Fast Ball Sports v. Metropolitan Entertainment ( 2013 )

CASES DETERMINED
IN THE
NEBRASKA COURT OF APPEALS
Fast Ball Sports, LLC, appellant and cross-appellee,
v. M etropolitan Entertainment & Convention
Authority, appellee and cross-appellant.
___ N.W.2d ___
Filed July 2, 2013. No. A-12-425.
1. Summary Judgment. Summary judgment is proper if the pleadings and admis-
sible evidence offered at the hearing show that there is no genuine issue as to
any material facts, or as to the ultimate inferences that may be drawn from those
facts, and that the moving party is entitled to judgment as a matter of law.
2. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an
appellate court views the evidence in the light most favorable to the party against
whom the judgment is granted and gives such party the benefit of all reasonable
inferences deducible from the evidence.
3. Contracts. A claim that the parties created an enforceable contract generally
presents an action at law.
4. Judgments: Appeal and Error. An appellate court reviews questions of law
independently of the conclusion reached by the lower court.
5. Breach of Contract: Proof. To recover for breach of contract, a plaintiff must
prove that a defendant made a promise, breached the promise, and caused the
plaintiff damage and that any conditions precedent were satisfied.
6. Contracts: Proof. To establish an express contract, a party must prove a definite
proposal and an unconditional and absolute acceptance of that proposal.
7. Contracts: Words and Phrases. An absolute proposal or offer is an expression
of willingness to enter into an agreement with another, made in such a way that
the other party is justified in believing that its acceptance is invited and will
result in a contract.
8. Contracts. A communication intended only as preliminary negotiation or an
expression of willingness to negotiate is not an offer.
9. ____. When a party subjects a contract to board approval, there is no contract or
offer until the board approves.
10. Contracts: Waiver. In Nebraska, under the prevention doctrine, if a party pre-
vents the occurrence of a condition necessary for the other party to perform an
oral or written agreement, a court may waive the condition.
11. Contracts. The prevention doctrine does not apply to a condition precedent for
the formation of a contract.
(1)
Decisions of the Nebraska Court of Appeals
2 21 NEBRASKA APPELLATE REPORTS
12. Fraud. The elements of fraud are (1) that a representation was made; (2) that the
representation was false; (3) that when made, the representation was known to be
false or made recklessly without knowledge of its truth and as a positive asser-
tion; (4) that it was made with the intention that the plaintiff should rely upon it;
(5) that the plaintiff reasonably did so rely; and (6) that he or she suffered dam-
age as a result.
13. ____. Fraud cannot ordinarily be predicated on unfulfilled promises or statements
as to future events.
14. Contracts: Fraud: Evidence. If there is no signed contract, a party seeking to
overcome the statute of frauds must proffer a writing, signed by the opposing
party, detailing the terms and conditions of their promises. The writing can be any
written evidence of an oral contract so long as the writing contains the essential
terms of the contract.
15. ____: ____: ____. The written evidence necessary to overcome the statute of
frauds does not need to be contained in a single document or communication,
but if the terms of the contract can be collected from the correspondence of the
parties, it will be a sufficient memorandum within the meaning of the statute
of frauds.
16. Contracts: Estoppel. Under the doctrine of promissory estoppel, a court may
enforce a promise made by a party if (1) that party should reasonably expect
its promise to induce another party’s action or forbearance, (2) its promise does
induce action or forbearance, and (3) the only way to avoid injustice is to enforce
the promise.
17. Contracts: Fraud: Estoppel. Promissory estoppel is not an exception to the
statute of frauds; nor can it be used to circumvent the statute of frauds.
18. ____: ____: ____. Only where a party to a written contract within the statute
of frauds induces another to waive some provision upon which he is entitled to
insist and thereby change his position to his disadvantage because of that party’s
inducement will the inducing party be estopped to claim that such oral modifica-
tion is invalid because not in writing.
19. Equity: Contracts: Fraud: Partial Performance. A court will enforce in equity
an oral contract partly performed, even if the contract falls within the statute
of frauds.
20. Contracts: Fraud: Partial Performance. The justification of the partial per-
formance exception to the statute of frauds is that partial performance is good
evidence for believing an agreement exists.
21. Contracts: Fraud. Ordinary business preparations are not sufficient to remove
an alleged contract from the statute of frauds.
22. Contracts: Partial Performance. Preliminary acts or mere preparations to act do
not constitute partial performance.
23. Trial: Appeal and Error. An appellate court reviews a trial court’s determination
of a request for sanctions for abuse of discretion.
24. Judges: Words and Phrases. A judicial abuse of discretion exists when a judge,
within the effective limits of authorized judicial power, elects to act or refrains
from acting, but the selected option results in a decision which is untenable and
unfairly deprives a litigant of a substantial right or a just result in matters submit-
ted for disposition through a judicial system.
