First State Bank Nebraska v. MP Nexlevel, LLCAnnotate this Case
The Supreme Court reversed the judgment of the district court dismissing First State Bank Nebraska's (First State) claims against MP Nexlevel, LLC seeking performance under a contract, holding that the district court erred in granting MP Nexlevel summary judgment and dismissing First State's complaint.
MP Nexlevel contracted to pay Husker Underground Utilities & Construction, LLC for construction services. Due to separate loan agreements, First State held a security interest in Husker Underground's accounts. When Husker Underground failed to meet its loan obligations, First State sought direct payment of MP Nexlevel's obligations under the contract. However, MP Nexlevel continued to submit its payments to Husker Underground. First State ultimately brought suit against MP Nexlevel for performance under the contract. The district court concluded that First State lacked standing. The Supreme Court reversed, holding (1) Neb. Rev. Stat. 9-406(a) imposed a duty on MP Nexlevel to discharge its obligations under its agreement with Husker Underground by paying directly to First State; (2) MP Nexlevel breached its obligations to First State; and (3) First State was authorized by Neb. Rev. Stat. 9-607(a)(3) to step into Husker Underground's place and enforce MP Nexlevel's contractual obligations as adjusted by operation of section 9-406(a).