Cass Cty. Bank v. Dana Partnership

C ass C ounty B ank , a neBraska Banking Corporation ,
appellee , v . D ana partnership , a neBraska
general partnership , et al ., appellants .
750 N.W.2d 701
Filed June 20, 2008. 	No. S-07-431.
1. Equity: Appeal and Error. In an appeal of an equitable action, an appellate court
tries factual questions de novo on the record and reaches a conclusion independent
of the findings of the trial court, provided, where credible evidence is in conflict
on a material issue of fact, the appellate court considers and may give weight to the
fact that the trial judge heard and observed the witnesses and accepted one version
of the facts rather than another.
2. Forbearance: Estoppel. Under the doctrine of promissory estoppel, a promise
which the promisor should reasonably expect to induce action or forbearance is
binding if injustice can be avoided only by enforcement of the promise.
3. Estoppel. Promissory estoppel requires that reliance be reasonable and
foreseeable.
4. Appeal and Error. An appellate court is not obligated to engage in an analysis
which is not needed to adjudicate the controversy before it.
Appeal from the District Court for Cass County: ranDall l.
rehmeier, Judge. Affirmed.
Brian T. McKernan, of McGrath, North, Mullin & Kratz, P.C.,
L.L.O., for appellants.
Steven J. Woolley and Alan E. Pedersen, of McGill, Gotsdiner,
Workman & Lepp, P.C., L.L.O., and Steven J. Riekes, of Marks,
Clare & Richards, L.L.C., for appellee.
heaviCan, 	C.J., 	W right, 	C onnolly, 	gerrarD, 	stephan,
mCC ormaCk, and miller -lerman, JJ.
gerrarD, J.
NATURE OF CASE
In this case, Cass County Bank (Bank) seeks reimbursement
from the appellants for money it paid to Upland Construction
Company (Upland) pursuant to a letter of credit. The Bank con-
tends that the appellants are liable for the Bank’s extension and
payment of the letter of credit because they promised to sign a
promissory note guaranteeing the letter. The appellants claim, in
essence, that they are not liable because they never signed the
note. The district court found in favor of the Bank. The primary
CASS CTy. BANK v. DANA PARTNERShIP 	933
Cite as 275 Neb. 933
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:55 AM CST

934 	275 NEBRASKA REPORTS
issues presented in this appeal are whether the Bank was autho-
rized to issue the letter of credit and whether the Bank is entitled
to reimbursement from the appellants.
FACTS
Anil K. Agarwal and Sudha Agarwal, husband and wife, are
the parents of three children, one of whom is Arun Agarwal.
At all times relevant to this case, the children were co-owners
of Dana Partnership, which in turn owns 90 percent of Reliant
Construction, L.L.C. (Reliant). Sudha was Dana Partnership’s
managing agent until 2001, when the partnership agreement was
amended and Arun became the managing agent. Arun is also
Reliant’s managing agent.
Although Sudha was no longer Dana Partnership’s managing
agent, she remained involved with the operation of the company.
Douglas Rasmussen, vice president of the Bank and the loan offi-
cer responsible for overseeing loans made to Dana Partnership,
testified that Arun had directed Rasmussen to speak to Sudha
regarding business dealings that involved Dana Partnership.
In 2003 and 2004, the Bank made various loans and issued
multiple letters of credit to Dana Partnership, all of which were
signed by Arun in his capacity as Dana Partnership’s managing
agent. Anil and Sudha cosigned on a number of these loans.
The record reflects that, with regard to the loans and letters of
credit issued by the Bank at Dana Partnership’s request, it was
the Bank’s general practice to take the loan documents to Dana
Partnership’s office, where the documents would be signed. And
the Bank would not advance any money or issue a letter of credit
without first acquiring the necessary signatures.
On June 6, 2003, Reliant entered into a subcontract agree-
ment with Upland to perform roofing work on a project to build
a waste disposal facility. Pursuant to the subcontract agreement,
Reliant was required to post a performance bond. In place of a
performance bond, however, Upland agreed to accept a letter of
credit from Reliant, listing Upland as the beneficiary.
On August 8, 2003, the Bank, at Arun’s request, issued irrevo-
cable standby letter of credit No. 41558 (original letter of credit),
naming Upland as the beneficiary. The amount of the original
letter of credit was $90,228 and had a stated expiration date of

