The Nebraska Supreme Court on Friday affirmed a 2017 $5.65 million trial judgment against Omaha-based Northern Natural Gas for failing to properly compensate Houston-based U.S. Pipeline for a project the two worked on together several years ago.
The ruling is a slam-dunk win for Houston firm Gibbs & Bruns, which essentially defeated billionaire investor Warren Buffett in the case. NNG is owned by Buffett’s Berkshire Hathaway.
The dispute dates back to July 2014, when NNG hired USPL as a contractor to install approximately 6.5 miles of natural gas pipeline in northern Michigan. USPL argued that once it was 90% finished with the work, NNG drastically expanded the scope of the project, forcing USPL to work on the project for an extra four months. The timeline expansion featured severe weather conditions for USPL workers and millions of additional incurred costs for the company.
NNG refused to pay the additional costs, citing change order procedures in the contract, so USPL sued NNG in Nebraska state court to recover the expenses.
After an eight-day bench trial in late 2017, the court sided with USPL when it awarded USPL’s full breach of contract damages and rejected NNG’s counterclaims, which alleged USPL had materially missed the substantial completion date and over-billed NNG for the work it performed.
NNG appealed, arguing that the trial court erred in denying its motion for directed verdict, that it abused its discretion when it admitted and refused to strike the testimony of one of USPL’s experts, and that it erred in denying NNG’s request for a declaratory judgment that it had a right to withhold money from USPL as liquidated damages since it didn’t meet its deadline.
In a 32-page opinion, Nebraska’s high court rejected all of NNG’s arguments.
“We find that the damages sought by, and subsequently awarded to, U.S. Pipeline were a direct result of the parties’ contractual agreement,” the opinion says.
Gibbs & Bruns partner Barrett Reasoner said in an email to The Texas Lawbook that his side was very “pleased” with Friday’s result.
“Our client is very pleased that, at both the trial court and Supreme Court levels, the Nebraska courts carefully analyzed the evidence and the contract, as shown by their detailed and well-reasoned opinions, and determined that U.S. Pipeline was entitled to full compensation for the substantial amount of extra work involved in the project,” he said.
NNG’s lawyers have not yet responded to a request for comment.
Others on the Gibbs & Bruns legal team included Ayesha Najam and Ross MacDonald. Omaha, Nebraska lawyers Rick Jeffries and Shawn Renner of Cline Williams served as USPL’s local counsel.
NNG’s lawyers were Gregory Scaglione, Daniel Weidner and Minja Herian of Koley Jessen in Omaha.