Meylan Enterprises, Inc., a Nebraska corporation v. W-S Industrial Services, Inc., a Nebraska corporation, et al.

Meylan Enterprises, Inc. (Meylan), sued W-S Industrial Services, Inc. (W-S), the estate of David L. Schmitz, John B. Wiese, Darrell F. Roane, and Cheryl Ridenour (collectively the defendants) for damages under several theories on the basis that Schmitz, Wiese, Roane, and Ridenour had conspired to obtain and use information they acquired through their employment with Meylan for the benefit of W-S, which after its formation competed with Meylan and thereby damaged it. Following a bench trial, the trial court found that Meylan had failed to meet its burden of proof to establish by a preponderance of evidence any of its theories of recovery, and the court therefore rendered judgment for the defendants. Meylan appeals, alleging that the trial court erred in finding that Meylan did not meet its burden of proof on the various theories of recovery alleged. We conclude that the facts and inferences necessary to support a recovery for Meylan under all theories are disputed, and under the applicable standard of review, this court cannot find that the trial court erred in its factual findings. Accordingly, we affirm.

BACKGROUND

The record in this case is extensive: 881 pages of testimony and over 60 exhibits, most of which span a number of pages. We will only summarize background evidence and give examples of a few of the acts upon which Meylan relies. In view of the applicable standard of review, except as necessary to disclose Meylan's position, we shall summarize disputed facts in the light most favorable to the defendants.

Meylan was formed by Wayne Meylan in the 1970's. He died in June 1987. The corporation was sold to Donald Graham in July 1988, and he became its vice president, treasurer, and only director. Robert LaMotte was vice president when Wayne Meylan owned the company, and in 1988, LaMotte became president and a minority shareholder. He supervised the day-to-day operation of the company.

Meylan was engaged in the business of cleaning boilers for large powerplants. It had developed a good business over a large area. There is considerable evidence about the sophistication and merits of the process Meylan used to do this operation as compared to other firms in the same business. It had a large number of return customers. Meylan had around four branches in 1994 and 1995, including an Oklahoma City, Oklahoma, branch which covered Oklahoma, Texas, and part of Arkansas. The Oklahoma City branch regularly served several large accounts in that area.

Schmitz was a certified public accountant who performed accounting services for Meylan from 1977 until Wayne Meylan died in 1987. Schmitz was also a fiduciary of Wayne Meylan's estate. After Graham purchased Meylan, Schmitz did not have any association with the corporation. He was clearly the principal organizer of W-S. Schmitz died on September 12, 1996, and the action was revived against his estate. Schmitz did not know anything about the operation of a boiler cleaning business, except such as he might have learned in working on Meylan's books while serving as its accountant. It is clear that in the spring and summer of 1993, Schmitz was in the process of organizing the company that would be called W-S. Three employees of Meylan quit in late 1993. The facts relative to each can be summarized as follows:

Wiese started working for Meylan in the 1970's as a laborer, and he later became a crew supervisor. He consulted with LaMotte about bids to be made by Meylan. In 1986, Wiese signed an employment contract with a 1-year covenant not to compete, but that agreement lapsed, and Meylan does not base any of its theories of recovery on any sort of covenant not to compete. In 1992, for its own reasons, Meylan changed its procedure and transferred some of its employees, including Wiese, to work for a separate corporation named D & R Industries, but these employees continued to do their same work for Meylan. D & R Industries was not controlled by Wayne Meylan or Graham. Wiese testified that he was unhappy about being transferred from Meylan to D & R Industries. He quit October 16, 1993, and started to work for W-S a day or two later.

The evidence clearly establishes that Wiese was familiar with all of the various techniques and tools used by Meylan in serving its customers, and he was familiar with the process Meylan used in bidding on jobs.

Roane started working for Meylan in 1981, and he became a crew foreman. He was also transferred to D & R Industries while continuing to perform his same function at Meylan. He was offered a job with W-S in October 1993, but continued with Meylan until December 26. The evidence of his knowledge of Meylan's operation is not as extensive as that showing Wiese's familiarity with it.