June 1, 2004. June 1 was chosen as the expiration date because
Arun and Upland believed that Reliant’s roofing job would be
completed by this date. In conjunction with the issuance of the
original letter of credit, Dana Partnership, as borrower, and Anil
and Sudha, as cosigners, signed and gave the Bank commercial
promissory note No. 41558 dated August 8, 2003. This com-
mercial promissory note was for the same amount as the original
letter of credit, $90,228, and had a maturity date of June 1, 2004,
which corresponded with the expiration date on the original
letter of credit.
The commercial promissory note provided that it was “fur-
ther governed by the Commercial Loan Agreement,” which
was signed by Anil and Sudha and dated August 8, 2003.
The commercial loan agreement, under the section entitled
“ADDITIONAL TERMS,” provided, in bold and capital let-
ters, that
oral agreements or commitments to loan money, extend
credit or to forbear from enforcing repayment of a debt
including promises to extend or renew such debt are not
enforceable. To protect you (borrower) and us (lender)
from misunderstanding or disappointment, any agreements
we reach covering such matters are contained in this writ-
ing, which is the complete and exclusive statement of
the agreement between us, except as we may later agree
in writing to modify it. By signing this agreement, the
parties affirm that no unwritten oral agreement exists
between them.
Anil and Sudha also signed, on August 8, a personal guaranty
for “each and every debt, of every type and description, that
[Dana Partnership] may now or at any time in the future owe
[the Bank].”
In May 2004, it became apparent that Reliant would not be
able to complete the contracted work before the original letter of
credit expired on June 1. As a result, Paul Sum, Upland’s owner
and president, contacted Arun and told Arun that the expiration
date on the original letter of credit needed to be extended. Sum
testified that he specifically instructed Arun to extend the expira-
tion date on the original letter of credit to October 31, because
Reliant should have been able to complete the project by that
CASS CTy. BANK v. DANA PARTNERShIP 	935
Cite as 275 Neb. 933

936 	275 NEBRASKA REPORTS
date. According to Sum, Arun assured him that he would get a
new letter of credit with an expiration date of October 31.
Following his conversation with Sum, Arun attempted to
contact Rasmussen at the Bank. however, Arun was not able
to reach Rasmussen personally, so Arun left Rasmussen two
or three voice mail messages. Rasmussen testified that Arun
indicated in his messages that the original letter of credit was
expiring and that Reliant needed a new letter of credit because
the project had been delayed. According to Rasmussen, Arun
also indicated that he would be going out of town. Rasmussen
testified that, due to pressing matters at the Bank, he was unable
to return Arun’s calls.
Because of the delay in hearing back from Rasmussen, Arun
instructed Sudha to try and contact Rasmussen, which she did.
Rasmussen had conversations with Sudha on two or three occa-
sions toward the later part of May 2004. Rasmussen testified that
he and Sudha discussed the expiration date of the original letter
of credit and that Sudha was “anxious” because the expiration
date was approaching. Rasmussen testified that Sudha instructed
him to contact Sum in order to determine how long the project
was going to be delayed and to determine how long the original
letter of credit needed to be extended. Sudha, however, testified
that she did not discuss extending the original letter of credit
with Rasmussen. She claimed instead that her conversation with
Rasmussen was merely to inform Rasmussen that Arun was try-
ing to contact him.
During the final week of May 2004, Rasmussen contacted
Sum, who informed Rasmussen that the original letter of credit
should be extended to October 31. Rasmussen testified that on
May 27, he called Sudha and told her that, after talking with
Sum, it had been determined that the original letter of credit’s
expiration date should be extended to October 31. Rasmussen
testified that Sudha indicated to him that “it needed to be done”
because the original letter of credit was expiring. According
to Rasmussen, Sudha instructed him to send the new letter of
credit to Upland before the original letter of credit expired on
June 1.
Rasmussen testified that he told Sudha, on May 27, 2004,
that the Bank would need the appropriate signatures on an

