Konecne v. Abram, LLC

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
Meghan Konecne, Personal Representative of
the Estate of Howard Misle, appellee, v.
Abram, LLC, a Nebraska limited
liability company, appellant.
___ N.W.3d ___
Filed September 26, 2025. 	No. S-24-122.
1. Summary Judgment: Appeal and Error. An appellate court reviews
rulings on a motion for summary judgment de novo, viewing the record
in the light most favorable to the nonmoving party and drawing all
reasonable inferences in that party’s favor.
2. Limitations of Actions: Appeal and Error. The point at which a stat-
ute of limitations begins to run is a factual question to be determined
from the facts of each case, and, in an action at law, the decision
of the fact finder will not be set aside by an appellate court unless
clearly wrong.
3. Recoupment. Recoupment is, in effect, a defense of reduction.
4. ____. Recoupment is merely defensive in that it does not seek an affir-
mative judgment in the action.
5. ____. Recoupment is an affirmative defense.
6. Limitations of Actions: Recoupment. The defense of recoupment is
not barred by a statute of limitations.
7. ____: ____. The defense of recoupment must arise out of the same
transaction or occurrence as the plaintiff’s cause of action, and it sur-
vives as long as the plaintiff’s cause of action exists, even if affirma-
tive legal action upon the subject of recoupment is barred by the statute
of limitations.
8. Claims: Recoupment: Words and Phrases. The “same transaction”
inquiry concerns whether the parties’ claims arise from the same trans-
action between the parties.
9. Limitations of Actions. When the discovery rule is applicable, the run-
ning of the statute of limitations is tolled until the discovery of the cause
of action.
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
10/14/2026 07:59 AM CDT

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
10. Limitations of Actions: Words and Phrases. “Discovery of a cause
of action” occurs when there is knowledge of facts constituting the
basis of the cause of action or awareness of the existence of facts
sufficient to put a person of ordinary intelligence and prudence on
inquiry, which, if pursued, would lead to the discovery of the cause
of action.
11. Limitations of Actions: Notice. The question as to a plaintiff’s knowl-
edge of the facts which should have put a person of ordinary intelligence
and prudence on notice is a question of fact.
12. Principal and Agent: Words and Phrases. An “agent” is a person
authorized by the principal to act on the principal’s behalf and under the
principal’s control.
13. Principal and Agent. As a general rule, the knowledge of an agent is
imputed to his principal.
14. ____. Generally, whether an agency relationship exists and the scope of
an agent’s authority present questions of fact.
15. Judgments: Appeal and Error. In a bench trial of a law action, the trial
court’s factual findings have the effect of a jury verdict and will not be
disturbed on appeal unless clearly wrong.
16. Corporations: Stock. As a general rule, two separate corporations are
regarded as distinct legal entities even if the stock of one is owned
wholly or partly by the other.
17. Principal and Agent: Notice. Notice of facts will be imputed only
to the principal for whom and in whose interest an agent acted at
the time.
18. Actions: Parties: Time. Plaintiffs, including cross-plaintiffs, are
bound by their knowledge as to specific facts occurring in specific
timeframes.
19. Actions. Discovery does not occur until there is at least an awareness of
the existence of specific facts, which, if pursued, would have led to the
discovery of the specific cause of action.
20. Principal and Agent: Notice. Notice to the agent is notice to the prin-
cipal only when the agent is acting within the scope of its authority, and
an agent’s powers may be limited or restricted.
21. Principal and Agent: Corporations. In the case of an officer or agent
of a private corporation dealing with its funds, the authority of such offi-
cer or agent is not known to all but depends upon the authority conferred
upon him by the corporation which he represents.
22. Limitations of Actions: Fraud. Under Neb. Rev. Stat. § 25-207(4)
(Reissue 2016), the statute of limitations is not tolled. Instead, the
accrual of the cause of action does not occur until the fraud is discovered.

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
23. Appeal and Error. To be considered by an appellate court, an alleged
error must be both specifically assigned and specifically argued in the
brief of the party assigning the error.
Appeal from the District Court for Lancaster County: Kevin
R. McManaman, Judge. Affirmed in part, and in part reversed
and remanded for further proceedings.
Sara A. Pernicek and Lawrence K. Sheehan, of Ellick, Jones,
Buelt, Blazek & Longo, L.L.P., for appellant.
Robert S. Sherrets, of Sherrets, Bruno & Vogt, L.L.C., for
appellee.
Funke, C.J., Cassel, Stacy, Papik, and Freudenberg, JJ.
Freudenberg, J.
I. INTRODUCTION
This appeal arises out of an action commenced by Howard
Misle (Howard) against Abram, LLC, on a promissory note.
While the action was pending below, it was revived in the
name 	of 	the 	personal 	representative 	of 	Howard’s 	estate,
which, in the interest of clarity, we also refer to as “Howard.”
At issue on appeal is the availability of Abram’s affirmative
defense of recoupment based on a purported 2007 overpay-
ment on the note, the tolling of the statute of limitations on
Abram’s counterclaims related to that overpayment, and the
district court’s adoption of Howard’s calculation of interest
on the note.
The district court granted summary judgment in favor of
Howard on the issue of recoupment, concluding that the 2007
payment for which Abram sought recoupment was from a
separate transaction; thus, any credit due was not recoverable.
Later, after a trial on the limited issue of Howard’s statute
of limitations defense to Abram’s counterclaims, the court
concluded that the statute of limitations on Abram’s counter-
claims had run and was not tolled. The court ordered Howard

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
to provide an interest calculation on the stipulated amount
due on the note and subsequently adopted Howard’s interest
calculation without holding an evidentiary hearing or trial on
the issue. Thereafter, the court denied Abram’s objection to the
calculation, concluding that the amount of interest was only
“a math question,” and entered judgment in favor of Howard.
As detailed below, we affirm in part, and in part reverse and
remand for further proceedings.
II. BACKGROUND
1. Misle Family and Entity Structure
The factual scenario underpinning this action flows from
the death of Howard’s father, Abram Misle. Abram Misle
was survived by his wife, Helen Misle, and their four chil-
dren: Howard, Linda Shrier (Linda), Marsha Misle-Haugland
(Marsha), and Gayle Misle (collectively the family). In accord-
ance with Abram Misle’s will, a trust (Misle Trust) was estab-
lished for the benefit of Helen Misle in late 2003.
The trust was funded with 100 percent of the shares of O
Street Development Company (O Street Development), which
was the sole member of Abram. Abram owned a single mort-
gaged property, which we refer to as “Park Place.” Helen Misle
was the president of O Street Development, while Marsha was
the trustee of the Misle Trust and the manager of Abram. The
Misle Trust, O Street Development, and Abram, as well as
Helen Misle and Marsha personally, were clients of the same
accountant.
2. Abram Business
(a) Early Years (2003 to 2005)
In 2003, due to the loss of Park Place’s tenant, Abram was
unable to make its mortgage payments. To meet Abram’s obli-
gations, the family individually contributed various amounts of
personal funds. By the end of 2003 or early 2004, Howard was
the only family member contributing funds to Abram.

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
As a result, in 2004, Howard, as lender, and Abram, as bor-
rower, executed a promissory note with a $500,000 line of
credit “at the [interest] rate of three percent (3%) per annum,”
payable on demand. The promissory note was secured by a
deed of trust for Park Place. Due to continued payments by
Howard, in 2005, the promissory note was modified to extend
the line of credit to $5 million. At that time, Marsha resigned
as manager of Abram and Howard became the manager.
(b) Howard and Sale of Park
Place (2005 to 2007)
From 2005 to 2007, Abram’s expenses were paid solely
by Howard’s advances on the note. Due to Abram’s state of
affairs, in 2007, Howard, in his role as manager of Abram,
decided to sell Park Place. Under Abram’s operating agree-
ment, the manager had full unilateral authority to sell and
purchase real property and the manager had no obligation to
provide any information to O Street Properties or the Misle
Trust. Still, Howard discussed his plan to sell the property with
the family, and no one in the family objected.
Abram closed on a sale of Park Place in February 2007.
Howard was unable to attend the closing, so he provided the
accountant limited power of attorney for the day of closing
the sale. The funds from the sale were used in part to pay off
the current balance on the promissory note, reimburse the fam-
ily for its various contributions, and satisfy other debts.
Relevant to this appeal, the accountant was involved in
coordinating the activities with the title company to complete
the sale of Park Place and with Howard regarding any needed
signatures. The accountant was instructed by Howard to pay
the balance on the promissory note, with 9 percent interest.
Howard provided the accountant with information concern-
ing the amount of the advances made on the note and never
provided the accountant with a copy of the note. Howard also
instructed the accountant to separately reimburse him for the
advances he had made to Helen Misle on behalf of Abram.

