Bailey v. First Nat. Bank of Chadron

D ouglas B ailey anD lee ann B ailey , appellants , v .
F irst national B ank oF C haDron , appellee .
741 N.W.2d 184
Filed November 13, 2007. 	No. A-06-060.
1. Pleadings. A trial court’s denial of leave to amend pleadings is appropriate only
in those limited circumstances in which undue delay, bad faith on the part of the
moving party, futility of the amendment, or unfair prejudice to the nonmoving
party can be demonstrated.
2. Pleadings: Appeal and Error. An appellate court generally reviews the denial of
a motion to amend for an abuse of discretion.
3. ____: ____. An appellate court reviews de novo the underlying legal conclusion
of whether the proposed amendments to a complaint would have been futile.
4. ____: ____. With regard to Neb. Ct. R. of Pldg. in Civ. Actions 15(a) (rev. 2003),
an abuse of discretion may be found if the court simply denies the motion to
amend without offering any explanation. On the other hand, when the reasons for
the denial are readily apparent, the failure to include reasons is not a per se abuse
of discretion, although the better practice is to state the reasons.
5. Judgments: Records: Appeal and Error. Meaningful appellate review requires a
record that elucidates the factors contributing to the lower court judge’s decision.
6. Pleadings: Time. Delay alone is not a reason in and of itself to deny leave to
amend a pleading; the delay must have resulted in unfair prejudice to the party
opposing amendment.
7. Pleadings: Proof. The burden of proof of prejudice is on the party opposing
amendment of a pleading.
8. Pleadings: Evidence: Summary Judgment. If leave to amend a pleading is
sought under Neb. Ct. R. of Pldg. in Civ. Actions 15(a) (rev. 2003) before discov-
ery is complete and before a motion for summary judgment has been filed, the
question of whether such amendment would be futile is judged by reference to
Neb. Ct. R. of Pldg. in Civ. Actions 12(b)(6) (rev. 2003). Leave to amend in such
circumstances should be denied as futile only if the proposed amendment cannot
withstand a rule 12(b)(6) motion to dismiss. If, however, the rule 15(a) motion is
made in response to a motion for summary judgment and the parties have presented
all relevant evidence in support of their positions, then the amendment should be
denied as futile only when the evidence in support of the proposed amendment cre-
ates no triable issue of fact and the opposing party would be entitled to judgment
as a matter of law.
9. 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 Dawes County: paul
D. 	empson, 	Judge. 	Reversed 	and 	remanded 	for 	further
proceedings.
bAILey v. FIRsT NAT. bANk OF ChADRON 	153
Cite as 16 Neb. App. 153
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:15 AM CST

John F. simmons, of simmons Olsen Law Firm, P.C., for
appellants.
Michael V. smith, of smith, king & Freudenberg, P.C., for
appellee.
inBoDy, Chief Judge, and C arlson and moore, Judges.
moore, Judge.
I. INTRODUCTION
Douglas bailey and Lee Ann bailey filed a complaint against
First National bank of Chadron (FNbC) in the district court
for Dawes County, alleging that FNbC was required to release
them from their guaranties of certain loans and that FNbC
wrongfully set off $57,726.17 out of a certificate of deposit to
pay debts guaranteed by the baileys. The baileys further alleged
that FNbC instructed the buyer of certain assets of bailey
Tire and service, Inc. (bailey Tire), a company owned by the
baileys, to convert $27,179.06 of bailey Tire assets not included
in the sale. The baileys sought judgment against FNbC for
$84,905.23. FNbC filed a motion for summary judgment. The
baileys filed a motion seeking to amend their complaint and
also filed a motion for partial summary judgment. The district
court denied the motion to amend and entered summary judg-
ment in favor of FNbC. The baileys have appealed. because
we find that the district court abused its discretion in denying
the baileys’ motion to amend the complaint, we reverse, and
remand for further proceedings.
II. bACkGROUND
1. original C omplaint F ileD
The baileys filed a complaint against FNbC in the district
court on June 21, 2005. The baileys alleged that they were
stockholders in bailey Tire and that FNbC at various times had
loaned money to bailey Tire, which loans were guaranteed by
the baileys in their individual capacities.
The baileys alleged that on or about February 1, 2002, the
parties executed a document entitled “‘Amendment to Loan
Agreement,’” but they did not specify any further details about
the original loan documents in their complaint. The baileys
154 	16 NebRAskA APPeLLATe RePORTs

