Valley Boys v. American Family Ins. Co. , 306 Neb. 928 ( 2020 )


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    www.nebraska.gov/apps-courts-epub/
    11/06/2020 08:08 AM CST
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    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    VALLEY BOYS v. AMERICAN FAMILY INS. CO.
    Cite as 
    306 Neb. 928
    Valley Boys, Inc., doing business as Valley Boys
    Roofing, assignee, appellant and cross-appellee,
    v. American Family Insurance Company,
    appellee and cross-appellant.
    ___ N.W.2d ___
    Filed August 28, 2020.   No. S-19-528.
    1. Actions: Parties: Standing. Whether a party who commences an action
    has standing and is therefore the real party in interest presents a jurisdic-
    tional issue.
    2. Judgments: Jurisdiction: Appeal and Error. When a jurisdictional
    question does not involve a factual dispute, determination of a juris-
    dictional issue is a matter of law which requires an appellate court to
    reach a conclusion independent from the trial court’s; however, when
    a determination rests on factual findings, a trial court’s decision on the
    issue will be upheld unless the factual findings concerning jurisdiction
    are clearly incorrect.
    3. Judgments: Verdicts: Appeal and Error. Review of a ruling on a
    motion for judgment notwithstanding the verdict is de novo on the
    record.
    4. Judgments: Verdicts. To sustain a motion for judgment notwithstand-
    ing the verdict, the court resolves the controversy as a matter of law and
    may do so only when the facts are such that reasonable minds can draw
    but one conclusion.
    5. ____: ____. On a motion for judgment notwithstanding the verdict, the
    moving party is deemed to have admitted as true all the relevant evi-
    dence admitted that is favorable to the party against whom the motion
    is directed, and, further, the party against whom the motion is directed
    is entitled to the benefit of all proper inferences deducible from the rel-
    evant evidence.
    6. Contracts: Appeal and Error. The construction of a contract is a mat-
    ter of law, in connection with which an appellate court has an obligation
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    306 Neb. 928
    to reach an independent, correct conclusion irrespective of the determi-
    nations made by the court below.
    7.   Contracts: Assignments. An assignment is a contract between the
    assignor and the assignee, and is interpreted or construed according to
    the rules of contract construction.
    8.   Assignments: Debtors and Creditors: Standing. A debtor has stand-
    ing to challenge an assignment if it can show actual prejudice by the
    improper assignment, an injury that is directly traceable to the assign-
    ment, such as being at risk for paying the same debt twice, or by other-
    wise showing that the assignment is invalid, ineffective, or void.
    9.   Assignments: Parties. If there has been a valid and complete assign-
    ment of rights, then the assignee is the real party in interest.
    10.   ____: ____. If an assignment is invalid, then the purported assignor
    remains the real party in interest.
    11.   Actions: Parties: Standing: Jurisdiction. The question of whether a
    party who commences an action has standing and is therefore the real
    party in interest is jurisdictional.
    12.   Judgments: Jurisdiction: Appeal and Error. Aside from any fac-
    tual findings, the trial court’s ruling on subject matter jurisdiction is
    reviewed de novo, because it presents a question of law.
    13.   Contracts. A contract written in clear and unambiguous language is not
    subject to interpretation or construction and must be enforced according
    to its terms.
    14.   ____. The court must accord clear terms their plain and ordinary mean-
    ing as an ordinary or reasonable person would understand them.
    15.   ____. Instruments made in reference to and as part of the same transac-
    tion are to be considered and construed together.
    16.   Contracts: Proof. A party seeking to enforce a contract has the burden
    of establishing the existence of a valid, legally enforceable contract.
    17.   Contracts. It is a fundamental rule that in order to be binding, an agree-
    ment must be definite and certain as to the terms and requirements.
    18.   ____. Generally, mutuality of obligation is an essential element of every
    enforceable contract and consists in the obligation on each party to do,
    or permit something to be done, in consideration of the act or promise
    of the other.
    19.   ____. An agreement which depends upon the wish, will, or pleasure
    of one of the parties is illusory and does not constitute an enforce-
    able promise.
    20.   ____. Where the promisor retains an unlimited right to decide later the
    nature or extent of his or her performance, the promise is too indefinite
    for legal enforcement.
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    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    VALLEY BOYS v. AMERICAN FAMILY INS. CO.
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    306 Neb. 928
    21. Assignments: Consideration. An assignment is effective only when
    supported by valid consideration.
