Missionary Benedictine Sisters, Inc. v. Hoffman, LLC

Filing 175

MEMORANDUM AND ORDER that Third-Party Defendant Robinson's motion for leave to amend 153 is denied. Third-Party Plaintiffs' objection to Robinson's motion for leave to amend 156 is denied without prejudice. Third-Party Defendant Ro binson's motion for summary judgment against Third-Party Plaintiff Hoffman 121 is denied. Third-Party Defendant Robinson's motion for summary judgment against Third-Party Plaintiffs Volkman and AMCO 130 is granted in part and denied in part, as follows: The motion is granted to the extent that Volkman and AMCO's contribution claim relates to a $400,000 payment to Hoffman. In all other respects, the motion is denied. Ordered by Senior Judge Richard G. Kopf. (JSF)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
MISSIONARY BENEDICTINE SISTERS, )
INC.,
)
)
Plaintiff,
)
v.
)
)
HOFFMAN, LLC,
)
)
Defendant and
)
Third-Party Plaintiff
)
v.
)
)
FREDERICKSEN ENGINEERING, INC., )
VOLKMAN PLUMBING & HEATING, )
INC., and LONNIE ROBINSON d/b/a
)
R&R Mechanical Insulation,
)
)
Third-Party Defendants )
)
)
VOLKMAN PLUMBING & HEATING, )
)
INC., and AMCO INSURANCE
)
COMPANY,
)
)
Third-Party Plaintiffs
)
v.
)
)
LONNIE ROBINSON d/b/a R&R
Mechanical Insulation, and ENGINEERED )
)
CONTROLS, INC.,
)
Third-Party Defendants )
)

4:11CV3180

MEMORANDUM
AND ORDER

This matter is before the court on motions for summary judgment (Filing Nos.
121, 130) filed by Lonnie Robinson doing business as R&R Mechanical Insulation

(“Robinson” or “R&R”). Robinson also requests leave to amend one of the motions
for summary judgment (Filing No. 153). The motions are directed at a third-party
complaint (Filing No. 78) filed against Robinson by Hoffman, LLC (“Hoffman”) and
a second amended third-party complaint (Filing No. 148) filed against Robinson by
Volkman Plumbing & Heating, Inc. (“Volkman”), and AMCO Insurance Company
(“AMCO”).
I. PROCEDURAL BACKGROUND
This action was commenced on September 23, 2011, in the District Court of
Madison County, Nebraska, by Missionary Benedictine Sisters, Inc. (“MBS”), a
Nebraska non-profit corporation, against Hoffman, a Wisconsin limited liability
company which is wholly owned by a Wisconsin corporation (Filing Nos. 1-1, 7). In
its complaint, MBS alleged that it “is the owner of real property and building
improvements known as the Immaculata Monastery located at 300 North 18th Street,
Norfolk, NE (herein, ‘Monastery’)”; that “[o]n or about March 28, 2007, [MSB] and
[Hoffman] entered into a written contract pursuant to which [Hoffman] agreed to
perform an extensive renovation project on the Monastery ... [and] to act as general
contractor, designer and engineer for all aspects of the renovation project (herein,
‘Project’)”; that “[s]everal months after moving back into the Monastery [in May
2009], the occupants of the Monastery began noticing deficiencies and defects relating
to the HVAC system and other mechanical systems ..., including ... that the system
fails to dehumidify the air in the interior of the Monastery which in turn has resulted
in the formation of significant amounts of mold”; that “[i]t has also been determined
that the equipment and machinery comprising the mechanical systems ... greatly
exceeds that which would be necessary to meet the needs of a building of the
Monastery’s size and type; thus, [MSB] has been inappropriately overcharged”; and
that “[b]eginning in July and August of 2009 and thereafter, the occupants of the
Monastery began observing numerous defects and deficiencies in the construction and
design of the renovation work by [Hoffman], including ... defective gasket work,
defective air handler units, defective flooring, defective insulation, defective bathroom
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vents, negative building pressure, and defective water heaters” (Filing No. 1-1, at
CM/ECF pp. 2-3, ¶¶ 3, 4, 8-10). MSB sued Hoffman to recover damages “in excess
of $250,000.00” for alleged breach of contract, negligence, and professional
negligence (Filing No. 1-1, at CM/ECF pp. 4-5, ¶¶ 11-21).
Hoffman removed the action to this court on October 19, 2011, on the basis of
diversity jurisdiction (Filing No. 1). Following removal, Hoffman obtained a stay of
proceedings to allow time for mediation, as provided by the parties’ contract (Filing
No. 21). The stay was twice extended upon the joint motion of Hoffman and MBS
(Filing Nos. 23, 26).
On October 1, 2012, Hoffman answered and filed a third-party complaint
against Fredericksen Engineering, Inc. (“Fredericksen”), a Wisconsin corporation, and
Volkman, a Nebraska corporation (Filing No. 28).1 Hoffman alleged that it “entered
into a contract ... with Fredericksen, pursuant to which Fredericksen ... was to act as
a design consultant with respect to the HVAC components of the project,” and that it
also “entered into a subcontract ... with Volkman, pursuant to which Volkman was to
perform construction services related to the Monastery’s plumbing and HVAC
components ... [and] also [be] responsible for the design and implementation of the
HVAC control system” (Filing No. 28, at CM/ECF pp. 7-8, ¶¶ 44, 46). Hoffman
claimed that it had expended $945,674.38 “to perform various remediation and repair
work on the Monastery” and to “attempt[ ] to resolve this dispute with MBS” (Filing
No. 28, at CM/ECF p. 9, ¶ 52), and it sought to recover this amount, plus any
additional future damages, from both third-party defendants based on theories of
breach of contract, negligence, indemnity, contribution, and subrogation (Filing No.
28, at CM/ECF pp. 9-17, ¶¶ 53-76 (re Fredericksen), 77-100 (re Volkman)).