Ridenour started working for Meylan in 1988 and became the bookkeeper (except for accounts payable), office manager, and assistant to the president. In her capacity, she had access to all the information in Meylan's computers, including information concerning capitalization, labor costs, material and equipment costs, and hours spent on jobs; information used to develop bids; and information on profits and losses. She was offered a job with W-S in October 1993, but did not accept the offer at that time. She admitted that in December, she talked with Schmitz about her employment agreement and that when asked, she told him the type of computer she would need at W-S. Schmitz had already decided on the "MAS 90" computer accounting program, and Ridenour was using that program at Meylan. W-S purchased similar, if not the same, software for its computer system from the same software provider who supplied Meylan's system. Ridenour testified that she decided to take the job after she read the W-S employment agreement on January 5, 1994; she signed the agreement at that time. Ridenour gave Meylan a 2-week notice on January 6. Under the agreement with W-S, she received a $60,000 bonus. Ridenour did the same work for W-S as she had done for Meylan.

Meylan's evidence is to the effect that Ridenour was 100 percent responsible for the MAS 90 accounting program, and through that program, one could retrieve from a company all of the data needed for job costing particular jobs, the percentage of profits, profit and loss statements, and apparently all of the company's financial information. Graham testified that the information on Meylan's MAS 90 accounting program was confidential and that if a competitor were to get that information, the competitor would gain access to Meylan's job costing, overhead, assets, equipment costs, cash balances, accounts payable, and accounts receivable, in other words, access to all Meylan's financial information. Ridenour clearly had access to all such information while she worked for Meylan.

Franklin Lea testified that he helped Ridenour install MAS 90, the same accounting program used by Meylan, onto her home computer, along with the "Carbon Copy" program, which would allow access to Meylan's computer system from her home. Ridenour denied copying any of Meylan's records, and she testified that she had MAS 90 on her home computer in 1992, with LaMotte's permission for home use. And, she denied that she had had any conversation in regard to Meylan with Lea, whom she hired to improve her computer's operation. She denied supplying Schmitz or Wiese with any cost data from Meylan's computer.

In July 1993, Schmitz contacted Michael Choiniere of Norwest Bank for possible financial backing for a corporation Schmitz desired to form. Schmitz presented Choiniere with a loan application and the detailed projections necessary for a corporation to obtain a loan. Choiniere prepared a detailed report which analyzed all of the facts that Schmitz had presented. This report was submitted to loan officers of the bank for their consideration in possibly loaning the corporation $1 million, in addition to funds raised from other investors. This report was very thorough and contained information to support the loan. Choiniere testified that Schmitz claimed the information he presented was from his prior service to Meylan. The report stated that Wiese was an expected employee of the new corporation. Choiniere testified that Schmitz indicated Wiese was a critical employee. Schmitz told Choiniere that Schmitz was going to rely upon Wiese to do the operations for the company and that the company would initially operate in Oklahoma City. Choiniere's report states that "once [Wiese], Frank [Lynn], and [Roane] leave Meylan, there would be no one adequately trained to continue that business." The report contains a list of needed equipment and expected expenses, income, and profits.

Wiese admitted that he and Schmitz had discussed establishing a business in January 1993, but Wiese denied that it was to be a "water blasting" (i.e., boiler cleaning) business. Schmitz questioned the feasibility of Wiese's establishing a business and encouraged him to stay with Meylan. It is clear that by the late spring or early summer of 1993, Schmitz was at least giving serious consideration to starting a business that would utilize the same abilities that Wiese was using at Meylan. Records show that on May 17, Schmitz consulted with a lawyer "regarding . . . Wiese." Wiese had five meetings with Schmitz between January and October 1993. In May or June, LaMotte asked Wiese if he was going stay with Meylan; LaMotte testified that Wiese said he was going to quit, but that Wiese denied trying to start a competing business.