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
The seller’s statement indicates, and the parties do not
dispute, that Howard received two relevant sums itemized as
(1) “Payoff Howard[’s] lien” and (2) “Reimburse Howard[’s]
advance to Helen Misle.” After the closing, the accountant
drafted a separate “seller’s statement,” because “[s]ometimes,
settlement statements that come from a title company can be
confusing” and the accountant wanted “to make it as simple
as [he] could” and “concisely put on one page.” This docu-
ment indicates the same two sums paid to Howard and also
notes that the lien payoff included “interest at 9%.” The
accountant maintained a copy of this document in his client
files at his firm.
(c) Howard and Pennsylvania
Properties (2008 to 2010)
Abram’s remaining share of the proceeds from the sale of
Park Place was reinvested through a “1031 exchange.” 1 The
1031 exchange required a replacement property to be identified
within 45 days of the sale, and the purchase of the replacement
property needed to close within 6 months. 2
As for identifying a replacement property, Howard’s original
plan was to purchase a discount store “in Scottsdale,” which
was “very lucrative” and “was going to have good cash flow
in a very prosperous area.” However, “[o]n the 44th day of the
45-day replacement period,” Howard chose to forgo purchas-
ing the discount store and, instead, purchased three strip malls
in Pennsylvania (Pennsylvania properties) that his friend had
found. Howard instructed the accountant “generally” not to tell
anyone about the transaction. In the end, Abram owned two of
the strip malls and the newly formed Misle Properties, LLC,
owned the third one. Nothing concerning Misle Properties is at
issue in this appeal.
1 See I.R.C. § 1031 (2018).
2 See id.

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
After acquiring the Pennsylvania properties, Howard hired
his friend as property manager. However, by all accounts,
that decision was a poor one, as the Pennsylvania proper-
ties quickly “were in bad financial shape.” In addition to the
friend’s purported mismanagement, the Pennsylvania proper-
ties suffered a loss of tenants due to the “2007, 2008 . . . reces-
sionary environment.” Due to the lack of revenue generation,
the Pennsylvania properties were operating at a loss, and in
July 2008, Howard began making more advances to Abram on
the promissory note.
In 2010, Howard resigned as manager of Abram, and Linda
replaced him. However, Howard continued to advance Abram
money on the promissory note.
(d) Linda and Pennsylvania
Properties (2010 to 2016)
With Abram in a failing financial condition, Linda began
managing 	the 	Pennsylvania 	properties. 	Linda 	focused 	on
reorganizing the strip malls, finding tenants, and recovering
unpaid rents. When Linda took over as manager of Abram, she
received only “a real thin little folder” of documents regarding
the management of the Pennsylvania properties. She proceeded
to receive copies of the leases from the accountant and worked
with someone at his accounting firm to “recreate” business
files on the properties.
In 2010, the family considered filing a lawsuit against
Howard’s friend for his mismanagement of the Pennsylvania
properties. There was also discussion somewhere between 2010
and 2013 by Marsha, Linda, and the accountant as to whether
to file a lawsuit against Howard for his decision to invest in
the Pennsylvania properties instead of the discount store “in
Scottsdale.” Ultimately, it was decided that no lawsuit would
be filed and that instead, Abram’s focus and efforts would be
placed on making the Pennsylvania properties profitable. No
discussion was ever had about the possibility of filing suit
against Howard concerning the sale of Park Place.

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
In 2014, Misle Properties, owner of the third strip mall,
declared bankruptcy. A complete refinancing of the Pennsylvania
properties for both Misle Properties and Abram was completed
in 2016. The bankruptcy and subsequent refinancing were
handled by Marsha. Howard continued to make advances to
Abram on the promissory note until the Pennsylvania proper-
ties became profitable in 2016.
3. Abram’s “Discovery” of Overpayment
In 2018 and 2019, Gayle Misle’s relationships with Marsha
and Linda soured for undisclosed reasons. Gayle Misle filed
suit against Linda and Marsha, wherein she alleged various
breaches of their duties to the Misle Trust concerning the
acquisition and management of the Pennsylvania properties.
As a result of the discovery in Gayle Misle’s lawsuit, Abram
received copies of (1) the 2004 promissory note between
Howard and Abram and (2) the 2007 “seller’s statement” pre-
pared by the accountant after the sale of Park Place.
In the instant action, Abram asserted that it was not until the
receipt of these two documents that Abram became aware of
Howard’s alleged misdeeds related to the sale of Park Place,
giving rise to its affirmative defense of recoupment and its
counterclaims in this case.
4. Instant Action
(a) Pleadings and Stipulations
Howard made a written demand for full repayment of the
promissory note in January 2020. Payment was not made by
Abram, and Howard instituted the instant action for repayment
of the amount due, plus interest.
Abram disputed the total amount due on the note. Abram
asserted that it was entitled to recoupment because in clos-
ing the sale of Park Place, Howard was paid (1) more than
what “his records” showed was the amount of advanced
funds between 2003 and 2007; (2) 9 percent interest instead
of 3 percent as called for by the note; (3) for four mortgage

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
payments made by Helen Misle, not Howard; and (4) for a
personal loan he made to Helen Misle, not Abram. Applying
the same reasoning, Abram also asserted two counterclaims:
breach of fiduciary duty and fraudulent concealment.
Eventually, the parties stipulated that the promissory note
required Abram to pay the principal amount of all advances
made on the note plus 3 percent interest. The parties also stipu-
lated to the total amount advanced by Howard and the total
amount repaid by Abram from 2008 to 2016.
(b) Summary Judgment Proceedings
In the summary judgment order applicable to this appeal,
the district court granted Howard’s related motion in part. The
court’s resolutions of two issues are relevant on appeal.
First is the court’s conclusion that, in light of the parties’
stipulations, there was no genuine dispute as to the outstand-
ing principal balance on the note subject to (1) a determination
on the validity of Abram’s counterclaims and (2) a calcula-
tion of the interest owed to Howard on the unpaid principal
balance. Due to the parties’ stipulations, the court also found
that no dispute of material fact existed that the series of
advances and payments between 2008 and 2016 were made
on the promissory note and amended promissory note and
that Howard was entitled to interest under the note. The court
“expressly reserve[ed]” the calculation of interest “to take
place at a later date.”
Second, the court granted summary judgment in Howard’s
favor on Abram’s defense of recoupment. Quoting Qualsett v.
Abrahams, 3 the court concluded that the defense failed as a
matter of law because recoupment “would only be applicable
if Abram ‘has a claim for damages against [Howard] aris-
ing out of the very same transaction from which [Howard]
seeks to recover.’” It noted that Howard’s claim on the
promissory note “arises out of the 21 advances he made to
3 Qualsett v. Abrahams, 23 Neb. App. 958, 879 N.W.3d 392 (2016).

