Weber v. N. Loup River Pub. Power & Irrigation Dist.

Weber v. N. Loup River Pub. Power & Irrigation Dist., 854 N.W.2d 263 (Neb. 2014) (holding that the district court properly granted the defendant’s motion for summary judgment because (i) the plaintiff’s failure to pay irrigation charges was a condition precedent to the defendant’s contractual duty to deliver water to the plaintiffs’ land; (ii) the defendant did not waive the condition precedent when it waived the irrigation fees for one newly contracted tract of land; (iii) the defendant did not anticipatorily breach the contracts because the plaintiffs had already materially breached the contract through nonpayment; and (iv) the defendant was not negligent in its delivery of the water to the plaintiffs because the plaintiffs’ prior breach of the contracts relieved the defendant of any preexisting duty).

North Loup River Public Power and Irrigation District (“North Loup”) manages an irrigation system with many diversion dams and canals, including the Taylor-Ord Canal (“Canal”), which originates at the Taylor Diversion Dam (“Dam”). William and Dixie Weber (“the Webers”) had eight contracts with North Loup to irrigate their farmland from the Canal. The contracts stated that North Loup would provide water during the irrigation season to the Webers’ land in exchange for $2.50 per acre. The money was to be paid by the first day of December the year preceding the irrigation season. The contracts also stated that North Loup would withhold delivery of the water if the Webers failed to pay within four months of that date.

In June of 2010, the North Loup River experienced an uncommon amount of rainfall and flooding. On June 11, 2010, the flood completely destroyed the Dam and severely damaged the Canal. North Loup determined that the Dam was “beyond repair” and decided to rebuild a permanent dam. The landowners with contracts for irrigation water received no water that year due to the damage.

The Webers’ bill for the 2010 irrigation season was due December 1, 2009. At the time of the flood in June 2010, the Webers still had not paid their bill. The Webers finally paid their bill on April 13, 2011, but they did so “under protest.” In December of 2011, the Webers filed a complaint against North Loup alleging that North Loup had breached its contracts with them and negligently failed to provide water during the 2010 irrigation season. North Loup denied the allegations and asserted that the Webers had failed to fulfill a condition precedent of the contracts when they failed to pay the 2010 irrigation charges until April 13, 2011. After an evidentiary hearing, the District Court for Loup County (“district court”) granted North Loup’s motion for summary judgment, concluding that the Webers breached a condition precedent, thereby relieving North Loup of its duty to deliver water. The Webers appealed directly to the Supreme Court of Nebraska (“Court”).

On appeal, the Webers claimed that the district court erred in granting summary judgment to North Loup because issues of material fact existed regarding the Webers’ obligation to make an advanced payment for the 2010 irrigation season. Accordingly, the Webers claimed, North Loup anticipatorily breached its contract. The Court clarified that the “meaning of an unambiguous contract is a question of law.”

The Court applied the same general rules regarding contracts to the Webers’ contract. In doing so, the Court first considered whether the Webers’ payment of irrigation charges was a condition precedent to North Loup’s contractual duty to deliver water. Holding that it was, the Court found a condition in the terms of the contract that stated, “[North Loup] shall withhold and stop the delivery of water to the landowner in the event a default of payments herein required occurs and such default continues for a period of four months following the due date.” The Webers did not deny that they failed to pay their bill when due on December 1, 2009. Further, the Webers admitted that their bill continued to be in default for much longer than four months after the due date. Therefore, the Court reasoned that North Loup’s duty to provide water “never came to fruition,” negating the possibility of breach.

The Court further held that North Loup did not waive the condition precedent. The Webers argued that North Loup never decided whether it would waive the landowners’ 2010 irrigation charges due to the flood. Finding that waiver of a condition precedent requires a clear, unequivocal, and decisive action, the Court held that North Loup did not waive the condition precedent to the Webers’ contract. Although North Loup waived a different landowner’s irrigation charges in the 2010 year, the Court found that North Loup did so because the contract was only formed two months prior to the flood. The Court concluded that North Loup’s isolated wavier of the other landowner’s irrigation fees did not waive the condition precedent in its contract with the Webers.

The Court next considered whether North Loup anticipatorily breached the contracts. The Webers argued that North Loup anticipatorily breached the contracts when it decided to build a new dam rather than a temporary one, without an assessment of damages two months before the irrigation season. The Court disagreed and held that North Loup did not anticipatorily breach the contracts. The Court reasoned that the Webers breached the contracts before North Loup’s alleged breach. Because payment of the 2010 irrigation fees was both the Webers’ duty to perform and a condition precedent to North Loup’s duty to provide water, North Loup could not anticipatorily breach the contracts when the Webers had already materially breached them. The Court emphasized that the term was material because the Webers’ payment was one of their only obligations under the contracts.

Finally, the Court found that North Loup did not act negligently by failing to deliver water to the Webers, even though non-delivery of the water might have been a statutory violation. Neb. Rev. Stat. section 46-263 makes it a misdemeanor for a person in charge “of a ditch or canal used for irrigation purposes . . . to prevent or interfere with the proper delivery of water to the person or persons having the right thereto.” North Loup argued that the statute was inapplicable because it applied to “persons” and not to “public entities.” The Court did not address whether the statute applied to “public entities,” instead finding that the statute did not require North Loup to deliver water to “those having no right to the water.” The Court held that the Webers’ nonpayment of the irrigation fees relieved North Loup of its duty to deliver water. Because North Loup had no duty to deliver the water at all, the Court found that North Loup’s failure to deliver the water was not negligent.

Accordingly, the Court affirmed the district court’s grant of North Loup’s motion for summary judgment.

 

The title image features the Loup River in Nebraska. This file has been released to the public domain.