By July 1993, Schmitz presented a business plan to Choiniere seeking financial backing for a corporation to be formed. Later, a certificate of authority dated October 1, 1993, which would authorize the corporation to borrow money and engage in banking activities, was presented to Norwest Bank. The articles of incorporation for W-S were filed with the Secretary of State of Nebraska on October 13. Schmitz was the initial president and treasurer of W-S, and Joseph Greir was vice president.

The July 1993 plan for the corporation included a list of equipment the corporation would need, and Wiese testified that he helped Schmitz prepare the equipment list. Choiniere's report stated that Schmitz had a "very good feel for what Maylan's [sic] numbers are and he is using these historic figures to generate his own." Choiniere's report states that Meylan's customers had expressed dissatisfaction with Meylan, and that Wiese served 95 percent of the plants for Meylan. Wiese testified that it would have been impossible for him to service 95 percent of the plants served by Meylan but that he could perhaps have done 80 to 85 percent of that service. He denied having a discussion with Schmitz about such matters before July 1993. Wiese testified that in their early discussions, he and Schmitz determined that Schmitz was going to manage the business. They discussed Wiese's part in the new company, and "probably" by September 1, they agreed that Wiese would manage the business operations and Schmitz the financial operations.

Wiese claims that initially he was only an employee of W-S but later became an owner. He admitted that he advised Schmitz on needed equipment and met with would-be investors for W-S. Wiese admitted that before July 7, 1993, he made revenue and profit projections for a possible company while still working at Meylan. W-S started purchasing equipment, such as trucks, in the last week of October 1993. W-S ordered the equipment listed on the sheet presented to Choiniere in July. By January 28, 1994, the several employees of W-S consisted of former employees of Meylan.

W-S was located in Oklahoma and initially targeted Oklahoma and Texas, which was an area Meylan served, but Schmitz and Wiese resided in Nebraska, and Ridenour lived in Council Bluffs, Iowa.

To counteract Meylan's claim that its boiler cleaning technique was unique and proprietary, W-S called Donald Dorr, a former general manager for Meylan's Oklahoma City territory, to testify. He testified that others within the boiler cleaning industry do things about the same way as Meylan. He testified, "[V]acuum trucks are vacuum trucks, and that service is -- it's basically a mechanical service, and, you know, it's pretty straightforward and routine." Dorr testified that there are water blasting standards and that one of the "mechanical societies" publishes water blasting standards to which all providers in the industry "supposedly" subscribe. Dorr testified that Meylan did not do anything in performing the job that he would consider a trade secret.

John Hancock, Meylan's expert, calculated damages for a 2-year period, based upon eight customers being served by W-S. He opined the loss would be from $950,500 to $1,186,000. Graham testified to the facts that might establish that the MAS 90 accounting program Meylan had was uniquely adapted to its business and was therefore proprietary to Meylan and its boiler cleaning business.

Graham testified that if he had learned of Wiese's involvement in a competing enterprise in the spring or summer of 1993, Meylan would have terminated Wiese's employment. Graham claimed that Wiese lied to him. Graham also testified to establish damages by way of proving loss of business. He testified that Meylan's revenues from customers located in the southwestern part of its marketing territory declined in 1994 and 1995 because customers were lost to W-S. This caused a substantial drop in Meylan's revenue.

