Turbines Ltd. v. Transupport, Inc.

TURBINES LTD. v. TRANSUPPORT, INC. 	129
Cite as 285 Neb. 129
A review of the county assessor’s testimony shows a reasonable
basis for the differences between the county’s valuation and
Sangree’s appraisals. We further question Sangree’s appraisals
to the extent that the appraisals showed a substantial difference
in 2009 and 2010 between the income and cost methods. It was
only after deductions in those respective amounts were made
for external depreciation that the income and cost approaches
were equal to each other. These large deductions are suspect
under the record in this case.
JQH is correct insofar as TERC erred when it found that
JQH had not rebutted the presumption of validity of the
county’s valuation. Nevertheless, TERC did not err in affirm-
ing the valuation of the property, because JQH failed to meet
its burden of showing that the county’s valuation was unrea-
sonable and arbitrary. TERC’s decision conforms to the law,
is supported by competent evidence, and is neither arbitrary,
capricious, nor unreasonable. JQH’s assignment of error to the
contrary is without merit.
CONCLUSION
The decisions of TERC are affirmed.
A ffirmed.
CAssel, J., not participating.
Turbines lTd., Appellee, v. TrAnsupporT,
inCorporATed, AppellAnT.
825 N.W.2d 767
Filed February 1, 2013. 	No. S-11-042.
1. Default Judgments: Appeal and Error. In an appeal from the entry of a default
judgment, or the denial of a motion to stay entry of a default judgment, an appel-
late court will affirm the action of the trial court in the absence of an abuse
of discretion.
2. Judges: Words and Phrases. A judicial abuse of discretion exists when the
reasons or rulings of a trial judge are clearly untenable, unfairly depriving
a litigant of a substantial right and denying just results in matters submitted
for disposition.
3. Actions: Default Judgments: Complaints: Damages: Proof. Where a defendant
is in default, the allegations of the complaint are to be taken as true against him,
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:39 AM CST

130 	285 NEBRASKA REPORTS
except allegations of value and amount of damage. Thus, if the complaint states
a cause of action, the plaintiff is entitled to judgment without further proof. The
necessary corollary of this rule is that if the allegations in the complaint fail to
state a cause of action, the plaintiff is not entitled to default judgment.
4. Actions: Default Judgments: Evidence: Appeal and Error. In determining
whether a district court’s entry of a default judgment is so clearly untenable as
to constitute an abuse of discretion, an appellate court should assume the truth
of all material facts alleged in the complaint and of any evidence offered by the
plaintiff. It must then decide whether the plaintiff has established a valid cause
of action.
5. Contracts: Rescission. Generally, grounds for cancellation or rescission of a
contract include fraud, duress, unilateral or mutual mistake, and inadequacy
of consideration.
6. ____: ____. Neither the doctrine of discharge by supervening frustration as set
forth in Restatement (Second) of Contracts § 265 (1981) nor the doctrine of dis-
charge by supervening impracticability under Restatement (Second) of Contracts
§ 261 (1981) can serve as the basis for rescission of a contract that has been
fully performed.
7. ____: ____. Performance of a duty subject to a condition cannot become due
unless the condition occurs or its nonoccurrence is excused. And the failure to
perform a promise, the performance of which is a condition, entitles the other
party to the contract to a rescission thereof.
Petition for further review from the Court of Appeals,
inbody, Chief Judge, and sievers and pirTle, Judges, on appeal
thereto from the District Court for Cuming County, roberT b.
ensz, Judge. Judgment of Court of Appeals affirmed.
Thomas B. Donner for appellant.
Denise E. Frost and Clarence E. Mock, of Johnson & Mock,
for appellee.
H eAviCAn, C.J., WrigHT, C onnolly, sTepHAn, mCC ormACk,
miller-lermAn, and CAssel, JJ.
sTepHAn, J.
Turbines Ltd. (Turbines), a Nebraska corporation, purchased
a replacement part for a helicopter engine from Transupport,
Incorporated, a New Hampshire corporation, intending to use
the part to fill an order Turbines had received from a customer
in Singapore to be shipped to Malaysia. When Turbines learned
that filling the order could subject it to criminal liability under
federal law, Turbines attempted to return the part to Transupport