Decisions of the Nebraska Court of Appeals
FAST BALL SPORTS v. METROPOLITAN ENTERTAINMENT 3
Cite as 21 Neb. App. 1Appeal from the District Court for Douglas County: Leigh
Ann R etelsdorf, Judge. Affirmed.
Jason M. Bruno, of Sherrets, Bruno & Vogt, L.L.C., for
appellant.
Mark C. Laughlin and Ryan M. Sewell, of Fraser Stryker,
P.C., L.L.O., for appellee.
Sievers and Riedmann, Judges.
Riedmann, Judge.
I. INTRODUCTION
Fast Ball Sports, LLC (FBS), appeals an order of the dis-
trict court for Douglas County denying it summary judgment
and granting summary judgment in favor of Metropolitan
Entertainment & Convention Authority (MECA). MECA cross-
appeals the trial court’s denial of dismissal of the suit as a
sanction. The trial court found that MECA and FBS did not
form a contract and that FBS was not entitled to remedies
under theories of promissory estoppel or fraud. We agree. We
further determine that the trial court did not abuse its discretion
in denying the requested sanction and affirm its ruling.
II. BACKGROUND
FBS is a corporation that sought to acquire a professional
baseball franchise to play baseball in Omaha, Nebraska, at TD
Ameritrade Park. MECA is a nonprofit group that manages and
operates TD Ameritrade Park.
MECA and FBS began negotiating in August 2009 with
the help of a consulting group, the Pierce Group, which acted
as a “go between.” In November, Roger Dixon, MECA’s
chief executive officer, prepared and sent a cover letter and
attached “Memorandum of Understanding” (MOU) to the
Pierce Group and to FBS’ chief executive officer. The cover
letter explained that the MOU provides “principal terms”
that would be used to prepare a “definitive Lease” if agreed
to by both parties. The cover letter stated that any lease
agreement must be “submitted for approval to the MECA
Board and thereafter mutually executed.” Both parties agreed
Decisions of the Nebraska Court of Appeals
4 21 NEBRASKA APPELLATE REPORTS
that the letter and the MOU provided the framework for
the negotiations.
The parties did not have contact again until May 2010, when
FBS requested to meet with Dixon to continue negotiations.
Dixon responded that MECA was involved in negotiations with
another group and would resume discussions with FBS if those
other negotiations failed.
In August 2010, MECA and FBS resumed discussions. At
that time, Dixon advised FBS in writing that MECA would
make one last attempt at negotiating a lease, but that it needed
more information about the individuals in FBS’ ownership
group and FBS’ available financial resources.
On August 19, 2010, MECA’s chief financial officer, Lea
French, prepared a draft lease, which the parties revised on two
occasions. On September 17, MECA’s attorney e-mailed FBS’
attorney asking for additional information about the “Northern
League” to provide to MECA’s board of directors (MECA
Board) in his confidential report. In his e-mail, he mentioned
he would be attending a MECA Board meeting that evening
but did not yet have all the information he needed to provide
to the MECA Board.
On September 20, 2010, French e-mailed a revised draft
lease dated September 17, 2010, to MECA and FBS repre­
sentatives. As with the previous drafts, she labeled the docu-
ment as a “[d]raft” and included blue editing marks. In her
e-mail, she identified the draft lease as a “redline” version. The
draft lease stated that MECA would lease the TD Ameritrade
Park stadium to FBS for a term of approximately 5 years for
the purpose of “presenting Northern League baseball games.”
It also contained a strict compliance clause.
Also on September 20, 2010, at the Pierce Group’s request,
French wrote a letter to the commissioner of the Northern
League to help FBS obtain a franchise. The letter states:
[MECA] has reached agreement with [FBS] on the major
terms of a lease agreement to play Northern League base-
ball at the TD Ameritrade Park Omaha stadium. [FBS]
was provided with a draft agreement and MECA has not
received any material comments to that draft. MECA
Decisions of the Nebraska Court of Appeals
FAST BALL SPORTS v. METROPOLITAN ENTERTAINMENT 5
Cite as 21 Neb. App. 1plans to have the final agreement approved at the October
14, 2010 meeting of the MECA Board . . . .
We ask that you swiftly formalize your approval and
issuance of a franchise to [FBS] so that we may finalize
the lease agreement.
French sent copies of the letter to MECA and FBS repre-
sentatives. In response, the Northern League awarded FBS a
franchise, and FBS paid a franchise fee of $200,000 and an
application fee of $10,000 and committed to paying a total
of $1,010,000.
During the fall of 2010, Dixon learned from outside sources
that FBS’ management had changed, and based upon infor-
mation from outside sources, he became concerned about the
Northern League’s future viability. As a result, Dixon decided
not to present the proposed lease agreement to the MECA
Board and no lease agreement was ever signed by both par-
ties. The Northern League ceased operations in 2010, and one
Northern League team joined the North American Baseball
League. While many of the teams in the Northern League
were located in the Midwest, the teams in the North American
Baseball League were located much farther away from Omaha,
in places such as Hawaii and Canada.