On January 14, 1994, Meylan filed a "petition in equity." A second amended petition at law was filed on March 12, 1999, and it is clearly an action at law for damages. In this petition, Meylan alleges the facts of the relationship and employment of Schmitz, Wiese, Roane, and Ridenour and their formation of W-S. Meylan alleges that since 1978, it has spent time and money to develop the various areas of expertise necessary to operate its successful and unique business of cleaning powerplant boilers. Meylan further alleges that it developed a distinctive reputation and good will in that field, as well as several distinct methods of cleaning boilers, and that these constitute trade secrets. These claims are alleged in greater detail than we will give in this summary. Meylan then alleges that Schmitz, Wiese, Roane, and Ridenour were, by reason of their employment, in a position to learn these various facts of its business, which facts it alleges are trade secrets, and that they conspired to appropriate these facts for themselves to induce Meylan's employees to leave, to injure its reputation and business, and to then compete unfairly with it. Meylan alleges six "claims," which are usually called theories of recovery, as follows: common law civil conspiracy; violation of Nebraska's Trade Secrets Act, Neb. Rev. Stat. § 87-501 et seq. (Reissue 1999); misappropriation of trade secrets under common law; violation of Nebraska's Uniform Deceptive Trade Practices Act, Neb. Rev. Stat. § 87-301 et seq. (Reissue 1999); tortious interference with Meylan's business relationships; and unfair competition under common law. This petition prays only for unspecified monetary damages, costs expended, and further relief as may be just and equitable.

The defendants' answer to this petition raised as affirmative defenses the failure to state a cause of action and the allegation that the petition was frivolous.

Trial Court's Order.

The trial court entered its order on February 21, 2002. It stated that the basic issue was whether Schmitz, Wiese, Roane, and Ridenour competed with Meylan prior to leaving their employment with Meylan and whether they used trade secrets in competing, thereby causing damage to Meylan. The court found that Meylan failed to meet its burden by a preponderance of the evidence as to any of the causes of action or theories of recovery.

On March 25, 2002, the defendants filed a motion for award of attorney fees and costs, pursuant to Neb. Rev. Stat. §§ 25-824 et seq. (Reissue 1995) and 87-303, alleging that the action was without merit. This motion was overruled.

ASSIGNMENTS OF ERROR

Meylan alleges that the trial court erred in finding Meylan did not meet its burden of proof on each of the six alleged theories of recovery, except that having to do with alleged violation of the Uniform Deceptive Trade Practices Act, and the defendants cross-appeal, alleging that the trial court abused its discretion by not granting their "cross-petition" for attorney fees.

STANDARD OF REVIEW

In a bench trial of a law action, the trial court's factual findings have the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong. Browning Ferris Indus. v. The Eating Establishment, 6 Neb. App. 608, 575 N.W.2d 885 (1998). An appellate court reaches independent conclusions on questions of law. Id.

In an action for damages, whether information sought to be protected rises to the level of a "trade secret" under the Trade Secrets Act is a question of fact. Home Pride Foods v. Johnson, 262 Neb. 701, 634 N.W.2d 774 (2001).

ANALYSIS

The several theories upon which Meylan relies to support its suit against the defendants are based upon a claim that Schmitz, a former agent, and people who were Meylan's employees got together to take Meylan's business secrets and customers to build a new business from both. All such cases are by nature going to be unique. The case of Frank H. Gibson, Inc. v. Omaha Coffee Co., 178 Neb. 329, 133 N.W.2d 462 (1965) (Gibson I), recognized a cause of action for what might be called stealing a business. In that case, the jury recognized a conspiracy of an outsider (Omaha Coffee) with the employees of an existing company (Gibson) to take over Gibson's established business without buying it. Gibson had a business of selling and delivering coffee to restaurants in the Omaha area. The wholesaler that regularly sold coffee to Gibson tried to buy the Gibson business and failed. The wholesaler then contacted a former manager for Gibson and most of the other employees of Gibson, who agreed to work for Omaha Coffee. Omaha Coffee was formed by the wholesaler to do the business that Gibson had been doing. Gibson's former employees and Omaha Coffee started serving mostly Gibson's former customers and only a couple of other restaurants. Omaha Coffee even used Gibson's trucks and coffee makers to serve Omaha Coffee's customers for a short time.