1

The third-party complaint is erroneously identified as a “cross-complaint.”
See Fed. R. Civ. P. 7(a) (listing allowable pleadings).
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On October 23, 2012, Volkman answered Hoffman’s third-party complaint and
filed its own third-party complaint against Lonnie Robinson doing business as R&R
Mechanical Insulation (“Robinson”), a Nebraska resident, and Engineered Controls,
Inc. (“Engineered Controls”), a Nebraska corporation (Filing No. 39).2 Fredericksen
answered Hoffman’s third-party complaint on October 26, 2012, (Filing No. 46).
In its third-party complaint, Volkman alleged that it “subcontracted the
insulation portion of the work on the Monastary Renovation to ... [Robinson] pursuant
to Purchase Order No. 1490 attached [to the third-party complaint]” (Filing No. 39,
at CM/ECF p. 7, ¶ 60), and that “[i]f as alleged by Hoffman the insulation work at the
Monastery Renovation was not properly performed and resulted in damage to the
[MBS] and/or Hoffman, Robinson has breached his agreement to perform his
insulation work on the Monastery Renovation in a good and workmanlike manner,
and/or has negligently performed his work under the insulation subcontract with
Volkman” (Filing No. 39, at CM/ECF p. 8, ¶ 62). Similarly, Volkman alleged that it
“subcontracted the controls portion of its subcontract work to Engineered Controls”
(Filing No. 39, at CM/ECF p. 9, ¶ 69), and that “[i]f as alleged by Hoffman the work
on the HVAC controls on the Monastery Renovation was not properly performed and
resulted in damage to the [MBS] and/or Hoffman, Engineered Controls has breached
its agreement to perform its work at the Monastery in a good and workmanlike
manner, and/or has negligently performed its work under the subcontract with
Volkman” (id., ¶ 71).
On November 21, 2012, Engineered Contols answered Volkman’s third-party
complaint (Filing No. 56). On December 19, 2012, Robinson answered Volkman’s
third-party complaint (Filing No. 60).
On February 1, 2013, MBS filed a Rule 41(a)(2) motion for the voluntary
dismissal, with prejudice, of its claims against Hoffman (Filing No. 66). Hoffman,
2

This pleading is also erroneously identified as a “cross-complaint.”
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Fredericksen, Volkman, and Engineered Controls all consented to the motion, but
Robinson did not (id.; Filing No. 68). The motion was granted by the court on
February 6, 2013 (Filing No. 69), but no judgment was entered.
On March 18, 2013, Volkman filed a Rule 41(a)(2) motion for the voluntary
dismissal, with prejudice, of its claims against Engineered Controls (Filing No. 72).
Hoffman and Fredericksen consented to the motion, but Robinson did not (id.; Filing
No. 74). The motion was granted by the court on April 22, 2013 (Filing No. 77), but
no judgment was entered.
On March 21, 2013, Hoffman filed a Rule 41(a)(2) motion for the dismissal,
with prejudice, of its claims against Fredericksen (Filing No. 73). Volkman and
Engineered Controls consented to the motion, but Robinson did not (id.; Filing No.
75). The motion was granted by the court on April 22, 2013 (Filing No. 77), but no
judgment was entered.
On May 10, 2013, Hoffman filed a Rule 41(a)(2) motion for the dismissal, with
prejudice, of its claims against Volkman (Filing No. 79). Volkman and Engineered
Controls consented to the motion, but Robinson did not (id.). The motion was granted
by the court on June 10, 2013 (Filing No. 84), but no judgment was entered.
Also on May 10, 2013, Hoffman filed third-party complaint against Robinson
and Volkman filed an amended third-party complaint against Robinson (Filing Nos.
78, 80). Hoffman and Volkman both claim a right to indemnification, contribution,
and subrogation, and seek to recover damages for “sums paid ... to make repairs
and/or make repairs on the Project and to settle the dispute with MBS” (id.). Robinson
answered both pleadings on May 20, 2013 (Filing Nos. 81, 82). Discovery followed.
On December 12, 2014, Robinson filed a motion for summary judgment on
Hoffman’s third-party complaint (Filing No. 121). The motion is supported by a brief
(Filing No. 122), index of evidence (Filing No. 123), and supplemental index of
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evidence (Filing No. 133). Hoffman responded to the motion on January 16, 2015,
with a brief (Filing No. 135) and index of evidence (Filing No. 136). Robinson filed
a reply brief on January 23, 2015 (Filing No. 139).
On January 13, 2015, Robinson filed a motion for summary judgment on
Volkman’s amended third-party complaint (Filing No. 130).The motion is supported
by a brief (Filing No. 131), index of evidence (Filing No. 132), and supplemental
index of evidence (Filing No. 134). Volkman responded to the motion on February 6,
2015, with a brief (Filing No. 143) and index of evidence (Filing No. 144). Robinson
filed a reply brief on February 13, 2015 (Filing No. 149), together with an index of
evidence (Filing No. 150).
On February 6, 2015, Volkman filed an unopposed motion to amend its thirdparty complaint to add AMCO Insurance Company (“AMCO”) as a third-party
plaintiff in order “to address R&R’s concerns about the real-party in interest on the
claims asserted by Volkman” (Filing No. 142). The court granted the motion on
February 9, 2015 (Filing No. 145 (text order)), and the second amended third-party
complaint was filed on February 13, 2015 (Filing No. 148). Robinson answered this
pleading on February 27, 2015 (Filing No. 154).
On February 23, 2015, Robinson filed a motion for leave to amend its motion
for summary judgment against Hoffman to include certain arguments that were made
in its motion for summary judgment against Volkman (Filing No. 153). Hoffman,
Volkman, and AMCO objected to the motion on March 9, 2015 (Filing No. 156).3
Robinson replied on March 16, 2015 (Filing No. 162).