TURBINES LTD. v. TRANSUPPORT, INC. 	131
Cite as 285 Neb. 129
and obtain a refund of the $30,000 purchase price. Transupport
refused to refund the payment, and Turbines brought this action
in the district court for Cuming County, seeking rescission
of the purchase order. Although served with summons and
notice of the proceedings, Transupport failed to appear at both
a pretrial conference and the trial. After receiving evidence,
the district court entered judgment in favor of Turbines. Eight
days later, Transupport appeared through counsel and filed
motions for new trial and to vacate the judgment. The district
court overruled those motions, and Transupport appealed. The
Nebraska Court of Appeals determined that the district court
did not err in overruling the posttrial motions. But the Court of
Appeals reversed the default judgment against Transupport and
ordered that Turbines’ complaint be dismissed, reasoning the
evidence adduced at trial did not support rescission as a matter
of law.1 We granted Turbines’ petition for further review and
now affirm the judgment of the Court of Appeals.
BACKGROUND
fACTs
Turbines, owned by Marvin Kottman, is in the business of
helicopter sales and support. Sometime in late 2006 or early
2007, Monarch Aviation (Monarch) contacted Turbines’ office
in Singapore seeking to purchase a turbine nozzle. Turbines
did not have the nozzle in its inventory, so it approached
Transupport, a turbine engine parts supplier with which it had
done business since the mid-1980’s. Turbines told Transupport
that it wanted the nozzle for a customer in Singapore, whom it
did not otherwise identify, and e-mail correspondence between
Transupport and Turbines reflects a discussion about the cus-
tomer’s requests and requirements. Kottman testified that the
customer referred to in the e-mails was Monarch and that
Transupport was aware of Turbines’ plans to ship the nozzle
to Malaysia.
Turbines 	purchased 	the 	nozzle 	from 	Transupport 	for
$30,000 and tendered payment with the purchase order. Under
1 Turbines Ltd. v. Transupport, Inc., 19 Neb. App. 485, 808 N.W.2d 643
(2012).

132 	285 NEBRASKA REPORTS
the “Remarks” section, the purchase order states, “Subject to
Inspection and acceptance by customer.” Kottman testified he
inserted this language to document that he had explained to
Transupport that he had no use for the nozzle and that if it
was unacceptable to his customer, he would return the nozzle
to Transupport. But additional text on the purchase order
stated: “Turbines . . . is Transupport’s customer, acceptance/
rejection is always at customer.” Kottman testified that this
notation was not on the purchase order when it was sent to
Transupport.
Transupport shipped the nozzle to Turbines with an accom-
panying invoice showing that the purchase price had been pre-
paid. The invoice stated that Transupport was not the “USPPI”
for the item. Kottman explained that USPPI is a customs
term for U.S. principal party of interest; a USPPI is required
for all exports of goods. Boilerplate language at the bot-
tom of the invoice states that the sale may include muni-
tions list items or commerce-controlled list items and indicates
that a license may be required for export. The back of the
invoice includes Transupport’s return policy: “NO RETURNS
WITH OUT [sic] PRIOR AUTHORIZATION. NO RETURNS
AFTER 90 DAYS.” Kottman testified that he never agreed to
this return policy.
Turbines attempted to ship the nozzle to Malaysia as directed
by Monarch. The nozzle was seized in February 2007 by U.S.
Customs and Border Protection (U.S. Customs), which claimed
that a license from the U.S. Department of State was required
to ship the nozzle overseas. After several appeals, it was
determined that no license was required, and the nozzle was
returned to Turbines sometime after January 2009. Turbines
kept Transupport informed of the status of the nozzle during
the contested seizure by U.S. Customs.
During the time that U.S. Customs retained the nozzle,
Turbines learned that Monarch was redirecting goods to Iran,
a prohibited destination, and that a person associated with
Monarch had become the subject of a federal indictment.
The indictment was unsealed in August 2007, 6 months after
the parties’ transaction was completed. Under federal law, if
Turbines shipped the nozzle to Monarch after learning this