    22. Contracts: Consideration. Without a mutuality of obligation, the
    agreement lacks consideration and, accordingly, does not constitute an
    enforceable agreement.
    Appeal from the District Court for Douglas County: Shelly
    R. Stratman, Judge. Affirmed.
    Matthew P. Saathoff, of Saathoff Law Group, P.C., L.L.O.,
    and Larry E. Bache, Jr., and Michael W. Duffy, of Merlin Law
    Group, P.A., for appellant.
    Joel D. Nelson and Joel Bacon, of Keating, O’Gara, Nedved
    & Peter, P.C., L.L.O., for appellee.
    Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
    Papik, and Freudenberg, JJ.
    Funke, J.
    Valley Boys, Inc., doing business as Valley Boys Roofing
    (Valley Boys), appeals the order of the district court for Douglas
    County which granted in part judgment notwithstanding a
    jury verdict in favor of American Family Insurance Company
    (American Family). Valley Boys alleged that American Family
    failed to pay the full amounts due under postloss assignments
    of insurance proceeds. The court found that eight of Valley
    Boys’ nine assignments were unenforceable. We agree, and we
    affirm the order of the district court.
    BACKGROUND
    In the summer of 2014, nine homeowners sustained prop-
    erty damage in a hailstorm. The properties were insured under
    American Family’s “Gold Star Special Deluxe” homeowner’s
    insurance policy, which covered direct physical loss caused by
    hail. Eight of the nine policies included an endorsement enti-
    tling the homeowner insureds to proceeds for covered losses
    determined at actual cash value, or “the amount actually and
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    VALLEY BOYS v. AMERICAN FAMILY INS. CO.
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    306 Neb. 928
    necessarily spent” for replacement cost. 1 The ninth policy
    had an endorsement which covered actual cash value only. In
    damages estimates for claims under these policies, American
    Family defined actual cash value as “the cost to repair or
    replace a damaged item with an item of like kind and quality,
    less depreciation,” and replacement cost as “the cost to repair
    the damaged item with an item of like kind and quality, without
    deduction for depreciation.”
    The homeowners purportedly assigned their proceeds under
    the insurance policies to Valley Boys, a roofing company,
    which submitted the claims to American Family. American
    Family’s catastrophe adjusters inspected the properties and
    prepared initial damages estimates for each property. Based
    on these estimates, American Family paid the homeowners the
    actual cash value of their losses, which the homeowners then
    paid to Valley Boys. Under the insurance policies issued by
    American Family, the replacement costs would be paid only
    after the work was completed and final invoices were received.
    The policies further required the work to be completed within
    1 year of the date of the loss.
    Valley Boys sought to expand the scope of work origi-
    nally approved by American Family by submitting requests for
    acknowledgment of coverage for additional damage (RAAD’s).
    The RAAD’s listed descriptions of repair work Valley Boys
    recommended be done at the properties but did not provide
    itemized prices or a total price for such work. The cover let-
    ter to the RAAD’s stated that if Valley Boys did not receive a
    response within 5 business days, “we will be forced to begin
    necessary repairs and/or replacement in order to prevent fur-
    ther damage to the insured’s premises.” American Family did
    not agree to the RAAD’s, and Valley Boys did not complete
    that work.
    With respect to the initial scope of work based on American
    Family’s estimates, Valley Boys submitted invoices of work
    1
    See D & S Realty v. Markel Ins. Co., 
    284 Neb. 1
    , 
    816 N.W.2d 1
    (2012)
    (discussing actual cash value and replacement cost coverage).
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    VALLEY BOYS v. AMERICAN FAMILY INS. CO.
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    completed at the properties and demanded payment of the
    withheld depreciation. The invoices list descriptions of com-
    pleted work and provide a total price without price itemization.
    American Family issued supplemental payments for some of
    Valley Boys’ requests, but declined to cover other requests,
    contending that no proceeds were due.
    In April 2015, Valley Boys, as assignee, filed suit against
    American Family for failing to pay the full amount of repair
    and/or replacement costs due under the policies. Valley Boys
    requested a judgment for damages in the amount of $83,746.73
    and stated its damages would likely increase with further
    investigation. In its answer, American Family affirmatively
    alleged that Valley Boys lacked standing to bring the claims
    that it brought.
    In April 2017, American Family moved for summary judg-
    ment, contending that Valley Boys is not the real party in
    interest, because the assignments between the homeowners
    and Valley Boys were invalid. American Family argued that
    due to a lack of agreement on key terms, such as scope of
    work and price, the assignment contracts were unenforceable.