In December 2010, the chairman of the MECA Board
advised FBS in writing that the MECA Board would not
consider FBS’ proposal. His reasoning was that FBS had rep-
resented in September that the Northern League was a solid
eight-team league, but that within a few days of that repre-
sentation, MECA learned from other sources that this was no
longer the case.
The parties dispute whether or not certain oral statements
were made during the course of negotiations. In particular,
FBS asserts that during the negotiations, MECA represented
that the parties had a “done deal,” that Dixon had authority to
bind MECA to a lease agreement, that the MECA Board would
approve any agreement presented to it by Dixon, and that if
FBS obtained an independent baseball franchise, the lease
would be signed and approved no later than October 14, 2010.
MECA denies making such representations.
Decisions of the Nebraska Court of Appeals
6 21 NEBRASKA APPELLATE REPORTS
In February 2011, FBS filed a complaint in the district court
for Douglas County. FBS attached a purported copy of the
September 17, 2010, lease agreement to its complaint. This
attachment, however, was not the copy of the lease MECA sent
FBS. The version attached to the complaint did not contain the
blue editing marks or the word “draft” in the upper right-hand
corner. Furthermore, it was initialed and signed by FBS repre-
sentative Nick Grammas.
MECA moved for sanctions, including that the trial court
dismiss the case with prejudice because FBS intentionally mis-
led the trial court by attaching an altered and executed version
of the draft lease. At the hearing, FBS admitted that it altered
the lease, but argued that it did not intend to mislead the trial
court, offering its admission at the hearing as proof. The trial
court denied MECA’s motion for sanctions.
Pursuant to rulings on motions to dismiss, FBS amended its
complaint twice. In the second amended complaint, FBS sought
remedies based on theories of breach of contract, fraud, and
promissory estoppel. Both parties subsequently filed motions
for summary judgment.
The court granted MECA’s motion for summary judg-
ment and denied that of FBS. The court found no valid con-
tract existed between the parties. It explained that the MECA
Board’s approval was a condition precedent to the formation of
a valid contract and that the evidence did not show the MECA
Board approved the contract. The court further found that the
statute of frauds barred consideration of any oral statements
made between the parties, and it denied FBS’ fraud and prom-
issory estoppel claims.
This timely appeal followed.
III. ASSIGNMENTS OF ERROR
FBS assigns that the trial court erred in (1) denying its
motion for summary judgment and (2) granting MECA’s
motion for summary judgment. MECA assigns on cross-appeal
that the trial court erred in denying its request for dismissal of
the suit as a sanction.
Decisions of the Nebraska Court of Appeals
FAST BALL SPORTS v. METROPOLITAN ENTERTAINMENT 7
Cite as 21 Neb. App. 1IV. STANDARD OF REVIEW
[1] Summary judgment is proper if the pleadings and admis-
sible evidence offered at the hearing show that there is no
genuine issue as to any material facts, or as to the ultimate
inferences that may be drawn from those facts, and that the
moving party is entitled to judgment as a matter of law.
Mortgage Express v. Tudor Ins. Co., 278 Neb. 449, 771 N.W.2d
137 (2009).
[2] In reviewing a summary judgment, an appellate court
views the evidence in the light most favorable to the party
against whom the judgment is granted and gives such party
the benefit of all reasonable inferences deducible from the
evidence. Wise v. Omaha Public Schools, 271 Neb. 635, 714
N.W.2d 19 (2006).
[3,4] A claim that the parties created an enforceable contract
generally presents an action at law. City of Scottsbluff v. Waste
Connections of Neb., 282 Neb. 848, 809 N.W.2d 725 (2011).
An appellate court reviews questions of law independently of
the conclusion reached by the lower court. See id.V. ANALYSIS
1. FBS Motion for
Summary Judgment
FBS argues that the trial court erred in denying its motion
for summary judgment. FBS moved for summary judgment on
theories of breach of contract, fraud, and promissory estoppel.
The trial court found that FBS was not entitled to summary
judgment on any of its claims. We agree.
(a) Breach of Contract Claims
FBS contends that MECA and FBS entered into a legally
enforceable lease agreement because Dixon and FBS agreed
to all material terms and the MECA Board’s approval was
not required. Because MECA and FBS did not form a con-
tract, the trial court correctly denied FBS relief for its first
three claims.
[5,6] To recover for breach of contract, a plaintiff must
prove that a defendant made a promise, breached the promise,
Decisions of the Nebraska Court of Appeals
8 21 NEBRASKA APPELLATE REPORTS
and caused the plaintiff damage and that any conditions pre­
cedent were satisfied. See Phipps v. Skyview Farms, 259 Neb.