TURBINES LTD. v. TRANSUPPORT, INC. 	133
Cite as 285 Neb. 129
information, it was subject to criminal penalties. Thus, after
receiving the nozzle from U.S. Customs, Turbines returned
it to Transupport and requested that the purchase price be
refunded. Transupport refused to do so and eventually shipped
the nozzle back to Turbines’ counsel.
proCedurAl H isTory
In March 2010, Turbines filed its complaint seeking to com-
pel Transupport to refund the $30,000 purchase price, based
upon the purchase order language, “Subject to Inspection and
acceptance by customer.” William Foote, Transupport’s reg-
istered agent and vice president, was personally served with
the complaint on March 16, but Transupport did not answer or
otherwise respond to the complaint within 30 days. On May
4, Turbines filed a motion for default judgment, and a hearing
was set for June 3.
On June 2, 2010, the clerk of the district court received a
letter from Transupport signed by Foote. The letter responded
to the allegations of the complaint and requested dismissal of
the action. On June 3, the court, on its own motion, entered a
pretrial progression order. It ordered that all discovery be com-
pleted before an August 5 pretrial conference. It further ordered
that the pretrial conference “shall be attended by the attorney
that will act as lead counsel at the time of trial.” On June 28,
Turbines filed a motion to compel Transupport’s compliance
with certain discovery requests, and a hearing on that motion
was set for the same date as the pretrial conference.
Transupport failed to appear at the August 5, 2010, pre-
trial conference. In an order entered the same day, the court
extended the deadline for discovery to November 1 and set
trial for November 29. On November 22, Turbines moved to
strike Foote’s letter purporting to answer the complaint, argu-
ing it was signed by a person not licensed to practice law in
Nebraska. Turbines also moved for default judgment. A hearing
on these motions was set for the same day as trial.
Transupport did not appear for trial on November 29, 2010.
Turbines presented evidence in support of its claim. After
receiving this evidence, the court orally sustained Turbines’
motion to strike Foote’s letter, reasoning that Foote was not a

134 	285 NEBRASKA REPORTS
lawyer licensed to practice in the State of Nebraska and there-
fore could not represent Transupport, a corporate entity. The
court then stated, “So this can then proceed as a motion for
default judgment,” but explained that “whether I treat it as a
motion for default judgment or a trial on the merits makes no
difference at this point because the evidence is only in sup-
port of the complaint because the defendant has chosen not to
appear in any capacity to respond to the evidence.”
The court then reviewed the evidence presented by Turbines
and found it clearly showed that the “customer” referenced in
the purchase order was the party to whom Turbines would
provide the nozzle. The court found that because the transac-
tion was never completed to satisfy this customer, the terms
of the contract were not met and it could exercise its equi-
table jurisdiction to grant rescission of the contract. The court
ordered Transupport to return the purchase price to Turbines
upon the return of the nozzle. Transupport was also ordered
to pay the costs of the proceeding. The district court’s judg-
ment memorializing these rulings was entered on December
7, 2010.
On December 15, 2010, a licensed Nebraska attorney entered
an appearance for Transupport and filed several motions,
including motions for new trial and to vacate judgment. The
motion for new trial alleged seven different grounds, each
of which is a ground listed in Neb. Rev. Stat. § 25-2001
(Reissue 2008), the statute authorizing district courts to vacate
or modify judgments. The motion to vacate judgment set forth
the same seven grounds and added that Transupport had a
meritorious defense and that vacating the judgment was nec-
essary for the proper and just determination of the action. In
conjunction with these motions, Transupport’s attorney filed an
affidavit which averred that he was first contacted by Foote on
December 13.
A hearing was held on December 21, 2010. Transupport
introduced three affidavits, including one from Foote stating
that he received the motions to strike answer and for default
judgment on November 24, but that he was out of the office
for Thanksgiving and his wife’s heart surgery from 5 p.m. on
November 24 to 4 p.m. on December 1. The affidavits were

TURBINES LTD. v. TRANSUPPORT, INC. 	135
Cite as 285 Neb. 129
received in support of Transupport’s motion to vacate judg-
ment. In addition, Transupport’s counsel argued that it should
be given an opportunity to present its meritorious defense.
Counsel argued that rescission required proof of fraud, undue
influence, misrepresentation, or business coercion and that the
affidavits showed that none of those had occurred.
In an order denying both of Transupport’s motions, the
district court found that Transupport failed to satisfy any
of the statutory grounds in § 25-2001 for vacating a judg-
ment. The court also determined that the motion for new trial
was nonmeritorious because it did not set forth any ground
listed in Neb. Rev. Stat. § 25-1142 (Reissue 2008), the new
trial statute.
C ourT of A ppeAls’ opinion
Transupport appealed, and assigned and argued to the Court
of Appeals that the district court erred in (1) striking its
answer, (2) overruling its motion to vacate judgment and
motion for new trial, and (3) determining Turbines was entitled
to rescission. The Court of Appeals determined that the district
court did not err in striking Transupport’s purported answer,
reasoning Foote was not a member of the Nebraska Bar
and therefore his letter was a nullity.2 The Court of Appeals
determined the district court did not abuse its discretion in
overruling Transupport’s motion to vacate judgment, reason-
ing Transupport failed to protect its own interests by ignoring
the district court’s orders and failing to appear for trial. The
Court of Appeals also upheld the district court’s ruling on
Transupport’s motion for new trial, determining that the motion
did not set out any statutory grounds for a new trial as speci-
fied in § 25-1142, but instead alleged statutory grounds for a
motion to vacate.
But ultimately, the Court of Appeals found Transupport
was entitled to relief because the evidence did not sup-
port rescission of the contract. It found that Neb. U.C.C.
§ 2-615 (Reissue 2001) did not support rescission, because
that section excuses a seller from timely delivering goods,
2 Id.