alleged that pursuant to their obligations under the amend-
ment to the loan agreement, the baileys executed a written
instrument guaranteeing a $350,000 loan to an entity called
I.M.s.h., Inc. (IMsh), which money was loaned to IMsh by
FNbC to facilitate the purchase of certain assets of bailey Tire
by IMsh.
The baileys further alleged that the parties’ February 2002
amendment document was itself amended by a letter agreement
dated April 3, 2002, that the small business Administration
(sbA) agreed to guarantee the loans described in the April 2002
letter, and that according to the parties’ amendment document,
the baileys’ guaranty obligations were therefore terminated.
The baileys alleged that despite the parties’ agreements, on
February 21, 2003, FNbC set off, on a certificate of deposit
owned by the baileys, the sum of $57,726.17 to pay the debts
of third parties guaranteed by the baileys. The baileys alleged
that FNbC controlled the transaction between bailey Tire and
IMsh; that at the direction of FNbC, IMsh took $27,179.06
in inventory from bailey Tire not included in the sale; and that
absent the wrongful act of FNbC in converting this inventory,
the sum of $27,179.06 would have been available to the baileys
to reduce their obligations to FNbC under their guaranty. The
baileys sought judgment in the amount of $84,905.23.
2. D oCuments attaCheD to original C omplaint
The baileys attached copies of the following documents to
their original complaint:
(a) February 2002 Amendment to Loan Agreement
On February 1, 2002, the baileys, bailey Tire, and FNbC
entered into an agreement amending a september 27, 2001,
loan agreement. The amendment document described certain
notes referenced in the original loan agreement and the bal-
ance due on one of those notes. In the amendment document,
the parties agreed that certain assets of the baileys and bailey
Tire would be sold to IMsh, an entity to be formed by Phillip
Darley and Jerry yanke, and that the proceeds of the sale would
be applied to one of the notes referenced in the original loan
agreement. The baileys specifically acknowledged that the
bAILey v. FIRsT NAT. bANk OF ChADRON 	155
Cite as 16 Neb. App. 153

financial status of bailey Tire had deteriorated substantially
since the date of the september 2001 loan agreement.
The February 2002 amendment to the loan agreement con-
tained provisions regarding equity support for the sale of bailey
Tire to IMsh, as follows:
The [baileys and bailey Tire acknowledge] that IMsh
will require equity support to complete its purchase from
[bailey Tire]. [The] baileys agree to furnish up to One
hundred Thousand Dollars ($100,000.00) to IMsh or its
shareholders in a manner that will constitute equity for
IMsh’s loan.
To assist [the] baileys in providing equity support,
[FNbC] will loan [the] baileys up to $35,000.00 for such
purpose which shall be secured by real estate owned by
[the] baileys and which [the] baileys will lease to IMsh.
This loan obligation will be payable in full on or before
March 1, 2002.
Further, [FNbC] will agree to loan [the] baileys an
additional $65,000.00 for such purpose providing an sbA
loan guarantee is obtained by IMsh. If an sbA loan
guarantee is obtained, [FNbC] will combine the existing
loan of $35,000.00 with an additional loan of $65,000.00
for a total of $100,000.00. such loan shall be secured by
real estate owned by [the] baileys and which [the] baileys
will lease to IMsh. The loan of $100,000.00 will be pay-
able in sixty equal monthly payments along with accrued
interest. [The] baileys will service such loan from lease
payments received from IMsh. If an sbA guarantee is not
obtained, then renewal of the $35,000.00 note shall be at
the sole discretion of [FNbC].
In the February 2002 amendment agreement, the baileys
also agreed to guarantee a $350,000 loan from FNbC to IMsh,
which IMsh would in turn use to pay bailey Tire. The 2002
agreement specifically provided:
The 	baileys 	hereby 	guarantee 	the 	repayment 	of 	the
$350,000.00 loan made by [FNbC] to IMsh as described
in separate guarantees to be executed by the baileys.
said guarantees will be collateralized with real estate that
presently collateralizes their guarantee to the bank. The
156 	16 NebRAskA APPeLLATe RePORTs