Gibson obtained a jury verdict against Omaha Coffee, and upon the Nebraska Supreme Court's initial consideration of the appeal, Gibson I, the Supreme Court reversed that verdict, stating that Omaha Coffee had the right to compete with Gibson and that Gibson's employees--having no contract with Gibson--had the right to seek employment with whomever they chose. Upon rehearing in Frank H. Gibson, Inc. v. Omaha Coffee Co., 179 Neb. 169, 137 N.W.2d 701 (1965) (Gibson II), that position was abandoned, and the Supreme Court stated that there was evidence of a company's attempt to steal a business while working with an employee of the business about to be taken over. The Gibson II court found that there was direct evidence of Omaha Coffee's intent to do so, corroborated by legitimate inferences from the employees' actions. The Gibson II court stated that the jury could have reasonably found the owner of Gibson was forced to sell by a conspiracy between Gibson's employees and the owner of Omaha Coffee, that that conspiracy destroyed the good will of the Gibson company, and that it was possible for the jury to find a conspiracy existed to take over the business. The Gibson II court stated that the employees could have left employment with Gibson in concert at any time; however, their agreement before any sale was made--that unless a sale was made to Omaha Coffee, they would take over the Gibson business--was wrong. The Gibson II court noted that this was not an agreement to solicit former customers of a former employer, but an agreement to actually transfer the accounts without soliciting the would-be customer.

The crucial distinction between the case detailed above and the case at hand is that in the former, the trier of fact, a jury, found in favor of the plaintiff and awarded substantial damages, whereas in the case at hand, the trial court found in favor of the defendants, and it specifically found that the plaintiff, Meylan, had not carried its burden of proof. Whereas the jury that found in favor of Gibson considered whether the evidence was sufficient to support the verdict, in the case at hand, we could reverse the trial court only if this court could determine that the trial court's factual determination was wrong as a matter of law. Had the trial court found for Meylan and awarded damages, this appeal would have been a far more difficult one to resolve, because then we would need to minutely consider the evidence to determine if the evidence and the possible inferences from it supported an award.

Meylan tends to rely upon its allegation of conspiracy. It cites Wiekhorst Bros. Excav. & Equip. v. Ludewig, 247 Neb. 547, 555, 529 N.W.2d 33, 39 (1995), where the court stated, "A conspiracy to unlawfully injure another's business is actionable." The same statement was made in Diesel Service, Inc. v. Accessory Sales, Inc., 210 Neb. 797, 317 N.W.2d 719 (1982) (where jury verdict for plaintiff in case based upon conspiracy was affirmed). In Koster v. P & P Enters., 248 Neb. 759, 539 N.W.2d 274 (1995), a jury verdict for the plaintiff for wrongful termination of an employment agreement and for a separate claim of conspiracy to tortiously interfere with the performance of an employment contract was affirmed. In so doing, it was held that conspiracy need not be proved by direct evidence. We find no case where an appellate court reversed a trial court's finding that the evidence did not support a finding of a conspiracy.

The effect of the claim of conspiracy is best explained by the following:

"As stated in Annotation, 152 A.L.R. 1147: 'It has been frequently pointed out that, speaking broadly, there is no such thing as a civil action for conspiracy, the action being for damages caused by acts committed pursuant to a formed conspiracy, rather than the conspiracy itself, so that, unless something is actually done by one or more of the conspirators which results in damage, no civil action will lie against anyone. See, for example, 11 Am. Jur. 577, Conspiracy, § 45. Thus, in most cases the gist of such an action is the wrongful conduct resulting in the plaintiff's damage, and proof of a conspiracy is of no consequence except as bearing upon the rules of evidence, . . . or to bring within the ambit of liability someone who may have conspired but who did not actively participate in the conduct itself. In such cases failure to prove an allegation of conspiracy does not affect the plaintiff's right to recover, there being sufficient independent grounds for recovery, although it limits those against whom recovery may be had to persons actively participating in the conduct complained of, and whose acts, as regards time, substance, and result, in fact united to produce the injury.'"