136 	285 NEBRASKA REPORTS
and Transupport had delivered the nozzle. The court also
found the doctrine of supervening frustration did not support
rescission, because it was “impossible to say that a ‘basic
assumption’ of the contract was Turbines’ ability to export the
nozzle to Monarch.”3 Lastly, the Court of Appeals concluded
that a unilateral mistake did not permit rescission, reasoning
that enforcement of the contract would not be unconscionable.
Turbines timely filed a petition for further review, which
we granted.
ASSIGNMENTS OF ERROR
Turbines assigns, restated and summarized, that the Court of
Appeals erred in reversing the district court’s order rescinding
the contract and in holding the evidence was insufficient to
support rescission.
In a response to the petition for further review, Transupport
assigns that the Court of Appeals erred in finding the district
court properly struck “the Answer” and properly disposed of
its posttrial motions. But these issues were not raised in a
timely manner. The Court of Appeals’ opinion was filed on
January 24, 2012. Our rules provide that “a petition for fur-
ther review and memorandum brief in support must be filed
within 30 days after the release of the opinion of the Court
of Appeals.”4 Because Transupport’s response was not filed
within the 30-day time period,5 Transupport’s assignments
of error are not properly before the court, and we do not
address them.
STANDARD OF REVIEW
[1,2] In an appeal from the entry of a default judgment,
or the denial of a motion to stay entry of a default judgment,
an appellate court will affirm the action of the trial court in
the absence of an abuse of discretion.6 A judicial abuse of
3 Id. at 501, 808 N.W.2d at 655.
4 Neb. Ct. R. App. P. § 2-102(F)(1) (rev. 2012).
5 See, id.; Corcoran v. Lovercheck, 256 Neb. 936, 594 N.W.2d 615 (1999).
6 State of Florida v. Countrywide Truck Ins. Agency, 258 Neb. 113, 602
N.W.2d 432 (1999).

TURBINES LTD. v. TRANSUPPORT, INC. 	137
Cite as 285 Neb. 129
discretion exists when the reasons or rulings of a trial judge
are clearly untenable, unfairly depriving a litigant of a sub-
stantial right and denying just results in matters submitted
for disposition.7
ANALYSIS
We begin by addressing Turbines’ argument that once the
Court of Appeals determined that the district court did not err
in refusing to vacate the judgment, it should have affirmed
without reaching the merits of the rescission claim. This
requires us to determine on what grounds a default judgment
may be challenged.
[3] The general rule is that “where a defendant is in
default, the allegations of the [complaint] are to be taken as
true against him, except allegations of value and amount of
damage.”8 Thus, if the complaint states a cause of action, the
plaintiff is entitled to judgment without further proof.9 The
necessary corollary of this rule is that if the allegations in the
complaint fail to state a cause of action, the plaintiff is not
entitled to default judgment. While this rule developed under
Nebraska’s former code pleading system, we perceive no
reason why it should not be applied under our current notice
pleading regime.
Here, Turbines did not rely solely on its pleading, but also
offered evidence in support of its motion for default judgment.
Both the district court and the Court of Appeals considered
that evidence when determining whether the judgment in favor
of Turbines was proper. We conclude that they did not err in
doing so, because a party seeking default judgment may pre-
sent evidence in support of its claim.
7 Prime Home Care v. Pathways to Compassion, 283 Neb. 77, 809 N.W.2d
751 (2012); Gary’s Implement v. Bridgeport Tractor Parts, 281 Neb. 281,
799 N.W.2d 249 (2011).
8 State of Florida v. Countrywide Truck Ins. Agency, supra note 6, 258 Neb.
at 124, 602 N.W.2d at 438 (emphasis omitted). Accord Weir v. Woodruff,
107 Neb. 585, 186 N.W. 988 (1922).
9 Weir v. Woodruff, supra note 8; State on behalf of Yankton v. Cummings, 2
Neb. App. 820, 515 N.W.2d 680 (1994).