3

The third-party plaintiffs’ “objection” is not a proper filing. See NECivR
7.1(b)(1)(A) (“The party opposing a motion must not file an ‘answer,’ ‘opposition,’
‘objection,’ or ‘response,’ or any similarly titled responsive filing.” The “objection”
will be denied without prejudice and treated as a brief.
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On March 13, 2015, Robinson filed an unopposed motion for leave to file an
amended answer to Hoffman’s third-party complaint to assert several affirmative
defenses (Filing No. 159). The motion was granted that same day (Filing No. 160 (text
order)), and the amended answer was filed on March 16, 2015 (Filing No. 161).
II. DISCUSSION
“The court shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). A material fact is one that “might affect the
outcome of the suit under the governing law,” and a genuine issue of material fact
exists when “the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In
determining whether a genuine issue of material fact exists, the evidence is to be taken
in the light most favorable to the nonmoving party, Adickes v. S.H. Kress & Co., 398
U.S. 144, 157 (1970), and the court must not weigh evidence or make credibility
determinations, Anderson, 477 U.S. at 249.
A. Hoffman’s Claims Against Robinson
Hoffman alleges in its third-party complaint that “[a]ll parties to this litigation
other than Lonnie Robinson d/b/a R&R Mechanical Insulation (“R&R”) have entered
into a multi-party settlement agreement which resolved certain claims at issue in this
litigation” (Filing No. 78, at CM/ECF p. 1, ¶ 1). MBS’s claims relating to Robinson’s
insulation work are summarized as follows:
13. Among other things, MBS alleged that the purported problems
with the Monastery were due to design and performance defects in the
Monastery’s HVAC system. Examples of the alleged defects asserted by
MBS include that the HVAC system was improperly designed and
installed in that some of the units in the system were oversized and
piping was placed too close to walls or obstructions. Because of the
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pipes’ proximity to other obstructions, MBS alleged that the pipes were
not properly insulated. MBS alleged that this lack of insulation caused
significant amounts of condensation to form on the exterior of the pipes.
MBS alleged that this excess condensation caused water damage to the
ceiling tiles, walls, floors, and various other portions of the Monastery
and contributed to the humidity issues in the building.
14. Among other things, MBS’ allegations stated that the
purported problems with the Monastery resulted in uncomfortable living
conditions and caused condensation which, in turn, caused water damage
to the ceiling tiles, insulation, walls, floors, and various other portions of
the Monastery.
15. Further, MBS alleged that the increased humidity caused mold
to form in various portions of the Monastery. MBS alleged that the mold
migrated throughout the monastery and was released and dispersed into
the atmosphere within the Monastery.
(Filing No. 78, at CM/ECF pp. 3-4, ¶¶ 13-15). Hoffman alleges that “[a]s a proximate
result of MBS’s allegations, ... Hoffman performed or paid for others to perform
various remediation and repair work on the Monastery ... [and] has also incurred
various costs and expenses in resolving this dispute with MBS, including the
incurrence of obligations under the multi-party settlement agreement” (Filing No. 78,
at CM/ECF p. 4, ¶ 18). Two settlement documents are in the record as Exhibits 23 and
24 to the deposition Miles Girouard (Filing No. 123-2).
The first settlement document is an agreement which provides for the payment
of $1.9 million to MBS “from several sources including monies paid from various
insurance companies,” in consideration for which MBS “releases, waives, and forever
discharges any and all claims, demands, and causes of action, whether based in law
or in equity, known and unknown, against Hoffman, FEI [Fredericksen], Volkman,
EC [Engineered Controls], and their respective parents, subsidiaries, affiliates,
suppliers, dealers, shareholders, subcontractors, officers, representatives, employees,
agents, successors, and any and all insurance companies providing insurance for
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Hoffman, FEI, Volkman and EC, ... arising out of or relating to the MBS Claims
and/or the Project, including but not limited to any claims for warranty express or
implied” (Filing No. 123-2, at CM/ECF p. 8, ¶¶ 1-2, 4). The agreement further
provides that “Hoffman, FEI, Volkman, and EC release, waive, and forever discharge
MBS with respect to any and all liens, claims, demands, and causes of action arising
out of or relating to the MBS Claims and/or the Project, whether based in law or in
equity,” but “[t]his release expressly does not apply to any claims that Hoffman, FEI,
Volkman or EC may have against Lonnie Robinson d/b/a R&R Mechanical
Insulation” (id., ¶ 5). The agreement “confers no rights, benefits, defenses, or causes
of action in favor of any third parties or entities” (Filing No. 123-2, at CM/ECF p. 9,
¶ 7). “The Parties do not admit liability ....” (Filing No. 123-2, at CM/ECF p. 8, ¶ 6).
The second settlement document is an agreement entered into by Hoffman,
Fredericksen, Volkman, and Engineered Controls, in which responsibility for the
$1.9 million settlement payment to MBS is apportioned as follows:
a.

Hoffman’s Insurer, Zurich agrees to pay Five Hundred Thousand
dollars ($500,000)[;]

b.

Hoffman agrees to pay One Hundred Fifty Thousand dollars
($150,000);

c.

Volkman’s Insurer, Allied4 agrees to pay Three Hundred Fifty
Thousand dollars ($350,000);

d.

FEI’s Insurer, Continental Casualty Company agrees to pay Six
Hundred Fifty Thousand dollars ($650,000); [and]

e.

EC’s Insurer, Allied agrees to pay Two Hundred Fifty Thousand
dollars ($250,000)[.]