$350,000.00 loan will be evidenced by a promissory note
payable in full on or before March 1, 2002. If an sbA
guarantee is obtained, [FNbC] will release [the] baileys
from their guarantee obligation of this loan. If an sbA
guarantee is not obtained, then renewal of the $350,000.00
loan will be at the sole discretion of [FNbC].
The 2002 amendment agreement also contained the follow-
ing clause:
[The baileys and bailey Tire acknowledge] that [FNbC]
is accommodating [the baileys and bailey Tire] in an
effort to assist in sale of assets and liquidation to meet
[their] obligation with [FNbC]. [The baileys and bailey
Tire], in consideration of this agreement, along with other
accommodations provided to [the baileys and bailey Tire]
by [FNbC], [agree] to hold [FNbC] harmless from and
assert no claim or past or present claims, or course of
action adopted by the parties hereinbefore or hereinafter,
and which claims the [baileys and bailey Tire] may assert
against [FNbC] whatsoever. [The baileys and bailey Tire]
hereby [release FNbC] from all claims, causes of action,
demands and liabilities of any kind whatsoever, whether
direct or indirect, fixed or contingent, liquidated or non-
liquidated, disputed or undisputed, known or unknown,
which [the baileys and bailey Tire have] or may have
or may claim relating in any way to any event, indebted-
ness, [FNbC-baileys and bailey Tire] relationship, cir-
cumstance, action or failure to act.
(b) April 2002 supplementary Letter Agreement
Also attached to the original complaint was a letter from the
president of FNbC to the baileys, dated April 3, 2002. The
April 2002 letter provided as follows:
This is in regard to the loan agreement of september
27, 	2001 	and 	an 	addendum 	to 	the 	agreement 	of
February 1, 2002.
As you are aware, IMsh was unable to obtain an
sbA [loan] as planned. however, IMsh has received a
conditional commitment for a $150,000 sbA low doc
loan on the scottsbluff location [of bailey Tire]. The
bAILey v. FIRsT NAT. bANk OF ChADRON 	157
Cite as 16 Neb. App. 153

remaining un-guaranteed (by sbA) debt of $200,000 will
be on the Chadron, Alliance and Fort Morgan locations [of
bailey Tire]. . . . Darley plans to purchase the assets of
these locations from IMsh for $200,000. An interim loan
may be made to [Darley] and Ms. Darley maturing May
1, 2002. [Darley] will need to secure long term financing.
We will require that IMsh, [yanke] and the both of you
guaranty repayment of the $200,000. The renewal of this
loan will be at the sole discretion of the bank.
you will be released from your prior $350,000 guaranty
once all documentation is in place for the $150,000 sbA
low doc loan to IMsh. A formal lease agreement must be
received on the scottsbluff location. your $200,000 guar-
anty will remain in full force.
If these terms are agreeable to you, we will initiate
item #2 (Purchase equity support) of the addendum to
the agreement, and extend the maturity of note #2 of the
original loan agreement to July 1, 2002 in accordance to
the liqui[d]ation plan submitted to the bank on February
15, 2002 and February 26, 2002. Please keep in mind that
the agreement and addendum remain in full force. All
modifications to these agreements must be in writing.
The baileys individually, and Douglas bailey as president of
bailey Tire, signed at the bottom of the letter agreement, indi-
cating their acknowledgment of and agreement to the terms of
the letter agreement.
3. FnBC’ s answer
FNbC answered on July 18, 2005. FNbC admitted that
FNbC had loaned money to bailey Tire, which loans were
individually guaranteed by the baileys. FNbC also admitted
signing the amendment document and the letter agreement of
April 3, 2002, but it generally denied the remaining allegations
of the complaint.
FNbC affirmatively alleged that it held a first lien on Arizona
real estate owned by the baileys as security for their indebted-
ness, that the baileys sold that real estate and used $100,000
of the proceeds for a certificate of deposit, and that the baileys
pledged the certificate of deposit as a substitution of collateral
158 	16 NebRAskA APPeLLATe RePORTs

to FNbC on April 19, 2002, as consideration for financial
accommodation given by FNbC to bailey Tire and others, col-
lateralizing guaranties given by the baileys to FNbC.
FNbC alleged that it made the $350,000 loan to IMsh at
the baileys’ request to accommodate IMsh in the purchase of
assets owned by bailey Tire, which loan was guaranteed by the
baileys. FNbC further alleged that after IMsh failed to pay off
the loan guaranteed by the baileys, FNbC set off $57,726.17
against a certificate of deposit owned by the baileys to pay debt
owed to FNbC by IMsh.
FNbC alleged that in consideration of the accommodation
made by FNbC to the baileys and bailey Tire, the baileys
released FNbC from all claims against FNbC relating to the
guarantees made by the baileys. FNbC specifically alleged
that the baileys released FNbC from any claims that might be
available to the baileys with respect to the setoff of the baileys’
funds in FNbC’s bank.
FNbC asked that the baileys’ complaint be dismissed by the
district court.
4. FnBC F iles motion For summary J uDgment
On November 7, 2005, FNbC filed a motion for summary
judgment, seeking dismissal of the baileys’ complaint and
alleging that the pleadings and admissions on file, including
the exhibits attached to the pleadings, showed that there was no
genuine issue as to any material fact and that FNbC was entitled
to judgment as a matter of law.
5. B aileys F ile motion to amenD C omplaint
On November 14, 2005, the baileys filed a motion for leave
to amend their complaint. The baileys attached an amended
complaint draft to their motion. In the proposed amended com-
plaint, the baileys attempted to include claims for mutual mis-
take and fraudulent misrepresentation, as well as conversion, in
addition to what they alleged previously.
In one paragraph of the proposed amended complaint, the
baileys stated:
[The baileys] allege that at the time of the execution of
[the February 2002 amendment document] and [April
bAILey v. FIRsT NAT. bANk OF ChADRON 	159
Cite as 16 Neb. App. 153