138 	285 NEBRASKA REPORTS
[4] The foregoing demonstrates that in determining whether
a district court’s entry of a default judgment is so “clearly
untenable” as to constitute an abuse of discretion, an appellate
court should assume the truth of all material facts alleged in the
complaint and of any evidence offered by the plaintiff. It must
then decide whether the plaintiff has established a valid cause
of action. Here, the Court of Appeals essentially concluded
that Turbines was not entitled to rescission as a matter of law
because the allegations of its complaint and the evidence it
presented failed to state a cause of action. We now review
that determination.
[5] Generally, grounds for cancellation or rescission of a
contract include fraud, duress, unilateral or mutual mistake,
and inadequacy of consideration.10 Turbines’ complaint does
not identify any specific legal grounds for rescission and does
not include any allegations of fraud or duress on the part of
Transupport. In its brief filed in the Court of Appeals, Turbines
relied on § 2-615 and “common law contractual principles
related to supervening impracticability” as its legal grounds
for rescission.11 The Court of Appeals examined the record and
concluded that the pleadings and evidence did not provide a
legal basis for rescission under § 2-615, the doctrines of super-
vening impracticability or supervening frustration, or unilateral
mistake. On further review, Turbines argues that the Court of
Appeals erred in its analysis of these theories and failed to
consider others.
uniform C ommerCiAl
C ode § 2-615
Section 2-615 provides:
Except so far as a seller may have assumed a greater
obligation and subject to the preceding section on substi-
tuted performance:
(a) Delay in delivery or nondelivery in whole or in
part by a seller who complies with paragraphs (b) and
10 See Eliker v. Chief Indus., 243 Neb. 275, 498 N.W.2d 564 (1993).
11 Brief for appellee at 20.

TURBINES LTD. v. TRANSUPPORT, INC. 	139
Cite as 285 Neb. 129
(c) is not a breach of his duty under a contract for sale
if performance as agreed has been made impracticable
by the occurrence of a contingency the nonoccurrence of
which was a basic assumption on which the contract was
made or by compliance in good faith with any applicable
foreign or domestic governmental regulation or order
whether or not it later proves to be invalid.
(b) Where the causes mentioned in paragraph (a) affect
only a part of the seller’s capacity to perform, he must
allocate production and deliveries among his customers
but may at his option include regular customers not then
under contract as well as his own requirements for further
manufacture. He may so allocate in any manner which is
fair and reasonable.
(c) The seller must notify the buyer seasonably that
there will be delay or nondelivery and, when allocation is
required under paragraph (b), of the estimated quota thus
made available for the buyer.
Comment 1 to § 2-615 states that it “excuses a seller from
timely delivery of goods contracted for, where his or her per-
formance has become commercially impracticable because of
unforeseen supervening circumstances not within the contem-
plation of the parties at the time of contracting.” The Court of
Appeals reasoned that § 2-615 was inapplicable because there
was no failure on the part of the seller, Transupport, to deliver
the nozzle to Turbines.
Relying upon comment 9 to § 2-615, which states that under
certain circumstances, it “may well apply” to the perform-
ance of a buyer under a “requirements” or “supply” contract,
Turbines argues that it applies here. But this case does not
involve such a contract. More important, it is not an action
for breach of contract. Section 2-615 specifies circumstances
under which nonperformance or delayed performance of a sales
contract will not constitute a breach. Here, there is no issue
of breach, because the contract was fully performed by each
party in that Transupport shipped the nozzle to Turbines and
Turbines remitted the purchase price to Transupport. We agree
with the Court of Appeals that § 2-615 does not provide a legal
basis for rescission on the facts presented here.