4

AMCO is a subsidiary of Allied. (See Filing No. 148, at CM/ECF p. 2, ¶ 5).
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(Filing No. 123-2, at CM/ECF pp. 16-17, ¶ 2). In addition to those payments,
“Volkman’s Insurer, Allied agrees to pay Four Hundred Thousand dollars ($400,000)”
to Hoffman, and “EC’s Insurer, Allied agrees to pay Seventy-five Thousand dollars
($75,000)” to Hoffman (Filing No. 123-2, at CM/ECF p. 17, ¶ 4). The agreement
contains a mutual release, but provides that “nothing in this Settlement Agreement
shall be construed in any way as a release of any claims against Robinson or the right
to proceeds from pursuit of Robinson as defined further in this Settlement Agreement”
(id., ¶ 7). “The Parties have each expressly reserved their claims, if any, against
Robinson” (Filing No. 123-2, at CM/ECF p. 18, ¶ 8). “The Parties further agree that
Zurich/Hoffman and Allied/Volkman may, in their discretion, continue the
prosecution of the claims against Robinson” (id.) “The costs of recovery will be paid
from any proceeds first,” and “[t]he remaining proceeds from the recovery, if any,
shall be split as determined by Zurich/Hoffman and Allied/Volkman” (id.).
1. Indemnity and Contribution
Hoffman’s “first claim for relief” against Robinson is based on “common law
implied indemnity” (Filing No. 78, at CM/ECF p. 4). Hoffman alleges:
20. MBS alleged that Hoffman is liable for various errors and
omissions regarding the construction and design of the Monastery’s
HVAC system. Under its subcontract with Volkman, R&R was
responsible for the placement of insulation. To the extent MBS’s
allegations regarding the HVAC system’s construction defects are true,
such defects were proximately caused, in whole or in part, by R&R.
21. As a result of MBS’s allegations, Hoffman has incurred
damages in an amount to be proven at trial related to sums paid by
Hoffman to make repairs and/or pay for repairs on the Project and to
settle the dispute with MBS. The damages Hoffman has incurred and
may continue to incur were proximately caused by R&R.
22. As a result of MBS’s allegations, Hoffman has discharged a
liability that in justice should be discharged by R&R.
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23. Hoffman is entitled to be indemnified by R&R in an amount
to be proven at trial related to sums paid by Hoffman to make repairs
and/or pay for repairs on the Project and to settle the dispute with MBS,
plus any additional damages Hoffman may suffer in the future in
connection with this matter.
(Filing No. 78, at CM/ECF pp. 4-5, ¶¶ 20-23).
Hoffman’s “second claim for relief” is identified as a contribution claim (Filing
No. 78, at CM/ECF p. 5). The allegations for this claim are substantially similar to
paragraphs 20, 21, and 23 of the indemnity claim:
25. MBS alleged that Hoffman is liable for various errors and
omissions regarding the construction and design of the Monastery’s
HVAC system. Under its subcontract with Volkman, R&R was
responsible for the placement of insulation. To the extent MBS’s
allegations regarding the HVAC system’s defects are true, such defects
were proximately caused by, in whole or in part, the acts or omissions of
R&R.
26. As a result of MBS’s allegations, Hoffman has incurred
damages in an amount to be proven at trial related to sums paid by
Hoffman to make repairs and/or pay for repairs on the Project and to
settle the dispute with MBS. The damages Hoffman has incurred and
may continue to incur were proximately caused, in whole or in part, by
R &R.
27. Hoffman is entitled to contribution from R&R in an amount to
be proven at trial related to sums paid by Hoffman to make repairs
and/or pay for repairs on the Project and to settle the dispute with MBS,
plus any additional damages Hoffman may suffer in the future. In
addition, Hoffman is entitled to obtain an apportionment of R&R’s
comparative fault under Neb. Rev. Stat. § 25-21,185.10
(Filing No. 78, at CM/ECF pp. 5-6, ¶¶ 25-27).

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“Under Nebraska law, indemnification is available when one party is compelled
to pay money which in justice another ought to pay or has agreed to pay.” Downey v.
Western Community College Area, 808 N.W.2d 839, 854 (Neb. 2012), citing Kuhn v.
Wells Fargo Bank of Neb., 771 N.W.2d 103 (Neb. 2009). “Generally, the party
seeking indemnification must have been free of any wrongdoing, and its liability is
vicariously imposed. Id., citing Warner v. Reagan Buick, 483 N.W.2d 764 (Neb.
1992). However, it has been held “[i]n the tort context ... that indemnity is available
to one who engaged in merely passive neglect, but unavailable to one who engaged
in direct and active negligence. Warner, 483 N.W.2d at 771, citing Hiway 20
Terminal, Inc. v. Tri-County Agri-Supply, Inc., 443 N.W.2d 872 (Neb. 1989) (general
contractor had common-law right of indemnification against subcontractor where
contractor’s liability was based solely on its failure to adequately inspect work of
subcontractor).
“Though at one time founded upon an implied contract, today the right to
indemnity is generally regarded as equitable in nature.” Warner, 483 N.W.2d at 770,
citing City of Wood River v. Geer-Melkus Const. Co., 444 N.W.2d 305 (Neb. 1989).
See also United General Title Insurance Company v. Malone, 858 N.W.2d 196,
217-18 (Neb. 2015) (“Absent a contractual arrangement, the right to indemnity has its
roots in equity.”).
“Contribution is defined as a sharing of the cost of an injury as opposed to a
complete shifting of the cost from one to another, which is indemnification.” Id., at
212, citing Estate of Powell v. Montange, 765 N.W.2d 496 (Neb. 2009). “[B]oth
indemnity and contribution rest on principles of restitution and unjust enrichment.”
Id., citing Restatement (Third) of Restitution and Unjust Enrichment § 23, comment
a. (2011).
“A party has a claim for indemnification if it pays a common liability that, as
between itself and another party, is altogether the responsibility of the other party.”
Id., at 212-13. “In contrast, a claim for contribution arises when a party has paid more
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than its fair share of a common liability that is allocated in some proportion between
itself and another party.” Id., at 213. “[T]hose entitled to indemnity are generally free
from personal fault while those entitled to contribution are not.” Downey, 808 N.W.2d
at 853.
“The prerequisites to a claim for contribution are that the party seeking
contribution and the party from whom it is sought share a common liability and that
the party seeking contribution has discharged more than his fair share of the common
liability.” Id., at 212, quoting Estate of Powell, 765 N.W.2d at 500, citing 18 C.J.S.
Contribution § 5 (1990). “In other words, a common liability to the same person must
exist in order for there to be contribution.” Estate of Powell, 765 N.W.2d at 500,
quoting Smith v. Kellerman, 541 N.W.2d 59, 65 (Neb. 1995).
Because the concepts are so closely related, the Restatement treats indemnity
and contribution in a single rule that provides:
(1) If the claimant renders to a third person a performance for which
claimant and defendant are jointly and severally liable, the claimant is
entitled to restitution from the defendant as necessary to prevent unjust
enrichment.
(2) There is unjust enrichment in such a case to the extent that
(a) the effect of the claimant’s intervention is to reduce an
enforceable obligation of the defendant to the third person, and
(b) as between the claimant and the defendant, the obligation
discharged (or the part thereof for which the claimant seeks
restitution) was primarily the responsibility of the defendant.
Restatement (Third) of Restitution and Unjust Enrichment § 23 (2011). As further
explained in the comments:

