Hearst-Argyle Prop. v. Entrex Comm. Servs.

H earst -argyle P roPerties , inc., et al ., aPPellants ,
v. entrex communication services ,
inc., et al ., aPPellees.
H earst -argyle P roPerties , inc., and tHe H earst
corPoration, aPPellants , v. entrex communication
services , inc., et al ., aPPellees.
778 N.W.2d 465
Filed February 19, 2010. 	Nos. S-09-048, S-09-104.
1. Jurisdiction: Appeal and Error. A jurisdictional question which does not
involve a factual dispute is determined by an appellate court as a matter
of law.
2. Contracts: Public Policy. The meaning of a contract is a question of law, as is
the determination of whether a contract violates public policy.
3. Appeal and Error. An appellate court resolves questions of law independently of
the determination reached by the court below.
4. Contracts. A contract must receive a reasonable construction, and a court must
construe it as a whole and, if possible, give effect to every part of the contract.
5. ____. A contract is viewed as a whole in order to construe it.
6. ____. Whatever the construction of a particular clause of a contract, standing
alone, may be, it must be read in connection with other clauses.
7. Courts: Contracts: Public Policy. The power of courts to invalidate contracts
for being in contravention of public policy is a very delicate and undefined power
which should be exercised only in cases free from doubt.
8. Contracts: Public Policy. A contractual provision should not be declared void as
contrary to public policy unless it is clearly and unmistakably repugnant to the
public interest.
Appeals from the District Court for Douglas County: tHomas
a. otePka, Judge. Appeal in No. S-09-048 dismissed. Judgment
in No. S-09-104 affirmed.
J. Joseph McQuillan, of Walentine, O’Toole, McQuillan
& Gordon, and Jeffrey R. Learned, of Denenberg Tuffley,
P.L.L.C., for appellants.
William 	R. 	Johnson 	and 	Craig 	F. 	Martin, 	of 	Lamson,
Dugan & Murray, L.L.P., for appellee Entrex Communication
Services, Inc.
Thomas A. Grennan and Francie C. Riedmann, of Gross &
Welch, P.C., L.L.O., for appellee Communication Structures
& Services, Inc.
468 	279 NEbRASkA REPORTS
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:48 AM CST

Dean Suing, of katskee, Henatch & Suing, for appellee
Dudutis Erection & Maintenance, Inc.
H eavican, c.J., WrigHt, connolly, gerrard, mccormack,
and miller-lerman, JJ.
gerrard, J.
The issues presented in this appeal arise out of a construction
contract requiring that the property owner maintain insurance
“without optional deductibles” and providing that if the insur-
ance had deductibles, the property owner would “pay costs
not covered because of such deductibles.” We must determine
whether those provisions insulate the construction contractor
from liability and whether public policy permits them to be
enforced if the contractor was grossly negligent. We find that
the provisions at issue protect the contractor, and we affirm the
district court’s ruling to that effect.
bACkGROuND
This case began with the July 2003 collapse of a television
antenna tower in Omaha, Nebraska. The defendants in this
case, Entrex Communication Services, Inc.; Communication
Structures 	& 	Services, 	Inc.; 	and 	Dudutis 	Erection 	&
Maintenance, Inc. (collectively the defendants), had either con-
tracted or subcontracted to remove the analog antenna on
the tower and replace it with a digital antenna. The owners
of the tower, Hearst-Argyle Properties, Inc., and The Hearst
Corporation (collectively Hearst), allege that the defendants’
negligence caused the tower to collapse, causing over $6 mil-
lion in damages to Hearst’s property.
Hearst and its insurers sued the defendants on that basis.
Although their claims were initially filed together, Hearst’s
claims were eventually separated, under a different trial docket
number, from the insurers’ claims. The district court granted
the defendants’ motion for summary judgment against the
insurers, concluding that a waiver of subrogation clause in the
contract between Hearst and the defendants barred recovery for
insured damages. On appeal, we affirmed that conclusion.1
1 See Lexington Ins. Co. v. Entrex Comm. Servs., 275 Neb. 702, 749 N.W.2d
124 (2008).
HEARST-ARGyLE PROP. v. ENTREx COMM. SERvS. 	469
Cite as 279 Neb. 468