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319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
Abram,” starting in July 2008, and, relying on opinions of
the U.S. Courts of Appeals for the Third and Eighth Circuits, 4
reasoned that “[t]he mere fact that there was an ongoing
contractual relationship [was] insufficient to meet the same
transaction requirement of recoupment.” The court concluded
that Abram’s defense of recoupment did not satisfy the same
transaction test for the defense of recoupment because Abram
sought to recover money from transactions separate and dis-
tinct “both in time and purpose” from the claim Howard
sought to recover on.
(c) Statute of Limitations Trial
The district court bifurcated the remaining trial issues and
held a bench trial on the limited issue of Howard’s affirma-
tive defense that the statute of limitations had run on Abram’s
counterclaims for breach of fiduciary duty and fraudulent
concealment. 5 At trial, three witnesses testified in support of
Abram: Linda, Marsha, and Abram’s accountant. The trial evi-
dence showed the facts and circumstances of Abram’s activities
from 2003 to 2019 as set forth above.
The parties did not dispute that Abram’s counterclaims
accrued upon the disbursement of funds to Howard from the
sale of Park Place in 2007. However, Abram contended that
the running of the statute of limitations was tolled under the
discovery rule, due to Howard’s alleged fraudulent conceal-
ment, or both. In response, Howard argued that the three wit-
nesses—Linda, Marsha, and Abram’s accountant—were agents
of Abram and that the limitations period was not tolled because
they each had knowledge of or were on inquiry of Abram’s
claims, they did not exercise due diligence to discover them,
and Howard did not conceal any facts that prevented them
from discovering the claims.
4 See, U.S. on behalf of Postal Serv. v. Dewey Freight, 31 F.3d 620 (8th Cir.
1994); In re University Medical Center, 973 F.2d 1065 (3d Cir. 1992).
5 See Neb. Rev. Stat. § 25-221 (Reissue 2016).

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
In its judgment, the court first determined that the statute
of limitations was not tolled by the discovery rule. The court
found that Abram’s three witnesses—Marsha as trustee of the
Misle Trust, Linda as manager of Abram, and Abram’s accoun-
tant—were agents of Abram and were on notice or had knowl-
edge of Abram’s claims against Howard.
Relevant to this appeal, the court found that Linda and
Marsha were on notice and Abram’s accountant had actual
knowledge of the claims. Specifically, Marsha was “aware
of the financial problems facing the Pennsylvania [p]roper-
ties as early as 2010” and considered suing Howard over his
purchase of the Pennsylvania properties. “This means, Abram
considered suing Howard over the very same transaction as the
underlying sale [of Park Place].” The court concluded that it
was unreasonable for Marsha, as trustee, to fail to review the
records related to the sale of Park Place and the 1031 exchange
for the Pennsylvania properties—Abram’s “one transaction.”
Similarly, Linda was on notice because her consideration of fil-
ing a lawsuit against Howard “reveal[ed] she was on notice of
an issue related to Howard’s management of Abram.” Finally,
Abram’s accountant had “clear and complete knowledge” of
the amounts Howard was paid from the sale of Park Place, and
that “knowledge is fully and completely imputed onto Abram.”
Thus, the court reasoned, it was impossible to toll the statute of
limitations under the discovery rule.
Turning to Abram’s claim of fraudulent concealment, the
court found that the statute of limitations was not tolled
because Abram did not adduce evidence that showed Howard
fraudulently concealed any information or established that it
had exercised due diligence. It reasoned that the seller’s state-
ment was in the accountant’s possession, and both Marsha
and Linda had access to it, and that Howard’s instruction
to the accountant not to tell any of the family members
details about the 1031 exchange was a “much more general”

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
statement so that Howard’s decisions would not be second-
guessed. In sum:
Abram, and its’ [sic] agents, had knowledge of the sale
and knowledge that Howard was getting reimbursed as a
part of the sale. Linda testified that to “uncover Abram’s
claim,” she merely had to “look” at the [seller’s state-
ment]. The same document that was in [the accountant’s]
files the entire time.
With Abram’s counterclaims resolved, the court ordered
Howard to submit an “interest calculation and a draft final
order on its claim” for the balance on the promissory note.
(d) Interest Calculation and Objection
In accordance with the court’s order, Howard submitted
an interest calculation. Abram filed an objection to Howard’s
interest calculation. Abram asserted that the amount of interest
was still in dispute, particularly the correct rate of interest—
whether it was compound or simple interest. Abram also took
issue with the imposition of interest because Linda was not
aware of the promissory note when she was manager of Abram
and Howard never discussed the issue of interest with her.
Howard resisted Abram’s objection. Citing the court’s prior
summary judgment order and the parties’ prior stipulation, he
argued that the court had previously determined that all of the
advances were pursuant to the promissory note and, there-
fore, were subject to 3 percent interest. Conversely, Abram
contended that the court’s prior summary judgment order,
wherein it “expressly reserve[ed]” the calculation of interest
“to take place at a later date,” left the correct calculation of
interest in dispute.
The court overruled Abram’s objection. In doing so, the
court noted that it had previously found that the amounts owed
were subject to a 3-percent interest rate. The court adopted
Howard’s interest calculation and entered judgment in favor
of Howard.

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Nebraska Supreme Court Advance Sheets
319 Nebraska Reports
KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
Abram timely appealed, and we moved this appeal to our
docket on our own motion. 6
III. ASSIGNMENTS OF ERROR
Abram assigns, restated, that the district court erred in
finding that (1) there was no genuine issue of fact and grant-
ing summary judgment in Howard’s favor on its affirmative
defense of recoupment and (2) the statute of limitations related
to Abram’s counterclaims was not tolled. Abram also assigns
that the court erred (3) by not having a trial regarding the issue
of interest and (4) in its adopted calculation of interest.
IV. STANDARD OF REVIEW
[1] An appellate court reviews rulings on a motion for sum-
mary judgment de novo, viewing the record in the light most
favorable to the nonmoving party and drawing all reasonable
inferences in that party’s favor. 7
[2] The point at which a statute of limitations begins to run is
a factual question to be determined from the facts of each case,
and, in an action at law, the decision of the fact finder will not
be set aside by an appellate court unless clearly wrong. 8
V. ANALYSIS
1. Defense of Recoupment
Abram first challenges the district court’s granting of sum-
mary judgment in Howard’s favor on its defense of recoupment.
Specifically, it contends that the court erred in concluding that
6 See, Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2024); Neb. Ct. R. App. P.
§ 2-102(C) (rev. 2022).
7 Galloway v. Husker Auto Group, 318 Neb. 178, 14 N.W.3d 218 (2024);
Ronnfeldt Farms v. Arp, 317 Neb. 690, 11 N.W.3d 371 (2024).
8 See, Zook v. Zook, 312 Neb. 128, 978 N.W.2d 156 (2022); Guinn v.
Murray, 286 Neb. 584, 837 N.W.2d 805 (2013); Vrbsky v. Arendt, 119
Neb. 443, 229 N.W. 337 (1930).

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KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
the payments to Howard upon the sale of Park Place consti-
tuted a separate transaction. By contrast, Howard responds
that the loans at issue in this case were made between 2008
and 2016, whereas the loans made between 2003 and 2007
were “on a completely separate loan,” which was “finalized”
by the payment from Abram after the sale of Park Place. 9 We
agree in part with both parties. Before setting forth our rea-
soning, it is first prudent to review both the development and
the legal principles of recoupment.
(a) Development of Recoupment
Recoupment, originally called recouper, is an ancient legal
concept that dates back to at least the reign of Henry VIII. 10
Under early common law, all actions and suits were confined
to the single subject of the litigation. 11 In the interest of judi-
cial economy and to address the resulting narrow remedies
and harsh results, courts of equity began to recognize recoup-
ment, setoff, and, later, cross-demands and counterclaims. 12
Many of these principles were also made available in courts
of law and adopted by statute. 13
As a leading 19th-century treatise observed, the defense of
recoupment is a creature of common law whereby “the defend-
ant was entitled to show that the plaintiff had not sustained
damages to the extent alleged, and thus to reduce, or altogether
9 Brief for appellee at 16.
10 See, generally, Theodore Sedgwick, Treatise on the Measure of Damages,
ch. XVII (4th ed. 1868); Thomas W. Waterman, Treatise on the Law of
Set-Off, Recoupment, and Counter-Claim, ch. X, § 417 (1869); Charles E.
Clark, Handbook of the Law of Code Pleading, ch. 10 (1928).
11 Id.
12 Id.
13 Id.