amendment to the promissory note that would correspond with
the issuance of the new letter of credit. Rasmussen testified that
Sudha told him to “[g]o ahead, and that she would see that it got
signed.” Rasmussen told Sudha that he was not going to be back
in his office until June 1 and that he would prepare and mail the
new loan documents to her on that day.
On May 27, 2004, after talking with Sudha, Rasmussen pre-
pared irrevocable standby letter of credit No. 41558A (replace-
ment letter of credit). This replacement letter of credit contained
the same terms as the original letter of credit except that the
expiration date on the replacement letter of credit had been
extended to October 31. On the same day, Rasmussen faxed a
copy of the replacement letter of credit to Sum and placed the
original in the mail.
Rasmussen admitted that it was not his general practice to
advance money to a Bank customer without first receiving a sig-
nature. Nevertheless, Rasmussen testified that he did so in this
instance because the Bank “had a longstanding relationship with
the Agarwals and they’ve always done what they said they would
do.” Rasmussen explained that the Bank was “doing a favor to
a good loan customer” who was in “distress.” Rasmussen testi-
fied that he would not have issued the replacement letter of
credit without having received Sudha’s verbal assurance that the
amendment to the promissory note would be signed.
When he returned to work on June 1, 2004, Rasmussen
prepared the amendment to the promissory note. The amend-
ment was dated June 1, 2004; was for the same amount as the
original promissory note, $90,228; and had a maturity date cor-
responding with the replacement letter of credit, October 31.
Rasmussen testified that he mailed the amendment and a copy of
the replacement letter of credit to Sudha on June 1.
“A few weeks” after Rasmussen mailed the loan documents
to Sudha, Rasmussen realized that the amendment to the prom-
issory note had not been signed and returned to the Bank.
Rasmussen testified that he contacted both Sudha and Arun,
each assured him that he or she would “look into it and get back
to [him],” and neither one of them indicated that the amendment
would not be signed. Both Arun and Sudha, however, claimed
that they have never received an amendment or modification to
CASS CTy. BANK v. DANA PARTNERShIP 	937
Cite as 275 Neb. 933

938 	275 NEBRASKA REPORTS
the original letter of credit. Arun testified that the first time he
realized that the original letter of credit had been amended or
modified was not until the second week of August 2004.
During the summer of 2004, Upland apparently became dis-
satisfied with Reliant’s work and, on various occasions, sent let-
ters to Arun threatening to exercise its rights under the replace-
ment letter of credit. On June 8, Sum faxed a letter to Arun in
which Sum directed Arun “to complete the roof installation . . .
no later than Tuesday, June 15, 2004 or Upland will enforce
all remedies against [Reliant] per our subcontract agreement,
including cashing in your Irrevocable Stand by Letter of Credit
#41558A at the . . . Bank.” Arun never questioned Upland’s ref-
erence to the replacement letter of credit, nor did Arun contact
the Bank or Upland and claim that the original letter of credit
had already expired on June 1.
In another letter from Sum to Arun, dated June 25, 2004, Sum
stated that “[b]ecause of [Reliant’s] failure to perform we have
held payments to protect our interests and at the present time we
are seriously considering exercising our demand on your letter
of credit with the . . . Bank.” On August 18, Sum faxed a letter
to Arun, notifying him that “[a]s a result of [Reliant’s] continued
failure to perform Upland has no choice but to declare [Reliant]
in default of [the] subcontract and replace [Arun’s] firm.”
The following day, Arun faxed a letter to Sum in which he
discussed, among other things, the efforts Reliant was making
toward completing the project and the estimated completion
dates for certain tasks. At the close of the letter, Arun stated that
“we hope that you [Upland] can hold your intention of accessing
our Letter of Credit until next week when you will see progress
towards our plan.” Despite Arun’s letter, Sum went to the Bank
on August 19, 2004, and informed Rasmussen that Reliant was
in default and that Upland was making a demand on the replace-
ment letter of credit. Sum presented to Rasmussen the necessary
documentation, including the replacement letter of credit. The
Bank did not pay Sum the funds at that time.
Later that day, Arun faxed a letter to the Bank. In this letter,
Arun claimed that Reliant had complied with each of Upland’s
requests. Arun stated that “our company [Reliant] had agreed
to extend [Upland’s] letter of credit till August 1, 2004, and