    American Family further argued that the assignments con-
    flicted with language in the endorsement which limits repair
    or replacement costs to those which are actually and necessar-
    ily spent.
    Following a hearing, the court entered a written order deny-
    ing American Family’s motion. In its order, the court first
    rejected Valley Boys’ argument that American Family lacked
    standing to challenge the assignments pursuant to Marcuzzo
    v. Bank of the West. 2 The court found that American Family
    had standing to argue the invalidity of the assignments on the
    theory that the assignment contracts altered American Family’s
    obligations under the insurance policies. The court then exam-
    ined the contractual language at issue and ultimately deter-
    mined there were triable issues of fact.
    2
    Marcuzzo v. Bank of the West, 
    290 Neb. 809
    , 
    862 N.W.2d 281
    (2015).
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    VALLEY BOYS v. AMERICAN FAMILY INS. CO.
    Cite as 
    306 Neb. 928
    The record indicates that Valley Boys and the homeowner
    insureds signed a document titled “Assignment of Insurance
    Claim.” The assignments, which all contain the same language,
    incorporate a contract by reference. The assignments provide:
    [I]n consideration of performing the work pursuant to
    the contract executed by [homeowners] and Valley Boys,
    as well as any change orders executed thereafter, and
    for other good and valuable consideration, [homeowners]
    hereby transfer, assign and set over onto Valley Boys, all
    of the right, title and interest [in] insurance claim(s) . . .
    covering loss sustained at the property . . . including but
    not limited to any and all insurance claims asserted there-
    under and proceeds thereof.
    Eight of the nine homeowner insureds contemporaneously
    signed a “Customer Service Agreement” (CSA). Under the
    terms and conditions of the CSA, the “Job Price” section states
    that Valley Boys will “provide material and labor services to
    the above described property within the scope of repairs and/or
    replacement to be submitted to the insurance company.” That
    section also states, “Due to the unique nature of repairs related
    to insurance claims, this contract may not include an explicit
    price because the final scope of repairs and/or replacement
    arising from the Claim has not yet been agreed upon with the
    insurer,” and “Valley Boys agrees to use customary industry
    pricing for the work, including general contractor markup at
    customary industry rates.” It further states, “Valley Boys’ per-
    formance under this agreement is contingent upon Valley Boys
    reaching agreement with the insurance company on the scope
    of repairs and/or replacement.”
    The “Scope of Work” provision of the CSA provides that
    “Valley Boys shall provide Customer with roofing and general
    contracting services, including labor and materials, as outlined
    in Exhibit A (the “Services”). Exhibit A sets forth the Services
    that Valley Boys shall provide Customer under Customer’s
    insurance claim(s).” (Emphasis supplied.) The provision also
    states, “Valley Boys will not perform and is not liable to
    perform any Services except those identified in Exhibit A,
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    VALLEY BOYS v. AMERICAN FAMILY INS. CO.
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    unless otherwise stated herein.” Valley Boys reserved the right
    to not perform the work specified in “Exhibit A” if it deter-
    mined the work was not “professionally necessary and/or appli-
    cable at the time of the work.” However, no “Exhibit A” was
    attached to any CSA herein, and there is no evidence either the
    homeowners or American Family ever received any documents
    labeled “Exhibit A.”
    The court found that because American Family had not
    fully denied any of the claims, there existed genuine issues of
    material fact regarding whether the parties, through subsequent
    conduct, established a definite agreement on scope of work
    and price.
    Lastly, the court considered American Family’s argument
    that the assignments materially changed its obligations under
    the insurance policies. Under the “Loss Value Determination”
    conditions of the endorsement found in eight of the policies, a
    section which concerns replacement costs states:
    Buildings insured at 100% of replacement cost will be
    settled at replacement cost, subject to the following:
    ....
    . . . [W]e will pay the cost to repair the damaged por-
    tion or replace the damaged building, provided repairs
    to the damaged portion or replacement of the damaged
    building are completed, but not exceeding . . . .
    ....
    . . . the amount actually and necessarily spent for repair
    of the damaged portion or replacement of the damaged
    building[.]
    American Family argued that the undefined “actually and
    necessarily spent” language limits the replacement costs it
    must pay. The court found this argument went to the issue of
    the agreed-upon scope of work, raising a question of fact for
    the jury.