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KONECNE v. ABRAM, LLC
Cite as 319 Neb. 966
to defeat, the plaintiff’s recovery.” 14 The defendant’s right
of recoupment was “in the earlier period of the law, of very
limited application.” 15 As another treatise succinctly stated,
“[recoupment] was limited to a showing of payment, or of
former recovery.” 16 Recoupment, “in its original sense, was a
mere right of deduction.” 17
However, by the late 19th century, the defense of recoup-
ment was expanded to “allow a defendant to show for the
purpose of reducing the plaintiff’s recovery any facts arising
out of the transaction sued upon or connected with the subject
thereof, which facts might have founded an independent action
in favor of the defendant against the plaintiff.” 18 To properly
raise a defense of recoupment,
[i]t [is] not necessary that the opposing claims be liqui-
dated, nor that they be of the same character; i. e., a claim
in “tort” [can] be set off against one in “contract.” It [is]
essential, however, that the claims of both plaintiff and
defendant involve the same “subject-matter,” or arise out
14 Waterman, supra note 10, ch. X, § 416 at 466. See, In re B & L Oil
Co., 782 F.2d 155, 157 (10th Cir. 1986) (“[r]ecoupment originated as an
equitable rule of joinder”); Lee v. Schweiker, 739 F.2d 870, 875 (3d Cir.
1984) (“in the era of common law pleading, . . . the scope of a ‘case’ was
far less inclusive than it is today, and . . . claim joinder was far narrower”).
See, also, Coplay Cement Co., Inc. v. Willis & Paul Group, 983 F.2d 1435,
1440 (7th Cir. 1993) (“recoupment is the ancestor of the compulsory
counterclaim . . . and setoff of the permissive counterclaim”). Cf. Neb. Ct.
R. Pldg. § 6-1113(b) (rev. 2025). See Boone River v. Miles, 314 Neb. 889,
994 N.W.2d 35 (2023), modified on denial of rehearing 315 Neb. 413, 996
N.W.2d 629.
15 Waterman, supra note 10, ch. X, § 415 at 466.
16 Clark, supra note 10, ch. 10, § 98 at 437. Cf. Exeter Nat. Bank v. Orchard,
39 Neb. 485, 58 N.W. 144 (1894) (defense of payment not barred by
statute of limitations).
17 Sedgwick, supra note 10, ch. XVII at 496. See Waterman, supra note 10.
18 Clark, supra note 10, ch. 10, § 98 at 437. Cf., e.g., Musgrove v. Eskilsen,
127 Neb. 730, 256 N.W. 883 (1934) (holding mortgagor may recoup
damages for false representations and citing cases). See, generally,
Sedgwick, supra note 10.

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of the “same transaction,” and that they be susceptible of
adjustment in the same action. 19
(b) Legal Principles of Recoupment
[3,4] Recoupment is, in effect, a defense of reduction. 20
“Recoupment” differs from “set-off” in this respect: Any claim
or demand the defendant may have against the plaintiff may
be used as a setoff, but it is not a subject for recoupment
unless it grows out of the very same transaction that furnishes
the plaintiff’s cause of action. 21 Likewise, recoupment is dis-
tinguished from a counterclaim, as a counterclaim seeks an
affirmative judgment and need not arise out of the same trans-
action or occurrence that is the basis of a plaintiff’s action. 22
Recoupment is merely defensive in that it does not seek an
affirmative judgment in the action. 23
[5] Recoupment is an affirmative defense. The burden of
both pleading and proving affirmative defenses is upon the
defendants, and when they fail to do so, they cannot recover
upon mere argument alone. 24 Recoupment is no exception. To
state an affirmative defense of recoupment, the defendant must
19 Clark, supra note 10, ch. 10, § 98 at 438. See Stow v. Yarwood, 14 Ill.
424 (1853). See, generally, 80 C.J.S. Set-off and Counterclaim § 38 (2022)
(requirement that recoupment arise out of same transaction); 20 Am. Jur.
2d Counterclaim, Recoupment, Etc. § 38 (2015) (determination of same
transaction).
20 See, Mobil Oil Corp. v. Grantham, 200 Neb. 782, 265 N.W.2d 669 (1978);
Mettlen v. Sandoz, 131 Neb. 625, 269 N.W. 98 (1936).
21 See In re Estate of Massie, 218 Neb. 103, 109, 353 N.W.2d 735, 740 (1984)
(internal quotation marks omitted) (quoting Black’s Law Dictionary (4th
ed. 1957)), disapproved on other grounds, In re Estate of Price, 223 Neb.
12, 388 N.W.2d 72 (1986). See, also, Oft v. Dornacker, 131 Neb. 644, 269
N.W. 418 (1936) (holding defendant’s payment to plaintiff for repair of
property did not grow out of annuity agreement for real property).
22 Ed Miller & Sons, Inc. v. Earl, 243 Neb. 708, 502 N.W.2d 444 (1993).
23 See, Nathan v. McDermott, 306 Neb. 216, 945 N.W.2d 92 (2020); Ed
Miller & Sons, Inc. v. Earl, supra note 22.
24 Nathan v. McDermott, supra note 23.

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prove the elements of the claim and that it occurred in the very
same action as the plaintiff’s claim against the defendant. 25
[6,7] The defense of recoupment is not barred by a statute of
limitations. 26 As we have long recognized:
[Even] if the statute of limitations had been properly
pleaded, the plea could, under no circumstances, do more
than defeat the [opposing party’s] claim and bar affirma-
tive relief; it could in no manner affect [a party’s] right to
act defensively and . . . show that [the opposing party’s]
claim . . . is unfounded. The right to commence and
prosecute an action may be lost by delay, but the right to
defend against a suit . . . is never outlawed. The limitation
law may . . . deprive a suitor of his [or her] sword, but of
his [or her] shield never. 27
The defense of recoupment must arise out of the same trans-
action or occurrence as the plaintiff’s cause of action, and it
survives as long as the plaintiff’s cause of action exists, even
if affirmative legal action upon the subject of recoupment is
barred by the statute of limitations. 28
25 Id.
26 Ed Miller & Sons, Inc. v. Earl, supra note 22. See, Katskee v. Nevada
Bob’s Golf of Neb., 238 Neb. 654, 472 N.W.2d 372 (1991); Kaup v.
Schinstock, 88 Neb. 95, 129 N.W. 184 (1910).
27 Pinkham v. Pinkham, 61 Neb. 336, 337-38, 85 N.W. 285, 285 (1901). See
Kaup v. Schinstock, supra note 26 (holding plaintiff’s action for damages
barred, but recoupment not barred in future action by defendant). See,
also, Warner v. Sullivan, 249 Mich. 469, 471, 229 N.W. 484, 485 (1930)
(“plaintiff will not be permitted to insist upon the statute of limitations as
a bar to such a defense when he [or she] is seeking to enforce payment
of that which is due him [or her] under the contract out of which the
defendant’s claim for recoupment arises”); State ex rel. American Etc.
Mtg. Co. v. Tanner, 45 Wash. 348, 357, 88 P. 321, 323 (1907) (“[i]t is
actions themselves which are barred by statutes of limitation, and not
matters of pure defense to such actions”).
28 See, Nathan v. McDermott, supra note 23; Becker v. Hobbs, 256 Neb. 432,
590 N.W.2d 360 (1999); Nathan v. McKernan, 170 Neb. 1, 101 N.W.2d
756 (1960); Oft v. Dornacker, supra note 21; Mettlen v. Sandoz, supra note
20.