2002 letter agreement,] they relied in good faith on the
representations of [FNbC], which held itself out to be
knowledgeable in such matters, that [an sbA] guaran-
tee was possible. In fact sbA regulations and operating
procedures forbade the approval of the loan the parties
contemplated. [FNbC’s] representation that an sbA guar-
antee was possible was untrue, was made with the inten-
tion that the [baileys] act upon the representation, was
recklessly or negligently made, and was a mistake “as
to a basic assumption on which the contract was made,”
and “ha[d] a material effect on the agreed exchange of
performances,” within the meaning of Restatement of the
Law of Contracts 2d, §§ 152-154. [The baileys] allege
further that [FNbC], as a national bank, held itself out as
an expert in financial matters and if it was not aware that
sbA regulations forbade the loan guarantee, it should have
been aware of that fact. [The baileys] therefore allege that
[FNbC] bears the risk of the mistake. . . . [The baileys]
would never have executed the contracts of February 1,
200[2] and April 3, 2002 had they been aware that an
sbA guarantee was not possible. In view of [FNbC’s]
misrepresentation regarding whether an sbA guarantee
was possible, [the baileys] are entitled to and do hereby
avoid the contract of February 1, 2002 as amended by
the letter agreement of April 3,[ ]2002. [The baileys]
show that they were induced to execute these contracts
as a result of [FNbC’s] negligent or reckless representa-
tions and that they have suffered damages as a result of
those representations.
The baileys alleged that they paid IMsh and its stockholders
$100,000 pursuant to the February 2002 amendment docu-
ment and that they would not have done so had it not been for
the contract formed by that document, which they alleged had
been made on FNbC’s assurance that an sbA loan guarantee
was possible. Further, with respect to FNbC’s setoff of the cer-
tificate of deposit “to pay the debts of IMsh and [the Darleys]
purportedly guarant[e]ed by [the baileys],” the baileys again
alleged that they would not have guaranteed these obligations
160 	16 NebRAskA APPeLLATe RePORTs

had it not been for the misrepresentations of FNbC concerning
whether an sbA loan guaranty was possible.
With regard to the alleged conversion of inventory, the baileys
specifically stated in the proposed amended complaint:
[FNbC] controlled the transaction between bailey Tire
and IMsh. At the direction of [FNbC], IMsh took inven-
tory not included in the sale. The wholesale value of this
inventory was $168,000, the retailer’s margin was approxi-
mately fifteen percent and the retail value was $193,200.
This inventory . . . was the property of bailey Tire. had
it not been for the wrongful act of [FNbC] in converting
this inventory, this sum would have been available . . . for
the reduction of the debt of bailey Tire to [FNbC]. [The
baileys] had guaranteed bailey Tire’s debt to [FNbC]. As
it was, the [baileys] were required to sell their home and
other personal assets to pay bailey Tire’s debt.
In their proposed amended complaint, the baileys sought
judgment in the sum of $350,926.17.
6. B aileys seek partial summary J uDgment
On November 28, 2005, the baileys filed a motion for partial
summary judgment. The baileys alleged that they were entitled
to judgment as a matter of law on the following issues:
1. The contracts attached to the Amended Complaint
were executed on the basis of negligent or reckless mis-
representations by [FNbC] or were the result of a mutual
mistake. In either event, the [baileys] are entitled to avoid
the contracts.
2. [FNbC] is liable to the [baileys] for the sum of
$57,726.17 as a result of the wrongful set-off alleged in
paragraph nine of the Amended Complaint.
3. [FNbC] is liable to the [baileys] in the sum of $100,000
as a result of the transfer of that sum by the [baileys] as
described in paragraph eight of the Amended Complaint.
7. D eCision By D istriCt C ourt
The district court heard the parties’ pending motions on
December 6, 2005. The parties’ arguments concerning the
motion to amend the complaint are not contained in the record
bAILey v. FIRsT NAT. bANk OF ChADRON 	161
Cite as 16 Neb. App. 153