    American Family then filed an offer to confess judgment
    in the amount of $20,000, which offer was not accepted. At
    trial, American Family moved for a directed verdict based on
    the invalidity of the assignments, which the court overruled.
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    VALLEY BOYS v. AMERICAN FAMILY INS. CO.
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    306 Neb. 928
    Following a 4-day trial, the jury returned a verdict in favor of
    Valley Boys in the amount of $62,841.06.
    American Family moved for judgment notwithstanding the
    verdict (JNOV), arguing that the assignments were indefinite,
    lacked consideration, and modified the insurer’s obligations.
    The court granted the motion as to the claims based on the
    eight assignments which incorporated a CSA, and it entered
    judgment in favor of Valley Boys for $1,586.07 in damages for
    the remaining claim.
    In its posttrial order, the court considered the language
    of the assignments which states that they were provided “in
    consideration of performing the work pursuant to the contract
    executed by [homeowners] and Valley Boys.” The court found
    that each assignment incorporated a CSA by reference and
    read each assignment and CSA together as a whole. The court
    returned to the CSA language which states that “Exhibit A”
    defines the scope of work. The court noted that the owner of
    Valley Boys acknowledged in his trial testimony that no CSA
    herein contained an “Exhibit A.” He testified that “Exhibit A”
    refers to RAAD’s and invoices, but conceded that these docu-
    ments are not titled “Exhibit A.”
    The court found that the record showed no agreement on
    scope of work or price and that as a result, the assignments
    were unenforceable due to lack of consideration. The court also
    found that even if Valley Boys and the homeowners had agreed
    upon an “Exhibit A” outlining the scope of work, under the
    CSA, Valley Boys retained the option to unilaterally determine
    that it would not perform any item in the agreed-upon scope
    of work. Consequently, the court ruled that each assignment
    and CSA was illusory and entered JNOV in favor of American
    Family with respect to eight of the claims.
    The court entered judgment in favor of Valley Boys on the
    ninth claim, because that claim was based on a “StraightForward
    Pricing” agreement rather than a CSA. The pricing agree-
    ment included an agreed-upon scope of work regarding com-
    pleted shingle replacement work, with itemized pricing and
    a total price of $2,828. The court found Valley Boys should
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    VALLEY BOYS v. AMERICAN FAMILY INS. CO.
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    recover for the work listed in the pricing agreement. The court
    subtracted the amount paid by American Family based on its
    estimate, $1,241.93, and awarded Valley Boys $1,241.93 for
    the ninth claim. Valley Boys appealed, and American Family
    cross-appealed. We moved this case to our docket on our
    own motion.
    ASSIGNMENTS OF ERROR
    Valley Boys assigns, restated, that the district court erred
    in (1) finding that American Family had standing to chal-
    lenge the assignments and (2) concluding that the assignments
    were invalid.
    American Family filed a cross-appeal which argues that if
    we reverse based on the reasoning of the district court, we
    should affirm on alternate grounds, because the assignments
    altered American Family’s duties under the insurance policies.
    STANDARD OF REVIEW
    [1,2] Whether a party who commences an action has stand-
    ing and is therefore the real party in interest presents a jurisdic-
    tional issue. 3 When a jurisdictional question does not involve
    a factual dispute, determination of a jurisdictional issue is a
    matter of law which requires an appellate court to reach a con-
    clusion independent from the trial court’s; however, when a
    determination rests on factual findings, a trial court’s decision
    on the issue will be upheld unless the factual findings concern-
    ing jurisdiction are clearly incorrect. 4
    [3-5] Review of a ruling on a motion for JNOV is de
    novo on the record. 5 To sustain a motion for JNOV, the court
    resolves the controversy as a matter of law and may do so only
    3
    Jacobs Engr. Group v. ConAgra Foods, 
    301 Neb. 38
    , 
    917 N.W.2d 435
        (2018), citing Countryside Co-op v. Harry A. Koch Co., 
    280 Neb. 795
    , 
    790 N.W.2d 873
    (2010), disapproved on other grounds, Weyh v. Gottsch, 
    303 Neb. 280
    , 
    929 N.W.2d 40
    (2019).
    4
    Western Ethanol Co. v. Midwest Renewable Energy, 
    305 Neb. 1
    , 
    938 N.W.2d 329
    (2020).
    5
    LeRette v. Howard, 
    300 Neb. 128
    , 
    912 N.W.2d 706
    (2018).