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(c) Abram’s Recoupment Defense
Before addressing the parties’ arguments on appeal, we
address two points of the district court’s reasoning in reaching
its conclusion that Abram’s asserted defense of recoupment
did not satisfy the same transaction test. First is the court’s
emphasis that Abram’s defense of recoupment needed to arise
out of the “very” same transaction. In In re Estate of Massie, 29
we quoted the definition of “recoupment” from Black’s Law
Dictionary, 30 for the proposition that “‘any claim or demand
. . . is not a subject for recoupment unless it grows out of the
very same transaction which furnishes the plaintiff’s cause
of action.’” We note that in that context, “very” is an adjec-
tive and does not indicate a narrow construction of “same
transaction.” 31 Simply, as we have long held, the defense of
recoupment needs to arise “‘out of the same transaction as
[the] claim.’” 32 We also note that “very” does not appear in the
definition of “recoupment” within the latest edition of Black’s
Law Dictionary. 33
The second is the court’s reliance on two cases from the
U.S. Courts of Appeals 34 in support of its conclusion that “[t]
he mere fact that there was an ongoing contractual relationship
[was] insufficient to meet the same transaction requirement of
recoupment.” We disagree that those cases are applicable to the
instant case.
29 In re Estate of Massie, supra note 21, 218 Neb. at 109, 353 N.W.2d at 740.
30 Black’s Law Dictionary, supra note 21.
31 See Merriam-Webster’s Collegiate Dictionary 1309 (10th ed. 2001)
(defining adjective “very” as “being the same one” and adverb “very” as
“to a high degree”).
32 In re Estate of Massie, supra note 21, 218 Neb. at 109, 353 N.W.2d at
740 (emphasis omitted) (citing Nathan v. McKernan, supra note 28; Oft v.
Dornacker, supra note 21; and Mettlen v. Sandoz, supra note 20).
33 Compare Black’s Law Dictionary, supra note 21, with Black’s Law
Dictionary (12th ed. 2024).
34 See, U.S. on behalf of Postal Serv. v. Dewey Freight, supra note 4; In re
University Medical Center, supra note 4.

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In In re University Medical Center, 35 the issue before the
Third Circuit concerned the overpayment of Medicare reim-
bursements to a hospital. In that case, the court concluded that
“the open-ended standard, endorsed in the context of discern-
ing compulsory counterclaims, is inadequate for determining
whether two claims arise from the same transaction for the
purposes of equitable recoupment in bankruptcy.” 36 It stressed
its precedent that “both setoff and recoupment play very dif-
ferent roles in bankruptcy than in their original roles as rules
of pleading.” 37 For that reason, “a mere logical relationship
[between the claims] is not enough.” 38 Relevant there, the
court observed that the Bankruptcy Code called for the “[u]se
of [a] stricter standard.” 39 It went on to conclude that because
the Medicare Act and related regulations establish that the
reconciliation process operates on an annual basis, overpay-
ments in 1985 were not the same transaction as overpayments
in 1988. Quoting the trial court, it explained: “‘The [health
care provider agreement at issue] is a unique type of contract.
It does not provide for a defined transaction or even a series
of transactions. It simply establishes a relationship between
the parties[.]’” 40
The Eighth Circuit considered a similar appeal in U.S.
on behalf of Postal Serv. v. Dewey Freight. 41 The circuit
court noted that the recoupment claim at issue “stem[med]
from [the d]ebtor’s failure to perform its future contractual
commitments.” 42 It ultimately concluded that the Bankruptcy
Code foreclosed the creditor from “reduc[ing] the amount
35 In re University Medical Center, supra note 4.
36 Id., 973 F.2d at 1081 (emphasis supplied).
37 Id. (emphasis supplied).
38 Id.
39 Id.
40 Id. (emphasis supplied).
41 U.S. on behalf of Postal Serv. v. Dewey Freight, supra note 4.
42 Id., 31 F.3d at 623 (emphasis in original).

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it owe[d] to [the d]ebtor for post-petition services by offset-
ting claims that [the Bankruptcy Code] has explicitly removed
from the post-petition scene.” 43
Unlike those cases, the instant case does not involve either
the Bankruptcy Code or a unique type of contract. As those
cases observe, recoupment has distinct characteristics in the
context of bankruptcy. Those distinctions are not present in
general civil actions under Nebraska law, and the stricter stan-
dard applicable in bankruptcy cases is inapplicable here.
On appeal, Abram argues that the district court erred in
finding that the amounts paid to Howard after the sale of
Park Place in 2007 were part of a separate transaction from
the amounts advanced between 2008 and 2016 that Howard
seeks to collect in the instant action. Abram reasons that
if Howard received an overpayment on the note in 2007,
Abram had a positive balance on the note when Howard
began making further advances on it in 2008, rather than
no balance as Howard maintains. Abram contends that it is
entitled to recoup the amount overpaid to Howard as princi-
pal and interest because “all payments and advances must be
considered in accounting for a line of credit.” 44 Abram main-
tains that all advances and payments on the promissory note
constitute one transaction.
Conversely, Howard argues that the parties conducted two
transactions: the advances that Abram used for Park Place and
the advances that Abram used for the Pennsylvania proper-
ties. He asserts that “[a] comparison of the attributes of [the]
loans shows clearly two separate transactions.” 45 Howard
contends that there were “two separate real estate deals”
because the purpose of Abram’s receipt of the advances was
funding for different properties, and therefore, there were two
43 Id. at 625.
44 Brief for appellant at 14.
45 Brief for appellee at 23.

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separate transactions. 46 In doing so, Howard misconstrues the
focus of the “same transaction” inquiry.
[8] The focus of the single transaction inquiry in this case is
not whether Howard’s advances to support Abram’s holding of
Park Place constitute the same transaction as his advances to
support Abram’s holding of the Pennsylvania properties. The
single transaction inquiry is not concerned with the purpose for
the advances or Abram’s use of the funds. The “same transac-
tion” inquiry concerns whether the parties’ claims arise from
the same transaction between the parties. Abram’s separate
business transactions do not affect the transaction between
Howard as the lender and Abram as the borrower. The appli-
cable question is whether Abram’s alleged overpayment on the
promissory note arises out of the same transaction as the out-
standing balance on the promissory note.
Howard’s cause of action only seeks payment of advances
he made to Abram between 2008 and 2016. However, as the
parties stipulated, Howard made these advances under the
promissory note. Howard also acknowledges in his appellate
brief that in 2008, he “began advancing money to Abram under
the line of credit.” 47 As the district court found, based on the
parties’ pleadings and stipulations, Howard and Abram entered
into an agreement on a single note, and all advances from 2004
to 2016 were under that note. 48 Howard, as the lender, and
Abram, as the borrower, conducted a single transaction, the
establishment and maintenance of an open line of credit.
Howard’s cause of action is for the amount outstanding on
the promissory note, and Abram disputes the amount Howard
claims is outstanding. Howard claims there was no balance
on the note when he made the advances for which he seeks
46 Id.
47 Id. at 22 (emphasis supplied).
48 See, e.g., Nathan v. McDermott, supra note 23 (judicial admission is
waiver of all controversy and limitation of issues); Barkalow Bros. Co. v.
English, 159 Neb. 407, 67 N.W.2d 336 (1954) (same).

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to recover, while Abram claims that there was a positive
balance on the note. In defense of Howard’s claim, Abram
seeks to reduce Howard’s recovery by showing that it made a
payment on its debt prior to the 2008 advances that is unac-
counted for in Howard’s claim. The payment would serve as
a deduction from the outstanding balance owed to Howard
on the note. Moreover, Abram’s defense of recoupment for
the alleged overpayment was not available to Abram until
Howard demanded payment of the outstanding balance that
he alleged. 49 Abram’s attempt to reduce Howard’s recovery
is a quintessential example of the early limited application of
the defense of recoupment, as it seeks to enforce its right of
deduction by showing a prior payment, which is the defense
of recoupment in its original sense.
Abram’s defense of recoupment for an overpayment of the
outstanding balance on the promissory note in 2007 arises from
the “same transaction” as Howard’s claim for payment of the
outstanding balance on the promissory note. The transaction is
the promissory note. The seller’s statement plainly shows that
the closing on Park Place included an amount to “Pay[ ]off
Howard[’s] lien.” Whether that amount exceeded the amount
due on the note when Abram paid Howard directly affects the
outstanding balance due on the note at the time Howard filed
his complaint. There is a dispute of material fact, and the court
erred in granting summary judgment on Abram’s defense of
recoupment related to the payment from the sale of Park Place
to Howard for the “lien.”
However, to the extent Abram has not abandoned its
defense 	of 	recoupment 	concerning 	the 	amount 	of 	funds
Howard received as repayment on a personal loan with
Helen Misle, Abram conflates Howard as the lender and
Howard as the former manager of Abram. The transaction
of any personal loan between Howard and Helen Misle is
49 See Mettlen v. Sandoz, supra note 20. See, also, Susman v. Kearney
Towing & Repair Ctr., 310 Neb. 910, 970 N.W.2d 82 (2022).