492, 610 N.W.2d 723 (2000). A contract may be express,
implied, written, or oral. To establish an express contract, a
party must prove a “definite proposal and an unconditional
and absolute acceptance” of that proposal. Viking Broadcasting
Corp. v. Snell Publishing Co., 243 Neb. 92, 97, 497 N.W.2d
383, 386 (1993).
(i) Legally Enforceable Contract
[7-9] To find an express contract, we must find writings
that prove there was an absolute proposal and unconditional
acceptance. An absolute proposal or offer is an expression
of willingness to enter into an agreement with another, made
in such a way that the other party is justified in believing
that its acceptance is invited and will result in a contract.
The offeror is the master of the offer. See Keller v. Bones,
260 Neb. 202, 615 N.W.2d 883 (2000). A communication
intended only as preliminary negotiation or an expression
of willingness to negotiate is not an offer. See Restatement
(Second) of Contracts § 26 (1981). When a party subjects a
contract to board approval, there is no contract or offer until
the board approves. See, Pluhacek v. Nebraska Lutheran
Outdoor Ministries, 227 Neb. 778, 420 N.W.2d 286 (1988);
Restatement (Second), supra.
In this case, MECA advised FBS at the outset of negotia-
tions in the MOU and its cover letter that any lease must be
approved by the MECA Board before being executed. Both
parties agreed that the letter and the MOU provided the frame-
work for the negotiations. The parties do not dispute that the
MECA Board never approved the September 17, 2010, draft
lease or any other lease.
In Pluhacek, supra, the Nebraska Supreme Court found that
an agreement which contained a provision which subjected
acceptance to full board approval did not constitute a contract
without board approval, even though it was fully executed.
In the present action, the draft lease contains less evidence of
a contract than the executed agreement in Pluhacek because
MECA did not execute the draft lease. Because the MECA
Decisions of the Nebraska Court of Appeals
FAST BALL SPORTS v. METROPOLITAN ENTERTAINMENT 9
Cite as 21 Neb. App. 1Board never approved the lease agreement, the parties never
entered into a binding agreement.
(ii) Doctrine of Prevention
FBS argues that lack of the MECA Board’s approval cannot
be used to defeat the finding of an express contract because
MECA waived the condition under the doctrine of prevention
when it failed to present the lease to the board. This argument
misapplies the prevention doctrine.
[10,11] In Nebraska, under the prevention doctrine, if a
party prevents the occurrence of a condition necessary for the
other party to perform an oral or written agreement, a court
may waive the condition. But the prevention doctrine does not
apply to a condition precedent for the formation of a contract.
See D & S Realty v. Markel Ins. Co., 284 Neb. 1, 816 N.W.2d 1(2012) (wherein court cites to 13 Samuel Williston, A Treatise
on the Law of Contracts § 39:1 at 509 (Richard A. Lord ed.,
4th ed. 2000), which explains that prevention doctrine applies
“where parties capable of contracting have deliberately entered
into a written contract by which there is created a condition
precedent to a right to performance”).
In this case, the condition precedent of the MECA Board’s
approval was a step required to form an agreement between
the parties rather than a condition to performance in an already
existing contract. Because the parties did not have an agree-
ment, Dixon was not obligated to present the potential agree-
ment to the MECA Board and did not waive the condition
by choosing not to do so. See 168th and Dodge, LP v. Rave
Reviews Cinemas, LLC, 501 F.3d 945 (8th Cir. 2007) (holding
that where terms are subject to board approval, board is free to
withhold consent or refuse to consider terms negotiated by its
officers). In December 2010, the MECA Board rejected FBS’
offer to present the potential agreement based on the informa-
tion it had received from Dixon regarding the instability of
FBS and the Northern League. The MECA Board was within
its rights to do so.
FBS argues that the failure to present the proposal con-
stituted a breach of the duty of good faith and fair dealing.
FBS, however, did not produce any evidence suggesting that
Decisions of the Nebraska Court of Appeals
10 21 NEBRASKA APPELLATE REPORTS
MECA did not negotiate in good faith. See Harmon Cable
Communications v. Scope Cable Television, 237 Neb. 871, 468
N.W.2d 350 (1991). The only evidence produced showed that
Dixon had concerns about FBS’ ownership, its financial stabil-
ity, and the long-term viability of the Northern League. For
that reason, Dixon decided not to present the draft lease to the
MECA Board. FBS’ argument that MECA breached the duty
of good faith and fair dealing is without merit.
(b) Fraud
In the alternative, FBS argues that it is entitled to summary
judgment because MECA made false misrepresentations upon
which FBS relied. FBS claims that MECA fraudulently rep-
resented that the two parties agreed on the terms of a lease,
that MECA would honor the lease, and that MECA would
enter into a lease agreement with FBS if FBS acquired a
professional baseball franchise. FBS argues that its reliance
on these fraudulent statements caused it to suffer damages.
