Declaratory-Judgment Counterclaims Cannot Serve as Fee-Shifting Vehicles for Issues Already Joined
Read the Court's Opinion (PDF)
Judge Brian Stagner
In CRS Mechanical v. Norfolk Cold Storage, plaintiffs moved for summary judgment to dismiss defendants' declaratory-judgment counterclaim seeking declarations that no partnership existed and that mechanic's liens were invalid. The motion challenged whether defendants' requested declarations impermissibly duplicated issues already joined by plaintiffs' breach-of-fiduciary-duty claims or sought relief regarding Nebraska real property beyond the Court's jurisdiction.
Court Staff Summary
Granting Plaintiffs' motion for summary judgment against defendants' counterclaims for declaratory relief because each requested declaration either duplicates issues already joined by the pleadings or seeks relief beyond this Court’s jurisdiction.
Background: Partnership Dispute Over Nebraska Cold-Storage Facility
CRS Mechanical, Inc., CRS Mechanical of Nebraska, Inc., and Chris Allensworth sued Norfolk Cold Storage, LLC and Jon Tryggestad over an alleged 2021 partnership to renovate and operate a cold-storage facility in Norfolk, Nebraska. According to plaintiffs, the parties agreed that defendants would purchase the facility at a foreclosure sale, plaintiffs would perform the necessary renovations funded by defendants, and plaintiff Allensworth would receive an ownership interest in a to-be-formed entity. Plaintiffs alleged that in reliance on defendants' assurances, they refrained both from bidding at the foreclosure sale and from enforcing two preexisting mechanic's liens on the property. Plaintiffs contended that defendants, after securing control of the facility, ceased performance and excluded plaintiffs from all ownership and operations. The operative pleading asserted claims for breach of fiduciary duty, knowing participation, and common-law fraud.
The Counterclaim and Motion for Summary Judgment
Defendants denied all wrongdoing and filed a counterclaim on October 30, 2025, seeking three specific declarations: (1) that no contract, agreement, or partnership was formed between the parties; (2) that the mechanic's liens were never valid because, among other things, the liens did not comply with Nebraska law, neither CRS entity had a real estate improvement contract with the contracting owner of the Norfolk property, and neither CRS entity timely recorded the liens; and (3) a third declaration regarding the liens' status. Defendants also requested attorney's fees, expert fees, and costs under the Declaratory Judgments Act.
On September 12, 2025, plaintiffs moved for summary judgment on defendants' counterclaim, arguing that each requested declaration impermissibly duplicated issues already before the Court or sought relief beyond the Court's jurisdiction. The Business Court granted the motion in a November 14, 2025 memorandum opinion, concluding that the motion should be granted after carefully considering the pleadings, the summary-judgment briefing and evidence, the arguments of counsel, and applicable law.