140 	285 NEBRASKA REPORTS
supervening imprACTiCAliTy
And frusTrATion
In Cleasby v. Leo A. Daly Co.,12 we determined that busi-
ness necessity justified an international architectural consult-
ing firm’s termination of a project manager’s assignment at
an overseas jobsite when an illness caused the manager’s
prolonged absence from the country where the work was
being performed. In reaching this conclusion, we relied in
part upon Restatement (Second) of Contracts §§ 261 and
265.13 	Section 	261, 	entitled 	“Discharge 	by 	Supervening
Impracticability,” provides:
Where, after a contract is made, a party’s performance
is made impracticable without his fault by the occurrence
of an event the non-occurrence of which was a basic
assumption on which the contract was made, his duty
to render that performance is discharged, unless the lan-
guage or the circumstances indicate the contrary.14
Section 265, entitled “Discharge by Supervening Frustration,”
provides:
Where, after a contract is made, a party’s principal
purpose is substantially frustrated without his fault by
the occurrence of an event the non-occurrence of which
was a basic assumption on which the contract was made,
his 	remaining 	duties 	to 	render 	performance 	are 	dis-
charged, unless the language or the circumstances indi-
cate the contrary.15
The Court of Appeals concluded that § 265 could not provide
a legal basis for rescission because it was “impossible to say
that a ‘basic assumption’ of the contract was Turbines’ ability
to export the nozzle to Monarch.”16 But we believe that there is
a more basic question of law, namely, whether the doctrine of
supervening frustration can serve as the basis for rescinding a
12 Cleasby v. Leo A. Daly Co., 221 Neb. 254, 376 N.W.2d 312 (1985).
13 Restatement (Second) of Contracts §§ 261 and 265 (1981).
14 Id., § 261 at 313.
15 Id., § 265 at 334-35.
16 Turbines Ltd. v. Transupport, Inc., supra note 1, 19 Neb. App. at 501, 808
N.W.2d at 655.

TURBINES LTD. v. TRANSUPPORT, INC. 	141
Cite as 285 Neb. 129
contract that has been fully performed. In Kunkel Auto Supply
Co. v. Leach,17 the buyer purchased automotive equipment
from the seller and gave a promissory note in payment. Both
parties believed that the equipment would allow the buyer to
operate a state testing station under a statute which they under-
stood to require mandatory vehicle testing. That understanding
was incorrect, and the statute was eventually repealed. When
sued on the note, the buyer alleged that it was void under vari-
ous theories, including the doctrine of commercial frustration
derived in part from a previous version of the Restatement of
Contracts on which § 265 is based.18 We held as a matter of
law that this defense was not viable because the contract, so
far as the seller was concerned, was fully performed before the
defense arose. We noted that the doctrine of commercial frus-
tration “applies to executory contracts alone.”19
In Mobile Home Estates v. Levitt Mobile Home,20 the Arizona
Supreme Court relied in part on our decision in Kunkel Auto
Supply Co. in holding that the doctrine of commercial frus-
tration could not be utilized as a basis for rescinding a fully
performed contract. In that case, a mobile home dealer pur-
chased and paid for several modular duplex dwelling units
with the intention of reselling them. Resale proved difficult
if not impossible because the units did not comply with sub-
sequently adopted standards. The purchaser sought rescission
of the contract and recovery of the purchase price under the
Arizona doctrine of “commercial frustration,” which provided
that “‘“when, due to circumstances beyond the control of the
parties the performance of a contract is rendered impossible,
the party failing to perform is exonerated.” . . .’”21 Citing
17 Kunkel Auto Supply Co. v. Leech, 139 Neb. 516, 298 N.W. 150 (1941).
18 See, Restatement of Contracts § 288 (1932); Restatement (Second), supra
note 13, § 265, Reporter’s Note.
19 Kunkel Auto Supply Co. v. Leech, supra note 17, 139 Neb. at 522, 298
N.W. at 153.
20 Mobile Home Estates v. Levitt Mobile Home, 118 Ariz. 219, 575 P.2d 1245
(1978).
21 Id. at 222, 575 P.2d at 1248, quoting Garner v. Ellingson, 18 Ariz. App.
181, 501 P.2d 22 (1972).

142 	285 NEBRASKA REPORTS
Kunkel Auto Supply Co. and other authorities, the court con-
cluded: “It would be contrary to logic and common sense to
hold that a contract was rendered impossible to perform when,
in fact, it had already been performed.”22
[6] We 	find 	this 	analysis 	applicable 	to 	§ 	265 	of 	the
Restatement, which clearly contemplates an executory con-
tract by providing that a party’s “remaining duties to render
performance are discharged” by the occurrence of an event
which substantially frustrates the party’s principal purpose.
Each of the illustrations which follow the statement of the rule
involve circumstances where a party’s obligation to perform
an executory contract is discharged by the occurrence of an
event which frustrates that party’s purpose in entering into the
contract.23 We therefore conclude as a matter of law that the
doctrine of discharge by supervening frustration as set forth in
§ 265 of the Restatement cannot serve as the basis for rescis-
sion of a contract that has been fully performed. And although
the Court of Appeals did not specifically discuss the doctrine
of discharge by supervening impracticability under § 261 of
the Restatement, we conclude that the same reasoning applies.
Like § 265, § 261 defines circumstances under which a party’s
obligation to perform a contract may be discharged. Neither
contemplates the circumstances of this case, in which the con-
tract was fully performed.
fAilure To Agree on
mATeriAl Terms
Turbines asserts that the district court properly granted
rescission on the ground that the parties failed to agree on a
material term of the contract and that the Court of Appeals
improperly ignored this basis for the district court’s judgment.
Turbines relies upon the following statement by the district
court to show that the court made that finding: “But it appears
from the evidence that there was probably some disagreement,
and the Court finds such as to the complete elements of the
transaction which was never completed to satisfy the terms of
22 Id.
23 Restatement (Second), supra note 13, § 265.