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A claim in restitution is potentially available in any situation not
governed by express contract in which A discharges all or part of what
is (i) a common liability of A and B vis-à-vis a third-party obligee,
but (ii) the obligation of B as between A and B.... The claim is called
indemnity when the liability in question, as between the parties, is
altogether the responsibility of B; it is called contribution when A has
paid more than A’s share of a common liability that is allocated in some
proportion between them. The logic and the rationale of the claim in
restitution are precisely the same in either case.
Id., comment a.
Robinson argues that indemnity, contribution, and subrogation have been
treated as remedies or theories of recovery by Nebraska courts, as opposed to claims
or causes of action. See, e.g., Fuxa v. CTB, Inc., No. A-98-800, 1999 WL 1338338,
at *4 (Neb.App. Nov. 23, 1999) (unpublished) (“In the instant case, equitable
subrogation, contribution, and indemnification are not separate causes of action, but,
rather, alternative theories of recovery.”). Robinson then contends that Hoffman’s
action sounds in contract because “[t]he source of Hoffman’s allegations against R&R
originates from R&R’s contractual duty to Volkman to insulate the Monastery during
the Project” (Filing No. 122, at CM/ECF p. 11), and concludes that the action must
be dismissed because “R&R never had a contract with Hoffman to undertake any
work on the Project” (Filing No. 122, at CM/ECF p. 12).
In Cerny v. Todco Barricade Co., 733 N.W.2d 877, 885 (Neb. 2007), the
Nebraska Supreme Court stated that “[i]t is questionable whether contribution and
indemnity are separate causes of action, as opposed to theories of recovery, ....” The
court found it unnecessary to decide issue in Cerny, but more recently, in Malone, it
ruled that “indemnification may be asserted as an independent claim under Nebraska
law.” 858 N.W.2d at 217-18.

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The Malone decision defeats Robinson’s argument, but the argument is flawed
in any event because Hoffman’s indemnification claim is based upon its payment of
an obligation that Robinson allegedly owed to MBS, and not upon any contractual
relationship between Hoffman and Robinson. The rule providing a right to indemnity
“applies irrespective of the existence of a contract or agreement between the payor
and the primary obligor, although it is subject to the terms of any contract which the
parties may make.” Restatement (First) of Restitution § 76, comment b (1937).5 “This
is because the duty of indemnity by the principal obligor exists although he did not
consent to enter into the relation with the payor out of which the duty of
reimbursement arises.” Id.
“A duty to indemnify will always arise out of another more basic obligation
whether it arises on contract or tort.” City of Wood River, 444 N.W.2d at 309.
Hoffman’s third-party complaint does not delineate what obligation Robinson, as a
sub-subcontractor, owed to the project owner, MBS, but Robinson argues that a
negligence theory will fail as a matter of law because there is no privity of contract
between MBS and Robinson. In making this argument, Robinson relies on Hawkins
Const. Co. v. Peterson Contractors, Inc., 970 F. Supp. 2d 945, 952 (D. Neb. 2013),
in which this court held that under Nebraska law, lack of privity of contract between
a prime contractor and consultants who were hired by a subcontractor to provide
design and engineering services for a road construction project barred the contractor’s
claims against the consultants for indemnity, contribution, and subrogation. The
holding in Hawkins, however, was premised on a determination that “[n]o matter how
5