We disagree.
[12] The elements of fraud are
(1) that a representation was made; (2) that the represen-
tation was false; (3) that when made, the representation
was known to be false or made recklessly without knowl-
edge of its truth and as a positive assertion; (4) that it
was made with the intention that the plaintiff should rely
upon it; (5) that the plaintiff reasonably did so rely; and
(6) that he or she suffered damage as a result.
Nebraska Nutrients v. Shepherd, 261 Neb. 723, 747, 626
N.W.2d 472, 495 (2001), abrogated on other grounds, Sutton v.
Killham, 285 Neb. 1, 825 N.W.2d 188 (2013).
[13] A fraudulent statement relates to a “‘present or pre­
existing fact.’” Linch v. Carlson, 156 Neb. 308, 316, 56
N.W.2d 101, 105 (1952). Fraud “‘cannot ordinarily be pred-
icated on unfulfilled promises, or statements as to future
events.’” Id.The MECA representatives deny having made the represen-
tations that FBS attributes to them; however, on review of a
summary judgment, an appellate court reviews the evidence
in a light most favorable to the party against whom judgment
Decisions of the Nebraska Court of Appeals
FAST BALL SPORTS v. METROPOLITAN ENTERTAINMENT 11
Cite as 21 Neb. App. 1was entered. We therefore address FBS’ claim of fraud as
though the alleged statements were made.
FBS contends that MECA represented to it that (1) MECA
would enter into a lease agreement if FBS obtained a profes-
sional baseball franchise; (2) the parties had reached an agree-
ment on all material terms; (3) MECA intended to honor the
lease agreement beginning in 2011; (4) the lease agreement
would be presented to the MECA Board for approval at its
October 14, 2010, meeting; and (5) MECA and FBS “had
a deal.”
The second of the foregoing contentions is not a fraudulent
statement. MECA does not deny that it had reached an agree-
ment with FBS on all material terms; however, this does not
create a binding agreement, because of the condition precedent
of board approval as discussed above. The first, third, and
fourth contentions are statements of unfulfilled promises or
future events and therefore are not subject to a finding of fraud.
As to the fifth contention, we find FBS could not have reason-
ably relied upon it for two reasons. First, MECA made known
to FBS from the outset of negotiations that board approval was
necessary. FBS does not allege that MECA ever represented
to it that the lease was board approved or that board approval
was not necessary. Grammas conceded that he could not have
reasonably relied upon Dixon’s “we ha[ve] a deal” statement
when Grammas stated in his deposition that although as a
businessman, he may believe someone’s statement “‘You got
a deal,’” to have a legally enforceable agreement, “you got
to see the paper.” In 168th and Dodge, LP v. Rave Reviews
Cinemas, LLC, 501 F.3d 945, 957 (8th Cir. 2007), the court,
applying Nebraska law, held that sophisticated business entities
could not reasonably rely upon a statement that an agreement
was a “‘done deal’” without execution of the required writ-
ten agreement. Therefore, we find that the trial court properly
rejected FBS’ claim of fraud.
Furthermore, the statute of frauds prevents an oral agree-
ment in these circumstances. FBS claims the parties agreed
to a minimum 5-year lease of the TD Ameritrade Park sta-
dium. Nebraska’s statute of frauds states: “Every contract
for the leasing for a longer period than one year, or for the
Decisions of the Nebraska Court of Appeals
12 21 NEBRASKA APPELLATE REPORTS
sale of any lands, shall be void unless the contract or some
note or memorandum thereof be in writing and signed by the
party whom the lease or sale is to be made.” Neb. Rev. Stat.
§ 36-105 (Reissue 2008).
[14,15] If there is no signed contract, a party seeking to
overcome the statute of frauds must proffer a writing, signed
by the opposing party, detailing the terms and conditions of
their promises. Hansen v. Hill, 215 Neb. 573, 340 N.W.2d 8(1983). The writing can be any written evidence of an oral
contract so long as the writing contains the essential terms
of the contract. See David v. Tucker, 196 Neb. 575, 244
N.W.2d 197 (1976). The written evidence does not need to
be contained in a single document or communication, but
“[i]f the terms of the contract can be collected from the cor-
respondence of the parties . . . it will be a sufficient memo-
randum within the meaning of the statute of frauds.” Collyer
v. Davis, 72 Neb. 887, 893, 101 N.W. 1001, 1003 (1904).
Accord Fowler Elevator Co. v. Cottrell, 38 Neb. 512, 57 N.W.
19 (1893).
In this case, there is no memorandum or writing that meets
the requirements of the statute of frauds. The cover letter to
the MOU specifically stated that the MOU was nonbinding
and subject to the MECA Board’s approval. The September 17,
2010, draft lease identifies itself as a draft, contains blue edit-
ing marks, and is not signed by MECA.