Hearst continued to press its claim for $250,000 in alleged
damages that had not been covered by insurance, because of its
insurance policy deductible. The defendants moved for sum-
mary judgment, arguing that subparagraphs 11.4.1 and 11.4.1.3
of the parties’ contract barred recovery for the deductible
amount. Subparagraph 11.4.1 required Hearst to
purchase and maintain . . . property insurance written
on a builder’s risk “all-risk” or equivalent policy form
in the amount of the initial Contract Sum, plus value of
subsequent Contract modifications and cost of materials
supplied or installed by others, comprising total value for
the entire Project at the site on a replacement cost basis
without optional deductibles.
(Emphasis supplied.) And subparagraph 11.4.1.3 added, “If
the property insurance requires deductibles, [Hearst] shall pay
costs not covered because of such deductibles.”
The district court agreed with the defendants’ argument that
the contract did not permit Hearst to recover its deductible and
granted the defendants’ motion for summary judgment.
ASSIGNMENTS OF ERROR
Hearst assigns that the district court erred in concluding
that (1) subparagraphs 11.4.1 and 11.4.1.3 bar Hearst’s claims
for its deductible and (2) Hearst’s gross negligence claims are
barred by subparagraph 11.4.1.3.
STANDARD OF REvIEW
[1-3] A jurisdictional question which does not involve a fac-
tual dispute is determined by an appellate court as a matter of
law.2 The meaning of a contract is also a question of law, as is
the determination of whether a contract violates public policy.3
An appellate court resolves questions of law independently of
the determination reached by the court below.4
2 Connelly v. City of Omaha, 278 Neb. 311, 769 N.W.2d 394 (2009).
3 See Lexington Ins. Co., supra note 1.
4 Tolliver v. Visiting Nurse Assn., 278 Neb. 532, 771 N.W.2d 908 (2009).
470 	279 NEbRASkA REPORTS

ANALySIS
aPPellate Jurisdiction
We first note a jurisdictional issue presented by a clerical
error on Hearst’s notice of appeal. As noted above, Hearst’s
claims and the claims of its insurers were separated in the
trial court into two separate trial docket numbers. The district
court entered summary judgment against Hearst on December
12, 2008. but Hearst’s first notice of appeal in this case, filed
January 9, 2009, was mistakenly filed under the docket number
for the insurers’ claims, not Hearst’s. And by the time Hearst
recognized its error and filed an amended notice of appeal, on
January 26, more than 30 days had elapsed from the district
court’s final judgment.5 The question, then, is whether either
notice was sufficient to perfect Hearst’s appeal.
We conclude that the untimely January 26, 2009, notice of
appeal was not effective to confer appellate jurisdiction. The
January 26 notice of appeal was not filed within 30 days after
the entry of the judgment from which Hearst sought to appeal.6
but Hearst’s January 9, 2009, notice of appeal was filed within
30 days of the judgment, albeit under the wrong trial docket
number. Section 25-1912 does not expressly require a notice
of appeal to display a trial court docket number, or be filed
in a particular trial court docket; instead, it requires only a
“notice of intention” to prosecute an appeal from a judgment,
decree, or final order of the district court. And other courts
have found, under comparable circumstances, that a notice
of appeal filed under the wrong docket number is not fatal to
appellate jurisdiction.7
Hearst’s defective January 9, 2009, notice of appeal effec-
tively served as a “notice of intention” to prosecute an appeal
5 See Neb. Rev. Stat. § 25-1912(1) (Reissue 2008).
6 See id.
7 See, Scherer v. Kelley, 584 F.2d 170 (7th Cir. 1978); Johnson v. Ragsdale,
158 S.W.3d 426 (Tenn. App. 2004); Seneca Ins. Co. v. Daniel, 93 Fed.
Appx. 872 (6th Cir. 2004). See, also, U.S. v. Grant, 256 F.3d 1146 (11th
Cir. 2001); Arequipeno v. Hall, No. 9625, 2000 WL 420622 (Mass. App.
Div. Apr. 12, 2000).
HEARST-ARGyLE PROP. v. ENTREx COMM. SERvS. 	471
Cite as 279 Neb. 468