TURBINES LTD. v. TRANSUPPORT, INC. 	143
Cite as 285 Neb. 129
the contract . . . .” Immediately before making this statement,
the court noted that while there may have been some confusion
among the parties as to what was meant by “customer,” the
evidence showed the parties understood that the customer was
someone other than the two of them. Thus, Turbines is arguing
that because the district court acknowledged the parties may
have attached different meanings to the term “customer,” the
parties failed to agree on a material term of the contract, and
that rescission was properly granted.
Turbines relies upon Sayer v. Bowley24 in support of its
argument. Sayer involved an oral contract for the sale of
land in which the buyer sought specific performance. This
court noted:
Unlike the situation in a case involving contracts for the
sale of goods, we will not read unsettled terms into con-
tracts for the sale of land . . . . “The parties themselves
must agree upon the material and necessary details of the
bargain, and if any of these be omitted, or left obscure
or indefinite, so as to leave the intention of the parties
uncertain respecting the substantial terms, the case is not
one for specific performance.”25
Even assuming this rule applies to the present transaction, it
would not entitle Turbines to relief, because the record reflects
that Turbines and Transupport agreed on all material and nec-
essary details of the bargain. Transupport agreed to supply the
nozzle, and Turbines agreed to pay $30,000 in exchange for
it. According to Kottman, it was agreed that Turbines could
return the nozzle, if the customer found the nozzle unaccept-
able. But as the Court of Appeals correctly determined, there
was no allegation or evidence that the nozzle was unacceptable
to either Turbines or Monarch.
fAilure of C ondiTion preCedenT
[7] Turbines argues that it is entitled to rescission because
the remark in the purchase order, “Subject to Inspection and
24 Sayer v. Bowley, 243 Neb. 801, 503 N.W.2d 166 (1993).
25 Id. at 807, 503 N.W.2d at 170-71, quoting Reifenrath v. Hansen, 190 Neb.
58, 206 N.W.2d 42 (1973).

144 	285 NEBRASKA REPORTS
acceptance by customer,” conditioned its duty to perform. This
court has recognized that performance of a duty subject to a
condition cannot become due unless the condition occurs or its
nonoccurrence is excused.26 And the failure to perform a prom-
ise, the performance of which is a condition, entitles the other
party to the contract to a rescission thereof.27
A case relied upon by Turbines provides a good example of
the application of these principles. Gallner v. Sweep Left, Inc.28
involved a contract for the purchase of stock which was to be
placed in escrow at a specified bank. The contract explicitly
made the company’s duty to place the stock in escrow “subject
to the payment of $1000.”29 This court concluded that because
the $1,000 was never paid, the company’s duty to perform by
placing the stock in escrow never arose, and that it was entitled
to rescind the contract.
Here, the purchase agreement is not explicit. The clause
that Turbines relies upon appears in the “Remarks” section of
the purchase order. There is no other language indicating that
Turbines’ duty to pay was subject to its customer’s acceptance
of the nozzle. Kottman testified that the language was added
to reflect the parties’ understanding that Turbines was allowed
to return the nozzle if it was unacceptable to the customer. But
Kottman also testified that he sent the purchase order along
with the $30,000 purchase price. Because the $30,000 was
prepaid, Turbines’ duty to pay could not have been conditioned
on acceptance and inspection by Monarch at some subsequent
date. Thus, the doctrine of failure of a condition precedent does
not support the district court’s grant of rescission.
supervening proHibiTion or
prevenTion by lAW
Turbines argues that it was entitled to rescission because
of the legal difficulties it would have faced if it shipped the
26 D & S Realty v. Markel Ins. Co., 284 Neb. 1, 816 N.W.2d 1 (2012).
27 Gallner v. Sweep Left, Inc., 203 Neb. 169, 277 N.W.2d 689 (1979).
28 Id.
29 Id. at 171, 277 N.W.2d at 690 (emphasis omitted).