we have never received a copy of that letter of credit extend-
ing any further from original date.” Arun ended this letter by
claiming that Reliant “never executed a subcontract agreement
with Upland . . . on this project.” Both Rasmussen and Sum
testified that Arun’s letter was the first time that they had ever
heard of August 1, 2004, as being the expiration date. Arun
acknowledged that this was the first time he had raised any
concerns with regard to the expiration date on the replacement
letter of credit.
On August 23, 2004, Reliant filed a complaint for a tempo-
rary restraining order and preliminary injunction in the Douglas
County District Court, against Upland and the Bank. In its
complaint, Reliant sought to prevent Upland from receiving and
the Bank from paying any funds under the replacement letter of
credit. In its complaint, Reliant made the following admission:
Letter of Credit No 41558 had an expiration date of June
1, 2004. Due to a number of circumstances beyond the
control of the parties hereto, work [o]n the [Reliant] sub-
contract did not commence until January of this year. As
such, it it [sic] became necessary to push back the above
referenced completion date for same by several months.
As a result Letter of Credit 41558 was replaced by Letter
of Credit No 41558A, effective May 27, 2004, in the
amount of $90,2[2]8.00, with an expiration date of October
31, 2004 . . . .
The district court denied Reliant’s request for a temporary
restraining order and preliminary injunction. On August 24, as
payment under the replacement letter of credit, the Bank issued
a check to Upland in the amount of $90,228.
The Bank filed a complaint against Dana Partnership, Reliant,
and Anil and Sudha (collectively appellants) after the appellants
refused to reimburse the Bank for its $90,228 payment to Upland.
Following a bench trial, the court found that Dana Partnership,
on behalf of Reliant, requested the expiration date on the origi-
nal letter of credit be extended and that Dana Partnership was
aware that an amendment to the promissory note would need to
be signed. The court further determined, applying principles of
promissory estoppel, that Sudha’s “promise to complete the nec-
essary loan documentation . . . induced the [Bank] to issue the
CASS CTy. BANK v. DANA PARTNERShIP 	939
Cite as 275 Neb. 933

940 	275 NEBRASKA REPORTS
Replacement Letter of Credit, and the failure to enforce the . . .
agreement to sign said documentation would act as an injustice
in this case.” Accordingly, the court entered judgment in favor of
the Bank and against the appellants.
ASSIGNMENTS OF ERROR
The appellants contend, renumbered, that the district court
erred in (1) finding that the original letter of credit had been
validly extended, (2) applying promissory estoppel to modify
the terms of the original letter of credit, (3) determining that
a third-party beneficiary could modify the terms of a letter of
credit that by its terms could not be modified, and (4) finding an
implied contract.
STANDARD OF REVIEW
[1] Given the nature of the relief requested, this action sounds
in equity.1 In an appeal of an equitable action, an appellate court
tries factual questions de novo on the record and reaches a con-
clusion independent of the findings of the trial court, provided,
where credible evidence is in conflict on a material issue of fact,
the appellate court considers and may give weight to the fact that
the trial judge heard and observed the witnesses and accepted
one version of the facts rather than another.2
ANALySIS
D ana partnership requesteD that original letter of C reDit
B e extenDeD anD promiseD to sign promissory note
The appellants contend that the district court erred in find-
ing that they reached an agreement with the Bank to issue the
replacement letter of credit and to sign the amendment to the
promissory note. Although Arun’s and Sudha’s testimony dif-
fered in certain respects from that given by Rasmussen and Sum,
the trial court, based on its observation and judgement, clearly
gave greater weight to Rasmussen’s and Sum’s testimony. And
in reaching our conclusion de novo, we consider the fact that
the trial court saw and heard the witnesses and observed their
1 See Pennfield Oil Co. v. Winstrom, 272 Neb. 219, 720 N.W.2d 886 (2006).
2 Id.

