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Wednesday, January 29, 2020

Nebraska Supreme Court declines to rule in crop-dusting companies' dispute

By Tabitha Fleming | Apr 11, 2017

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LINCOLN, Neb. (Legal Newsline) – Two agriculture companies went to court over a non-compete clause in a lawsuit that has twice seen appeals dismissed for procedural reasons. 

On March 28, the Nebraska Supreme Court ruled it did not have jurisdiction in an appeal in Last Pass Aviation's lawsuit. The court, for a second time, said it couldn't rule on an appeal of something that is not a final order.

Tony Peterson agreed to sell his company Last Pass Aviation Inc. to Western Cooperative Co. (Westco) in February 2011. Part of the agreement included a non-compete clause that prohibited Last Pass from engaging in spraying or chemical sales in Nebraska, South Dakota, Wyoming or Colorado for a period of 10 years.

Three years later, Last Pass asked the court to declare the covenant not to compete unenforceable, stating that the original agreement was too broad. Westco, in its answer to the filing, Westco asked the court to issue an injunction requiring Last Pass to comply with the original covenant preventing “selling, dispersing, delivering or consigning any aerial spraying services or agricultural chemicals within the states of Nebraska, South Dakota, Wyoming or Colorado."

Westco was initially successful and the court issued an injunction, albeit temporary, in April 2014.

Following the temporary injunction, Westco filed a counterclaim, alleging that Last Pass had breached the original purchase agreement. The counterclaim requested that Last Pass be held liable for damages not only for loss of profits, but also loss of goodwill.

Last Pass was successful at trial, and the court entered an order in its favor. According to the court, the original non-compete agreement was indeed overbroad and unenforceable. 

The ruling, issued Sept. 28, 2015, failed to address Westco’s counterclaims. Following its success at the trial, Last Pass then filed a motion with the court seeking damages from Westco for the temporary injunction, along with legal fees. Westco filed a notice of appeal before the damage claims were considered.

Westco’s appeal was dismissed by the Court of Appeals for what the court cited as a lack of jurisdiction. With the case remanded back to the original court, both parties filed a stipulated motion to dismiss without prejudice. The joint motion asked that the case be dismissed. 

In the joint filing, the two parties noted that the trial court had failed to address Westco’s counterclaim, and that Westco could re-file if desired. Similarly, the motions filed by Fast Pass to recover damages and fees from the temporary injunction could be refilled.  The district court dismissed.

Wescto then appealed the order of dismissal, which prompted the case to be heard by the Nebraska Supreme Court.  The Supreme Court of Nebraska moved the court to its docket in order to relieve caseload of the lower appellate court.

Unfortunately for Westco, the Supreme Court found that it too lacked jurisdiction because there was never a ruling issued on their counterclaim. In order for the court to consider an appeal, first a lower court must issue a final order. 

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Nebraska Supreme Court