within the meaning of § 25-1912(1). It displayed the wrong
trial docket number, but correctly and specifically identified
the parties and the December 12, 2008, order being appealed
from. The defendants do not argue that they were confused or
misled by the notice of appeal; in fact, the record affirmatively
demonstrates that they were not. And Hearst has presented this
court with a consolidated record that contains the December
12 order and the evidence upon which the district court’s
order was based.8 under these circumstances, we conclude that
§ 25-1912(1) was substantially complied with and that we have
jurisdiction to consider Hearst’s appeal.
We are left with two appellate docket numbers. but a docket
number is not synonymous with an appeal. Docket numbers are
a function of this court’s internal administration, and regard-
less of how they have been enumerated, it is clear that there is
only one appeal here: Hearst’s appeal from the December 12,
2008, summary judgment order. because it will simplify mat-
ters for the trial court if our mandate on appeal corresponds
to the trial docket number in which the December 12 order
was entered, we accept Hearst’s suggestion that we dismiss
case No. S-09-048 as moot, and we enter our judgment in this
appeal in case No. S-09-104.
insurance P rovisions of contract
As noted above, subparagraph 11.4.1 of the parties’ con-
tract required Hearst to purchase and maintain builder’s “all-
risk” insurance “without optional deductibles.” Subparagraph
11.4.1.2 	required 	Hearst 	to 	notify 	Entrex 	Communication
Services (hereinafter Entrex) if it did not intend to purchase
the required insurance “with all of the coverages in the amount
described above,” permitting Entrex to obtain such insurance
and charge the cost to Hearst. but instead, Hearst obtained
insurance 	with 	a 	$250,000 	deductible. And 	subparagraph
11.4.1.3 provides that if Hearst obtained property insurance
with deductibles, Hearst “shall pay costs not covered because
of such deductibles.”
8 See Holste v. Burlington Northern R.R. Co., 256 Neb. 713, 592 N.W.2d
894 (1999).
472 	279 NEbRASkA REPORTS

Nonetheless, Hearst argues that the contract does not pre-
clude it from seeking indemnification for the deductible from
the defendants. Hearst first points to subparagraph 11.4.7 of the
contract, the “Waivers of Subrogation” provision, under which
Hearst and Entrex “waive all rights against . . . each other and
any of their subcontractors, sub-subcontractors, agents and
employees, each of the other . . . for damages caused by fire or
other causes of loss to the extent covered by property insurance
obtained pursuant to this Paragraph 11.4.” (Emphasis sup-
plied.) Hearst argues that because subparagraph 11.4.7 operates
only as a waiver of liability “to the extent covered by property
insurance,” the recovery of any amount not covered by insur-
ance—i.e., the deductible—is not waived by this provision.
With that much, we agree. Subparagraph 11.4.7 does not pre-
clude Hearst from recovering the deductible amount.
[4-6] but subparagraph 11.4.1.3 does require Hearst to pay
the costs not covered because of the deductible. Hearst argues
that it is simply required to pay the costs not covered by the
deductible, but that it can still seek indemnification for those
costs. Hearst’s construction of subparagraph 11.4.1.3, however,
makes little sense when read in the context of the entire con-
tract. A contract must receive a reasonable construction, and a
court must construe it as a whole and, if possible, give effect
to every part of the contract.9 And a contract is viewed as a
whole in order to construe it.10 Whatever the construction of a
particular clause of a contract, standing alone, may be, it must
be read in connection with other clauses.11
Here, subparagraph 11.4.1 required Hearst to obtain property
insurance without optional deductibles. Subparagraph 11.4.1.2
required Hearst to notify Entrex in writing if Hearst did not
purchase insurance meeting that requirement, and provided that
if Hearst chose not to do so, it would bear any resulting costs
if Entrex was damaged. The only construction of subparagraph
11.4.1.3 consistent with the preceding provisions is that if
9 Lexington Ins. Co., supra note 1.
10 Keller v. Bones, 260 Neb. 202, 615 N.W.2d 883 (2000).
11 Poulton v. State Farm Fire & Cas. Cos., 267 Neb. 569, 675 N.W.2d 665
(2004).
HEARST-ARGyLE PROP. v. ENTREx COMM. SERvS. 	473
Cite as 279 Neb. 468