As pointed out by FBS, both parties were represented by
legal counsel throughout the negotiations. Furthermore, the par-
ties were sophisticated businesspersons. Sophisticated business
entities are charged with knowledge of the statute of frauds
and cannot reasonably rely on oral statements. See 168th and
Dodge, LP v. Rave Reviews Cinemas, LLC, 501 F.3d 945 (8th
Cir. 2007). In 168th and Dodge, LP, the Eighth Circuit, inter-
preting Nebraska law, found as a matter of law that because
one party should have known that a lease for an interest in real
estate must be in writing, it could not have reasonably relied on
the other party’s oral statement that the lease agreement was a
“‘done deal.’” 501 F.3d at 957.
We therefore find that the trial court was correct in denying
summary judgment on FBS’ fraudulent representation claim.
Decisions of the Nebraska Court of Appeals
FAST BALL SPORTS v. METROPOLITAN ENTERTAINMENT 13
Cite as 21 Neb. App. 1(c) Promissory Estoppel
FBS argues that in the alternative to breach of contract, it is
entitled to damages on grounds of promissory estoppel because
MECA induced it to suffer damages. FBS relies upon French’s
September 20, 2010, letter to the commissioner of the Northern
League in which she requests issuance of a franchise to FBS. It
claims that as a result of the letter, the Northern League issued
a franchise to FBS which cost FBS $210,000 and a future com-
mitment of $800,000. It claims on appeal that it was entitled to
summary judgment for reimbursement of the $210,000 it paid
for the franchise. We disagree.
[16] Under the doctrine of promissory estoppel, a court may
enforce a promise made by a party if (1) that party should
reasonably expect its promise to induce another party’s action
or forbearance, (2) its promise does induce action or forbear-
ance, and (3) the only way to avoid injustice is to enforce the
promise. See Rosnick v. Dinsmore, 235 Neb. 738, 457 N.W.2d
793 (1990).
To succeed under its promissory estoppel claim, FBS must
prove that it paid $210,000 as a result of a promise made by
MECA. FBS relies heavily upon French’s September 20, 2010,
letter to the commissioner of the Northern League which states
that “MECA plans to have the final agreement approved at the
October 14, 2010 meeting of the MECA Board.” The letter
contains no promise that the MECA Board will approve the
lease, a condition precedent to any binding contract between
the parties. Even considering the oral statements attributed
to the individual MECA employees, none of those statements
indicated that the MECA Board’s approval was received or had
become unnecessary. Since no promise was made regarding
board approval, we find that FBS failed to prove the threshold
element of promissory estoppel.
Furthermore, there is nothing in the record to prove that
French should have reasonably expected FBS to make an
immediate payment for the franchise. She testified in her
deposition that she did not know a franchise fee was required.
Dixon testified that he assumed FBS would have to pay a
franchise fee, but there is nothing to indicate when that fee
was due. Of the $210,000 that FBS claims as damages, the
Decisions of the Nebraska Court of Appeals
14 21 NEBRASKA APPELLATE REPORTS
record indicates that $10,000 was a nonrefundable applica-
tion fee which FBS paid prior to the date of French’s letter;
therefore, French’s letter could not have induced this pay-
ment. The evidence further reveals a draft in the amount of
$198,000 dated September 16, 2010 (4 days prior to French’s
letter), which Grammas identified as a copy of the check paid
to the Northern League for the franchise. The record indicates
that a franchise agreement was entered into on September
29 and that FBS immediately paid a deposit of $200,000.
There is no evidence that anyone from MECA should have
reasonably expected FBS to make such a payment prior
to the MECA Board’s approving the lease, because board
approval was a condition precedent from the outset of the par-
ties’ negotiations.
[17,18] In addition, as stated above, the statute of frauds is
applicable to the alleged agreement because it involves a lease
greater than 1 year. Promissory estoppel is not an exception to
the statute of frauds. See Farmland Service Coop, Inc. v. Klein,
196 Neb. 538, 244 N.W.2d 86 (1976). Only
[w]here a party to a written contract within the stat-
ute of frauds induces another to waive some provision
upon which he is entitled to insist and thereby change
his position to his disadvantage because of that party’s
inducement [will] the inducing party . . . be estopped to
claim that such oral modification is invalid because not
in writing.
See id. at 543, 244 N.W.2d at 89-90. Promissory estoppel
cannot be used to circumvent the statute of frauds. Rosnick,
supra.FBS seeks alternative damages based on MECA’s alleged
failure to fulfill an obligation that is covered by the statute of
frauds by artfully pleading promissory estoppel. Because the
statute of frauds applies, we find that the trial court properly
denied FBS’ promissory estoppel claim.