before us, the record simply indicating “ARGUMeNTs OF
COUNseL heARD.” After hearing arguments on the motion
to amend, the court stated that the motion was denied. The
court subsequently entered an order on December 15 denying
the baileys’ motion to amend the complaint. In the December
15 order, the court stated that “after consideration of the plead-
ings, the original Complaint, the proposed Complaint and argu-
ment submitted by counsel, the Court [found] that [the baileys’]
Motion to Amend the original Complaint should be denied.”
The court did not further specify its reasons for the denial.
The district court also received evidence at the December 6,
2005, hearing with respect to the motions for summary judg-
ment. because the evidence received in support of the motions
for summary judgment was not considered by the court in
reaching its decision on the baileys’ motion to amend and
because our resolution of the baileys’ assignment of error with
respect to that decision is dispositive of this appeal, we have
not set forth any of the evidence received by the district court
in connection with the motions for summary judgment. On
December 29, the court entered an order denying the baileys’
motion for partial summary judgment and granting FNbC’s
motion for summary judgment. because they are not relevant
to our resolution of the present appeal, we have not further
detailed the district court’s findings with regard to the motions
for summary judgment.
III. AssIGNMeNTs OF eRROR
The baileys assert that the district court erred in (1) deny-
ing their motion to amend the complaint, (2) granting FNbC’s
motion for summary judgment, and (3) denying their motion for
partial summary judgment.
IV. sTANDARD OF ReVIeW
As stated above, this action was filed on June 21, 2005, and
thus, we apply the new rules for notice pleading. see Neb. Ct.
R. of Pldg. in Civ. Actions 1 (rev. 2004). Neither this court
nor the Nebraska supreme Court has previously discussed the
standard of review for denial of a motion to amend filed under
Neb. Ct. R. of Pldg. in Civ. Actions 15(a) (rev. 2003). because
162 	16 NebRAskA APPeLLATe RePORTs

Nebraska’s current notice pleading rules are modeled after the
Federal Rules of Civil Procedure, we look to federal decisions
for guidance. see Kellogg v. Nebraska Dept. of Corr. Servs.,
269 Neb. 40, 690 N.W.2d 574 (2005).
[1] Nebraska’s rule 15(a) provides, in relevant part, as follows:
A party may amend the party’s pleading once as a mat-
ter of course before a responsive pleading is served or,
if the pleading is one to which no responsive pleading is
permitted, the party may amend it within 30 days after it
is served. Otherwise a party may amend the party’s plead-
ing only by leave of court or by written consent of the
adverse party, and leave shall be freely given when justice
so requires.
similarly, Fed. R. Civ. P. 15(a) provides that once a responsive
pleading has been filed, “a party may amend the party’s plead-
ing only by leave of court or by written consent of the adverse
party; and leave shall be freely given when justice so requires.”
Under the liberal amendment policy of Federal Rule of
Civil Procedure 15(a), a district court’s denial of leave to
amend pleadings is appropriate only in those limited cir-
cumstances in which undue delay, bad faith on the part of
the moving partly [sic], futility of the amendment, or unfair
prejudice to the non-moving party can be demonstrated.
Roberson v. Hayti Police Dept., 241 F.3d 992, 995 (8th Cir.
2001), citing Foman v. Davis, 371 U.s. 178, 83 s. Ct. 227, 9 L.
ed. 2d 222 (1962).
Federal courts generally review the denial of a motion to
amend for an abuse of discretion. see, In re K-tel Intern., Inc.
Securities Litigation, 300 F.3d 881 (8th Cir. 2002); 6 Charles
Alan Wright et al., Federal Practice and Procedure § 1484 (2d
ed. 1990). Federal case law from the eighth Circuit indicates,
however, that the eighth Circuit reviews de novo the underly-
ing legal conclusion of whether the proposed amendments to a
complaint would have been futile. see, Marmo v. Tyson Fresh
Meats, Inc., 457 F.3d 748 (8th Cir. 2006); U.S. ex rel. Joshi
v. St. Luke’s Hosp., Inc., 441 F.3d 552 (8th Cir. 2006) (citing
U.S. ex rel. Gaudineer & Comito, L.L.P. v. Iowa, 269 F.3d 932
(8th Cir. 2001)), cert. denied 549 U.s. 881, 127 s. Ct. 189, 166
L. ed. 2d 142. see, also, Corsello v. Lincare, Inc., 428 F.3d
bAILey v. FIRsT NAT. bANk OF ChADRON 	163
Cite as 16 Neb. App. 153