Hearst neither obtained the required no-deductible insurance
nor informed Entrex of that fact, Hearst would bear any result-
ing costs. To conclude otherwise would leave Entrex with no
way to enforce its rights under paragraph 11.4.
Hearst also argues, briefly, that it was required only to
obtain insurance without “optional deductibles” and that there
is no proof in this case that the deductible was “optional.” but
subparagraph 11.4.1.3 more plainly states that “[i]f the prop-
erty insurance requires deductibles, [Hearst] shall pay costs
not covered because of such deductibles.” We reject Hearst’s
argument that the deductible in this case does not fall within
the scope of subparagraph 11.4.1.3.
We conclude that the district court correctly read the parties’
contract to require Hearst to bear the risk associated with its
insurance deductible. We find no merit to Hearst’s first assign-
ment of error.
liability for gross negligence
Hearst argues that if subparagraph 11.4.1.3 operates to pro-
tect the defendants from liability for the deductible amount, it
is against public policy and void to the extent that it operates
to shield the defendants from liability for gross negligence.12
Resolving Hearst’s argument requires a close examination
of two particular decisions of this court: New Light Co. v.
Wells Fargo Alarm Servs.13 and Lexington Ins. Co. v. Entrex
Comm. Servs.14
In New Light Co., the plaintiff contracted with the defend-
ant for the defendant to install and maintain a fire alarm sys-
tem. The operative contract contained an exculpatory clause
stating that the defendant would not be liable for any loss or
damage, irrespective of origin, to persons or property whether
directly or indirectly caused by performance or nonperform-
ance of any obligation imposed by the agreement or “‘by
negligent acts or omissions of [the defendant], its agents or
12 See Bamford v. Bamford, Inc., ante p. 259, 777 N.W.2d 573 (2010).
13 New Light Co. v. Wells Fargo Alarm Servs., 247 Neb. 57, 525 N.W.2d 25
(1994).
14 Lexington Ins. Co., supra note 1.
474 	279 NEbRASkA REPORTS

employees.’”15 The issue before this court was whether the
exculpatory clause released the defendant from liability for
gross negligence or willful and wanton misconduct.
We held that public policy prohibited such an exclusion.
We explained that whether a particular exculpatory clause in
a contractual agreement violates public policy depends upon
the facts and circumstances of the agreement and the parties
involved and that “[t]he greater the threat to the general safety
of the community, the greater the restriction on the party’s
freedom to contractually limit the party’s liability.”16 “Common
sense tells us that the greater the risk to human life and prop-
erty, the stronger the argument in favor of voiding attempts by
a party to insulate itself from damages caused by that party’s
gross negligence or willful and wanton misconduct.”17
under the circumstances of that case, we reasoned that
when we balance the parties’ right to contract against the
protection of the public, we find a sufficiently compelling
reason to prevent [the defendant] from insulating itself by
contractual agreement from damages caused by its own
gross negligence or willful and wanton misconduct. Such
an agreement would have a tendency to be injurious to
the public. This limitation on the freedom to contract is
imposed by law because of the potential risks to human
life and property and is, therefore, independent of the
agreement of the parties.18
but in Lexington Ins. Co., the predecessor to this case, we
concluded that New Light Co. did not extend to the waiver
of subrogation provision contained in subparagraph 11.4.7
of the contract, even though that provision was effective
against claims for gross negligence.19 We recognized that
“[a]dmittedly, language in New Light Co. can be read as sug-
gesting that our policy concern was protecting the public by
15 New Light Co., supra note 13, 247 Neb. at 59, 525 N.W.2d at 27.
16 Id. at 63, 525 N.W.2d at 30.
17 Id. at 64, 525 N.W.2d at 30.
18 Id.
19 See Lexington Ins. Co., supra note 1.
HEARST-ARGyLE PROP. v. ENTREx COMM. SERvS. 	475
Cite as 279 Neb. 468

providing incentive for parties to refrain from grossly negli-
gent conduct.”20 We declined, however, to extend our discus-
sion in New Light Co.
We explained that the danger with exculpatory clauses is that
a party injured by another’s gross negligence will be unable to
recover its losses.21 but such a danger is not present in cases
involving waivers of subrogation, because the waiver applies
only to losses covered by insurance, so there is no risk that an
injured party will be left uncompensated. And we noted that
waivers of subrogation served other important policy interests
not met by pure exculpatory clauses, because they encouraged
parties to anticipate risks and to procure insurance covering
those risks, thereby avoiding future litigation, and facilitating
and preserving economic relations and activity.22
We also noted that in the particular context of a construc-
tion contract, a waiver of subrogation avoids disruption and
disputes among the parties to the project, eliminating the need
for lawsuits and protecting the contracting parties from loss
by bringing all property damage under the all-risk builder’s
property insurance.23 We recognized “the important policy goal
that waivers of subrogation serve in avoiding disruption of
construction projects and reducing litigation among parties to
complicated construction contracts” and explained that refus-
ing to enforce waivers of subrogation against gross negligence
claims “would undermine this underlying policy by encourag-
ing costly litigation to contest whether a party’s conduct was
grossly negligent.”24 Therefore, we held that public policy
favored enforcement of waivers of subrogation even against
gross negligence claims.25
The present case falls someplace in the middle. On the
one hand, as in New Light Co., permitting the enforcement
20 Id. at 710, 749 N.W.2d at 130.
21 Id.
22 Lexington Ins. Co., supra note 1.
23 Id.
24 Id. at 711, 749 N.W.2d at 131.
25 Id.
476 	279 NEbRASkA REPORTS