2. MECA’s Motion for
Summary Judgment
FBS alleges that the trial court should not have granted
MECA’s motion for summary judgment. FBS argues that the
Decisions of the Nebraska Court of Appeals
FAST BALL SPORTS v. METROPOLITAN ENTERTAINMENT 15
Cite as 21 Neb. App. 1statute of frauds is inapplicable because the parties set forth
their initial agreement in writing, FBS partially performed
under the agreement, and the statute of frauds does not apply
to claims of fraud and promissory estoppel.
Our discussion above regarding the insufficiency of the
writings upon which FBS relies and its claims of fraud and
promissory estoppel adequately addresses FBS’ argument as
to these claims, and we find that the trial court did not err
in its determination that the statute of frauds was applicable
on these bases. Therefore, we will address only FBS’ claim
that partial performance removes this case from the statute
of frauds.
[19] A court will enforce in equity an oral contract partly
performed, even if the contract falls within the statute of
frauds. See Campbell v. Kewanee Finance Co., 133 Neb. 887,
277 N.W. 593 (1938).
[20-22] The justification of the partial performance excep-
tion to the statute of frauds is that partial performance is
good evidence for believing an agreement exists. Howard O.
Hunter, Modern Law of Contracts § 7:36 (2012). Ordinary
business preparations, however, are not sufficient to remove
an alleged contract from the statute of frauds. Id. Preliminary
acts or mere preparations to act do not constitute partial per-
formance. F.D.I.C. v. Altholtz, 4 F. Supp. 2d 80 (D. Conn.
1998). See Heine v. Fleischer, 184 Neb. 379, 167 N.W.2d
572 (1969).
In Heine, the Nebraska Supreme Court found that paying
the entire consideration for the purchase of realty was not
sufficient partial performance to prevent application of the
statute of frauds. Similarly, in 168th and Dodge, LP v. Rave
Reviews Cinemas, LLC, 501 F.3d 945 (8th Cir. 2007), the
court found that plaintiffs who spent approximately $600,000
to purchase additional land and remove a gasline to ensure
the land was ready for the impending lease agreement had not
partially performed the contract.
In this case, FBS argues that it partially performed the
contract by taking steps to hire staff, develop a marketing
scheme, and acquire a baseball franchise. FBS alleges that it
spent $210,000 acquiring a franchise and other sums to pay
Decisions of the Nebraska Court of Appeals
16 21 NEBRASKA APPELLATE REPORTS
the salaries of staff hired to work on promoting the baseball
team. But FBS did not actually perform any part of the contract
through these actions.
These actions were similar to the actions of the plaintiffs
in 168th and Dodge, LP, supra, in that while the actions were
substantial, they were necessary before the plaintiffs could
begin performing the contract. In this case, FBS needed to
acquire a franchise and create a marketing plan before it could
play professional baseball in the TD Ameritrade Park stadium,
which was the purpose of the proposed lease. Preparations do
not constitute sufficient performance to remove the contract
from the statute of frauds.
Because the parties had no express contract and the statute
of frauds applies to FBS’ claims of fraud and promissory estop-
pel, we affirm the trial court’s order granting summary judg-
ment in favor of MECA.
3. Denial of Dismissal
as Sanction
MECA cross-appeals the trial court’s denial of sanctions
against FBS. MECA argues that the trial court should have
used its inherent power to sanction FBS by dismissing its com-
plaint because FBS materially altered evidence and attached it
to its original complaint in a misleading way.
The record reveals that FBS attached to its original com-
plaint an altered piece of documentary evidence purporting to
be a lease to which the parties agreed. We note that counsel
for FBS concedes he removed language indicating this was a
draft, added the signature of FBS, and added initials of FBS’
representative on each page. MECA moved for sanctions,
including requesting that the trial court dismiss FBS’ complaint
with prejudice or stay discovery until the altered lease was
explained. FBS filed a motion to strike MECA’s motion for
sanctions claiming that “[t]here has been absolutely no tamper-
ing, misrepresentations, or underhandedness of any kind and
[MECA’s] Motion is a red hearing [sic] intended to mislead the
Court.” Despite this accusation, FBS admitted to the alterations
set forth above of “the removal of ‘draft’ from the upper right
Decisions of the Nebraska Court of Appeals
FAST BALL SPORTS v. METROPOLITAN ENTERTAINMENT 17
Cite as 21 Neb. App. 1hand corner, the signature of [FBS], and the initials of [FBS’]
representative on each page.”
At the hearing on the motion for sanctions, FBS’ counsel
confessed that one of his colleagues or FBS itself altered the
document he attached to the complaint. However, he stated that
the act was not “dishonest.” The court addressed the serious-
ness of counsel’s actions in the following exchange:
THE COURT: The problem that I have is in paragraph
13 of the complaint, it says the agreement was memo-
rialized in writing within a stadium lease agreement
prepared by MECCA [sic] and its attorneys. In that case
that is an agreement and is something that they sent to
you. Then you say a copy of the stadium lease agreement
signed by FBS is attached there to [sic] as Exhibit A,
inferring Exhibit A is the same item as the stadium lease
agreement allegedly sent. If you wanted to modify if [sic]
and say sent [sic] a copy of the stadium lease agreement
signed by FBS is attached to Exhibit A, wouldn’t that
solve it?