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not related to the promissory note—the subject of Howard’s
cause of action. The court did not err in granting summary
judgment in favor of Howard on Abram’s defense of recoup-
ment as it relates to Howard’s self-reimbursement for the
personal loan. Nevertheless, this issue was properly asserted
as it relates to Abram’s counterclaims for breach of fiduciary
duty and fraudulent concealment, which we address in the
next section.
Because the cause must be remanded, there is one final issue
to address related to Abram’s defense of recoupment as to the
alleged overpayment after the sale of Park Place. An appellate
court may, at its discretion, discuss issues unnecessary to the
disposition of an appeal where those issues are likely to recur
during further proceedings. 50
The appellate record shows that there was much discus-
sion had in the proceedings below as to whether a defense
of recoupment is an equitable defense that should be tried to
the bench, instead of to a jury. As indicated in our discussion
above of the development of recoupment, recoupment is a rule
of pleading and merely equitable insofar as it allows consid-
eration of an issue that would otherwise not be considered as
part of the plaintiff’s cause of action. 51 In this case, Abram’s
defense of recoupment does not raise an independent claim or
seek equitable relief. It solely concerns the balance of the note
as part of Howard’s cause of action.
2. Limitations Period of
Abram’s Counterclaims
As mentioned above, due to our resolution concerning
Abram’s recoupment defense as to the amount paid on the
promissory note from the sale of Park Place, Abram’s two
50 Brush & Co. v. W. O. Zangger & Son, 314 Neb. 509, 991 N.W.2d 294
(2023).
51 See, also, Stow v. Yarwood, supra note 19 (holding two claims arising out
of same subject matter may properly be investigated and adjusted in one
action).

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alternative theories of recovery under its counterclaims are
only applicable to its alleged damages caused by Howard’s
self-reimbursement for a personal loan to Helen Misle. There
is no dispute that these claims are governed by the 4-year
statute of limitations found in Neb. Rev. Stat. § 25-207(3)
and (4) (Reissue 2016). There is also no dispute that Abram
asserted these claims more than 4 years after Howard’s self-
reimbursement from the sale of Park Place.
However, Abram contends that the discovery rule applies to
the 4-year statute of limitations for each of its counterclaims. 52
We address them in turn.
(a) Discovery Rule Principles
The general rule is that a claim accrues and the statute of
limitations begins to run when the aggrieved party has the
right to institute and maintain suit. 53 A party is not aggrieved
and cannot institute and maintain suit if any element of that
party’s claim depends upon abstract questions or issues that
might arise in a hypothetical or fictitious situation or setting
and may never come to pass. 54 The essential attribute of a
statute of limitations is that it accords and limits a reason-
able time within which a suit may be brought upon causes of
action which it affects. 55 The mischief which statutes of limi-
tations are intended to remedy is the general inconvenience
resulting from delay in the assertion of a legal right which is
practicable to assert. 56 However, if an injured party is wholly
unaware of the nature of an injury or the cause of it, it is
52 See § 25-207.
53 Spath v. Morrow, 174 Neb. 38, 115 N.W.2d 581 (1962). See Susman v.
Kearney Towing & Repair Ctr., supra note 49.
54 Susman v. Kearney Towing & Repair Ctr., supra note 49.
55 Id.
56 Id. See, Shlien v. Board of Regents, 263 Neb. 465, 640 N.W.2d 643 (2002);
Condon v. A. H. Robins Co., 217 Neb. 60, 349 N.W.2d 622 (1984); Spath
v. Morrow, supra note 53.

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difficult to see how the party may be charged with a lack of
diligence or sleeping on its rights. 57 Accordingly, Nebraska
has adopted the “discovery rule,” which provides an exception
to a statute of limitations for a claim that would otherwise be
outside the statutory period. 58
Under Nebraska law, there are several different discovery
rules that pertain to various types of actions. For example,
a number of discovery rules are statutory, such as in the
instance of “an action for relief on the ground of fraud,” 59
actions concerning professional negligence or breach of war-
ranty of professional services, 60 and actions concerning breach
of warranty or defects related to improvements to real prop-
erty. 61 In addition, we have judicially recognized discovery
rules for other claims, unless the statutory provisions are to
the contrary. 62
Though the differences between the various discovery rules
may be slight, it is necessary that the bench and bar ensure
57 See, Shlien v. Board of Regents, supra note 56; Condon v. A. H. Robins
Co., supra note 56; Spath v. Morrow, supra note 53.
58 See, Alston v. Hormel Foods Corp., 273 Neb. 422, 730 N.W.2d 376
(2007); Sacchi v. Blodig, 215 Neb. 817, 341 N.W.2d 326 (1983). See, also,
Spath v. Morrow, supra note 53.
59 § 25-207(4).
60 See Neb. Rev. Stat. § 25-222 (Reissue 2016). See, also, Nuss v. Alexander,
269 Neb. 101, 691 N.W.2d 94 (2005).
61 See Neb. Rev. Stat. § 25-223 (Cum. Supp. 2024).
62 Compare Shlien v. Board of Regents, supra note 56 (discovery rule
applicable to State Tort Claims Act); Hutmacher v. City of Mead, 230
Neb. 78, 430 N.W.2d 276 (1988) (discovery rule applicable to Political
Subdivisions Tort Claims Act); Condon v. A. H. Robins Co., supra note
56 (discovery rule applicable to Neb. Rev. Stat. § 25-224 (Reissue 2016)
concerning product liability actions); and Spath v. Morrow, supra note 53
(discovery rule applicable to medical malpractice actions), with Mandolfo
v. Mandolfo, 281 Neb. 443, 796 N.W.2d 603 (2011) (discovery rule
inapplicable to claims under Neb. U.C.C. § 3-420 (Reissue 2020)). See,
generally, John P. Lenich, Nebraska Civil Procedure, § 5:27 (2025).

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that the proper discovery rule is applied in any given case. 63
In this case, a different discovery rule applies to each of
Abram’s counterclaims. Abram’s claim for breach of fiduciary
duty is subject to the 4-year statute of limitations and our
judicial discovery rule under § 25-207(3), and Abram’s claim
for fraudulent concealment is based on fraud and, thus, is con-
trolled by § 25-207(4). We address each in turn.
(b) Breach of Fiduciary Duty
[9,10] When the discovery rule is applicable, the running
of the statute of limitations is tolled until the discovery of the
cause of action. 64 “‘Discovery of a cause of action’” occurs
when there is knowledge of facts constituting the basis of the
cause of action or awareness of the existence of facts suffi-
cient to put a person of ordinary intelligence and prudence on
inquiry, which, if pursued, would lead to the discovery of the
cause of action. 65 The cause of action in any case embraces
not only the injury which the complaining party has received,
but it includes more. 66 All the facts which, taken together,
are necessary to fix the responsibility are parts of the cause
of action. 67
[11] We have long recognized that the question as to a
plaintiff’s knowledge of the facts which should have put a
person of ordinary intelligence and prudence on notice is
a question of fact. 68 Accordingly, the point at which a statute
63 Cf. Rosnick v. Marks, 218 Neb. 499, 357 N.W.2d 186 (1984). See,
generally, Lenich, supra note 62.
64 See Alston v. Hormel Foods Corp., supra note 58. See, also, Colwell v.
Mullen, 301 Neb. 408, 918 N.W.2d 858 (2018); Behrens v. Blunk, 284
Neb. 454, 822 N.W.2d 344 (2012).
65 E.g., Gering – Ft. Laramie Irr. Dist. v. Baker, 259 Neb. 840, 846, 612
N.W.2d 897, 903 (2000).
66 Christensen v. Broken Bow Public Schools, 312 Neb. 814, 981 N.W.2d 234
(2022).
67 Susman v. Kearney Towing & Repair Ctr., supra note 49.
68 Vrbsky v. Arendt, supra note 8.