demeanor while testifying, and we give significant weight to the
trial court’s judgement as to credibility.
We agree with the district court’s factual finding. The vari-
ous correspondence sent between Sum, Arun, and the Bank, and
the complaint for a temporary restraining order and preliminary
injunction filed by Reliance, supports Rasmussen’s and Sum’s
versions of the facts. After the original letter of credit had expired
on June 1, 2004, Sum sent multiple letters to Arun threatening
to make a demand on the replacement letter of credit. yet Arun
never questioned Sum’s references to the replacement letter of
credit, nor did Arun contact the Bank or Sum and claim that the
original letter of credit had already expired. Instead, in a letter
faxed to Sum on August 19, Arun requested that Upland not
exercise “our Letter of Credit until next week.”
Furthermore, in a letter faxed to the Bank on this same
day, Arun expressly stated that Reliant “had agreed to extend
[Upland’s] letter of credit.” And finally, in its complaint for a
temporary restraining order and preliminary injunction against
the Bank, Reliant admitted that “Letter of Credit 41558 was
replaced by Letter of Credit No 41558A . . . with an expiration
date of October 31, 2004.” Simply stated, in light of this evi-
dence, and giving weight to the district court’s evaluation of the
witnesses’ credibility, we agree with the district court and find
that Sudha, on behalf of Dana Partnership, requested that the
original letter of credit be extended, agreed to October 31, 2004,
as the expiration date, and assured the Bank that the amendment
to the promissory note would be signed.
promissory estoppel
The appellants next argue that, even if Sudha asked the Bank
to issue a replacement letter of credit and then promised to sign
the corresponding amendment to the promissory note, this type
of oral agreement is prohibited by the original promissory note
and is therefore unenforceable. The provision in the original
promissory note upon which the appellants rely provides that
oral agreements or commitments to loan money, extend
credit or to forbear from enforcing repayment of a debt
including promises to extend or renew such debt are not
enforceable. To protect you (borrower) and us (lender)
CASS CTy. BANK v. DANA PARTNERShIP 	941
Cite as 275 Neb. 933

942 	275 NEBRASKA REPORTS
from misunderstanding or disappointment, any agreements
we reach covering such matters are contained in this writ-
ing, which is the complete and exclusive statement of
the agreement between us, except as we may later agree
in writing to modify it. By signing this agreement, the
parties affirm that no unwritten oral agreement exists
between them.
The Bank argues, however, that under the principles of promis-
sory estoppel, the appellants cannot rely on the above provision
as a way of avoiding liability in this case. We agree. In discuss-
ing a contractual provision similar to the one at issue in this
case, we have held that “[i]t is well-established that the parties to
a contract may avoid such a provision where . . . the party claim-
ing the benefit of the provision is estopped to rely on it.”3
[2,3] Under the doctrine of promissory estoppel, a promise
which the promisor should reasonably expect to induce action
or forbearance is binding if injustice can be avoided only by
enforcement of the promise.4 Promissory estoppel requires that
reliance be reasonable and foreseeable.5 In the present case,
given the particular circumstances and the appellants’ conduct,
we conclude that the appellants are estopped from relying on the
contractual provision at issue as a defense to their liability.
The appellants claim, in essence, that the Bank’s reliance on
Sudha’s promise that the amendment to the promissory note
would be signed was neither reasonable nor foreseeable, because
the original promissory note prohibited modification by oral
agreement. The appellants also contend that the Bank’s reliance
was not reasonable or foreseeable, because the Bank’s decision
to issue the replacement letter of credit without first having the
necessary signatures on the amendment to the promissory note
3 Griffin v. Geneva Industries, Inc., 193 Neb. 694, 696-97, 228 N.W.2d 880,
882 (1975). See, also, Shreves v. D. R. Anderson Constructors, Inc., 206
Neb. 433, 293 N.W.2d 106 (1980).
4 Blinn v. Beatrice Community Hosp. & Health Ctr., 270 Neb. 809, 708
N.W.2d 235 (2006).
5 Hawkins Constr. Co. v. Reiman Corp., 245 Neb. 131, 511 N.W.2d 113
(1994).