1008 (11th Cir. 2005) (underlying legal conclusion of whether
particular amendment to complaint would have been futile is
reviewed de novo); Miller v. Calhoun County, 408 F.3d 803
(6th Cir. 2005) (where district court draws legal conclusion that
amendment would be futile, conclusion is reviewed de novo).
[2,3] We hereby adopt the federal standards of review out-
lined above. Accordingly, we review the district court’s denial
of the baileys’ motion to amend under Nebraska’s rule 15(a) for
an abuse of discretion. however, we review de novo any under-
lying legal conclusion that the proposed amendments would
be futile.
V. ANALysIs
1. D enial oF motion to amenD C omplaint
The baileys assert that the district court erred in denying
their motion to amend the complaint. The parties’ arguments
before the district court on the baileys’ motion to amend were
not recorded in the record, and the court denied the baileys’
motion to amend before it received any evidence in support of
or opposition to the parties’ motions for summary judgment.
The district court denied the baileys’ motion from the bench,
without stating its reasons for the denial, and it did not specify
its reasons for the denial in the subsequent order ruling on
the motion. The court did, however, specify that in denying
the motion, it considered the pleadings on file, the proposed
amended complaint, and argument submitted by counsel.
[4,5] With regard to Nebraska’s rule 15(a), it has been stated
of the federal rule 15(a) that
an abuse of discretion may be found if the court simply
denies the motion to amend without offering any explana-
tion. On the other hand, when the reasons for the denial
are readily apparent, the failure to include reasons is not a
per se abuse of discretion, although the better practice is to
state the reasons.
6 Charles Alan Wright et al., Federal Practice and Procedure
§ 1484 at 598-600 (2d ed. 1990). because the district court
in this case did not specifically state its reasons for its denial
of the motion to amend, we examine the record to see if the
reasons for the denial are readily apparent. We also take this
164 	16 NebRAskA APPeLLATe RePORTs

opportunity to state that the better practice for Nebraska trial
judges denying motions to amend under Nebraska’s rule 15(a)
is to state their reasons for such denial on the record, either
from the bench, in the order ruling on the motion, or both.
In determining whether the reasons for the denial are readily
apparent, we have examined the pleadings included in the tran-
script and the proposed amended complaint. Unfortunately, the
argument submitted by counsel was not preserved in the record
for our review. Although not evidence, such arguments would
have been helpful in our examination of the district court’s
denial of the baileys’ motion to amend. Meaningful appellate
review requires a record that elucidates the factors contributing
to the lower court judge’s decision. J.B. Contracting Servs. v.
Universal Surety Co., 261 Neb. 586, 624 N.W.2d 13 (2001). In
resolving this assignment of error, we have not considered any
of the exhibits introduced in support of the parties’ motions
for summary judgment, as those exhibits, while part of our
record on appeal, were not introduced into evidence in connec-
tion with the baileys’ motion to amend and made part of the
record of the hearing on the motion to amend. see Lockenour v.
Sculley, 8 Neb. App. 254, 592 N.W.2d 161 (1999) (in reviewing
decision of lower court, appellate court considers only evidence
included within record).
(a) Undue Delay, bad Faith, and Unfair Prejudice
We find no indication of undue delay, bad faith, or unfair
prejudice in the record. FNbC presents no arguments alleg-
ing that it would have been unfairly prejudiced had the district
court granted the baileys’ motion to amend the complaint.
FNbC’s arguments relate more directly to the futility of any
such amendment. For example, FNbC argues that the proposed
amended complaint “was equally vulnerable to summary judg-
ment.” brief for appellee at 16. We have addressed FNbC’s
arguments as to futility below.
[6,7] FNbC also argues that the baileys’ motion to amend
was made for the sole purpose of avoiding summary judgment.
To the extent that this argument can be seen as an argument that
the baileys’ motion was filed with undue delay or in bad faith,
we disagree. The baileys’ motion to amend, in large part, was
bAILey v. FIRsT NAT. bANk OF ChADRON 	165
Cite as 16 Neb. App. 153