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    when the facts are such that reasonable minds can draw but
    one conclusion. 6 On a motion for JNOV, the moving party
    is deemed to have admitted as true all the relevant evidence
    admitted that is favorable to the party against whom the motion
    is directed, and, further, the party against whom the motion
    is directed is entitled to the benefit of all proper inferences
    deducible from the relevant evidence. 7
    [6] The construction of a contract is a matter of law, in
    connection with which an appellate court has an obligation to
    reach an independent, correct conclusion irrespective of the
    determinations made by the court below. 8
    ANALYSIS
    American Family Had Standing
    to Challenge Assignments
    Valley Boys argues that under our holding in Marcuzzo, 9
    American Family lacks standing to challenge the validity of
    the assignments, because American Family is not a party to
    the assignments. In contrast, American Family argues that the
    terms of the assignments altered its obligations under the insur-
    ance policies and that as a result, it has standing to challenge
    the validity of the assignments.
    [7] An assignment is a contract between the assignor and the
    assignee, and is interpreted or construed according to the rules
    of contract construction. 10 Nebraska law states that only a party
    (actual or alleged) to a contract can challenge its validity. 11
    In Marcuzzo, in the context of a mortgage assignment,
    we held that a borrower who alleges that an assignment is
    6
    Facilities Cost Mgmt. Group v. Otoe Cty. Sch. Dist., 
    298 Neb. 777
    , 
    906 N.W.2d 1
    (2018).
    7
    Id. 8
         Acklie v. Greater Omaha Packing Co., ante p. 108, 
    944 N.W.2d 297
         (2020).
    9
    Marcuzzo, supra note 2.
    10
    Western Ethanol Co., supra note 4.
    11
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    voidable, and who is not a party to a mortgage assignment or
    a third-party beneficiary of the assignment, lacks standing to
    challenge the assignment. 12 In that case, the borrower asserted
    that the wrong entity signed the assignment paperwork, an
    issue which we determined would not affect the validity of the
    assignment but would merely make the assignment voidable at
    the election of a party to the assignment. 13
    [8] Recently, however, this court discussed the recognized
    exception to the rule in Marcuzzo. 14 A debtor has standing to
    challenge an assignment if it can show actual prejudice by the
    improper assignment, an injury that is directly traceable to the
    assignment, such as being at risk for paying the same debt
    twice, or by otherwise showing that the assignment is invalid,
    ineffective, or void. 15 In Western Ethanol Co. v. Midwest
    Renewable Energy, 16 we held that a debtor had standing to
    challenge the assignment of a judgment based on the conten-
    tion that the debtor was at risk of paying the same debt twice.
    Here, American Family contends that it can show an injury that
    is directly traceable to the assignment.
    Generally, all contract rights may be assigned, unless the
    assignment would materially change the duty of the obligor
    or materially increase the obligor’s burden or risk under the
    contract. 17 An assignment does not affect or change any of
    the provisions of the contract. 18 The assignee of a chose in
    action acquires no greater rights than those of the assignor,
    and takes it subject to all the defenses existent at the time. 19 A
    12
    See Marcuzzo, supra note 2.
    13
    See
    id. 14
         See Western Ethanol Co., supra note 4.
    15
    Id. 16
    
    Id.
    17
    29 
    Richard A. Lord, A Treatise on the Law of Contracts by Samuel
    Williston § 74:10 (4th ed. 2003 & Supp. 2020); 3 Restatement (Second) of
    Contracts § 317(2) (1981).
    18
    Kasel v. Union Pacific RR. Co., 
    291 Neb. 226
    , 
    865 N.W.2d 734
    (2015).
    19
    Western Ethanol Co., supra note 4.
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    postloss assignment of insurance proceeds is allowed because
    it is essentially an assignment of a chose in action against the
    insurer; but such an assignment neither increases nor changes
    the insurer’s obligations under the policy. 20
    Although not controlling here, subsequent to the events in
    this case, the Legislature enacted Neb. Rev. Stat. § 44-8605
    (Cum. Supp. 2018), which sets forth requirements for postloss
    assignments of rights under insurance policies.
    Under the policies in this case, American Family acknowl-
    edges that it had an obligation to pay the replacement costs to
    repair the hail damage due upon the completion of the work
    and the receipt of invoices for the work. However, under the
    assignments, Valley Boys demanded payment for work that
    either was not agreed to by the parties or was not completed. As
    a result, the assignments altered American Family’s obligations
    and created the risk that American Family would pay more
    than what it was obligated to pay, resulting in an injury that
    is directly traceable to the assignment. Therefore, American
    Family has standing to challenge the assignments.