“A person [i.e., the payor] who, in whole or in part, has discharged a duty
which is owed by him but which as between himself and another [i.e., the primary
obligor] should have been discharged by the other, is entitled to indemnity from the
other, unless the payor is barred by the wrongful nature of his conduct.” Restatement
(First) of Restitution § 76 (1937). This rule “applies where two or more persons are
subject to a duty to a third person either as joint promisors or otherwise, under such
circumstances that one or more of them, as between themselves, should perform it
rather than the other.” Id., comment b.
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[the contractor] couches these claims [against the consultants], including those for
equitable relief, they are really claims for professional negligence.” Id. “[I]n Nebraska,
absent proof of fraud or some other extraordinary facts that would override the general
rule, professionals are not liable in negligence to third parties with whom they are not
in privity of contract.” John Day Co. v. Alvine & Associates, Inc., 510 N.W.2d 462,
466 (Neb.App. 1993). Robinson does not claim to be a “professional.”
Robinson next states that “a party cannot seek indemnity from another party in
tort unless a common liability exists between the two” (Filing No. 139 at CM/ECF p.
7, citing Kuhn, 771 N.W.2d at 119-120). Robinson argues that there is no common
liability because “Hoffman contracted with MBS (owner) to be the general contractor
on the Project,” while “R&R was a subcontractor of Volkman on the Project and did
not have a contract with MBS for any of the work undertaken to remodel the
Monastery” (Filing No. 122 at CM/ECF pp. 15-16). Even though privity of contract
may not exist between R&R and MBS, see Moglia v. McNeil Co., Inc., 700 N.W.2d
608, 614 (Neb. 2005) (“[I]n the absence of an otherwise binding agreement, express
or implied, there is no privity of contract between a subcontractor and the property
owner who negotiated the original agreement with the general contractor.”), “a lack
of privity [is] ‘immaterial’ because contribution and indemnification are common-law
equitable remedies that are not limited by the strictures of legal theories that require
privity.” Parkos Const. Co., Inc. v. Anchor Distributing, Inc.,No. A07-0700, 2008 WL
2246044, at *4 (Minn.App. June 3 ,2008), citing City of Willmar v. Short-ElliottHendrickson, Inc., 512 N.W.2d 872, 874, 876-77 (Minn. 1994). “Common liability
exists when two or more actors are liable to an injured party for the same damages,
even though their liability may rest on different grounds.” Guillard v. Niagara
Machine and Tool Works, 488 F.2d 20, 22 (8th Cir. 1973) (applying Minnesota law).
Finally, Robinson argues that the “accepted work doctrine” bars any recovery
in this case. Under Nebraska law, “[a] construction contractor is not liable for injuries
or damage to a third person with whom he is not in contractual relation resulting from
the negligent performance of his duty under his contract with the contractee where the
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injury or damage is sustained after the work is completed and accepted by the owner.”
Delicious Foods Co., Inc. v. Millard Warehouse, Inc., 507 N.W.2d 631, 638 (Neb.
1993), quoting Stover v. Ed Miller & Sons, Inc., 231 N.W.2d 700, 703 (Neb. 1975).
The Nebraska Supreme Court “has recognized an exception to the accepted work
doctrine in situations where ... the defect at issue was latent and could not have been
discovered by the owners or employer.” Moglia, 700 N.W.2d at 619 (holding that
subsequent homeowners could not recover against contractor and subcontractors for
roofing defects and drainage problems), quoting Parker v. Lancaster Cty. Sch. Dist.
No. 001, 579 N.W.2d 526, 528 (1998). To the extent that the accepted work doctrine
may apply in this case, there are genuine issues a material fact regarding MBS’s
acceptance of the work and whether the alleged defects were latent and could not have
been discovered.
3. Subrogation
Hoffman’s final, “third claim for relief” asserts a right to “subrogation” (Filing
No. 122, at CM/ECF p. 6). The allegations for this claim are also substantially similar
to paragraphs 20, 21, and 23 of the “common law implied indemnity” claim:
29. MBS alleged that Hoffman is liable for various errors and
omissions regarding the construction and design of the Monastery’s
HVAC system. Under its subcontract with Volkman, R&R was
responsible for the placement of insulation. To the extent MBS’s
allegations regarding the HVAC system’s defects are true, such defects
were proximately caused, in whole or in part, by R &R and not by any
active negligence of Hoffman.
30. As a result of MBS’s allegations, Hoffman has incurred
damages in an amount to be proven at trial related to sums paid by
Hoffman to make repairs and/or pay for repairs on the Project and to
settle the dispute with MBS. The damages Hoffman has incurred and
may continue to incur were proximately caused by R&R.

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31. Hoffman is entitled to assert a right of subrogation against
R&R in an amount to be proven at trial related to sums paid by Hoffman
to make repairs and/or pay for repairs on the Project and to settle the
dispute with MBS, plus any additional damages Hoffman may suffer in
the future.
(Filing No. 122, at CM/ECF p. 6, ¶¶ 29-30).
“Generally, subrogation is the right of one, who has paid the obligation which
another should have paid, to be indemnified by the other.” SFI Ltd. Partnership 8 v.
Carroll, 851 N.W.2d 82, 88 (Neb. 2014), citing Buckeye State Mut. Ins. Co. v.
Humlicek, 822 N.W.2d 351 (Neb. 2012). “It is the substitution of one person in the
place of another with reference to a lawful claim, demand, or right, so that the one
who is substituted succeeds to the rights of the other in relation to the debt or claim,
and its rights, remedies, or securities.” Midwest PMS v. Olsen, 778 N.W.2d 727, 732
(Neb. 2010), citing Leader Nat. Ins. v. American Hardware Ins., 545 N.W.2d 451
(Neb. 1996). In other words, “[o]ne who asserts a right of subrogation must step into
the shoes of, or be substituted for, the one whose claim or debt he has paid and can
only enforce those rights which the latter could enforce.” Thrower v. Anson, 752
N.W.2d 555, 562 (Neb. 2008), quoting Querrey & Harrow v. Transcontinental Ins.,
885 N.E.2d 1235, 1237 (Ind. 2008) (Sullivan, J., dissenting).
“The doctrine of equitable subrogation applies where a party is compelled to
pay the debt of a third person to protect his own rights or interest or to save his own
property.” Bel Fury Invs. Group, L.L.C. v. Palisades Collection, L.L.C., 814 N.W.2d
394, 400 (Neb.App. 2012), citing Rawson v. City of Omaha, 322 N.W.2d 381 (Neb.
1982). “[S]ubrogation is never awarded in equity to one who is merely a volunteer in
paying the debt of another.” Id., quoting Rawson, 322 N.W.2d at 384. The Nebraska
Supreme Court has expressly held, however, that “one who is sued ... and who, in an
effort to save his property, including the expenditure of attorney fees, enters into a
reasonable settlement is not a volunteer and is entitled to seek reimbursement under
the doctrine of equitable subrogation.” Rawson, 322 N.W.2d at 385. See also In re Air
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Crash Disaster, 86 F.3d 498, 550 (6th Cir. 1996) (“Equitable subrogation is especially
well-suited to allow recovery by an innocent settling party from the actual wrongdoer,
and it has often been applied in this context.”), citing Rawson.
“Subrogation is an equitable principle applied not as a legal right but to
subserve the ends of justice and do equity.” Humlicek, 822 N.W.2d at 354, citing
Countryside Co-op. v. Harry A. Koch Co., 790 N.W.2d 873 (Neb. 2010). “In terms of
the exercise of the right of subrogation, no general rule can be laid down which will
afford a test for its application in all cases.” Id., citing Jindra v. Clayton, 529 N.W.2d
523 (Neb. 1995). “The facts and circumstances of each case determine whether the
doctrine is applicable.” Id.
Robinson advances no arguments against subrogation that have not already
been discussed with reference to the indemnity and contribution claims. Because the
court has rejected those arguments, Robinson’s motion for summary judgment on
Hoffman’s third-party complaint will be denied.
B. Robinson’s Motion for Leave to Amend
On February 23, 2015, Robinson moved to amend its motion for summary
judgment against Hoffman “to include the identical arguments (that subrogation has
been waived and a party cannot recover indemnification and subrogation unless that
party was free from active culpability)” that were included in its motion for summary
judgment against Volkman. The motion will be denied because the deadline for filing
motions for summary judgment was January 13, 2015 (see Filing No. 113), and
Hoffman represents that it “would have additional arguments that would need to be
made as well as additional evidence that would need to be presented” if the
amendment were allowed (Filing No. 156 at CM/ECF p. 3).