[Counsel for FBS]: It would solve it.
THE COURT: You don’t think that’s misleading?
[Counsel for FBS]: I don’t think so.
....
[Counsel for FBS]: We weren’t trying to be misleading.
THE COURT: But it is. I don’t think there’s any
question.
FBS’ counsel then orally moved to file an amended com-
plaint without the altered document attached. The trial court
denied sanctions and granted leave to file the amended
complaint.
In addition, FBS’ counsel also confesses to sending a let-
ter via e-mail to Omaha’s mayor encouraging him to persuade
MECA to honor the purported lease agreement. In support,
counsel attached a copy of the complaint containing the lease
with the deletions and alterations confessed above. Counsel
represented to the mayor that the attached lease was a “true and
correct” copy of the lease.
Decisions of the Nebraska Court of Appeals
18 21 NEBRASKA APPELLATE REPORTS
[23] We review a trial court’s determination of a request
for sanctions for abuse of discretion. See Paro v. Farm &
Ranch Fertilizer, 243 Neb. 390, 499 N.W.2d 535 (1993). We
note that typically, a request for sanctions arises under Neb.
Ct. R. Disc. § 6-337 for violation of a court order involving
discovery. In the present case, MECA requested sanctions for
violation of the very foundation upon which the practice of
law is built—integrity. While our court rules do not contain a
specific provision imposing sanctions upon one who violates
his duties as an officer of the court, such violation is no less
sanctionable than violation of a discovery rule, and the courts
have inherent power to impose such sanctions. In the past, this
level of misconduct may have subjected the offender to the old
English common law rule requiring attorneys who deceived
the court to be imprisoned for a day and a year. See, West. 1, 3
Edw. I, ch. 29 (1275); Alex B. Long, Attorney Deceit Statutes:
Promoting Professionalism Through Criminal Prosecutions
and Treble Damages, 44 U.C. Davis L. Rev. 413 (2010). But,
we review a trial court’s order on sanctions for an abuse of
discretion, and we find that the trial court did not abuse its
discretion in denying MECA’s requested sanction of dismissal
with prejudice.
[24] A judicial abuse of discretion exists when a judge,
within the effective limits of authorized judicial power, elects
to act or refrains from acting, but the selected option results in
a decision which is untenable and unfairly deprives a litigant
of a substantial right or a just result in matters submitted for
disposition through a judicial system. Cole v. Isherwood, 271
Neb. 684, 716 N.W.2d 36 (2006). Applying this definition,
we find that although the granting of such a sanction would
have been within the trial court’s discretion, its refusal to do
so was not untenable; nor did it deprive MECA of a substan-
tial right or just result. FBS omitted the altered lease when it
filed its amended complaint, removing the false impression
that MECA had provided a final copy for FBS’ consideration.
The case then proceeded without the false representation that
MECA had submitted a final lease to FBS for consideration.
Therefore, MECA was not deprived of a substantial right or
just result. We further note that dismissing FBS’ complaint
Decisions of the Nebraska Court of Appeals
FAST BALL SPORTS v. METROPOLITAN ENTERTAINMENT 19
Cite as 21 Neb. App. 1would have punished the client rather than its attorney, and
the record contains no indication that FBS was aware of its
counsel’s actions.
This is not to say that we condone counsel’s actions or that
we adhere to a principle of “no harm, no foul” in a situation
such as this. To the contrary, we find FBS’ counsel’s conduct
highly offensive for an officer of the court. But our standard
of review dictates this outcome, and it is not the function of
an appellate court to become investigators and truth finders
on issues not before it. Any potential discipline is not within
our realm, but, rather, within that of the Counsel of Discipline,
if appropriate. See, e.g., State ex rel. Counsel for Dis. v.
Riskowski, 272 Neb. 781, 724 N.W.2d 813 (2006); State ex
rel. Counsel for Dis. v. Mills, 267 Neb. 57, 671 N.W.2d 765(2003). Thus, our finding of no abuse of discretion by the trial
court in denying the particular sanction sought should not be
taken for anything more than exactly that.
VI. CONCLUSION
Viewing the evidence in a light most favorable to FBS, and
giving it the benefit of all reasonable inferences deducible from
the evidence, we find that the trial court did not err in denying
FBS’ motion for summary judgment or in granting MECA’s
motion for summary judgment. While we do not condone the
actions of FBS’ counsel, we do not find that the trial court
abused its discretion in refusing to dismiss FBS’ complaint
with prejudice. Therefore, we affirm the trial court’s order in
all respects.
Affirmed.
Irwin, Judge, participating via the Internet.