    The district court correctly found that American Family has
    standing to argue that the assignments between the homeown-
    ers and Valley Boys are invalid.
    Valley Boys Not Real
    Party in Interest
    Valley Boys argues the district court erred in determining
    that eight of the assignments were invalid and that Valley
    Boys is not the real party in interest with respect to the claims
    based on those assignments. Valley Boys further argues that
    the district court erred in not finding that the terms of the
    assignments, the repair work, and the handling of the insurance
    claims provide sufficient consideration.
    [9,10] Nebraska’s real party in interest statute provides that
    “[e]very action shall be prosecuted in the name of the real
    20
    See Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins. Co., 
    295 Neb. 419
    , 
    889 N.W.2d 596
    (2016).
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    party in interest . . . .” 21 The purpose of that section is to pre-
    vent the prosecution of actions by persons who have no right,
    title, or interest in the cause. 22 The focus of the real party in
    interest inquiry is whether the party has standing to sue due to
    some real interest in the cause of action, or a legal or equitable
    right, title, or interest in the subject matter of controversy. 23 If
    there has been a valid and complete assignment of rights, then
    the assignee is the real party in interest. 24 If an assignment
    is invalid, then the purported assignor remains the real party
    in interest. 25
    [11,12] The question of whether a party who commences
    an action has standing and is therefore the real party in inter-
    est is jurisdictional. 26 If a motion challenging a court’s subject
    matter jurisdiction is filed after the pleadings stage, and the
    court holds an evidentiary hearing and reviews evidence out-
    side the pleadings, it is considered a “factual challenge.” 27 The
    party opposing the motion must then offer affidavits or other
    relevant evidence to support its burden of establishing subject
    matter jurisdiction. 28 Where the trial court’s decision on subject
    matter jurisdiction is based on a factual challenge, the court’s
    factual findings are reviewed under the clearly erroneous stan-
    dard. 29 But aside from any factual findings, the trial court’s
    21
    Neb. Rev. Stat. § 25-301 (Reissue 2016).
    22
    Jacobs Engr. Group, supra note 3.
    23
    Id. 24
         See, Western Ethanol Co., supra note 4; Millard Gutter Co., supra note
    20; Archer v. Musick, 
    147 Neb. 1018
    , 
    25 N.W.2d 908
    (1947); John P.
    Lenich, Nebraska Civil Procedure § 6:4 (2020).
    25
    See, Earth Science Labs. v. Adkins & Wondra, P.C., 
    246 Neb. 798
    , 
    523 N.W.2d 254
    (1994); Lenich, supra note 24.
    26
    Jacobs Engr. Group, supra note 3.
    27
    Id., citing Washington v.
    Conley, 
    273 Neb. 908
    , 
    734 N.W.2d 306
    (2007).
    28
    Id. 29
         Western Ethanol Co., supra note 4.
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    r­ uling on subject matter jurisdiction is reviewed de novo,
    because it presents a question of law. 30
    Here, American Family challenged Valley Boys’ standing in
    its answer, motion for summary judgment, motion for directed
    verdict, and motion for JNOV. In considering American
    Family’s motion for JNOV, the court received the entire trial
    record and determined that Valley Boys lacked standing with
    respect to eight of the assignments.
    Valley Boys contends that the district court erred, because
    postloss assignments are a well-entrenched principle of
    Nebraska law and therefore Valley Boys was the real party in
    interest. In Millard Gutter Co. v. Farm Bureau Prop. & Cas.
    Ins. Co., 31 we held that as a general principle, a clause in an
    insurance policy restricting assignment does not in any way
    limit the policyholder’s power to make an assignment of the
    rights under the policy—consisting of the right to receive the
    proceeds of the policy—after a loss has occurred. However,
    American Family has not argued that the insurance policies or
    Nebraska law prohibits the homeowner insureds from assigning
    their postloss insurance proceeds. Rather, American Family’s
    challenge to the assignments concerns general contract prin-
    ciples. American Family contends, as the district court found,
    that the assignments are invalid because they are indefinite and
    lack consideration.
    [13-15] A contract written in clear and unambiguous lan-
    guage is not subject to interpretation or construction and must
    be enforced according to its terms. 32 The court must accord
    clear terms their plain and ordinary meaning as an ordinary
    or reasonable person would understand them. 33 Instruments
    30
    Id. 31
         Millard Gutter Co., supra note 20.