was contrary to the customary way in which the Bank and the
appellants had interacted in the past.
Notwithstanding the parties’ previous dealings and the lan-
guage in the original promissory note, we are not persuaded by
the appellants’ argument. Sudha’s promise did not form an oral
agreement to modify the promissory note. It was a promise to
sign a written modification. The Bank does not claim the prom-
ise modified the note—the Bank claims it was injured by its reli-
ance on Sudha’s promise to modify the note. We agree with the
district court and find that, under the particular circumstances
of this case, the Bank’s reliance on Sudha’s promise was both
reasonable and foreseeable.
According to Rasmussen, Sudha assured him that the amend-
ment to the promissory note corresponding to the replacement
letter of credit would be signed and returned to the Bank.
Although it was not the Bank’s general practice to issue a letter
of credit without first receiving a signature, Rasmussen testified
that he did so in this instance because the Bank and the appel-
lants had a longstanding relationship with each other and the
appellants had “always done what they said they would do.”
Rasmussen explained that the Bank was assisting a good loan
customer who was in “distress” and that he would not have
issued the replacement letter of credit without first receiving
Sudha’s promise that the amendment to the promissory note
would be signed. Accordingly, in direct reliance on Sudha’s
promise, the Bank issued the replacement letter of credit and
shortly thereafter sent Sudha the amendment to the promissory
note to be signed.
Given 	the 	circumstances 	under 	which 	the 	promise 	was
made—in particular, the short amount of time remaining with
which to extend the original letter of credit before the original
letter of credit expired—it was both reasonable and foreseeable
that Sudha’s promise would induce the Bank to act in reli-
ance upon it. And to refuse to enforce Sudha’s promise would
work an injustice on the Bank. Accordingly, we conclude that,
under the doctrine of promissory estoppel, the appellants are
precluded from denying their obligation to reimburse the Bank
for the payment made to Upland under the replacement letter
of credit.
CASS CTy. BANK v. DANA PARTNERShIP 	943
Cite as 275 Neb. 933

944 	275 NEBRASKA REPORTS
remaining assignments of error
[4] Our conclusion that Sudha, on behalf of Dana Partnership,
requested the replacement letter of credit be issued and that the
appellants are estopped from denying their obligation to reim-
burse the Bank, is dispositive of this appeal. An appellate court
is not obligated to engage in an analysis which is not needed
to adjudicate the controversy before it.6 Therefore, we need not
address the appellants’ remaining assignments of error.
CONCLUSION
We conclude the district court did not err in finding that the
Bank issued the replacement letter of credit pursuant to Dana
Partnership’s request and that the appellants, under the doctrine
of promissory estoppel, are precluded from denying their liability
for lack of a signature on the amendment to the promissory note.
Accordingly, the judgment of the district court is affirmed.
affirmeD.
6 Papillion Rural Fire Prot. Dist. v. City of Bellevue, 274 Neb. 214, 739
N.W.2d 162 (2007).
mary kay D avis , appellant , v . henry a. D avis , appellee .
750 N.W.2d 696
Filed June 20, 2008. 	No. S-07-529.
1. Judgments. A court has discretion to require reasonable security for an obli-
gor’s current or delinquent support obligations when compelling circumstances
require it.
2. Divorce: Judgments: Appeal and Error. An appellate court reviews a district
court’s postdissolution order regarding security for a support obligation de novo on
the record to determine whether the trial court has abused its discretion.
3. Judgments: Words and Phrases. An abuse of discretion occurs when a trial court
bases its decision upon reasons that are untenable or unreasonable or if its action
is clearly against justice or conscience, reason, and evidence.
4. Judgments: Statutes: Appeal and Error. Questions of law and statutory interpre-
tation require an appellate court to reach a conclusion independent of the decision
made by the court below.
5. Insurance: Contracts. Neb. Rev. Stat. § 44-704 (Reissue 2004) specifically
requires adult insureds to consent to insurance policies on their lives unless they or
their spouses are the owners of the policies.