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C. Volkman and AMCO’s Claims Against Robinson
Volkman and AMCO’s claims for indemnity, contribution, and subrogation are
virtually identical to the claims alleged by Hoffman, except that they seek to recover
damages for amounts paid “to settle the dispute with MBS and Hoffman” (Filing No.
148, ¶¶ 24, 28, 32 (emphasis supplied)). In support of his motion for summary
judgment, which was filed with reference to Volkman’s first amended third-party
complaint (before AMCO was added as a party), Robinson argues that Volkman (1)
is not the real party in interest; (2) is not entitled to contribution because its action
sounds in contract; (3) is not entitled to indemnity or contribution because there is no
common liability; (4) cannot recover contribution because it failed to extinguish
R&R’s liability as to Hoffman; (5) waived its right to seek subrogation from R&R;
and (6) cannot obtain subrogation and indemnity unless it was free from culpability.
The first issue appears to have been resolved by the filing of a second amended thirdparty complaint (Filing No. 148) on February 6, 2012, which added Volkman’s
insurer as a third-party plaintiff, and the third issue has already been discussed with
reference to the motion for summary judgment against Hoffman. The remaining four
arguments will be addressed below.
1. No Contribution in Contract Actions
Robinson argues that Volkman’s action sounds in contract and, relying on cases
from other jurisdictions, asserts that contribution is not available in such an action.
Volkman has not responded to this argument, but in light of the Nebraska Supreme
Court’s holding in Malone that indemnity may be asserted as an independent claim,
the court believes that contribution should be accorded the same treatment. As
previously discussed, the only real difference between the two equitable concepts is
that contribution involves sharing the cost of an injury, whereas indemnification
involves a complete shifting of the cost from one to another. See Malone, 858 N.W.2d
at 212. As held by the Wisconsin Supreme Court in State Farm Mut. Auto. Ins. Co.
v. Schara, 201 N.W.2d 758, 759 (Wis. 1972), “a cause of action for contribution is
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separate and distinct from the underlying cause of action whether that underlying
cause sounds in contract or in tort.” Accordingly, “an action for contribution does not
fall merely because the underlying action is one of contract. Rather, instead of looking
to the nature of the underlying transaction, the question is simply whether one person
jointly liable paid more than his fair share for a common obligation.” Kafka v. Pope,
533 N.W.2d 491, 494 (Wis. 1995).
2. Failure to Extinguish R&R’s Liability to Hoffman
Robinson states that “Volkman failed to extinguish R&R’s liability as to
Hoffman when Volkman’s insurer paid $400,000 to Hoffman to settle this matter,”
and contends that contribution is not allowed unless the party seeking contribution
“extinguished the liability of the parties from whom contribution is sought” (Filing
No. 131 at CM/ECF p. 19, quoting Estate of Powell, 765 N.W.2d at 504). Volkman
does not refute this contention, but merely indicates that “Volkman and Hoffman
settled the various claims MBS had against themselves as well as R&R” and thereby
“extinguish[ed] the common liability of the parties as to MBS” (Filing No. 143 at
CM/ECF p. 16).
In the settlement agreement, MBS released all claims “against Hoffman, FEI
[Fredericksen], Volkman, EC [Engineered Controls], and their ... subcontractors”
(Filing No. 123-2, at CM/ECF p. 8, ¶¶ 1-2, 4). However, Hoffman, Fredericksen,
Volkman, and Engineered Controls “each expressly reserved their claims, if any,
against Robinson” and “agree[d] that Zurich/Hoffman and Allied/Volkman may, in
their discretion, continue the prosecution of the claims against Robinson” (Filing No.
123-2, at CM/ECF p. 18, ¶ 8). The $350,000 that AMCO paid as part of the settlement
with MBS may give rise to a claim for contribution from Robinson, but the $400,000
that AMCO paid to Hoffman does not. Thus, Robinson is entitled to partial summary
judgment providing that Volkman and AMCO are not entitled to contribution from
Robinson regarding any portion of the $400,000 settlement payment that was made
to Hoffman.
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3. Waiver of Subrogation
Clause 9.2.8.1 of Volkman’s subcontract with Hoffman provides for the waiver
of certain subrogation rights:6
The Design-Builder [Hoffman] and Subcontractor [Volkman] waive all
rights against each other, the Owner [MBS] and the Architect/Engineer
[Hoffman], and all of their respective consultants, subcontractors, and
sub-subcontractors, agents and employees, for damages caused by perils
to the extent covered by the proceeds of the insurance provided in Clause
9.2.7.1, except such rights as they may have to the insurance proceeds.
The Subcontractor shall require similar waivers from its subcontractors.
(Filing No. 123-2, at CM/ECF p. 82). The referenced Clause 9.2.7.1 provides:
Upon written request of the Subcontractor, the Design-Builder shall
provide the Subcontractor with a copy of the Builder’s Risk policy of
insurance or any other property or equipment insurance in force for the
Project and procured by the Owner or Design-Builder. The DesignBuilder will advise the Subcontractor if a Builder’s Risk policy of
insurance is not in force.
(Filing No. 123-2, at CM/ECF p. 81).
Robinson argues that because “Volkman’s insurer, covered all of the damages
that Volkman incurred during the Remediation[,] ... Volkman’s waiver of subrogation
against R&R is effective and should be enforced” (Filing No. 131, at CM/ECF p. 21).
By its terms, however, the waiver of subrogation clause only applies to damages that
are covered by insurance that was procured by Hoffman or MBS.