    32
    City of Sidney v. Municipal Energy Agency of Neb., 
    301 Neb. 147
    , 
    917 N.W.2d 826
    (2018).
    33
    Ray Anderson, Inc. v. Buck’s, Inc., 
    300 Neb. 434
    , 
    915 N.W.2d 36
    (2018).
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    made in reference to and as part of the same transaction are to
    be considered and construed together. 34
    [16-19] A party seeking to enforce a contract has the burden
    of establishing the existence of a valid, legally enforceable
    contract. 35 It is a fundamental rule that in order to be bind-
    ing, an agreement must be definite and certain as to the terms
    and requirements. 36 Generally, mutuality of obligation is an
    essential element of every enforceable contract and consists in
    the obligation on each party to do, or permit something to be
    done, in consideration of the act or promise of the other. 37 An
    agreement which depends upon the wish, will, or pleasure of
    one of the parties is illusory and does not constitute an enforce-
    able promise. 38
    In its order disposing of American Family’s motion for
    summary judgment, the district court found that each assign-
    ment which incorporated a CSA contained no definite agree-
    ment on scope of work or price. Nevertheless, the court
    overruled the motion to give Valley Boys the opportunity to
    present evidence at trial that the parties through their sub-
    sequent actions came to an enforceable agreement. 39 After
    reviewing American Family’s motion for JNOV with the ben-
    efit of all of the evidence admitted at trial, the court found
    the evidence showed that each assignment and CSA left scope
    34
    Id. 35
         Houghton v. Big Red Keno, 
    254 Neb. 81
    , 
    574 N.W.2d 494
    (1998).
    36
    Davco Realty Co. v. Picnic Foods, Inc., 
    198 Neb. 193
    , 
    252 N.W.2d 142
         (1977).
    37
    Johnson Lakes Dev. v. Central Neb. Pub. Power, 
    254 Neb. 418
    , 
    576 N.W.2d 806
    (1998).
    38
    Acklie, supra note 8.
    39
    See, Nebraska Nutrients v. Shepherd, 
    261 Neb. 723
    , 
    626 N.W.2d 472
         (2001), abrogated in part on other grounds, Sutton v. Killham, 
    285 Neb. 1
    ,
    
    825 N.W.2d 188
    (2013); MBH v. John Otte Oil & Propane, 
    15 Neb. Ct. App. 341
    , 
    727 N.W.2d 238
    (2007) (unenforceable agreement may then become
    enforceable when missing term is subsequently supplied by parties).
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    of work and price to be determined in the future and that no
    binding agreement had been reached.
    A review of the framework of insurance coverage in this
    case shows that “scope of work” and “price” are vital terms.
    The primary dispute was the amount of replacement costs due.
    Actual cash value is the value of the property in its depreci-
    ated condition. 40 The purpose of actual cash value coverage is
    indemnification to make the insured whole, not to benefit the
    insured because the loss occurred. 41 Unlike standard indemnity,
    replacement cost coverage places the insured in a better posi-
    tion than he or she was in before the loss. In essence, replace-
    ment cost coverage insures against the expected depreciation
    of the property. 42
    Here, the homeowner policies required work to be com-
    pleted prior to recovery of replacement costs and within 1 year
    from the date of loss. If the insured repairs or replaces the
    property within the time period stated in the policy, the insured
    will then be entitled to an additional payment for the amount
    by which the cost of the repair or replacement exceeded the
    actual cash value payment. 43
    However, under the assignment contracts, scope of work and
    price were left to be determined in the future, and no agreement
    ultimately was reached. As set forth in the CSA, Valley Boys’
    promise to perform was conditioned upon “reaching agreement
    with the insurance company on the scope of repairs and/or
    replacement.” However, Valley Boys never reached an agree-
    ment with American Family regarding the scope of repairs and
    replacement and therefore could not reach an agreement with
    the homeowners regarding the scope of work.
    As pointed out, the CSA required Valley Boys’ scope of
    work to be set forth in an “Exhibit A” but no “Exhibit A” can
    be found in our record. Valley Boys asserted that the RAAD’s
    40
    D & S Realty, supra note 1.
    41
    Id. 42
    
    Id.
    43
    
         Id.
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    and invoices constituted the scope of work and resolved the
    insufficiencies of the assignment contracts. However, the
    record does not show that the RAAD’s and invoices were
    ever sent to the homeowners. Additionally, there is no proof
    that Valley Boys agreed to perform the work described in the
    RAAD’s or that the homeowners agreed to pay for any such
    work. In addition, the RAAD’s included no itemized prices
    for work or materials, and no total price, making the RAAD’s
    vague and unenforceable.