Treptow Co. v. Duncan Aviation, Inc., 210 Neb. 72, 77, 313 N.W.2d 224, 228 (1981). Under the allegations of Meylan in this case, the wrongful acts the defendants could have committed were to steal Meylan's trade secrets as defined at common law or under the Trade Secrets Act, to tortiously interfere with Meylan's business relationships, or to unfairly compete with Meylan.

The elements necessary to establish a cause of action for misappropriation of a trade secret are the existence of a trade secret or secret manufacturing process, the value and importance of the trade secret to the employer in conduct of its business, the employer's right by reason of discovery or ownership to the use and enjoyment of the secret, and the communication of the secret to the employee while he was employed in a position of trust and confidence and under circumstances making it inequitable and unjust for him to disclose it to others or to use it himself to the employer's prejudice. Richdale Dev. Co. v. McNeil Co., 244 Neb. 694, 508 N.W.2d 853 (1993). In its brief, Meylan states that the trade secrets taken by the defendants included financial information, how Meylan solved some of the special problems associated with the type of cleaning that it performed, protective devices Meylan used, and operational techniques.

We hasten to point out that in the above-mentioned portions of the brief for appellant, and in most of the other parts of the brief, the citation for supporting evidence is to pages of the transcript. A bill of exceptions is the only vehicle for bringing evidence before an appellate court; evidence which is not made a part of the bill of exceptions may not be considered. Coates v. First Mid-American Fin. Co., 263 Neb. 619, 641 N.W.2d 398 (2002). Thus, we cannot consider information in the transcript that is not included in the bill of exceptions. The facts that we have summarized in this opinion were taken from the bill of exceptions, not the transcript. Meylan's evidence and argument were intended to support its claim, inter alia, that trade secrets in the form of financial records were taken. To support this claim, Meylan cites information in Choiniere's report, which information purports to come from Schmitz. Schmitz had not worked for Meylan for approximately 6 years before the documents were prepared. We believe the rule with regard to use of trade secrets by former agents to be: "[T]he former agent may use general information concerning the method of business of the principal, and names of customers retained in the agent's memory, if not acquired in violation of his duty as agent." 3 C.J.S. Agency § 287 at 72 (1973). Whether the estimates that Schmitz gave were from general information is debatable. There is no indication that the information which Schmitz gave to Choiniere came from other than Schmitz' memory, as opposed to having come from records that Schmitz would have had access to while serving Meylan as its accountant. Whether using the information from Schmitz in Choiniere's report was the use of trade secrets is at the very least a question of fact for the trier of fact.

Similarly, Meylan claims that Wiese disclosed and used trade secrets regarding the process of cleaning boilers, particularly by supplying Schmitz with a list of needed machinery. With regard to former employees and information that might be trade secrets, the rule is as follows:

Where an employee leaves his employer and goes elsewhere, he may lawfully use in his new employment knowledge gained in the old, provided only that he does not disclose secret processes or confidential information . . . . The employee may achieve superiority in his particular department by every lawful means at hand, and then, on the rightful termination of his contract for service, use that superiority for the benefit of himself or rivals in trade of his former employer. The knowledge, experience, and efficiency which an employee obtains in his employment do not become the property of the employer and they are not trade secrets.

30 C.J.S. Employer-Employee § 123 at 194 (1992).

Meylan seems to be claiming that everything its employees do in the process of cleaning a boiler is a trade secret because either the process, the techniques, or the tools used are in some way special and unique to Meylan. Meylan's evidence tends to support that claim. However, there is also evidence that Meylan's employees clean boilers in about the same way other people in that business do the task. We are not sure the evidence would support a finding that all the matters Meylan claim to be trade secrets are in fact that, but we are confident that at the very least, these issues were questions of fact for the trial court, and it decided against Meylan. The trial court did not make specific findings of fact on these issues, but it was not requested to do so.