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of limitations begins to run must be determined from the
facts of each case, and, in an action at law, the decision of the
fact finder will not be set aside by an appellate court unless
clearly wrong. 69
In this case, the district court found that Marsha, Linda,
and the accountant were agents of Abram and imputed their
knowledge of facts concerning Howard’s reimbursement from
the sale proceeds of Park Place to Abram. As a result, the court
found that Abram had knowledge of the facts which should
have put a person of ordinary intelligence and prudence on
notice at the time of the sale of Park Place. Before addressing
whether Abram discovered its cause of action, we first review
our principles of agency.
(i) Agency Principles
[12] An “agent” is a person authorized by the principal to
act on the principal’s behalf and under the principal’s control. 70
However, an independent contractor is one who, in the course
of an independent occupation or employment, undertakes work
subject to the will or control of the person for whom the work
is done only as to the result of the work and not as to the meth-
ods or means used. 71 The determination of whether one is an
independent contractor or an agent is one of fact. 72
The common-law test for determining whether an indepen-
dent contractor status exists includes the consideration and
weighing of many factors, no one of which is conclusive. 73
69 See, e.g., Zook v. Zook, supra note 8; Guinn v. Murray, supra note 8;
Vrbsky v. Arendt, supra note 8.
70 RM Campbell Indus. v. Midwest Renewable Energy, 294 Neb. 326, 886
N.W.2d 240 (2016); Koricic v. Beverly Enters. – Neb., 278 Neb. 713, 773
N.W.2d 145 (2009); McCurry v. School Dist. of Valley, 242 Neb. 504, 496
N.W.2d 433 (1993).
71 Sparks v. M&D Trucking, 301 Neb. 977, 921 N.W.2d 110 (2018); McCurry
v. School Dist. of Valley, supra note 70.
72 McCurry v. School Dist. of Valley, supra note 70.
73 Id.

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The criteria for making the determination include a consider-
ation of who has the right of control, who provided the tools,
the degree of supervision exerted over the one performing the
work, the method of payment, and the contractual understand-
ing between the parties. 74 Moreover, whether an agency rela-
tionship exists between two parties depends on the facts under-
lying the association, irrespective of how the parties describe
or characterize their connection. 75 Moreover, an agency may
be implied from the words and conduct of the parties and the
circumstances of the particular case that evidence an intention
to create the relationship. 76
[13] As a general rule, the knowledge of an agent is imputed
to the principal. 77 If knowledge, as distinguished from reason
to know, is the important element in a transaction, and the
agent who has the knowledge is not one acting for the principal
in the transaction, the principal is not affected by the fact that
the agent has the knowledge. 78 In many situations, in order for
one to be responsible, it is necessary that the act be done with
knowledge in a subjective sense, and it is not sufficient that
one has the means of information. 79
It is the duty of an agent to communicate to the princi-
pal all the facts concerning the service in which the agent is
engaged that come to the agent’s knowledge in the course of
the agent’s employment, and this duty, in a subsequent action
between the principal and a third person, the agent is conclu-
sively presumed to have performed. 80 This is the foundation of
74 Id.
75 Id.
76 Id.
77 Exchange Bank of Wilcox v. Nebraska Underwriters Ins. Co., 84 Neb. 110,
120 N.W. 1010 (1909). See Scottsbluff Nat. Bank v. Blue J Feeds, Inc., 156
Neb. 65, 54 N.W.2d 392 (1952).
78 Nebraska Pub. Emp. v. Otoe Cty., 257 Neb. 50, 595 N.W.2d 237 (1999).
79 See id.
80 Id.

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the doctrine that notice to an agent is notice to the principal. 81
Notice to the agent is notice to the principal, where such notice
is received by the agent while acting within the scope of the
agent’s authority. 82 A principal may limit or restrict the pow-
ers of its agent, and, when such restrictions are known to the
person dealing with the agent, the principal is only bound by
the acts of the agent performed within the scope of the author-
ity conferred. 83 In the case of an officer or agent of a private
corporation dealing with its funds, the authority of such officer
or agent is not known to all but depends upon the author-
ity conferred by the corporation which the officer or agent
represents. 84
(ii) Knowledge of Abram’s Agents
[14,15] Generally, whether an agency relationship exists and
the scope of an agent’s authority present questions of fact. 85 In
a bench trial of a law action, the trial court’s factual findings
have the effect of a jury verdict and will not be disturbed on
appeal unless clearly wrong. 86
a. Marsha
The district court found that Marsha was an agent of Abram
because she was the trustee of the Misle Trust. This finding is
clearly wrong.
[16,17] Marsha was never authorized by Abram to act on
its behalf or under its control. As a general rule, two separate
81 Nebraska Pub. Emp. v. Otoe Cty., supra note 78; Equilease Corp. v. Neff
Towing Serv., 227 Neb. 523, 418 N.W.2d 754 (1988).
82 See, Robbins v. National Life & Acc. Ins. Co., 182 Neb. 749, 157 N.W.2d
188 (1968); Arendt v. North American Life Ins. Co., 107 Neb. 716, 187
N.W. 65 (1922).
83 See German Ins. Co. v. Heiduk, 30 Neb. 288, 46 N.W. 481 (1890).
84 Blue J Feeds, Inc. v. Scottsbluff Nat. Bank, 156 Neb. 84, 54 N.W.2d 404
(1952); Scottsbluff Nat. Bank v. Blue J Feeds, Inc., supra note 77.
85 See Koricic v. Beverly Enters. - Neb., supra note 70.
86 Koricic v. Beverly Enters. - Neb., supra note 70.

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corporations are regarded as distinct legal entities even if the
stock of one is owned wholly or partly by the other. 87 We dis-
agree with the court’s theory of agency law that it found to
impute knowledge to a subsidiary limited-liability company
through the trustee of the parent entity. We have long recog-
nized that notice of facts will be imputed only to the principal
for whom and in whose interest an agent acted at the time. 88
What Marsha knew about Howard’s self-reimbursement for
the personal loan to Helen Misle was not relevant to whether
Abram knew or should have known of the cause of action for
breach of fiduciary duty. Even though Marsha was the trustee
of the trust that owned Abram, neither the trust nor Marsha
was ever an agent of Abram.
b. Linda
The district court also found that Linda was an agent of
Abram. As manager of Abram from 2010 throughout this
action, it cannot be disputed that Linda was an agent of Abram.
Thus, Linda’s knowledge is imputed to Abram. The question
then is whether Linda had knowledge of facts constituting
the basis of the cause of action or awareness of the existence
of sufficient facts that would have led to the discovery of the
cause of action.
The court found that Linda was aware of sufficient facts
because she considered filing suit against Howard for his “mis-
management” of the Pennsylvania properties and his decision
to purchase those properties in lieu of the discount store “in
Scottsdale.” This finding is clearly wrong.
[18] 	Plaintiffs, 	including 	cross-plaintiffs, 	are 	bound 	by
their knowledge as to specific facts occurring in specific
87 See Roos v. KFS BD, Inc., 280 Neb. 930, 799 N.W.2d 43 (2010). Accord
Bacon v. DBI/SALA, 284 Neb. 579, 822 N.W.2d 14 (2012).
88 See, also, State, ex rel. Davis, v. Farmers & Merchants Bank, 112 Neb.
840, 201 N.W. 897 (1924).