6

Nebraska, “like other jurisdictions, recognize[s] the important policy goal that
waivers of subrogation serve in avoiding disruption of construction projects and
reducing litigation among parties to complicated construction contracts.” Lexington
Ins. Co. v. Entrex Communication Services, Inc., 749 N.W.2d 124, 131 (Neb. 2008).
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4. No Subrogation Unless Free From Culpability
Finally, Robinson argues that “Volkman cannot recover from R&R unless a
jury finds that Volkman was free from culpability during the Project” (Filing No. 131,
at CM/ECF p. 21). In his reply brief, however, Robinson modifies this statement to
argue instead that “Volkman cannot recover subrogation or indemnification unless it
(Volkman) was free from active fault during the Project” (Filing No. 149, at CM/ECF
p. 12 (emphasis supplied)), and he “requests this Court to enter a partial summary
judgment, finding that Volkman and AMCO cannot recover subrogation or
indemnification from R&R in the event a jury concludes that [Volkman] was actively
culpable during the Project” (Filing No. 149, at CM/ECF pp. 14-15).7 Robinson’s
request will be denied because “[t]he Federal Rules of Civil Procedure provide no
basis for granting partial summary judgment on a hypothetical question of this sort,
see Fed.R.Civ.P. 56(a) (providing for summary judgment on ‘part of [a] claim or
defense’ where there is no genuine dispute as to any material fact).” Gaudreault v.
Elite Line Services, LLC, 22 F.Supp.3d 966, 978 (D.Minn. 2014).
Restatement (Third) of Restitution and Unjust Enrichment § 24 permits
subrogation in the following circumstance:
(1) If the claimant renders to a third person a performance for which the
defendant would have been independently liable to the third person, the
claimant is entitled to restitution from the defendant as necessary to
prevent unjust enrichment.
(2) There is unjust enrichment in such a case to the extent that
7

For its part, Volkman states that “Nebraska recognizes what other jurisdictions
have termed the ‘active-passive’ theory of equitable indemnity” (Filing No. 143, at
CM/ECF p. 21, quoting Madden v. Antonov, 966 F.Supp.2d 851, 856 (D.Neb. 2013)),
and it compares this to a rule stating that subrogation “is not allowed where the debt
paid is one for which the payor is primarily liable” (Filing No. 143, at CM/ECF p. 22,
quoting Madden, 966 F.Supp. 2d at 859).
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(a) the claimant acts in the performance of the claimant’s
independent obligation to the third person, or otherwise in the
reasonable protection of the claimant’s own interests; and
(b) as between the claimant and the defendant, the performance in
question (or the part thereof for which the claimant seeks
restitution) is primarily the obligation of the defendant.
Subrogation “is one of the mechanisms by which the law of restitution and
unjust enrichment will reallocate the burden of a given liability from one who has
originally discharged it to another whom the law considers more appropriate to bear
it.” Id., comment a. “To this extent a claim under § 24 is directly analogous to a claim
under § 23, usually called ‘indemnity’ or ‘contribution.’” Id. “The principal difference
is that the parties to a restitution claim within the scope of § 23 are at the outset jointly
and severally liable to the third person in the transaction; while § 24 deals with claims
between parties whose duties to the third person are not only independent but may be
of different character and origin.” Id. “Restitution under this section [24] depends on
a legal conclusion that, as between claimant and defendant, the performance with
respect to which the claimant seeks restitution is primarily the obligation of the
defendant.” Id., comment g. “The relevant determination of ‘primary’ and ‘secondary’
thus ranks the obligations of the parties inter se, not by reference to their respective
obligations to the third party whom the claimant has paid.” Id.
III. CONCLUSION
Robinson is entitled to partial summary judgment providing that Volkman and
AMCO are not entitled to contribution from Robinson regarding any portion of the
$400,000 settlement payment that was made to Hoffman, because such payment did
not extinguish Robinson’s liability to Hoffman. In all other respects, however,
Robinson’s motions will be denied.
Accordingly,
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IT IS ORDERED that:
1.

Third-Party Defendant Robinson’s motion for leave to amend (Filing No.
153) is denied.

2.

Third-Party Plaintiffs’ objection to Robinson’s motion for leave to
amend (Filing No. 156) is denied without prejudice.

3.

Third-Party Defendant Robinson’s motion for summary judgment
against Third-Party Plaintiff Hoffman (Filing No. 121) is denied.

4.

Third-Party Defendant Robinson’s motion for summary judgment
against Third-Party Plaintiffs Volkman and AMCO (Filing No. 130) is
granted in part and denied in part, as follows:
a.

The motion is granted to the extent that Volkman and AMCO’s
contribution claim relates to a $400,000 payment to Hoffman.

b.

In all other respects, the motion is denied.

May 4, 2015.

BY THE COURT:
s/ Richard G. Kopf
Senior United States District Judge

* This opinion may contain hyperlinks to other documents or Web sites. The U.S. District
Court for the District of Nebraska does not endorse, recommend, approve, or guarantee any third
parties or the services or products they provide on their Web sites. Likewise, the court has no
agreements with any of these third parties or their Web sites. The court accepts no responsibility
for the availability or functionality of any hyperlink. Thus, the fact that a hyperlink ceases to work
or directs the user to some other site does not affect the opinion of the court.

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