premised on the parties’ alleged mutual mistake and FNbC’s
alleged misrepresentations as to the possibility of an sbA
guarantee of the loans to IMsh, Darley, and yanke, as well as
alleged misrepresentation by FNbC. The baileys argue that they
first learned that it had never been possible to obtain an sbA
LowDoc loan guaranty through discovery responses of FNbC
dated september 29, 2005. FNbC filed its motion for summary
judgment on November 7. The baileys filed their motion to
amend on November 14, a week after FNbC filed its motion
for summary judgment. even if waiting from september 29 to
November 14 to file the motion to amend could be considered
undue delay, “[d]elay alone is not a reason in and of itself to
deny leave to amend; the delay must have resulted in unfair
prejudice to the party opposing amendment.” Roberson v. Hayti
Police Dept., 241 F.3d 992, 995 (8th Cir. 2001). “‘The burden
of proof of prejudice is on the party opposing the amendment.’”
Id. We see no proof of prejudice in the record before us with
respect to the proposed amendment on the mutual mistake or
misrepresentation theories, and FNbC presents no arguments
to the contrary. We also note that requests for leave to amend
under federal rule 15(a) have, in fact, been granted at hear-
ings on motions to dismiss or for summary judgment. see 6
Charles Alan Wright et al., Federal Practice and Procedure
§ 1488 (2d ed. 1990).
With respect to the conversion claim, FNbC presents no
arguments in its brief on appeal stating specifically that there
was any undue delay or bad faith in the baileys’ motion to
amend with respect to the conversion claim or that it would have
been unfairly prejudiced in any way by such an amendment of
the original complaint.
It is not readily apparent from the record that the district
court denied the baileys’ motion to amend on the basis of bad
faith, undue delay, or unfair prejudice, and we conclude that a
denial for any of those reasons in this case would have consti-
tuted an abuse of discretion. however, we must still consider
whether the proposed amendments to the original complaint
would have been futile and whether it is readily apparent from
the record that the district court’s denial of the motion was
based on such futility.
166 	16 NebRAskA APPeLLATe RePORTs

(b) Futility of Amendment
We next consider by what standard to judge whether a
proposed amendment under rule 15(a) is futile. several fed-
eral courts hold that at a certain point in pretrial proceedings,
a motion to amend the complaint should be judged under a
standard comparable or identical to the standard for summary
judgment. see Richard henry seamon, An erie Obstacle to
State Tort Reform, 43 Idaho L. Rev. 37 (2006). The First Circuit
explains its rationale for applying such a standard as follows:
If leave to amend is sought before discovery is complete
and neither party has moved for summary judgment, the
accuracy of the “futility” label is gauged by reference
to the liberal criteria of Federal Rule of Civil Procedure
12(b)(6). . . . In this situation, amendment is not deemed
futile as long as the proposed amended complaint sets
forth a general scenario which, if proven, would entitle
the plaintiff to relief against the defendant on some cogni-
zable theory. . . . If, however, leave to amend is not sought
until after discovery has closed and a summary judgment
motion has been docketed, the proposed amendment must
be not only theoretically viable but also solidly grounded
in the record. . . . In that type of situation, an amendment
is properly classified as futile unless the allegations of the
proposed amended complaint are supported by substan-
tial evidence.
Hatch v. Department for Children, Youth & Families, 274 F.3d
12, 19 (1st Cir. 2001) (citations omitted). see, also, Bethany
Pharmacal Co., Inc. v. QVC, Inc., 241 F.3d 854 (7th Cir. 2001)
(amendment of complaint is futile if added claim would not
survive motion for summary judgment). but see Peoples v.
Sebring Capital Corp., 209 F.R.D. 428 (N.D. Ill. 2002) (when
no summary judgment motion pending, proposed amendment
futile only if it could not stand Fed. R. Civ. P. 12(b)(6) motion
to dismiss).
The second Circuit offers a similar explanation as follows:
It is true that when a cross-motion for leave to file an
amended complaint is made in response to a motion to
dismiss under Fed.R.Civ.P. 12(b)(6), leave to amend will
be denied as futile only if the proposed new claim cannot
bAILey v. FIRsT NAT. bANk OF ChADRON 	167
Cite as 16 Neb. App. 153

withstand a 12(b)(6) motion to dismiss for failure to state
a claim, i.e., if it appears beyond doubt that the plaintiff
can plead no set of facts that would entitle him to relief. .
. . however, the rule is different where, as here, the cross-
motion is made in response to a Fed.R.Civ.P. 56 motion
for summary judgment, and the parties have fully briefed
the issue whether the proposed amended complaint could
raise a genuine issue of fact and have presented all rele-
vant evidence in support of their positions. In the latter
situation, even if the amended complaint would state a
valid claim on its face, the court may deny the amendment
as futile when the evidence in support of the plaintiff’s
proposed new claim creates no triable issue of fact and the
defendant would be entitled to judgment as a matter of law
under Fed.R.Civ.P. 56(c).
Milanese v. Rust-Oleum Corp., 244 F.3d 104, 110 (2d Cir.
2001).
Other federal courts appear to not make such a clear distinc-
tion between the standard or standards used to judge futility at
various points in pretrial proceedings or simply apply the stan-
dard used to judge rule 12(b)(6) motions to dismiss. The eighth
Circuit has stated:
Although ordinarily the decision of whether to allow a
plaintiff to amend the complaint is within the trial court’s
discretion, when a court denies leave to amend on the
ground of futility, it means that the court reached a legal
conclusion that the amended complaint could not withstand
a Rule 12 motion.
In re Senior Cottages of America, LLC, 482 F.3d 997, 1001
(8th Cir. 2007). Other cases from the eighth Circuit indicate,
however, that leave to amend may be denied if the amended
pleading could be defeated by a motion for summary judgment
or dismissal. see, Holloway v. Dobbs, 715 F.2d 390 (8th Cir.
1983); Collyard v. Washington Capitals, 477 F. supp. 1247 (D.
Minn. 1979). We also note Rose v. Hartford Underwriters Ins.
Co., 203 F.3d 417 (6th Cir. 2000), a case from the sixth Circuit,
stating that the test for futility does not depend on whether
the proposed amendment could be potentially dismissed on a
motion for summary judgment; instead, a proposed amendment
168 	16 NebRAskA APPeLLATe RePORTs