In its opinion, the trial court did cite and shortly discuss legal authority to the effect that a former employee may compete against a former employer and that an employee may not solicit business for a future business before leaving his or her employment. The trial court recognized the employee's duty of loyalty; it made no specific findings, but at least impliedly made a finding that Schmitz, Wiese, Roane, and Ridenour were not disloyal. Otherwise, the court made general findings.

Meylan also argues that W-S interfered with its customer relations, upon the basis that Wiese "secretly provided proprietary financial information [about Meylan] to Schmitz." Brief for appellant at 22. Wiese denied the allegation. The information which the evidence disclosed Wiese supplied to Schmitz had to do with a list of the equipment a company would need to engage in the boiler cleaning business. Whether this is "secret proprietary information" is questionable at best. The evidence seems to establish that an experienced person could compile such information from memory and reference with public information. Meylan's claim that W-S engaged in unfair competition is based upon the same claims.

Somewhat similarly, Meylan claims violation of trade secrets via W-S' use of a very similar computer system and program. Most of the evidence goes to establish that Ridenour was exposed to Meylan's financial information and had the opportunity to take such information. She denied taking such information. Perhaps circumstantial evidence would support a finding that she did, but no such finding is required as a matter of law. In addition, whether purchase from a third party of similar hardware and software for a computer system is the use of a trade secret is questionable at best. Whether such information is a trade secret is at least a fact issue.

Meylan relies upon Huff v. Swartz, 258 Neb. 820, 606 N.W.2d 461 (2000) (action for damages for tortious interference with business relationship; gist of that decision was insufficient evidence to support plaintiff's claim); Miller Chemical Co., Inc. v. Tams, 211 Neb. 837, 320 N.W.2d 759 (1982), disapproved in part, Matheson v. Stork, 239 Neb. 547, 477 N.W.2d 156 (1991) (action for intentional interference with business relationship, where bench decision for defendants was affirmed); United Wild Rice, Inc. v. Nelson, 313 N.W.2d 628 (Minn. 1982) (trial court's order in equity in favor of plaintiff was reversed because acts of former employee were merely legitimate competition); and Pioneer Hi-Bred Intern. v. Holden Foundation Seeds, 35 F. 3d 1226 (8th Cir. 1994) (damage award of over $46 million for misappropriation of genetic makeup of certain seed corn was affirmed). None of these cases support Meylan's argument that we should reverse the trial court's decision in this case.

W-S' Cross-Appeal.

While the cases were pending on a motion for new trial, W-S filed a motion for attorney fees and costs under §§ 25-824 et seq. and 87-303. The motion for fees was denied.

Section 25-824 allows the court to award attorney fees if "the court finds that an attorney or party brought or defended an action or any part of an action that was frivolous or that the action or any part of the action was interposed solely for delay or harassment." As used in § 25-824(2), "frivolous" means a legal position wholly without merit, that is, without rational argument based on law and evidence to support a litigant's position in the lawsuit. Nebraska Pub. Emp. v. City of Omaha, 244 Neb. 328, 506 N.W.2d 686 (1993). The allowance of fees is within the discretion of the trial court, and we cannot say that the court abused its discretion in concluding the matter was not frivolous and thereby denying attorney fees.

Section 87-303 provides for costs and additional remedies under the Uniform Deceptive Trade Practices Act, the only theory of recovery upon which Meylan did not assign error to the trial court's finding. That section allows attorney fees if "(1) the party complaining of a deceptive trade practice has brought an action which he knew to be groundless or (2) the party charged with a deceptive trade practice has willfully engaged in the trade practice knowing it to be deceptive." The allowance of attorney fees under this statute is likewise within the trial court's discretion. We cannot say that the court abused its discretion in denying W-S' motion for attorney fees.

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Click the case caption above for the full text
of the Court's opinion.

We conclude that the trial court's factual findings on the various causes alleged by Meylan were not clearly wrong. We further conclude that the court did not abuse its discretion in denying the defendants' motion for attorney fees. We therefore affirm.

Affirmed in favor of Defendent.

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Reported by L. Hargraves