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timeframes. 89 As one Nebraska law scholar succinctly states,
“Just because the plaintiff may be in possession of informa-
tion from which its cause of action could have been discovered
does not necessarily mean that the plaintiff could have reason-
ably discovered its cause of action.” 90
When Linda assumed the role of manager of Abram in
2010, Abram’s business consisted of the Pennsylvania prop-
erties. The evidence shows that Howard decided to purchase
the Pennsylvania properties instead of the discount store “in
Scottsdale” and that the properties were suffering from a lack
of tenants and were not profitable. Howard’s decision to pur-
chase the Pennsylvania properties and his subsequent manage-
ment of those properties are removed from the distribution of
funds from the sale of Park Place. The distribution of funds
from the closing of Park Place would not have been relevant to
Linda’s lawsuit.
Our decision in Norfolk Iron & Metal v. Behnke 91 is instruc-
tive. In that case, the plaintiff company brought suit against
an accountant who prepared monthly unaudited statements
and annual audits of a company the plaintiff purchased. The
next year’s annual audit revealed a shortage of the company’s
scrap metal inventory of “about 344 railroad carloads,” which
amounted to “somewhere in the neighborhood of 75 percent of
[the company’s] total stated inventory.” 92 The plaintiff’s presi-
dent testified that “‘[i]t was [his] feeling’” that there was an
inventory shortage when the purchase of the company closed,
which was confirmed by the next year’s audit. 93 We held
that the plaintiff’s discovery of its cause of action was made
89 See Kelly Klosure v. Johnson Grant & Co., 229 Neb. 369, 427 N.W.2d 44
(1988).
90 Lenich, supra note 62, § 5:28 at 266-67 (citing cases).
91 Norfolk Iron & Metal v. Behnke, 230 Neb. 414, 432 N.W.2d 18 (1988).
92 Id. at 416, 432 N.W.2d at 20.
93 Id. at 422, 432 N.W.2d at 23.

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“when [the president] first had a feeling that the inventory was
short,” and not after the annual audit. 94
The plaintiff had argued that another certified public accoun-
tant needed to have done a physical inventory in order to dis-
cover the shortage. However, we noted that the president felt
that the inventory was short and that he was able to go through
the yard, observe the scrap metal inventory, and estimate the
inventory to confirm his feeling. We recognized that the presi-
dent may not have been capable of discovering the exact extent
of the shortage, but since the shortage amounted to 75 percent
of the company’s recorded inventory and 344 railroad carloads
of scrap metal, the president was capable of ascertaining for
himself that a shortage existed.
[19] Norfolk Iron & Metal v. Behnke presented an extreme
factual scenario that is quite different from the factual scenario
in the instant case. But that case illustrates the relationship
between the cause of action and knowledge of the specific
facts required to discover a claim. Discovery does not occur
until there is at least an awareness of the existence of specific
facts, which, if pursued, would have led to the discovery of the
specific cause of action. The record shows that Linda had no
such awareness.
c. Abram’s Accountant
Finally, the district court found that Abram’s accountant was
an agent of Abram and had full knowledge of Abram’s claims.
The court found that the accountant had “clear and complete
knowledge of the amounts Howard was paid” from the sale of
Park Place and that he therefore had knowledge of Abram’s
claims in 2007. The court then imputed such knowledge to
Abram. This finding is clearly wrong.
[20,21] As set forth above, notice to the agent is notice to
the principal only when the agent is acting within the scope
of its authority, and an agent’s powers may be limited or
94 Id. at 425, 432 N.W.2d at 25.

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restricted. 95 In the case of an officer or agent of a private cor-
poration dealing with its funds, the authority of such officer
or agent is not known to all but depends upon the authority
conferred upon the officer or agent by the corporation which
he or she represents. 96
Here, assuming that the accountant was an agent of Abram,
the accountant was not a “general” agent. The scope of the
accountant’s duties was limited to those actions directed by
Howard as the manager of Abram. It was outside the scope of
the accountant’s duties to audit the amount of funds that Howard
advanced and was reimbursed. Even though the accountant
knew the amount of money that Howard received from the sale
of Park Place, he had never received a copy of the promissory
note. There is nothing that suggests that the accountant should
have been aware of any wrongdoing by Howard.
(iii) Statute of Limitations Was Tolled
There is no evidence in the record that Abram discovered
its cause of action for Howard’s breach of fiduciary duty
until it received copies of the 2004 promissory note between
Howard and Abram and the 2007 “seller’s statement” prepared
by the accountant after the sale of Park Place. Accordingly,
the statute of limitations was tolled and Abram timely raised
its counterclaim.
(c) Fraudulent Concealment
[22] The statute of limitations for Abram’s claim for fraud-
ulent concealment is found in § 25-207(4), which provides
that the 4-year limitations period applies to “an action for
relief on the ground of fraud, but the cause of action in such
case shall not be deemed to have accrued until the discovery
of the fraud.” Under this section, the statute of limitations is
95 See Nebraska Pub. Emp. v. Otoe Cty., supra note 78.
96 Blue J Feeds, Inc. v. Scottsbluff Nat. Bank, supra note 84; Scottsbluff Nat.
Bank v. Blue J Feeds, Inc., supra note 77.

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not tolled. Instead, the accrual of the cause of action does not
occur until the fraud is discovered.
In order to successfully assert the doctrine of fraudulent con-
cealment and thus estop the defendant from claiming a statute
of limitations defense, the plaintiff must show the defendant
has, either by deception or by a violation of a duty, concealed
from the plaintiff material facts which prevented the plaintiff
from discovering the cause of action. 97 Under the doctrine
of fraudulent concealment, the plaintiff must show that he or
she exercised due diligence to discover his or her cause of
action before the statute of limitations expired. 98 Allegations
of fraudulent concealment for tolling purposes must be pleaded
with particularity. 99
[23] The district court found that Abram failed to show
that Howard concealed any material facts from Abram or that
Abram exercised due diligence to discover the cause of action.
However, Abram did not provide an argument in its appellate
brief addressing these findings of the court. To be considered
by an appellate court, an alleged error must be both specifi-
cally assigned and specifically argued in the brief of the party
assigning the error. 100 Accordingly, we do not consider whether
the court erred in these findings.
3. Interest Calculation
Abram argues that the district court erred in adopting
Howard’s interest calculation without providing Abram with
an opportunity to challenge the calculation after the court
had denied summary judgment on the issue. Specifically,
Abram seeks to challenge the applicability of interest to at
least some of the advances, because Linda was not aware
97 See Chafin v. Wisconsin Province of Society of Jesus, 301 Neb. 94, 917
N.W.2d 821 (2018).
98 Id.
99 Id.
100 Uhrich & Brown Ltd. Part. v. Middle Republican NRD, 315 Neb. 596, 998
N.W.2d 41 (2023).

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that the advances were subject to interest, and to challenge
the use of compound interest to calculate the amount of
interest owed.
As mentioned above, based on the parties’ pleadings and
stipulations, the court found that all of the advances were under
the promissory note. The promissory note provides that loans
are subject to a 3-percent per annum interest rate. We find no
merit to Abram’s contention that it should be able to challenge
the applicability of interest.
However, we agree that a dispute remains as to whether the
promissory note’s “per annum” 3-percent interest rate refers to
compound or simple interest. 101 On remand, the parties should
be given the opportunity to litigate the issue. 102
VI. CONCLUSION
On Abram’s defense of recoupment, we affirm the grant of
summary judgment as it relates to the alleged personal loan
to Helen Misle and reverse the grant of summary judgment as
it relates to Abram’s alleged overpayment on the promissory
note. On Abram’s counterclaims, we affirm the court’s judg-
ment as it relates to Abram’s claim of fraudulent concealment
and reverse the judgment as it relates to Abram’s claim of
breach of fiduciary duty. Further, on remand, the parties should
be given the opportunity to litigate whether the promissory
note provides simple or compound interest.
Affirmed in part, and in part reversed and
remanded for further proceedings.
Miller-Lerman, J., not participating.
101 See, also, Lincoln Lumber Co. v. Fowler, 248 Neb. 221, 533 N.W.2d 898
(1995); Ashland State Bank v. Elkhorn Racquetball, Inc., 246 Neb. 411,
520 N.W.2d 189 (1994).
102 See McAllister v. McAllister, 228 Neb. 314, 422 N.W.2d 345 (1988).