is futile only if it could not withstand a rule 12(b)(6) motion
to dismiss.
[8] We find the explanations and rationale used and applied by
the First and second Circuits to be sound and hold that if leave
to amend is sought under Nebraska’s rule 15(a) before discovery
is complete and before a motion for summary judgment has been
filed, the question of whether such amendment would be futile
is judged by reference to Neb. Ct. R. of Pldg. in Civ. Actions
12(b)(6) (rev. 2003). Leave to amend in such circumstances
should be denied as futile only if the proposed amendment can-
not withstand a rule 12(b)(6) motion to dismiss. If, however, the
rule 15(a) motion is made in response to a motion for summary
judgment and the parties have presented all relevant evidence in
support of their positions, then the amendment should be denied
as futile only when the evidence in support of the proposed
amendment creates no triable issue of fact and the opposing
party would be entitled to judgment as a matter of law.
In the present case, we decline to apply the newly enunciated
standards for judging the question of futility, given that it does
not appear from the record that the question of futility was in
fact presented to and passed upon by the district court. In appel-
late proceedings, the examination by the appellate court is con-
fined to questions which have been determined by the trial court.
Watson v. Watson, 272 Neb. 647, 724 N.W.2d 24 (2006). In the
present case, it is not readily apparent from the record developed
in connection with the motion to amend that the district court
denied the baileys’ motion to amend on the basis of futility, and
we conclude that a denial on that basis would have constituted
an abuse of discretion.
2. ruling on summary J uDgment motions
[9] The baileys assert that the district court erred in granting
FNbC’s motion for summary judgment and in denying their
motion for partial summary judgment. Given our above resolu-
tion of the baileys’ first assignment of error, we need not decide
the baileys’ remaining assignments of error. An appellate court
is not obligated to engage in an analysis which is not needed to
adjudicate the controversy before it. Castillo v. Young, 272 Neb.
240, 720 N.W.2d 40 (2006).
bAILey v. FIRsT NAT. bANk OF ChADRON 	169
Cite as 16 Neb. App. 153

VI. CONCLUsION
The 	district 	court 	abused 	its 	discretion 	in 	denying 	the
baileys’ motion to amend the complaint. Accordingly, we
reverse, and remand for further proceedings consistent with the
above analysis.
reverseD anD remanDeD For
Further proCeeDings .
kristi a. shaFer , appellee , v . layne D. shaFer , appellant .
741 N.W.2d 173
Filed November 13, 2007. 	No. A-06-362.
1. Property Division: Alimony: Appeal and Error. The division of property is
entrusted to the discretion of the trial court and on appeal will be reviewed
de novo on the record and affirmed in the absence of an abuse of the trial
court’s discretion.
2. Alimony: Appeal and Error. In reviewing an award of alimony, an appellate
court does not determine whether it would have awarded the same alimony, but
whether the trial court’s award is untenable so as to deprive a party of a substantial
right or just relief.
3. Property Division: Proof. The burden of proof to show that property is a non-
marital asset remains with the person making the claim.
4. Property Division. how inherited property will be considered in determining the
division of property must depend upon the facts of the particular case and the
equities involved, and if an inheritance can be identified, it is to be set off to the
inheriting spouse and eliminated from the marital estate.
5. ____. Property acquired by one of the parties through gift or inheritance is ordi-
narily set off to such individual and not considered part of the estate unless the
party not receiving the inheritance or gift has substantially cared for the property
during the marriage.
6. Divorce: Equity. A divorce action sounds in equity.
Appeal from the District Court for Dawson County: J ames e.
D oyle iv, Judge. Affirmed as modified.
Claude e. berreckman, Jr., of berreckman & berreckman,
P.C., for appellant.
kent A. schroeder, of Ross, schroeder & George, L.L.C., for
appellee.
irwin , sievers, and C assel, Judges.
170 	16 NebRAskA APPeLLATe RePORTs