    Moreover, even if there were an “Exhibit A,” the “Scope
    of Work” provision granted Valley Boys the unilateral right
    to decline to perform work specified in “Exhibit A” which it
    deemed unnecessary. The record indicates that the contract
    was drafted in a manner to protect Valley Boys from insurance
    company coverage denials or price disagreements.
    [20] Where the promisor retains an unlimited right to decide
    later the nature or extent of his or her performance, the promise
    is too indefinite for legal enforcement. 44 As such, the assign-
    ments which incorporated a CSA failed to set forth a sufficient
    scope of work, permitting Valley Boys unlimited discretion as
    to what work to perform, and are therefore unenforceable as a
    matter of law.
    With respect to price, Valley Boys argues the assignments
    themselves mutually acknowledged the receipt and sufficiency
    of good and valuable consideration. Nonetheless, the CSA
    makes clear that at the time of its execution, it did “not include
    an explicit price because the final scope of repairs and/or
    replacement arising from the Claim has not yet been agreed
    upon with the insurer.” The record at trial showed no subse-
    quent agreement as to price ever came to fruition.
    [21,22] An assignment is effective only when supported
    by valid consideration. 45 “‘[A] mere pretense of bargain does
    not suffice, as where there is a false recital of consideration
    or where the purported consideration is merely nominal. In
    44
    Acklie, supra note 8.
    45
    Ehlers v. Perry, 
    242 Neb. 208
    , 
    494 N.W.2d 325
    (1993).
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    such cases there is no consideration . . . .’” 46 Mutual promises
    may constitute consideration if they are given in exchange
    for each other and are equally obligatory on the parties so
    that each may have an action thereon. 47 Mutuality is absent
    when only one of the contracting parties is bound to perform,
    and the rights of the parties exist at the option of one only. 48
    Without a mutuality of obligation, the agreement lacks con-
    sideration and, accordingly, does not constitute an enforce-
    able agreement. 49
    Valley Boys claimed that the issue of price was satisfied
    by Valley Boys’ obligation to use customary industry pricing.
    Additionally, Valley Boys contends that when it provided esti-
    mates in the invoices using “Xactimate,” a computer software
    which estimates the scope of loss, pricing was established.
    A supervisor of catastrophe adjusters for American Family
    testified that Xactimate is one tool that American Family
    uses to estimate loss, in addition to industry guidelines and
    an adjuster’s experience. She testified that without itemized
    pricing, she could not interpret Valley Boys’ requests in the
    invoices. Valley Boys’ expert witness admitted that if two
    experienced adjusters looked at the same house and used
    Xactimate, they would come up with different numbers due to
    the human input that goes into estimates.
    The record before us makes clear that Valley Boys never
    reached an agreement with American Family regarding the
    scope of repairs and replacement and that therefore, Valley
    Boys never reached an agreement with the homeowners as
    to price. As such, the assignments which incorporated a CSA
    failed to set forth a sufficient price and are therefore unen-
    forceable as a matter of law.
    46
    Irwin v. West Gate Bank, 
    288 Neb. 353
    , 360, 
    848 N.W.2d 605
    , 610 (2014),
    quoting Restatement (Second) of Contracts § 71, comment b. (1981).
    47
    See De Los Santos v. Great Western Sugar Co., 
    217 Neb. 282
    , 
    348 N.W.2d 842
    (1984).
    48
    Johnson Lakes Dev., supra note 37.
    49
    Acklie, supra note 8.
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    Pursuant to our obligation to reach an independent correct
    conclusion irrespective of the determinations made by the court
    below, when the language of each assignment and CSA is con-
    strued together as a whole, and considered in the context of the
    evidence presented at trial, we conclude that there was no defi-
    nite, mutual agreement between the homeowner insureds and
    Valley Boys. As a result, no right to collect postloss insurance
    proceeds passed to Valley Boys under the assignments and
    Valley Boys is not the real party in interest for those claims.
    Because we determine that the assignments are unenforce-
    able under general contract principles, and because American
    Family’s cross-appeal asserts only an alternative basis for
    affirming and does not challenge the ninth claim, we need not
    address American Family’s cross-appeal.
    CONCLUSION
    For the foregoing reasons, the judgment of the district court
    is affirmed.
    Affirmed.