of subparagraph 11.4.1.3 against a claim of gross negligence
leaves Hearst, the injured party, uncompensated for that amount
of its damages. On the other hand, subparagraph 11.4.1.3 serves
many of the same public policy interests as the waiver of sub-
rogation at issue in Lexington Ins. Co., because it encourages
the anticipation of risks and the procurement of insurance, and
brings those risks under the all-risk builder’s property insur-
ance. The property owner is provided an incentive to abide by
the terms of the property insurance provisions.
Furthermore, subparagraph 11.4.1.3 is no more or less excul-
patory of a grossly negligent defendant than the waiver of sub-
rogation at issue in Lexington Ins. Co. both provisions permit
a grossly negligent party to shield itself from liability. The
contract permitted Entrex to protect itself from risk by requir-
ing the purchase of insurance—a decision that, in Lexington
Ins. Co., we held was favored by public policy. And even if
shielded from liability, a contracting party still has an incen-
tive to avoid both negligence and gross negligence, because
performing the contracted-for work negligently could threaten
its right to payment under the contract.
The present case is distinguishable from Lexington Ins. Co.
only insofar as the damages Hearst sustained were uninsured.
but they were uninsured because Hearst did not obtain the
nondeductible insurance that the contract expressly contem-
plated. Refusing to enforce subparagraph 11.4.1.3 would leave
Hearst in the peculiar position of benefiting from the degree of
the defendants’ alleged negligence, because if the defendants’
negligence was gross, as opposed to ordinary, Hearst would
be able to recover damages that by the terms of the contract
should have been covered by Hearst’s insurance. And that
would encourage precisely the sort of costly litigation, to deter-
mine whether a party was grossly negligent, that we sought to
discourage in Lexington Ins. Co.
[7,8] On balance, based on the facts and circumstances of the
contract and the parties involved,26 we conclude that enforce-
ment of subparagraph 11.4.1.3 is not contrary to public policy.
26 See Ray Tucker & Sons v. GTE Directories Sales Corp., 253 Neb. 458, 571
N.W.2d 64 (1997).
HEARST-ARGyLE PROP. v. ENTREx COMM. SERvS. 	477
Cite as 279 Neb. 468

The power of courts to invalidate contracts for being in contra-
vention of public policy is a very delicate and undefined power
which should be exercised only in cases free from doubt.27 So,
a contractual provision should not be declared void as contrary
to public policy unless it is clearly and unmistakably repugnant
to the public interest.28
In this case, as in Lexington Ins. Co., the terms of the
contract served to encourage the anticipation of risks and the
procurement of insurance against those risks. The parties were
sophisticated business entities capable of appreciating those
risks. And had the terms of the contract been followed to the
letter, none of the alleged damages would have been uninsured.
Given the facts and circumstances of the contract and the par-
ties involved, we find that subparagraph 11.4.1.3 is not void as
against public policy, and find no merit to Hearst’s final assign-
ment of error.
CONCLuSION
We conclude that we have jurisdiction over this appeal by
virtue of Hearst’s erroneous but sufficiently effective January
9, 2009, notice of appeal. As a result, we enter judgment in
case No. S-09-104 and dismiss case No. S-09-048 as moot. We
further conclude that the contract required Hearst to bear the
costs of its insurance deductible and that the contract’s waiver
of liability was not void as against public policy. We affirm the
judgment of the district court.
aPPeal in no. s-09-048 dismissed.
Judgment in no. s-09-104 affirmed.
stePHan, J., not participating.
27 Myers v. Nebraska Invest. Council, 272 Neb. 669, 724 N.W.2d 776 (2006);
Jeffrey Lake Dev. v. Central Neb. Pub. Power, 262 Neb. 515, 633 N.W.2d
102 (2001).
28 Ray Tucker & Sons, supra note 26. See, also, State ex rel. Wagner v.
United Nat. Ins. Co., 277 Neb. 308, 761 N.W.2d 916 (2009); Jeffrey Lake
Dev., supra note 27.
478 	279 NEbRASkA REPORTS