TURBINES LTD. v. TRANSUPPORT, INC. 	145
Cite as 285 Neb. 129
nozzle to Monarch. It relies on two cases holding that a party’s
failure to perform a contract does not constitute a breach where
performance is made unlawful by a governmental entity.30 In
both cases, a seller located in the United States successfully
argued that it was excused from a contractual undertaking to
ship goods to a buyer in Iran as a result of export restrictions
imposed by the government of the United States. In each case,
the courts held that intervening action of the government which
would have made shipment unlawful excused the seller’s non-
performance, so that its failure to ship the goods did not con-
stitute a breach of the contract. Neither case provides support
for rescinding a contract that has been fully performed, as is
the case here.
unilATerAl misTAke
Finally, the Court of Appeals reasoned that Turbines’ argu-
ably unilateral mistake regarding its ability to ship the nozzle
to Monarch could not provide a basis for rescission, because
enforcement of the contract as made would not be uncon-
scionable, given Kottman’s admission that there were other
potential customers for the nozzle.31 We agree.
CONCLUSION
Turbines 	fulfilled 	its 	contractual 	obligation 	to 	pay 	in
advance for the nozzle which it ordered from Transupport. In
turn, Transupport fulfilled its contractual obligation to ship
the nozzle to Turbines. The contract did not contemplate the
circumstances which subsequently prevented Turbines from
shipping the nozzle to Monarch. But the occurrence of those
circumstances did not constitute a basis for rescinding the fully
performed contract. Thus, although Transupport clearly ignored
the district court’s orders and failed to appear for trial, the
district court abused its discretion in entering default judgment
in favor of Turbines, because the uncontroverted facts provide
30 See, Harriscom Svenska, AB v. Harris Corp., 3 F.3d 576 (2d Cir. 1993);
McDonnell Douglas Corp. v. Islamic Republic of Iran, 591 F. Supp. 293
(E.D. Mo. 1984).
31 Turbines Ltd. v. Transupport, Inc., supra note 1.

146 	285 NEBRASKA REPORTS
no legal basis for rescission, and to allow such a judgment to
stand would be untenable. Accordingly, although our reasoning
differs in some respects, we affirm the judgment of the Court
of Appeals.
A ffirmed.
sTATe of nebrAskA ex rel. C ounsel for disCipline
of THe nebrAskA supreme C ourT, relATor,
v. dAvid e. C ording, respondenT.
825 N.W.2d 792
Filed February 1, 2013. 	No. S-11-870.
1. Disciplinary Proceedings. A proceeding to discipline an attorney is a trial de
novo on the record.
2. Disciplinary Proceedings: Appeal and Error. When no exceptions to the ref-
eree’s findings of fact are filed, the Nebraska Supreme Court may consider the
referee’s findings final and conclusive.
3. Disciplinary Proceedings. The basic issues in a disciplinary proceeding against
an attorney are whether the Nebraska Supreme Court should impose discipline
and, if so, the appropriate discipline under the circumstances.
4. ____. Any violation of the Nebraska Rules of Professional Conduct constitutes
grounds for discipline.
5. ____. Each attorney discipline case must be evaluated individually in light
of its particular facts and circumstances, and the Nebraska Supreme Court
considers the attorney’s acts underlying the events of the case and throughout
the proceedings.
6. ____. To determine whether and to what extent discipline should be imposed in
a lawyer discipline proceeding, the Nebraska Supreme Court considers the fol-
lowing factors: (1) the nature of the offense, (2) the need for deterring others, (3)
the maintenance of the reputation of the bar as a whole, (4) the protection of the
public, (5) the attitude of the offender generally, and (6) the offender’s present or
future fitness to continue in the practice of law.
7. Disciplinary Proceedings: Attorney and Client. Among the major consider-
ations in determining whether a lawyer should be disciplined is maintenance of
the highest trust and confidence essential to the attorney client relationship.
8. Disciplinary Proceedings. The determination of an appropriate penalty to be
imposed on an attorney requires consideration of any aggravating or mitigat-
ing factors.
Original action. Judgment of public reprimand.
John W. Steele, Assistant Counsel for Discipline, for relator.