.2d 761 (2020).
(a) Statute of Frauds
Beekman first contends that the district court erred when it granted the Appellees' motion to dismiss his contract claim for failure to state a claim because his claim violated the statute of frauds. The district court found that, as pled, Beekman's claims sounding in contract, unjust enrichment, and fraud were barred by the statute of frauds. Beekman only assigns this error in connection with his contract claim and not the court's order dismissing his unjust enrichment and fraud claim. Neb. U.C.C. § 2-201(1) (Reissue 2020), which governs the Nebraska statute of frauds, states:
However, the Uniform Commercial Code contains an exception to the writing requirement. Section 2-201(3) states in pertinent part that "[a] contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable ... (c) with respect to goods for which payment has been made and accepted or which have been received and accepted (section 2-606)." Further, Neb. U.C.C. § 2-606(1) (Reissue 2020) provides, in pertinent part, that "[a]cceptance of goods occurs when the buyer ... (c) does any act inconsistent with the seller's ownership...."
The district court acknowledged these principles, but ultimately summarized:
But as we noted earlier in our discussion regarding the real party in interest, we find that Beekman sufficiently alleged that the individuals, and not the businesses, separately orally negotiated for the sale of the quarried rock. Nor do we find that allegation inconsistent with the written contract, which dealt only with business equipment and not the quarried rock. As we stated before, we find that in applying our liberal pleading rules, Beekman sufficiently alleged that the individuals separately orally contracted for the sale and purchase of the quarried rock; that the Appellees, as individuals, took possession thereof; and that the terms of sale required the Appellees to make payment to Beekman upon subsequent sale of the quarried rock. These allegations, taken as true, sufficiently state a claim for an oral contract that does not facially violate the statute of frauds due to the writing exception found in § 2-201(3). Stated differently, because we find that, on the face of the complaint, Beekman sufficiently pled that the quarried rock sold to the Appellees in their individual capacities was accepted by them, we find the district court erred in dismissing Beekman's contract claim as facially violating the statute of frauds.
(b) Fraudulent Misrepresentation
Beekman next contends that the district court erred in dismissing his fraudulent misrepresentation claim for failing to plead his claim with sufficient particularity.
Unlike Nebraska's more liberal pleading rules discussed above, Neb. Ct. R. Pldg. § 6-1109(b) (rev. 2008) provides that "[i]n all averments of fraud, mistake, or undue influence, the circumstances constituting fraud, mistake, or undue influence shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally."
In order to state a claim for fraudulent misrepresentation under Nebraska law, a plaintiff must allege that (1)
After reviewing Beekman's complaint, although we find that Beekman's general averments were sufficient to plead a claim for an oral contract between the individuals separate and distinct from the written contract between the businesses, we find Beekman did not state a claim of fraudulent misrepresentation with sufficient particularity. For instance, although Beekman generally claimed that "[t]he sale of the quarr[ied] rock was separately negotiated on that same date between [Beekman] and [the Appellees]" and that "[the Appellees] represented to [Beekman] that they were buying the rock," Beekman failed to particularly allege what specific statements were made, by whom, where the specific statements were made, and other specific details associated with the Appellees' purported statements. Because Beekman failed to plead his claim of fraudulent misrepresentation with sufficient particularity, we hold that the district court did not err in dismissing this claim for failure to state a claim upon which relief can be granted. And because Beekman did not separately assign as error that the court erred in refusing to allow him to amend this claim, we find that the claim was properly dismissed from the lawsuit.
(c) Statute of Limitations
Next, Beekman contends that the district court erred when it found that the statute of limitations barred his contract, conversion, and fraud claims. He did not assign error in connection with the court's determination that the statute of limitations barred his unjust enrichment claim; therefore, we do not address it. Additionally, because we have already disposed of Beekman's cause of action for fraud as stated above, we need not address additional arguments regarding that claim here.
"An action upon a contract, not in writing, expressed or implied, or an action upon a liability created by statute, other than a forfeiture or penalty, can only be brought within four years." Neb. Rev. Stat. § 25-206 (Reissue 2016). Claims of property conversion are likewise governed by a 4-year statute of limitations. See Neb. Rev. Stat. § 25-207 (Reissue 2016). The general rule is that where a complaint does not disclose on its face that it is barred by the statute of limitations, a defendant must plead the statute as an affirmative defense, and, in that event, the defendant has the burden to prove that defense. Lindner v. Kindig, 285 Neb. 386, 826 N.W.2d 868 (2013). Thus, if the complaint does not disclose that it is barred by the statute of limitations, dismissal is improper. See
A challenge that a pleading is barred by the statute of limitations is a challenge that the pleading fails to allege sufficient facts to constitute a claim upon which relief can be granted. Carruth v. State, 271 Neb. 433, 712 N.W.2d 575 (2006). A district court's grant of a motion to dismiss on the pleadings is reviewed de novo, accepting the allegations in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party. Rutledge v. City of Kimball, 304 Neb. 593, 935 N.W.2d 746 (2019).
Here, Beekman alleged that on August 1, 2016, the parties, in their individual capacities, entered into a separate oral agreement for the sale of the quarried rock. According to Beekman, the Appellees first wanted to measure the piles of rock to verify the quantity of rock on the premises; he drew a map at that time providing the Appellees with the location and description of the rock; and the Appellees agreed to pay for the rock as the Appellees sold it while keeping track of the tickets of sale. Beekman contends that the Appellees then sold the rock, failed to keep him apprised of the sale as agreed, and failed to pay him the amount due for the rock.
In determining when the statute of limitations begins to run in a contract action, the Nebraska Supreme Court stated:
Here, Beekman alleged that the parties agreed to a different credit arrangement than the date of delivery. Specifically, Beekman asserts that the Appellees were obligated to pay for the delivered rock as it was sold. On the face of the complaint, Beekman does not indicate when the rock was sold because he alleges that the Appellees failed to inform him of the sale date or dates. As such, because the statute of limitations, as pled, would continue to run from the Appellees' sale date and because Beekman did not allege the sale date, it became incumbent upon the Appellees to allege the statute of limitations as an affirmative defense, and the burden shifted to them to then prove it.
Here, resolving all allegations and inferences in favor of the nonmoving party, we hold the district court erred in finding that the complaint facially disclosed that Beekman's contract claim was
In sum, we find the court erred in finding it lacked subject matter jurisdiction of Beekman's claims. We further find that the court erred in finding Beekman failed to state a claim for which relief could be granted in his breach of contract claim. We affirm the court's dismissal of Beekman's fraud and conversion claims for those reasons set forth herein and do not reach the issue of the court's dismissal of Beekman's unjust enrichment claim because Beekman failed to assign error in connection with the dismissal of that claim. The matter is remanded for further proceedings.
AFFIRMED IN PART, AND IN PART REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.